ITEM 2. MANAGEMENT’S 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 Ryman’s 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 Ryman’s 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 joint venture (the “Gaylord Rockies joint venture”) that owns the Gaylord Rockies Resort & Convention Center in Aurora, Colorado (“Gaylord Rockies”); (v) the consummation of the proposed transaction to increase our ownership interest in the Gaylord Rockies joint venture; (vi) the anticipated opening of Gaylord Rockies; (vii) the Company’s future consolidation of the results of operations and debt of the Gaylord Rockies joint venture; (viii) Marriott International, Inc.’s (“Marriott’s”) ability to effectively manage our hotels and other properties; (ix) our anticipated capital expenditures and investments; (x) 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 (xi) 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, risks and uncertainties associated with the proposed transaction to increase our ownership interest in the Gaylord Rockies joint venture, including, but not limited to, the occurrence of any event, change or other circumstance that could delay the closing of the proposed transaction; the Company’s ability to utilize its existing borrowing capacity under the Company’s credit facility; certain conditions to closing, including obtaining any joint venture lender consent and finalization of joint venture agreements and the possibility that such
conditions to closing may not be met and the transaction may be terminated; and transaction costs which have been and may continue to be incurred related to the proposed transaction. Other factors that could cause results to differ include, but are not limited to, 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 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 this Quarterly Report on Form 10-Q and 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 the Gaylord Rockies joint venture that is developing and owns Gaylord Rockies, which is scheduled to open in late 2018 and will be managed by Marriott. For more information regarding the Company’s announced intention to increase its ownership interest in the Gaylord Rockies joint venture, see “Gaylord Rockies Joint Venture” below.
We also own and operate media and entertainment assets including the Grand Ole Opry, the legendary weekly showcase of country music’s 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 Opry’s 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.
Gaylord Rockies Joint Venture
On September 13, 2018, we entered into a purchase agreement (“Purchase Agreement”) with Aurora Convention Center Hotel Partners, LLC and certain affiliates of the other Gaylord Rockies joint venture partners to increase our ownership interest in the Gaylord Rockies joint venture to approximately 62.3% for a purchase price of approximately $242 million
in cash (the “Rockies Interest Purchase”), subject to the satisfaction or waiver of the various closing conditions in the Purchase Agreement, including the required consent of the Gaylord Rockies joint venture lender and Marriott, the release of certain guarantees and indemnities (which may involve the substitution of the Company on such guarantees and indemnities), no occurrence of any material casualty to Gaylord Rockies and other customary closing conditions. We have sufficient cash on hand and availability under our existing credit facility to finance the cash purchase price. We expect the transaction to close by the end of 2018.
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 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. On September 17, 2018, our board of directors declared our third 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 October 15, 2018 to stockholders of record as of the close of business on September 28, 2018. We currently plan to pay a quarterly cash dividend of $0.85 per share of common stock in 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 nation’s 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 through the payment of dividends, 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 Opry’s 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, and four Blake Shelton-themed multi-level bar, music venue and event spaces in Nashville, Orlando, Gatlinburg, Tennessee, and Tishomingo, Oklahoma, named after the
Shelton hit “Ol’ Red.” We believe that licensing our brand for products may provide an opportunity to increase revenues and cash flow with relatively little capital investment.
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 nine months ended September 30, 2018 and 2017, our total revenues were divided among these business segments as follows:
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
|
|
September 30,
|
|
September 30,
|
|
Segment
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
Hospitality
|
|
85
|
%
|
87
|
%
|
88
|
%
|
89
|
%
|
Entertainment
|
|
15
|
%
|
13
|
%
|
12
|
%
|
11
|
%
|
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 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 generally 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 nine months ended September 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 September 30,
|
|
Nine Months Ended September 30,
|
|
|
|
2018
|
|
%
|
|
2017
|
|
%
|
|
2018
|
|
%
|
|
2017
|
|
%
|
|
Income Statement Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
REVENUES:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rooms
|
|
$
|
103,181
|
|
35.3
|
%
|
$
|
100,534
|
|
38.0
|
%
|
$
|
332,490
|
|
36.4
|
%
|
$
|
314,577
|
|
37.5
|
%
|
Food and beverage
|
|
|
118,496
|
|
40.5
|
%
|
|
104,437
|
|
39.5
|
%
|
|
392,488
|
|
42.9
|
%
|
|
359,047
|
|
42.8
|
%
|
Other hotel revenue
|
|
|
27,563
|
|
9.4
|
%
|
|
24,619
|
|
9.3
|
%
|
|
81,129
|
|
8.9
|
%
|
|
73,493
|
|
8.8
|
%
|
Entertainment
|
|
|
43,009
|
|
14.7
|
%
|
|
35,134
|
|
13.3
|
%
|
|
108,446
|
|
11.9
|
%
|
|
92,427
|
|
11.0
|
%
|
Total revenues
|
|
|
292,249
|
|
100.0
|
%
|
|
264,724
|
|
100.0
|
%
|
|
914,553
|
|
100.0
|
%
|
|
839,544
|
|
100.0
|
%
|
OPERATING EXPENSES:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rooms
|
|
|
29,563
|
|
10.1
|
%
|
|
27,575
|
|
10.4
|
%
|
|
88,550
|
|
9.7
|
%
|
|
83,962
|
|
10.0
|
%
|
Food and beverage
|
|
|
67,305
|
|
23.0
|
%
|
|
62,649
|
|
23.7
|
%
|
|
211,677
|
|
23.1
|
%
|
|
200,091
|
|
23.8
|
%
|
Other hotel expenses
|
|
|
74,350
|
|
25.4
|
%
|
|
72,299
|
|
27.3
|
%
|
|
226,965
|
|
24.8
|
%
|
|
220,073
|
|
26.2
|
%
|
Hotel management fees, net
|
|
|
6,558
|
|
2.2
|
%
|
|
4,708
|
|
1.8
|
%
|
|
22,323
|
|
2.4
|
%
|
|
16,417
|
|
2.0
|
%
|
Entertainment
|
|
|
31,327
|
|
10.7
|
%
|
|
22,651
|
|
8.6
|
%
|
|
80,947
|
|
8.9
|
%
|
|
61,637
|
|
7.3
|
%
|
Corporate
|
|
|
7,212
|
|
2.5
|
%
|
|
7,909
|
|
3.0
|
%
|
|
23,181
|
|
2.5
|
%
|
|
22,786
|
|
2.7
|
%
|
Preopening costs
|
|
|
300
|
|
0.1
|
%
|
|
877
|
|
0.3
|
%
|
|
3,972
|
|
0.4
|
%
|
|
1,587
|
|
0.2
|
%
|
Impairment and other charges
|
|
|
4,540
|
|
1.6
|
%
|
|
—
|
|
—
|
%
|
|
4,540
|
|
0.5
|
%
|
|
—
|
|
—
|
%
|
Depreciation and amortization:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hospitality
|
|
|
27,946
|
|
9.6
|
%
|
|
26,061
|
|
9.8
|
%
|
|
81,379
|
|
8.9
|
%
|
|
76,786
|
|
9.1
|
%
|
Entertainment
|
|
|
2,613
|
|
0.9
|
%
|
|
1,965
|
|
0.7
|
%
|
|
6,885
|
|
0.8
|
%
|
|
5,465
|
|
0.7
|
%
|
Corporate and Other
|
|
|
435
|
|
0.1
|
%
|
|
520
|
|
0.2
|
%
|
|
1,391
|
|
0.2
|
%
|
|
1,611
|
|
0.2
|
%
|
Total depreciation and amortization
|
|
|
30,994
|
|
10.6
|
%
|
|
28,546
|
|
10.8
|
%
|
|
89,655
|
|
9.8
|
%
|
|
83,862
|
|
10.0
|
%
|
Total operating expenses
|
|
|
252,149
|
|
86.3
|
%
|
|
227,214
|
|
85.8
|
%
|
|
751,810
|
|
82.2
|
%
|
|
690,415
|
|
82.2
|
%
|
OPERATING INCOME:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hospitality
|
|
|
43,518
|
|
17.5
|
%
|
|
36,298
|
|
15.8
|
%
|
|
175,213
|
|
21.7
|
%
|
|
149,788
|
|
20.0
|
%
|
Entertainment
|
|
|
9,069
|
|
21.1
|
%
|
|
10,518
|
|
29.9
|
%
|
|
20,614
|
|
19.0
|
%
|
|
25,325
|
|
27.4
|
%
|
Corporate and Other
|
|
|
(7,647)
|
|
(A)
|
|
|
(8,429)
|
|
(A)
|
|
|
(24,572)
|
|
(A)
|
|
|
(24,397)
|
|
(A)
|
|
Preopening costs
|
|
|
(300)
|
|
(0.1)
|
|
|
(877)
|
|
(0.3)
|
|
|
(3,972)
|
|
(0.4)
|
|
|
(1,587)
|
|
(0.2)
|
|
Impairment and other charges
|
|
|
(4,540)
|
|
(1.6)
|
|
|
—
|
|
—
|
|
|
(4,540)
|
|
(0.5)
|
|
|
—
|
|
—
|
|
Total operating income
|
|
|
40,100
|
|
13.7
|
%
|
|
37,510
|
|
14.2
|
%
|
|
162,743
|
|
17.8
|
%
|
|
149,129
|
|
17.8
|
%
|
Interest expense
|
|
|
(19,220)
|
|
(A)
|
|
|
(16,621)
|
|
(A)
|
|
|
(55,574)
|
|
(A)
|
|
|
(49,640)
|
|
(A)
|
|
Interest income
|
|
|
2,678
|
|
(A)
|
|
|
2,957
|
|
(A)
|
|
|
8,197
|
|
(A)
|
|
|
8,874
|
|
(A)
|
|
Loss from joint ventures
|
|
|
(985)
|
|
(A)
|
|
|
(899)
|
|
(A)
|
|
|
(2,227)
|
|
(A)
|
|
|
(2,616)
|
|
(A)
|
|
Other gains and (losses), net
|
|
|
1,881
|
|
(A)
|
|
|
1,453
|
|
(A)
|
|
|
2,085
|
|
(A)
|
|
|
57
|
|
(A)
|
|
Provision for income taxes
|
|
|
(1,863)
|
|
(A)
|
|
|
(530)
|
|
(A)
|
|
|
(9,748)
|
|
(A)
|
|
|
(2,022)
|
|
(A)
|
|
Net income
|
|
$
|
22,591
|
|
(A)
|
|
$
|
23,870
|
|
(A)
|
|
$
|
105,476
|
|
(A)
|
|
$
|
103,782
|
|
(A)
|
|
|
(A)
|
|
These amounts have not been shown as a percentage of revenue because they have no relationship to revenue.
|
Summary Financial Results
Results of Operations
The following table summarizes our financial results for the three months and nine months ended September 30, 2018 and 2017 (in thousands, except percentages and per share data):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
|
|
September 30,
|
|
September 30,
|
|
|
|
|
|
|
|
|
|
%
|
|
|
|
|
|
|
|
%
|
|
|
|
2018
|
|
2017
|
|
Change
|
|
2018
|
|
2017
|
|
Change
|
|
Total revenues
|
|
$
|
292,249
|
|
$
|
264,724
|
|
10.4
|
%
|
$
|
914,553
|
|
$
|
839,544
|
|
8.9
|
%
|
Total operating expenses
|
|
|
252,149
|
|
|
227,214
|
|
11.0
|
%
|
|
751,810
|
|
|
690,415
|
|
8.9
|
%
|
Operating income
|
|
|
40,100
|
|
|
37,510
|
|
6.9
|
%
|
|
162,743
|
|
|
149,129
|
|
9.1
|
%
|
Net income
|
|
|
22,591
|
|
|
23,870
|
|
(5.4)
|
%
|
|
105,476
|
|
|
103,782
|
|
1.6
|
%
|
Net income per share - fully diluted
|
|
|
0.44
|
|
|
0.46
|
|
(4.3)
|
%
|
|
2.05
|
|
|
2.02
|
|
1.5
|
%
|
Total Revenues
The increase in our total revenues for the three months ended September 30, 2018, as compared to the same period in 2017, is attributable to increases in our Hospitality segment and Entertainment segment of $19.7 million and $7.9 million, respectively, each as discussed more fully below. The increase in our total revenues for the nine months ended September 30, 2018, as compared to the same period in 2017, is attributable to increases in our Hospitality segment and Entertainment segment of $59.0 million and $16.0 million, respectively, each as discussed more fully below.
Total Operating Expenses
The increase in our total operating expenses for the three months ended September 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 $10.5 million and $8.7 million, respectively, as well as an increase in depreciation and amortization expenses of $2.4 million and impairment and other charges of $4.5 million in the 2018 period, each as discussed more fully below. The increase in our total operating expenses for the nine months ended September 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 $29.0 million and $19.3 million, respectively, as well as increases in depreciation and amortization expenses and preopening expenses of $5.8 million and $2.4 million, respectively, and impairment and other charges of $4.5 million in the 2018 period, each as discussed more fully below.
Net Income
The decrease in our net income to $22.6 million for the three months ended September 30, 2018, as compared to $23.9 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 $2.6 million increase in interest expense for the 2018 period.
|
|
·
|
|
A $1.3 million increase in the provision for income taxes in the 2018 period.
|
The increase in our net income to $105.5 million for the nine months ended September 30, 2018, as compared to $103.8 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 $7.7 million increase in the provision for income taxes in the 2018 period.
|
|
·
|
|
A $5.9 million increase in interest expense for the 2018 period.
|
|
·
|
|
A $2.0 million increase in other gains and losses, net 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 nine months ended September 30, 2018 described herein were:
|
·
|
|
Increased outside-the-room spending at Gaylord Opryland (an increase of 13.8% and 13.0%, respectively) during each of the 2018 periods, as compared to the 2017 periods, primarily due to an increase in group business partially attributable to a prior year rooms renovation project. Gaylord Opryland also experienced increased occupancy (an increase of 2.7 points of occupancy) and ADR (an increase of 6.0%) during the nine-month 2018 period due to the increase in group business, as well as an increase in transient rates.
|
|
·
|
|
Increased occupied rooms (an increase of 22.0% and 9.4%, respectively) and outside-the-room spending (an increase of 27.0% and 13.4%, respectively) at Gaylord Texan during the 2018 periods, as compared to the 2017 periods, primarily due to
increases in group business partially attributable to the recent rooms and meeting space expansion
.
|
|
·
|
|
Increased ADR (an increase of 5.0
% and 3.4%, respectively)
at Gaylord Palms during the 2018 periods, as compared to the 2017 periods, due to an increase in both group and transient business, as well an increase in outside-the-room spending (an increase of 4.6% and 5.9%, respectively), due primarily to an increase in catering and increased collection of attrition and cancellation payments
.
|
|
·
|
|
Increased outside-the-room spending (an increase of 6.1% and 5.1%, respectively) at Gaylord National during the 2018 periods, as compared to the 2017 periods, primarily due to
an increase in group business
.
|
|
·
|
|
Increased revenue for our Entertainment segment during the 2018 periods, as compared to the 2017 periods (an increase of 22.4% and 17.3%, respectively), due primarily to
the opening of our flagship Ole Red location in Nashville in May 2018.
|
|
·
|
|
Increased expenses for our Entertainment segment during the 2018 periods, as compared to the 2017 periods (an increase of 38.3% and 31.3%, respectively), due primarily to the opening of our Ole Red Nashville location, as well as operating expenses for Opry City Stage being included in Entertainment expenses subsequent to our purchase of the remaining joint venture interest in the second quarter of 2018.
|
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 nine months ended September 30, 2018 and 2017 (in thousands, except percentages and performance metrics):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Nine Months Ended
|
|
|
|
September 30,
|
|
|
September 30,
|
|
|
|
|
|
|
|
|
|
%
|
|
|
|
|
|
|
|
|
%
|
|
|
|
2018
|
|
2017
|
|
Change
|
|
|
2018
|
|
2017
|
|
Change
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rooms
|
|
$
|
103,181
|
|
$
|
100,534
|
|
2.6
|
%
|
|
$
|
332,490
|
|
$
|
314,577
|
|
5.7
|
%
|
Food and beverage
|
|
|
118,496
|
|
|
104,437
|
|
13.5
|
%
|
|
|
392,488
|
|
|
359,047
|
|
9.3
|
%
|
Other hotel revenue
|
|
|
27,563
|
|
|
24,619
|
|
12.0
|
%
|
|
|
81,129
|
|
|
73,493
|
|
10.4
|
%
|
Total hospitality revenue
|
|
|
249,240
|
|
|
229,590
|
|
8.6
|
%
|
|
|
806,107
|
|
|
747,117
|
|
7.9
|
%
|
Hospitality operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rooms
|
|
|
29,563
|
|
|
27,575
|
|
7.2
|
%
|
|
|
88,550
|
|
|
83,962
|
|
5.5
|
%
|
Food and beverage
|
|
|
67,305
|
|
|
62,649
|
|
7.4
|
%
|
|
|
211,677
|
|
|
200,091
|
|
5.8
|
%
|
Other hotel expenses
|
|
|
74,350
|
|
|
72,299
|
|
2.8
|
%
|
|
|
226,965
|
|
|
220,073
|
|
3.1
|
%
|
Management fees, net
|
|
|
6,558
|
|
|
4,708
|
|
39.3
|
%
|
|
|
22,323
|
|
|
16,417
|
|
36.0
|
%
|
Depreciation and amortization
|
|
|
27,946
|
|
|
26,061
|
|
7.2
|
%
|
|
|
81,379
|
|
|
76,786
|
|
6.0
|
%
|
Total Hospitality operating expenses
|
|
|
205,722
|
|
|
193,292
|
|
6.4
|
%
|
|
|
630,894
|
|
|
597,329
|
|
5.6
|
%
|
Hospitality operating income (1)
|
|
$
|
43,518
|
|
$
|
36,298
|
|
19.9
|
%
|
|
$
|
175,213
|
|
$
|
149,788
|
|
17.0
|
%
|
Hospitality performance metrics:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Occupancy
|
|
|
73.2
|
%
|
|
75.5
|
%
|
(3.0)
|
%
|
|
|
75.3
|
%
|
|
75.0
|
%
|
0.4
|
%
|
ADR
|
|
$
|
177.97
|
|
$
|
174.20
|
|
2.2
|
%
|
|
$
|
191.13
|
|
$
|
185.08
|
|
3.3
|
%
|
RevPAR (2)
|
|
$
|
130.27
|
|
$
|
131.56
|
|
(1.0)
|
%
|
|
$
|
143.97
|
|
$
|
138.73
|
|
3.8
|
%
|
Total RevPAR (3)
|
|
$
|
314.69
|
|
$
|
300.45
|
|
4.7
|
%
|
|
$
|
349.04
|
|
$
|
329.48
|
|
5.9
|
%
|
Net Definite Group Room Nights Booked
|
|
|
339,294
|
|
|
482,732
|
|
(29.7)
|
%
|
|
|
1,184,587
|
|
|
1,179,521
|
|
0.4
|
%
|
|
(1)
|
|
Hospitality segment operating income does not include preopening costs of $0.2 million in the three months ended September 30, 2018 and $2.2 million and $0.2 million in the nine months ended September 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 September 30, 2018, as compared to the same period in 2017, is primarily due to increases of $12.7 million, $4.4 million, $1.7 million and $1.4 million at Gaylord Texan, Gaylord Opryland, Gaylord Palms and Gaylord National, respectively. The increase in total Hospitality segment revenue in the nine months ended September 30, 2018, as compared to the same period in 2017, is primarily due to increases of $26.8 million, $20.1 million, $7.5 million and $5.4 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 nine months ended September 30, 2018 include $3.2 million and $8.3 million, respectively, in attrition and cancellation fee collections, an increase of $0.9 million and $1.7 million, respectively, from the 2017 periods.
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
|
|
Nine Months Ended
|
|
|
|
September 30,
|
|
September 30,
|
|
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
Group
|
|
70
|
%
|
69
|
%
|
75
|
%
|
74
|
%
|
Transient
|
|
30
|
%
|
31
|
%
|
25
|
%
|
26
|
%
|
Rooms operating expenses increased in the three months and nine months ended September 30, 2018, as compared to the same periods in 2017, due primarily to increases at Gaylord Opryland and Gaylord Texan, as described below.
Food and beverage operating expenses increased in the three months and nine months ended September 30, 2018, as compared to the same periods in 2017, primarily due to increases at Gaylord Opryland, Gaylord Texan and Gaylord National, as described below.
Other hotel expenses for the three months and nine months ended September 30, 2018 and 2017 consist of the following (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
|
|
September 30,
|
|
September 30,
|
|
|
|
|
|
|
|
|
|
%
|
|
|
|
|
|
|
|
%
|
|
|
|
2018
|
|
2017
|
|
Change
|
|
2018
|
|
2017
|
|
Change
|
|
Administrative employment costs
|
|
$
|
28,395
|
|
$
|
26,596
|
|
6.8
|
%
|
$
|
84,790
|
|
$
|
80,501
|
|
5.3
|
%
|
Utilities
|
|
|
7,245
|
|
|
7,440
|
|
(2.6)
|
%
|
|
20,418
|
|
|
20,768
|
|
(1.7)
|
%
|
Property taxes
|
|
|
8,593
|
|
|
8,312
|
|
3.4
|
%
|
|
25,263
|
|
|
25,118
|
|
0.6
|
%
|
Other
|
|
|
30,117
|
|
|
29,951
|
|
0.6
|
%
|
|
96,494
|
|
|
93,686
|
|
3.0
|
%
|
Total other hotel expenses
|
|
$
|
74,350
|
|
$
|
72,299
|
|
2.8
|
%
|
$
|
226,965
|
|
$
|
220,073
|
|
3.1
|
%
|
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 nine months ended September 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 Palms, and the nine-month 2018 increase is primarily due to increases at Gaylord Texan and Gaylord National. Utility costs decreased slightly during the three months and nine months ended September 30, 2018, as compared to the same periods in 2017. Property taxes increased during the three months and nine months ended September 30, 2018, as compared to the 2017 periods, primarily due to an increase at Gaylord Texan related to the property’s recent expansion, partially offset by a decrease at Gaylord National due to prior period tax settlements. Other expenses, which include supplies, advertising, maintenance costs and consulting costs, remained stable during the three months ended September 30, 2018 and increased during the nine months ended September 30, 2018, as compared to the same periods in 2017, primarily as a result of various increases at Gaylord Palms and Gaylord Opryland.
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 September 30, 2018 and 2017, we incurred $5.0 million and $4.7 million, respectively, and in the nine months ended September 30, 2018 and 2017, we incurred $16.3 million and $15.1 million, respectively, related to base management fees for our Hospitality segment. In the three months ended September 30, 2018 and 2017, we also incurred $2.5 million and $0.8 million, respectively, and in the nine months ended September 30, 2018 and 2017, we incurred $8.5 million and $3.6 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 nine months ended September 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 nine months ended September 30, 2018 and 2017.
Gaylord Opryland Results.
The results of Gaylord Opryland for the three months and nine months ended September 30, 2018 and 2017 are as follows (in thousands, except percentages and performance metrics):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
|
|
September 30,
|
|
September 30,
|
|
|
|
|
|
|
|
|
|
%
|
|
|
|
|
|
|
|
%
|
|
|
|
2018
|
|
2017
|
|
Change
|
|
2018
|
|
2017
|
|
Change
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rooms
|
|
$
|
34,792
|
|
$
|
36,009
|
|
(3.4)
|
%
|
$
|
111,956
|
|
$
|
101,956
|
|
9.8
|
%
|
Food and beverage
|
|
|
35,368
|
|
|
30,227
|
|
17.0
|
%
|
|
116,519
|
|
|
101,899
|
|
14.3
|
%
|
Other hotel revenue
|
|
|
10,431
|
|
|
10,001
|
|
4.3
|
%
|
|
29,776
|
|
|
27,604
|
|
7.9
|
%
|
Total revenue
|
|
|
80,591
|
|
|
76,237
|
|
5.7
|
%
|
|
258,251
|
|
|
231,459
|
|
11.6
|
%
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rooms
|
|
|
9,224
|
|
|
8,715
|
|
5.8
|
%
|
|
27,195
|
|
|
24,961
|
|
8.9
|
%
|
Food and beverage
|
|
|
19,271
|
|
|
17,315
|
|
11.3
|
%
|
|
60,156
|
|
|
54,604
|
|
10.2
|
%
|
Other hotel expenses
|
|
|
22,401
|
|
|
22,702
|
|
(1.3)
|
%
|
|
68,865
|
|
|
67,862
|
|
1.5
|
%
|
Management fees, net
|
|
|
2,772
|
|
|
1,766
|
|
57.0
|
%
|
|
8,762
|
|
|
5,716
|
|
53.3
|
%
|
Depreciation and amortization
|
|
|
8,913
|
|
|
8,765
|
|
1.7
|
%
|
|
26,450
|
|
|
25,235
|
|
4.8
|
%
|
Total operating expenses
|
|
|
62,581
|
|
|
59,263
|
|
5.6
|
%
|
|
191,428
|
|
|
178,378
|
|
7.3
|
%
|
Performance metrics:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Occupancy
|
|
|
72.4
|
%
|
|
76.9
|
%
|
(5.9)
|
%
|
|
75.4
|
%
|
|
72.7
|
%
|
3.7
|
%
|
ADR
|
|
$
|
180.77
|
|
$
|
176.13
|
|
2.6
|
%
|
$
|
188.41
|
|
$
|
177.82
|
|
6.0
|
%
|
RevPAR
|
|
$
|
130.95
|
|
$
|
135.53
|
|
(3.4)
|
%
|
$
|
142.00
|
|
$
|
129.32
|
|
9.8
|
%
|
Total RevPAR
|
|
$
|
303.32
|
|
$
|
286.93
|
|
5.7
|
%
|
$
|
327.55
|
|
$
|
293.57
|
|
11.6
|
%
|
Rooms revenue and RevPAR decreased at Gaylord Opryland during the three months ended September 30, 2018, as compared to the same period in 2017, as the result of a decrease in occupancy for group room nights. Rooms revenue and RevPAR increased during the nine months ended September 30, 2018, as compared to the same period 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 12,250 and 49,300 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 group commissions and compensation costs.
The increase in food and beverage revenue at Gaylord Opryland during the three months and nine months ended September 30, 2018, as compared to the same periods in 2017, was primarily due to increased catering revenue. 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 nine months ended September 30, 2018, as compared to the same periods in 2017, primarily due to an increase in attrition and cancellation fee collections. The nine-month 2018 increase was also impacted by increased ancillary revenue, such as parking and resort fees associated with the increase in occupancy. Other hotel expenses decreased slightly in the three-month 2018 period, as compared to the 2017 period. Other hotel expenses increased in the nine-month 2018 period, as compared to the 2017 period, primarily due to increased sales and marketing expenses.
Depreciation and amortization increased at Gaylord Opryland during the three months and nine months ended September 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 nine months ended September 30, 2018 and 2017 are as follows (in thousands, except percentages and performance metrics):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
|
|
September 30,
|
|
September 30,
|
|
|
|
|
|
|
|
|
|
%
|
|
|
|
|
|
|
|
%
|
|
|
|
2018
|
|
2017
|
|
Change
|
|
2018
|
|
2017
|
|
Change
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rooms
|
|
$
|
15,299
|
|
$
|
14,667
|
|
4.3
|
%
|
$
|
56,990
|
|
$
|
54,526
|
|
4.5
|
%
|
Food and beverage
|
|
|
18,731
|
|
|
18,330
|
|
2.2
|
%
|
|
74,380
|
|
|
71,635
|
|
3.8
|
%
|
Other hotel revenue
|
|
|
4,871
|
|
|
4,241
|
|
14.9
|
%
|
|
15,701
|
|
|
13,458
|
|
16.7
|
%
|
Total revenue
|
|
|
38,901
|
|
|
37,238
|
|
4.5
|
%
|
|
147,071
|
|
|
139,619
|
|
5.3
|
%
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rooms
|
|
|
3,939
|
|
|
3,572
|
|
10.3
|
%
|
|
12,500
|
|
|
12,192
|
|
2.5
|
%
|
Food and beverage
|
|
|
10,961
|
|
|
11,292
|
|
(2.9)
|
%
|
|
38,412
|
|
|
38,550
|
|
(0.4)
|
%
|
Other hotel expenses
|
|
|
15,227
|
|
|
13,821
|
|
10.2
|
%
|
|
48,137
|
|
|
45,882
|
|
4.9
|
%
|
Management fees, net
|
|
|
981
|
|
|
692
|
|
41.8
|
%
|
|
4,017
|
|
|
3,079
|
|
30.5
|
%
|
Depreciation and amortization
|
|
|
4,868
|
|
|
4,753
|
|
2.4
|
%
|
|
14,456
|
|
|
14,307
|
|
1.0
|
%
|
Total operating expenses
|
|
|
35,976
|
|
|
34,130
|
|
5.4
|
%
|
|
117,522
|
|
|
114,010
|
|
3.1
|
%
|
Performance metrics:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Occupancy
|
|
|
72.8
|
%
|
|
73.3
|
%
|
(0.7)
|
%
|
|
78.6
|
%
|
|
77.8
|
%
|
1.0
|
%
|
ADR
|
|
$
|
161.31
|
|
$
|
153.62
|
|
5.0
|
%
|
$
|
187.57
|
|
$
|
181.32
|
|
3.4
|
%
|
RevPAR
|
|
$
|
117.44
|
|
$
|
112.59
|
|
4.3
|
%
|
$
|
147.43
|
|
$
|
141.05
|
|
4.5
|
%
|
Total RevPAR
|
|
$
|
298.62
|
|
$
|
285.85
|
|
4.5
|
%
|
$
|
380.45
|
|
$
|
361.18
|
|
5.3
|
%
|
Rooms revenue and RevPAR increased at Gaylord Palms during the three months and nine months ended September 30, 2018, as compared to the same periods in 2017, due primarily to an increase in ADR for both group and transient business. Rooms expenses increased during the 2018 periods, as compared to the 2017 periods, primarily due to increased group commissions.
Food and beverage revenue increased at Gaylord Palms during the three months and nine months ended September 30, 2018, as compared to the same periods in 2017, due primarily to increased catering revenue. Food and beverage expenses decreased slightly in the 2018 periods, as compared to the 2017 periods, as the increase in variable costs associated with the increase in revenue was offset by improved labor and food margins.
Other hotel revenue at Gaylord Palms increased during the three months and nine months ended September 30, 2018, as compared to the same periods in 2017, primarily due to an increase in attrition and cancellation fee collections. The nine-month 2018 period increase was also impacted by increased holiday programming revenue that continued into January 2018. Other hotel expenses increased in the 2018 periods, as compared to the 2017 periods, primarily as a result of increased sales and marketing expenses, as well as the prior periods including a one-time beneficial sales tax audit settlement.
Depreciation and amortization increased slightly at Gaylord Palms during the three months and nine months ended September 30, 2018, as compared to the same periods in 2017.
Gaylord Texan Results.
The results of Gaylord Texan for the three months and nine months ended September 30, 2018 and 2017 are as follows (in thousands, except percentages and performance metrics):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
|
|
September 30,
|
|
September 30,
|
|
|
|
|
|
|
|
|
|
%
|
|
|
|
|
|
|
|
%
|
|
|
|
2018
|
|
2017
|
|
Change
|
|
2018
|
|
2017
|
|
Change
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rooms
|
|
$
|
23,463
|
|
$
|
19,178
|
|
22.3
|
%
|
$
|
65,295
|
|
$
|
58,682
|
|
11.3
|
%
|
Food and beverage
|
|
|
32,205
|
|
|
25,289
|
|
27.3
|
%
|
|
95,777
|
|
|
84,902
|
|
12.8
|
%
|
Other hotel revenue
|
|
|
7,158
|
|
|
5,699
|
|
25.6
|
%
|
|
18,722
|
|
|
16,099
|
|
16.3
|
%
|
Total revenue
|
|
|
62,826
|
|
|
50,166
|
|
25.2
|
%
|
|
179,794
|
|
|
159,683
|
|
12.6
|
%
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rooms
|
|
|
5,076
|
|
|
4,212
|
|
20.5
|
%
|
|
13,999
|
|
|
12,792
|
|
9.4
|
%
|
Food and beverage
|
|
|
16,089
|
|
|
14,141
|
|
13.8
|
%
|
|
47,391
|
|
|
44,151
|
|
7.3
|
%
|
Other hotel expenses
|
|
|
16,502
|
|
|
15,286
|
|
8.0
|
%
|
|
47,360
|
|
|
44,959
|
|
5.3
|
%
|
Management fees, net
|
|
|
1,562
|
|
|
951
|
|
64.2
|
%
|
|
5,335
|
|
|
3,434
|
|
55.4
|
%
|
Depreciation and amortization
|
|
|
6,581
|
|
|
5,175
|
|
27.2
|
%
|
|
17,749
|
|
|
15,425
|
|
15.1
|
%
|
Total operating expenses
|
|
|
45,810
|
|
|
39,765
|
|
15.2
|
%
|
|
131,834
|
|
|
120,761
|
|
9.2
|
%
|
Performance metrics:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Occupancy
|
|
|
76.2
|
%
|
|
75.0
|
%
|
1.6
|
%
|
|
75.2
|
%
|
|
75.7
|
%
|
(0.7)
|
%
|
ADR
|
|
$
|
184.45
|
|
$
|
183.90
|
|
0.3
|
%
|
$
|
190.99
|
|
$
|
187.80
|
|
1.7
|
%
|
RevPAR
|
|
$
|
140.59
|
|
$
|
137.96
|
|
1.9
|
%
|
$
|
143.68
|
|
$
|
142.26
|
|
1.0
|
%
|
Total RevPAR
|
|
$
|
376.45
|
|
$
|
360.87
|
|
4.3
|
%
|
$
|
395.63
|
|
$
|
387.11
|
|
2.2
|
%
|
Rooms revenue and RevPAR increased at Gaylord Texan during the three months and nine months ended September 30, 2018, as compared to the same periods in 2017, due primarily to an increase in ADR for group business and an increase in group occupancy. The 2018 periods were also positively impacted by additional room availability from the recently completed rooms expansion, as well as the absence of hurricane-related impacts that occurred in the prior year. Rooms expenses increased during the 2018 periods, as compared to the 2017 periods, primarily due to an increase in group commissions.
Food and beverage revenue increased at Gaylord Texan during the three months and nine months ended September 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 improved food and labor margins.
Other hotel revenue at Gaylord Texan increased during the three months and nine months ended September 30, 2018, as compared to the same periods in 2017, primarily as a result of increased ancillary revenue, such as parking and resort fees associated with the increase in total room nights sold. 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.
Depreciation and amortization increased at Gaylord Texan during the three months and nine months ended September 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 nine months ended September 30, 2018 and 2017 are as follows (in thousands, except percentages and performance metrics):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
|
|
September 30,
|
|
September 30,
|
|
|
|
|
|
|
|
|
|
%
|
|
|
|
|
|
|
|
%
|
|
|
|
2018
|
|
2017
|
|
Change
|
|
2018
|
|
2017
|
|
Change
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rooms
|
|
$
|
24,489
|
|
$
|
25,181
|
|
(2.7)
|
%
|
$
|
82,097
|
|
$
|
82,537
|
|
(0.5)
|
%
|
Food and beverage
|
|
|
30,799
|
|
|
29,177
|
|
5.6
|
%
|
|
101,970
|
|
|
96,776
|
|
5.4
|
%
|
Other hotel revenue
|
|
|
5,015
|
|
|
4,578
|
|
9.5
|
%
|
|
16,679
|
|
|
16,075
|
|
3.8
|
%
|
Total revenue
|
|
|
60,303
|
|
|
58,936
|
|
2.3
|
%
|
|
200,746
|
|
|
195,388
|
|
2.7
|
%
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rooms
|
|
|
9,888
|
|
|
9,617
|
|
2.8
|
%
|
|
30,564
|
|
|
29,798
|
|
2.6
|
%
|
Food and beverage
|
|
|
19,936
|
|
|
18,884
|
|
5.6
|
%
|
|
62,746
|
|
|
59,957
|
|
4.7
|
%
|
Other hotel expenses
|
|
|
18,260
|
|
|
18,465
|
|
(1.1)
|
%
|
|
56,252
|
|
|
55,161
|
|
2.0
|
%
|
Management fees, net
|
|
|
985
|
|
|
960
|
|
2.6
|
%
|
|
3,348
|
|
|
3,244
|
|
3.2
|
%
|
Depreciation and amortization
|
|
|
6,891
|
|
|
6,701
|
|
2.8
|
%
|
|
20,647
|
|
|
19,830
|
|
4.1
|
%
|
Total operating expenses
|
|
|
55,960
|
|
|
54,627
|
|
2.4
|
%
|
|
173,557
|
|
|
167,990
|
|
3.3
|
%
|
Performance metrics:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Occupancy
|
|
|
71.9
|
%
|
|
74.2
|
%
|
(3.1)
|
%
|
|
73.7
|
%
|
|
75.1
|
%
|
(1.9)
|
%
|
ADR
|
|
$
|
185.56
|
|
$
|
184.89
|
|
0.4
|
%
|
$
|
204.35
|
|
$
|
201.77
|
|
1.3
|
%
|
RevPAR
|
|
$
|
133.36
|
|
$
|
137.13
|
|
(2.7)
|
%
|
$
|
150.66
|
|
$
|
151.47
|
|
(0.5)
|
%
|
Total RevPAR
|
|
$
|
328.39
|
|
$
|
320.95
|
|
2.3
|
%
|
$
|
368.40
|
|
$
|
358.57
|
|
2.7
|
%
|
Rooms revenue and RevPAR decreased at Gaylord National during the three months and nine months ended September 30, 2018, as compared to the same periods in 2017. The three-month 2018 decreases are due primarily to a decrease in transient occupancy and a decrease in ADR for group business. These decreases were partially offset by an increase in group occupancy and an increase in ADR for transient business. The nine-month 2018 decreases are due to a decrease in both group and transient occupancy, partially offset by an increase in ADR for both group and transient business. Both periods were negatively impacted by Hurricane Florence in September 2018. 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 nine months ended September 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 at Gaylord National during the three months ended September 30, 2018, as compared to the same period in 2017, primarily due to an increase in resort fees, as the prior year included several government groups, who, per standard government policy, do not pay a resort fee. Other hotel revenue increased during the nine months ended September 30, 2018, as compared to the same period in 2017, primarily due to an increase in attrition and cancellation fee collections. Other hotel expenses decreased slightly in the three-month 2018 period, as compared to the 2017 period, due to decreased property taxes due to prior period tax settlements and decreased maintenance costs. Other hotel expenses increased in the nine-month 2018 period, as compared to the 2017 period, due to an increase in sales and marketing expenses, partially offset by the decrease in property taxes.
Depreciation and amortization at Gaylord National increased during the three months and nine months ended September 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.
Entertainment Segment
Total Segment Results.
The following presents the financial results of our Entertainment segment for the three months and nine months ended September 30, 2018 and 2017 (in thousands, except percentages):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
|
|
September 30,
|
|
September 30,
|
|
|
|
|
|
|
|
|
|
%
|
|
|
|
|
|
|
|
%
|
|
|
|
2018
|
|
2017
|
|
Change
|
|
2018
|
|
2017
|
|
Change
|
|
Revenues
|
|
$
|
43,009
|
|
$
|
35,134
|
|
22.4
|
%
|
$
|
108,446
|
|
$
|
92,427
|
|
17.3
|
%
|
Operating expenses
|
|
|
31,327
|
|
|
22,651
|
|
38.3
|
%
|
|
80,947
|
|
|
61,637
|
|
31.3
|
%
|
Depreciation and amortization
|
|
|
2,613
|
|
|
1,965
|
|
33.0
|
%
|
|
6,885
|
|
|
5,465
|
|
26.0
|
%
|
Operating income (1)
|
|
$
|
9,069
|
|
$
|
10,518
|
|
(13.8)
|
%
|
$
|
20,614
|
|
$
|
25,325
|
|
(18.6)
|
%
|
|
(1)
|
|
Entertainment segment operating income does not include preopening costs of $0.1 million and $0.9 million in the three months ended September 30, 2018 and 2017, respectively, and $1.7 million and $1.4 million in the nine months ended September 30, 2018 and 2017, respectively. Entertainment segment operating income also does not include impairment and other charges of $4.5 million in the 2018 periods. See discussion of these items below.
|
Entertainment segment revenue increased during the three months and nine months ended September 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, as well as revenue from Opry City Stage subsequent to our purchase of the remaining 50% joint venture interest in the second quarter of 2018.
Entertainment operating expenses increased during the three months and nine months ended September 30, 2018, as compared to the same periods in 2017, primarily as a result of the opening of our Ole Red Nashville location in May 2018, expenses associated with Opry City Stage subsequent to our purchase of the remaining 50% joint venture interest in the second quarter of 2018, and increased compensation and consulting costs.
Entertainment depreciation expense increased in the three months and nine months ended September 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 nine months ended September 30, 2018 and 2017 (in thousands, except percentages):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
|
|
September 30,
|
|
September 30,
|
|
|
|
|
|
|
|
|
|
%
|
|
|
|
|
|
|
|
%
|
|
|
|
2018
|
|
2017
|
|
Change
|
|
2018
|
|
2017
|
|
Change
|
|
Operating expenses
|
|
$
|
7,212
|
|
$
|
7,909
|
|
(8.8)
|
%
|
$
|
23,181
|
|
$
|
22,786
|
|
1.7
|
%
|
Depreciation and amortization
|
|
|
435
|
|
|
520
|
|
(16.3)
|
%
|
|
1,391
|
|
|
1,611
|
|
(13.7)
|
%
|
Operating loss
|
|
$
|
(7,647)
|
|
$
|
(8,429)
|
|
9.3
|
%
|
$
|
(24,572)
|
|
$
|
(24,397)
|
|
(0.7)
|
%
|
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, decreased in the three months ended September 30, 2018, as compared to the same period in 2017, primarily due to a decrease in employee benefit expense. Corporate and Other operating expenses increased in the nine months ended September 30, 2018, as compared to the same period in 2017, primarily due to increased administrative and employment costs associated with supporting our growth initiatives within our Hospitality and Entertainment segments.
Corporate and Other depreciation and amortization expense decreased in the three months and nine months ended September 30, 2018, as compared with the same periods in 2017.
Operating Results – Preopening Costs
Preopening costs of $4.0 million during the nine months ended September 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 $0.9 million and $1.6 million during the three months and nine months ended September 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.
Operating Results – Impairment and Other Charges
Impairment charges in the 2018 periods represent the impairment of a portion of our carrying value in Opry City Stage assets. Subsequent to our purchase of the remaining 50% joint venture interest in the second quarter of 2018, we determined that current ongoing operations were not meeting our revenue expectations from the time of purchase. In September 2018, we announced that we were temporarily suspending operations at Opry City Stage to appropriately reposition the venue and its operations. As a result, we performed an impairment assessment of the carrying amount of Opry City Stage assets based on the related estimated total future net cash flows and determined that an impairment charge of $4.5 million was warranted.
Non-Operating Results Affecting Net Income
General
The following table summarizes the other factors which affected our net income for the three months and nine months ended September 30, 2018 and 2017 (in thousands, except percentages):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
|
|
September 30,
|
|
September 30,
|
|
|
|
|
|
|
|
|
|
%
|
|
|
|
|
|
|
|
%
|
|
|
|
2018
|
|
2017
|
|
Change
|
|
2018
|
|
2017
|
|
Change
|
|
Interest expense
|
|
$
|
(19,220)
|
|
$
|
(16,621)
|
|
(15.6)
|
%
|
$
|
(55,574)
|
|
$
|
(49,640)
|
|
(12.0)
|
%
|
Interest income
|
|
|
2,678
|
|
|
2,957
|
|
(9.4)
|
%
|
|
8,197
|
|
|
8,874
|
|
(7.6)
|
%
|
Loss from joint ventures
|
|
|
(985)
|
|
|
(899)
|
|
(9.6)
|
%
|
|
(2,227)
|
|
|
(2,616)
|
|
14.9
|
%
|
Other gains and (losses), net
|
|
|
1,881
|
|
|
1,453
|
|
29.5
|
%
|
|
2,085
|
|
|
57
|
|
3,557.9
|
%
|
Provision for income taxes
|
|
|
(1,863)
|
|
|
(530)
|
|
(251.5)
|
%
|
|
(9,748)
|
|
|
(2,022)
|
|
(382.1)
|
%
|
Interest Expense
Interest expense increased $2.6 million during the three months and increased $5.9 million in the nine months ended September 30, 2018, as compared to the same periods in 2017. The three-month 2018 increase is due primarily to increased borrowings under our revolving credit facility, as well as increased interest rates on our variable rate debt. The nine-month 2018 increase is due primarily to increased interest expense incurred in connection with our term loan A and increased borrowings under our term loan B, which were both refinanced in May 2017, and increased interest rates on our variable rate debt. This increase was partially offset by increased capitalized interest in the current period.
Cash interest expense increased $2.9 million to $19.7 million in the three months and increased $7.7 million to $56.8 million in the nine months ended September 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 $(0.5) million in the three months and decreased $1.8 million to $(1.2) million in the nine months ended September 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 4.9% and 4.5% for the three months ended September 30, 2018 and 2017, respectively, and 4.8% and 4.4% for the nine months ended September 30, 2018 and 2017, respectively.
Interest Income
Interest income for the three months and nine months ended September 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.
Loss from Joint Ventures
The loss from joint ventures for the three months and nine months ended September 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 nine-month 2018 period includes a gain of $2.8 million recognized from the re-measurement of the pre-existing Opry City Stage equity method investment prior to consolidation. In September 2018, we announced that we were temporarily suspending operations at Opry City Stage to appropriately reposition the venue and its operations.
Other Gains and (Losses), net
Other gains and (losses), net for the
three months and nine months ended September 30, 2018 and 2017 primarily includes gains of $2.7 million and $2.6 million, respectively, from a fund associated with the Gaylord National bonds to reimburse us for certain marketing and maintenance expenses. These gains are partially offset by pension settlement losses associated with our defined benefit pension plan in the three months and nine months ended September 30, 2018 and 2017 of $1.0 million and $1.2 million, respectively.
Other gains and (losses), net for the
nine-month 2017 period also includes 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 September 30, 2018 and 2017, we recorded an income tax provision of $1.9 million and $0.5 million, respectively. For the nine months ended September 30, 2018 and 2017, we recorded an income tax provision of $9.7 million and $2.0 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. As discussed in SEC Staff Accounting Bulletin No. 118, the accounting for the TCJA should be completed within one year from enactment. As of September 30, 2018, we have completed our accounting for all of the enactment-date income tax effects of the TCJA. During the nine months ended September 30, 2018, we have made no adjustments to the provisional amounts recorded at December 31, 2017.
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 nine months ended September 30, 2018, our net cash flows provided by operating activities were $225.3 million, primarily reflecting cash provided by our income before depreciation expense, amortization expense and other non-cash charges of approximately $220.3 million, and favorable changes in working capital of approximately $5.0 million. During the nine months ended September 30, 2017, our net cash flows provided by operating activities were $215.8 million, primarily reflecting cash provided by our income before depreciation expense, amortization expense and other non-cash charges of approximately $197.0 million, and favorable changes in working capital of
approximately $18.8 million. The changes in working capital in both periods primarily resulted from an increase in accounts payable and accrued liabilities primarily attributable to an increase in deferred revenues associated with our Christmas-related programs and an increase in accrued interest on our outstanding debt, partially offset by 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.
Cash Flows From Investing Activities.
During the nine months ended September 30, 2018, our primary uses of funds for investing activities were purchases of property and equipment, which totaled $132.8 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, an expansion of the retail, ticketing and parking areas at the Grand Ole Opry House, and ongoing maintenance capital expenditures for our existing properties.
During the nine months ended September 30, 2017, our primary uses of funds for investing activities were purchases of property and equipment, which totaled $127.1 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, the commencement of construction for the new waterpark at Gaylord Opryland, a freestanding event ballroom and an expanded event space at Gaylord National, 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 nine months ended September 30, 2018, our net cash flows used in financing activities were approximately $37.0 million, primarily reflecting the payment of $128.8 million in cash dividends, partially offset by $99.0 million in net borrowings under our revolving credit facility.
During the nine months ended September 30, 2017, our net cash flows used in financing activities were approximately $65.2 million, primarily reflecting the repayment of $235.9 million under our refinanced revolving credit facility, the payment of $120.7 million in cash dividends and the payment of $12.3 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 $107.5 million in net borrowings under our refinanced term loan B.
Liquidity
At September 30, 2018, we had $86.0 million in unrestricted cash and $427.6 million available for borrowing under our revolving credit facility. During the nine months ended September 30, 2018, we net borrowed $99.0 million under
our revolving credit facility, incurred capital expenditures of $132.8
million and
paid cash dividends of $128.8 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 September 30, 2018.
We currently plan to pay a quarterly cash dividend of $0.85 per share in 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 approximately $242 million to purchase an additional investment interest in the Gaylord Rockies joint venture and by spending between $45 million and $65 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 and our planned additional investment in the Gaylord Rockies joint venture, we could draw on our credit facility, subject to the satisfaction of covenants in the credit facility.
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 September 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 Company’s 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):
|
·
|
|
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.
|
|
·
|
|
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.
|
|
·
|
|
We must maintain a consolidated fixed charge coverage ratio (as defined in the Credit Agreement) of not less than 1.50 to 1.00.
|
|
·
|
|
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.
|
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.
$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 September 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 September 30, 2018, $270.0 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 $427.6 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 September 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 September 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 September 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 nine months ended September 30, 2018, which is included in interest expense in the accompanying condensed consolidated statement of operations. At September 30, 2018, $493.8 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 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 guarantor’s 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 Partnership’s 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 Company’s 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 guarantor’s 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 Partnership’s 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.
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:
|
·
|
|
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
|
|
·
|
|
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.
|
The pooled limitations on Secured Debt (as defined in the pooling agreement) are as follows:
|
·
|
|
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.
|
|
·
|
|
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.
|
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 hotel’s 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 venture’s obligations under the construction loan prior to the hotel’s 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 venture’s obligations under the mezzanine loan prior to the hotel’s 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 September 30, 2018, we have not recorded any liability in the condensed consolidated balance sheet associated with these guarantees.
In addition, w
e 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 $2.4 million of letters of credit at September 30, 2018. Except as set forth in these paragraphs, we do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.
Commitments and Contractual Obligations
The following table summarizes our significant contractual obligations at September 30, 2018, including long-term debt and operating and capital lease commitments (amounts in thousands):
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Payment due by Period
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Total amounts
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Less than
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More than
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Contractual obligations
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committed
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1 year
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1-3 years
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3-5 years
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5 years
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Long-term debt (1)
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$
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1,713,750
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$
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5,000
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$
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630,000
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$
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610,000
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$
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468,750
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Capital leases
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623
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21
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45
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48
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509
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Operating leases (2)
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676,924
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7,504
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16,273
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17,336
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635,811
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Construction commitments (3)
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37,222
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37,222
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—
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—
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—
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Total contractual obligations
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$
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2,428,519
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$
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49,747
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$
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646,318
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$
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627,384
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$
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1,105,070
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(1)
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Long-term debt commitments do not include approximately $306.9 million in interest payments projected to be due in future years (less than 1 year – $76.6 million; 1‑3 years – $140.9 million; 3‑5 years – $76.8 million; more than 5 years – $12.6 million) based on the stated interest rates on our fixed-rate debt and the rates in effect at September 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 $676.9 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 property’s total annual revenue. At September 30, 2018, $37.2
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
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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 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, “Management’s 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 nine 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.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Market risk is the risk of loss arising from adverse changes in market rates and prices, such as interest rates, foreign currency exchange rates and commodity prices. Our primary exposures to market risk are from changes in interest rates and changes in asset values of investments that fund our pension plan.
Risk Related to Changes in Interest Rates
Borrowings outstanding under the Revolver bear interest at an annual rate of LIBOR plus 1.55%, subject to adjustment as described in the Credit Agreement. If LIBOR were to increase by 100 basis points, our annual interest cost on the $270.0 million in borrowings outstanding under the Revolver at September 30, 2018 would increase by approximately $2.7 million.
Borrowings outstanding under our Term Loan A currently bear interest at an annual rate of LIBOR plus 1.50%, subject to adjustment as described in the Credit Agreement. If LIBOR were to increase by 100 basis points, our annual interest cost on the $200.0 million in borrowings outstanding under our Term Loan A at September 30, 2018 would increase by approximately $2.0 million.
Borrowings outstanding under our Term Loan B currently bear interest at an annual rate of LIBOR plus
2.00
%, subject to adjustment as described in the Credit Agreement. If LIBOR were to increase by 100 basis points, our annual interest cost on the $493.8 million in borrowings outstanding under our Term Loan B at September 30, 2018 would increase by approximately $4.9 million.
Certain of our outstanding cash balances are occasionally invested overnight with high credit quality financial institutions. We do not have significant exposure to changing interest rates on invested cash at September 30, 2018. As a result, the interest rate market risk implicit in these investments at September 30, 2018, if any, is low.
Risk Related to Changes in Asset Values that Fund our Pension Plans
The expected rates of return on the assets that fund our defined benefit pension plan are based on the asset allocation of the plan and the long-term projected return on those assets, which represent a diversified mix of equity securities, fixed income securities and cash. At September 30, 2018, the value of the investments in the pension plan was $68.6 million, and an immediate 10% decrease in this value would have reduced the value of the investments in the pension plan by approximately $6.9 million.
ITEM 4. CONTROLS AND PROCEDURES.
The Company maintains disclosure controls and procedures, as defined in Rule 13a‑15(e) promulgated under the Exchange Act, that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. The Company carried out an evaluation under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this report. Based on the evaluation of these disclosure controls and procedures, the Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of the end of the period covered by this report.
There has been no change in our internal control over financial reporting that occurred during the period covered by this report that materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
PART II — OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
The Company is a party to certain litigation in the ordinary course, as described in Note 12, “Commitments and Contingencies,” to our condensed consolidated financial statements included herein and which our management deems will not have a material effect on our financial statements.
ITEM 1A. RISK FACTORS.
Except as otherwise described herein, there have been no material changes from the risk factors disclosed in Part I, Item 1A, “Risk Factors,” of our Annual Report on Form 10‑K for the fiscal year ended December 31, 2017.
We may fail to complete the Rockies Interest Purchase on a timely basis or at all.
Although we expect to complete the Rockies Interest Purchase by the end of 2018, the completion of the Rockies Interest Purchase is subject to closing conditions and there can be no assurance that the Rockies Interest Purchase will be completed on the anticipated schedule or at all. In particular, closing conditions involving third parties, such as the lender to the Gaylord Rockies joint venture and Marriott, may be difficult to satisfy and may not be satisfied on the anticipated schedule or at all. If we fail to consummate the Rockies Interest Purchase or should the completion of the Rockies Interest Purchase be significantly delayed, we will have incurred significant costs related to the Rockies Interest Purchase, such as costs for legal and accounting services, without realizing all or a portion of the intended economic benefits of the Rockies Interest Purchase. Even if we consummate the Rockies Interest Purchase, we may not realize the intended economic benefits. As a general matter, any failure to complete the Rockies Interest Purchase could have a negative impact on our business, results of operations or financial condition.
The consummation of the Rockies Interest Purchase will subject us to additional liability and risk.
Following the consummation of the Rockies Interest Purchase, and as a result of our increased ownership in the Gaylord Rockies joint venture, we will be subject to additional liability, including an expected increase in our obligations relating to various guarantees and environmental indemnities of the construction loan for the development and construction of Gaylord Rockies (as well as future financings). Additionally, we will be subject to increased risks related to the
prevailing market conditions in the greater Denver area, as well as the general operating performance of Gaylord Rockies. The additional liabilities and risks associated with the completion of the Rockies Interest Purchase could have a material adverse effect on our business, financial condition and results of operations.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.
Inapplicable.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
Inapplicable.
ITEM 4. MINE SAFETY DISCLOSURES.
Inapplicable.
ITEM 5. OTHER INFORMATION.
Inapplicable.
ITEM 6. EXHIBITS.
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Exhibit Number
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Description
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2.1
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P
urchase Agreement, dated as of September 13, 2018, by and among Ryman Hospitality Properties, Inc., Aurora Convention Center Hotel Partners LLC, AREG Aurora CCH LLC, and RIDA Aurora LLC (incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K filed September 14, 2018).
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3.1
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Amended and Restated Certificate of Incorporation of Ryman Hospitality Properties, Inc. (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8‑K filed October 1, 2012).
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3.2
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Amended and Restated Bylaws of Ryman Hospitality Properties, Inc. (incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8‑K filed October 1, 2012).
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31.1*
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Certification of Colin V. Reed pursuant to Section 302 of Sarbanes-Oxley Act of 2002.
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31.2*
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Certification of Mark Fioravanti pursuant to Section 302 of Sarbanes-Oxley Act of 2002.
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32.1**
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Certification of Colin V. Reed and Mark Fioravanti pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of Sarbanes-Oxley Act of 2002.
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101*
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The following materials from Ryman Hospitality Properties, Inc.’s Quarterly Report on Form 10‑Q for the quarterly period ended September 30, 2018, formatted in XBRL (eXtensible Business Reporting Language): (i) Condensed Consolidated Balance Sheets (unaudited) at September 30, 2018 and December 31, 2017, (ii) Condensed Consolidated Statements of Operations and Comprehensive Income (unaudited) for the three months and nine months ended September 30, 2018 and 2017, (iii) Condensed Consolidated Statements of Cash Flows (unaudited) for the nine months ended September 30, 2018 and 2017, and (iv) Notes to Condensed Consolidated Financial Statements (unaudited).
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* Filed herewith.
** Furnished herewith.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
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RYMAN HOSPITALITY PROPERTIES, INC.
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Date: November 7, 2018
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By:
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/s/ Colin V. Reed
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Colin V. Reed
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Chairman of the Board of Directors and
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Chief Executive Officer
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By:
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/s/ Mark Fioravanti
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Mark Fioravanti
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President and Chief Financial Officer
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By:
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/s/ Jennifer Hutcheson
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Jennifer Hutcheson
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Senior Vice President, Corporate
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Controller and Chief Accounting Officer
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