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Press release from Business Wire

Ryman Hospitality Properties, Inc. Reports Third Quarter 2013 Results

<p class='bwalignc'> - <i><b>Gross Advanced Group Bookings for all Future Periods Increased 34.7 Percent Over Third Quarter 2012 –</b></i> </p> <p class='bwalignc'> - <i><b>In-The-Year, For-The-Year Gross Advanced Group Bookings Increased 20.8 Percent Over Third Quarter 2012 –</b></i> </p> <p class='bwalignc'> - <i><b>Progress Being Made on Transition Issues –</b></i> </p>

Tuesday, November 05, 2013

Ryman Hospitality Properties, Inc. Reports Third Quarter 2013 Results

08:30 EST Tuesday, November 05, 2013

NASHVILLE, Tenn. (Business Wire) -- Ryman Hospitality Properties, Inc. (NYSE:RHP), a lodging real estate investment trust ("REIT") specializing in group-oriented, destination hotel assets in urban and resort markets, today reported financial results for the third quarter ended September 30, 2013.

Colin V. Reed, chairman, chief executive officer and president of Ryman Hospitality Properties, stated, “Our business performed as expected this quarter, and while our results continued to be challenged by transition-related issues, we are encouraged by the progress we have made to date. Most notably, our bookings performance was solid, as we booked nearly 456,000 gross room nights, an almost 35 percent increase from the same period last year. On a net room night basis, we booked more than 309,000 net room nights in the third quarter, an increase of over 39 percent from the third quarter in 2012. This bookings performance is promising and an indication that the modifications to the sales process that we recommended and Marriott implemented over the past two quarters are working and are better aligned with the unique dynamics of large group hotels such as ours.

“We are also encouraged by several other factors, such as continued growth in our transient segment performance as evidenced by an increase in transient room nights of 28.0 percent over the same period last year. In addition, we saw a significant decrease in in-the-year for-the-year cancellations for all our hotels, which declined more than 55 percent from the prior year period. Furthermore, our Opry and Attractions business had a record third quarter financial performance as evidenced by a healthy increase in revenue and Adjusted EBITDA over the third quarter last year. In terms of our bottom-line results, we continue to work alongside Marriott to identify additional areas to improve profitability and harvest the synergies that were projected by our manager. We are confident that as this process evolves we will steadily realize property-level cost synergies and that our bottom-line performance will strengthen as a result.”

Third Quarter 2013 Results (as compared to Third Quarter 2012)

  • Gross advanced group bookings for all future periods increased 34.7 percent to approximately 456,000 room nights; net advanced group bookings for all future periods increased 39.6 percent to approximately 309,000 room nights
  • Gross advanced group bookings of in-the-year, for-the-year room nights increased 20.8 percent to approximately 54,000 room nights; net advanced group bookings of in-the-year, for-the-year room nights increased 72.8 percent to approximately 23,000 room nights
  • Transient room nights during the quarter increased 28.0 percent to approximately 155,000 room nights while transient Average Daily Rate, or ADR, declined 2.3 percent
  • Cancellations in-the-year, for-the-year decreased 55.3 percent to approximately 9,800 group rooms compared to approximately 22,000 group rooms in the third quarter 2012
  • Attrition for groups that traveled in the third quarter of 2013 was 12.2 percent of contracted room block compared to 10.2 percent in the same period in 2012; attrition and cancellation fees collected during the quarter were $2.0 million compared to $1.7 million in the same period in 2012
  • Total Revenue decreased 1.9 percent to $221.2 million compared to Total Retail Adjusted Revenue in the third quarter 2012, or a decrease of 3.0 percent compared to unadjusted Total Revenue in the third quarter 2012
  • Hospitality Revenue Per Available Room, or RevPAR, decreased 2.7 percent to $112.49
  • Hospitality Total RevPAR decreased 2.9 percent to $267.52 compared to Hospitality Retail Adjusted Total RevPAR in the third quarter 2012, or a decrease of 4.2 percent compared to unadjusted Hospitality Total RevPAR in the third quarter 2012
  • Hospitality Revenue decreased 2.9 percent to $199.3 million compared to Hospitality Retail Adjusted Revenue in the third quarter 2012, or a decrease of 4.2 percent compared to unadjusted Hospitality Revenue in the third quarter 2012
  • Net income was $18.0 million compared to a net loss of $26.7 million in third quarter 2012
  • Adjusted EBITDA on a consolidated basis was slightly lower by 0.3 percent to $57.3 million
  • Hospitality Adjusted EBITDA decreased 10.3 percent to $54.8 million
  • Adjusted Funds from Operations, or Adjusted FFO, was $43.5 million, an increase of 163.9 percent over the prior-year quarter. Adjusted FFO excluding REIT conversion costs was $45.7 million, an increase of 28.8 percent over the prior-year quarter.

For the Company's definitions of RevPAR, Total RevPAR, Adjusted EBITDA, Retail Adjusted Revenue, Retail Adjusted Total RevPAR, and Adjusted FFO as well as a reconciliation of the non-GAAP financial measure Adjusted EBITDA to Net Income, a reconciliation of the non-GAAP financial measure Retail Adjusted Revenue to revenue, and a reconciliation of the non-GAAP financial measure Adjusted FFO to Net Income, see “Retail Adjusted Revenue”, “Calculation of RevPAR and Total RevPAR”, “Non-GAAP Financial Measures”, and “Supplemental Financial Results” below.

Hospitality

Property-level results and operating metrics for the third quarter of 2013 and 2012 are presented in greater detail below and under “Supplemental Financial Results.”

  • Gaylord Opryland RevPAR increased 10.6 percent to $115.03 compared to the third quarter of 2012. Total RevPAR increased 7.7 percent to $251.48 as compared to Retail Adjusted Total RevPAR in the third quarter of 2012. The growth in RevPAR was led by an 8.0 percentage point increase in occupancy. Transient room nights increased by approximately 10,400, or 24.0 percent, over third quarter 2012 while transient ADR grew by 3.1 percent. Furthermore, premium Corporate and Association group room nights were up approximately 45,000 room nights which led to an increase in outside-the-room spending, primarily in food and beverage banqueting. The property exhibited solid margin management as its Adjusted EBITDA margin increased to 31.4 percent, or an increase of 4.7 percentage points over the same period last year.
  • Gaylord Palms RevPAR decreased 4.9 percent to $98.68 compared to the third quarter of 2012. Total RevPAR decreased 6.3 percent to $255.90 compared to Total RevPAR in the third quarter of 2012. The decrease in RevPAR is primarily related to a decline in room nights in the Corporate and Association segments with a modest decline in ADR for these particular group segments. This decline was partially offset by a 61.9 percent increase in transient room nights and a 3.1 percent increase in transient ADR compared to the third quarter of 2012. Adjusted EBITDA margin declined 4.6 percentage points compared to the same period last year. In the third quarter of 2012, the property realized a $1.0 million sales tax credit, which impacts the year-over-year comparison in terms of Adjusted EBITDA and Adjusted EBITDA margin.
  • Gaylord Texan RevPAR decreased 10.9 percent to $117.39 compared to the third quarter of 2012. Total RevPAR decreased 7.2 percent to $306.34 as compared to Retail Adjusted Total RevPAR in the third quarter of 2012. Adjusted EBITDA margin declined 2.4 percentage points compared to the same period last year. Transient room nights for the property increased approximately 4,600 or 12.8 percent over third quarter of 2012, while transient ADR decreased by 12.1 percent. The property was negatively impacted by approximately 7,600 room night cancellations made in-the-year for the third quarter. The property was unable to completely replace this loss with short-term group business, and subsequent transient room nights came at a lower rate and with less outside-the-room revenue.
  • Gaylord National RevPAR decreased 12.4 percent to $120.01 compared to the third quarter of 2012. Total RevPAR decreased 9.6 percent to $293.11 as compared to Retail Adjusted Total RevPAR in the third quarter of 2012. Adjusted EBITDA margin declined 7.5 percentage points compared to the same period last year. Transient room nights for the property increased by approximately 2,800, or 16.3 percent, while transient ADR increased by 11.7 percent over third quarter of 2012, which partially offset the decline in group room nights. The Washington D.C. market remains challenging, and the property is not immune to this challenging environment. The property's Adjusted EBITDA and Adjusted EBITDA margin were negatively impacted by a $1.7 million increase in union related expenses compared to the third quarter of 2012. These expenses lowered Adjusted EBITDA margin by 3.1 percentage points for the quarter.

Reed continued, “The quarter was highlighted by the strong results from Gaylord Opryland, which delivered significant top and bottom-line improvement compared to the same period last year, including a 10.6 percent increase in RevPAR. We also saw double-digit increases in transient room nights at each of our properties, led by a nearly 62 percent increase at Gaylord Palms, as we benefited from the Marriott Rewards Program and Marriott's transient delivery channels.

“However, overall softness in the group sector resulted in several significant group cancellations earlier in the year that affected our properties during the quarter, particularly at the Gaylord Texan. Also, in-the-year, for-the-year group reach was negatively affected by the sales transition issues we highlighted earlier in the year. This drop in group business was offset somewhat through transient bookings. In addition, Gaylord National was again impacted by the government uncertainty and the challenging Washington D.C. market. From an operational perspective, we continued to make progress towards the full integration and adoption of new Marriott systems and procedures, and while this is an ongoing effort, we are confident that as we refine these processes we will see improvements in our occupancy and margin performance at the property level across the board.”

Opry and Attractions

Opry and Attractions segment had a record third quarter in both revenue and profitability. Revenue for the segment rose 8.4 percent to $21.9 million in the third quarter of 2013 from $20.2 million in the prior-year quarter. The segment's Adjusted EBITDA rose 9.4 percent to $6.6 million in the third quarter of 2013, from $6.1 million in the prior-year quarter.

Corporate

Corporate and Other Adjusted EBITDA totaled a loss of $4.1 million in the third quarter of 2013 compared to a loss of $9.6 million in the same period last year. The reduction in costs at the Corporate level is directly related to the transition of the Company to a REIT, and cost savings are in-line with previously discussed estimated cost synergies.

REIT Conversion Costs

The Company has segregated all conversion costs associated with our conversion to a REIT and reported these amounts separately as REIT conversion costs in the accompanying financial information. During the third quarter of 2013, the Company incurred $1.0 million of costs associated with this conversion compared to $51.4 million in the third quarter of 2012.

Dividend Update

The Company paid its third quarter cash dividend of $0.50 per share of common stock on October 15, 2013 to stockholders of record on September 27, 2013. It is the Company's current plan to distribute total annual dividends of approximately $2.00 per share for 2013 in cash in equal quarterly payments in April, July, October, and January 2014, subject to our board of directors' future determinations as to the amount of quarterly distributions and the timing thereof.

Balance Sheet/Liquidity Update

As of September 30, 2013, the Company had total debt outstanding of $1,174.8 million and unrestricted cash of $52.1 million. At September 30, 2013, $533.0 million of borrowings were drawn under the Company's $1 billion credit facility, and the lending banks had issued $6.9 million in letters of credit, which left $460.1 million of availability for borrowing under the credit facility.

During the quarter, the Company settled its repurchase of $54.7 million in principal amount of its 3.75% convertible senior notes due 2014, which were cancelled, and settled the conversion of $1.2 million in principal amount of the convertible notes that were converted by a holder. After these transactions, $304.1 million in principal amount of the notes remains outstanding. The repurchases were made for aggregate consideration of $98.6 million funded by draws under the Company's revolving credit facility. The Company recorded a loss on extinguishment of debt of $4.2 million in the third quarter of 2013 related to these repurchases and conversions.

In connection with the Company's repurchase of a portion of the 3.75% convertible senior notes, the number of options and warrants underlying the bond hedge transaction related to the convertible notes were proportionately reduced. In consideration for these adjustments, the counterparties to the bond hedge transactions paid the Company 157,886 shares of the Company's common stock, which were subsequently cancelled. The adjustments to the options and warrants were considered modifications to the terms of the underlying agreements.

Guidance

The Company is maintaining its 2013 guidance provided on August 8, 2013 on a consolidated as well as on a segment basis. The following business performance outlook is based on current information as of November 5, 2013. The Company does not expect to update the guidance provided below before next quarter's earnings release. However, the Company may update its full business outlook or any portion thereof at any time for any reason.

Reed continued, “Despite the transition challenges that we faced in the first three quarters of the year, we are confident that the issues have been identified, and that we, working with Marriott, are making the right modifications and adjustments both on the sales and operational levels. As a result, we are confident that our business is moving in the right direction and is on track to deliver the 2013 guidance ranges we provided last quarter.”

 
        Guidance
For Full Year 2013
Low     High
 
Hospitality RevPAR 1 -1.5 % 0.0 %
Hospitality Total RevPAR 1 -2.5 % 0.0 %
 
 
Hospitality $ 242.0 $ 250.0
Opry and Attractions 19.0 20.0
Corporate and Other (23.0 ) (21.0 )
Gaylord National Bonds 2   12.0     12.0  
Adjusted EBITDA 3 $ 250.0   $ 261.0  
 
Adjusted FFO 3,4 $ 187.5 $ 197.0
REIT conversion costs (tax effected) $ 19.0 $ 18.0

Adjusted FFO after REIT conversion costs 3,4

$ 168.5 $ 179.0
 
Adjusted FFO per Share 3,4 $ 3.65 $ 3.84

Adjusted FFO per Share after REIT conversion costs 3,4

$ 3.28 $ 3.49
Estimated Basic Shares Outstanding 51.3 51.3
 
1.   Hospitality RevPAR estimated annual changes are based on 2012 RevPAR of $123.36 (as adjusted to reflect a change in room counting methods that does not exclude renovation rooms from the calculation of rooms available, per Marriott room counting methods), and Hospitality Total RevPAR estimated annual changes are based on 2012 Retail Adjusted Total RevPAR of $306.41 (as adjusted to reflect the elimination from the first three quarters of 2012 of revenues from retail operation that were outsourced to a third-party retailer beginning in the fourth quarter of 2012, as well as Marriott room counting methods).
2. Interest income from Gaylord National bonds reported in estimated hospitality segment results in 2013.
3. Does not include the impact of the loss on the call spread settlement related to our convertible notes repurchase.
4. Adjusted FFO guidance includes a deduction for maintenance capital expenditures of $33.0 to $35.0 million.
 

For our definitions of RevPAR, Total RevPAR, Adjusted EBITDA, and Adjusted FFO as well as a reconciliation of the non-GAAP financial measure Adjusted EBITDA to Net Income, a reconciliation of the non-GAAP financial measure Adjusted FFO to Net Income, and 2012 Retail Adjusted Revenue and Total RevPAR amounts, see “Calculation of RevPAR and Total RevPAR”, “Non-GAAP Financial Measures”, “Supplemental Financial Results” and “Reconciliation of Forward-Looking Statements” below.

Earnings Call information

Ryman Hospitality Properties will hold a conference call to discuss this release today at 12:00 p.m. ET. Investors can listen to the conference call over the Internet at www.rymanhp.com. To listen to the live call, please go to the Investor Relations section of the website (Investor Relations/Presentations, Earnings, and Webcasts) at least 15 minutes prior to the call to register, download and install any necessary audio software. For those who cannot listen to the live broadcast, a replay will be available shortly after the call and will run for at least 30 days.

About Ryman Hospitality Properties, Inc.

Ryman Hospitality Properties, Inc. (NYSE: RHP) is a REIT for federal income tax purposes, specializing in group-oriented, destination hotel assets in urban and resort markets. The Company's owned assets include a network of four upscale, meetings-focused resorts totaling 7,795 rooms that are managed by world-class lodging operator Marriott International, Inc. under the Gaylord Hotels brand. Other owned assets managed by Marriott International, Inc. include Gaylord Springs Golf Links, the Wildhorse Saloon, the General Jackson Showboat and The Inn at Opryland, a 303-room overflow hotel adjacent to Gaylord Opryland. The Company also owns and operates a number of media and entertainment assets, including the Grand Ole Opry (opry.com), the legendary weekly showcase of country music's finest performers for nearly 90 years; the Ryman Auditorium, the storied former home of the Grand Ole Opry located in downtown Nashville; and WSM-AM, the Opry's radio home. For additional information about Ryman Hospitality Properties, visit www.rymanhp.com.

Cautionary Note Regarding Forward-Looking Statements

This press release contains statements as to the Company's beliefs and expectations of the outcome of future events that are forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. You can identify these statements by the fact that they do not relate strictly to historical or current facts. Examples of these statements include, but are not limited to, statements regarding the future performance of our business, the effect of the Company's election of REIT status, anticipated cost synergies and revenue enhancements from the Marriott relationship, the effect of and degree of success of the joint action plan to improve the performance of the Hospitality segment, the expected approach to making dividend payments, the board's ability to alter the dividend policy at any time, and other business or operational issues. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from the statements made. These include the risks and uncertainties associated with economic conditions affecting the hospitality business generally, the geographic concentration of the Company's hotel properties, business levels at the Company's hotels, the effect of the Company's election to be taxed as a REIT for federal income tax purposes effective for the year ending December 31, 2013, the Company's ability to remain qualified as a REIT, the Company's ability to execute its strategic goals as a REIT, the effects of business disruption related to the Marriott management transition and the REIT conversion, the Company's ability to realize cost savings and revenue enhancements from the REIT conversion and the Marriott transaction, the Company's ability to generate cash flows to support dividends, future board determinations regarding the timing and amount of dividends and changes to the dividend policy, which could be made at any time, the determination of Adjusted FFO and REIT taxable income, and the Company's ability to borrow funds pursuant to its credit agreements. Other factors that could cause operating and financial results to differ are described in the filings made from time to time by the Company with the U.S. Securities and Exchange Commission (SEC) and include the risk factors described in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2012 and its Quarterly Report on Form 10-Q for the fiscal quarters ended March 31, 2013 and June 30, 2013. The Company does not undertake any obligation to release publicly any revisions to forward-looking statements made by it to reflect events or circumstances occurring after the date hereof or the occurrence of unanticipated events.

Additional Information

This release should be read in conjunction with the consolidated financial statements and notes thereto included in our most recent report on Form 10-K. Copies of our reports are available on our website at no expense at www.rymanhp.com and through the SEC's Electronic Data Gathering Analysis and Retrieval System (“EDGAR”) at www.sec.gov.

Retail Adjusted Revenue

Under Marriott International, Inc.'s management of Gaylord Opryland, Gaylord Texan, and Gaylord National, the retail operations of such hotels were outsourced to a third party retailer beginning in the fourth quarter of 2012. The properties now receive rental lease payments rather than full retail revenue and associated expense. The net impact of this change lowered overall retail revenue for each affected property. During the third quarter of 2013 the change resulted in revenue decreases of approximately $2.8 million (Gaylord Opryland–$1.5 million, Gaylord Texan–$0.8 million, and Gaylord National–$0.5 million). The change impacted consolidated revenue, Hospitality segment revenue, property revenue, and Total RevPAR as explained below. To enable period-over-period comparison, we have included adjusted 2012 revenue and 2012 Total RevPAR figures to reflect the elimination of retail revenues from operations that have been outsourced in the 2013 period. No adjustments were made to the Gaylord Palms' results due to the fact that during all periods presented, retail operations were outsourced at that property. A reconciliation of actual revenue to Retail Adjusted Revenue for the 2012 period is set forth below under “Supplemental Financial Results.”

Calculation of RevPAR and Total RevPAR

We calculate revenue per available room (“RevPAR”) for our hotels by dividing room revenue by room nights available to guests for the period. We calculate total revenue per available room (“Total RevPAR”) for our hotels by dividing the sum of room revenue, food & beverage, and other ancillary services revenue by room nights available to guests for the period. We calculate retail adjusted total revenue per available room (“Retail Adjusted Total RevPAR”) for our hotels for 2012 by dividing the sum of room revenue, food and beverage, and other ancillary services revenue minus the retail inventory adjustment for the period by room nights available to guests for the period.

Under Marriott International, Inc.'s management of Gaylord Opryland, Gaylord Texan, and Gaylord National, the retail operations of such hotels were outsourced to a third party retailer beginning in the fourth quarter of 2012. The properties now receive rental lease payments rather than full retail revenue and associated expense. The net impact of this change lowered overall retail revenue for each affected property. To enable period-over-period comparison, we have based 2013 Total RevPAR guidance on 2012 Retail Adjusted Revenue and 2012 Retail Adjusted Total RevPAR figures, which reflect the elimination from the 2012 figures of retail revenues from operations that have been outsourced in the 2013 period. No adjustments were made to the Gaylord Palms' revenue due to the fact that during all periods presented, retail operations were outsourced at that property. A presentation of actual revenue and Retail Adjusted Revenue for the 2012 period is set forth below under “Supplemental Financial Results.”

RevPAR estimated annual change included in our guidance is based on 2012 RevPAR of $123.36 (as adjusted to reflect a change in room counting methods that does not exclude renovation rooms from the calculation of rooms available, per Marriott room counting methods), and Total RevPAR estimated annual change is based on 2012 Retail Adjusted Total RevPAR of $306.41 (as adjusted to reflect the elimination from the first three quarters of 2012 of revenues from retail operations that were outsourced to a third-party retailer beginning in the fourth quarter of 2012, as well as Marriott room counting methods).

Non-GAAP Financial Measures

We present the following non-GAAP financial measures we believe are useful to investors as key measures of our operating performance: Adjusted EBITDA, Adjusted FFO and Retail Adjusted Revenue, as described above.

To calculate Adjusted EBITDA, we determine EBITDA, which represents net income (loss) determined in accordance with GAAP, plus loss (income) from discontinued operations, net; provision (benefit) for income taxes; other (gains) and losses, net; loss on extinguishment of debt; (income) loss from unconsolidated entities; interest expense; and depreciation and amortization, less interest income. Adjusted EBITDA is calculated as EBITDA plus preopening costs; non-cash ground lease expense; equity-based compensation expense; impairment charges; any closing costs of completed acquisitions; interest income on Gaylord National bonds; other gains (and losses); REIT conversion costs and any other adjustments we have identified in this release. We believe Adjusted EBITDA is useful to investors in evaluating our operating performance because this measure helps investors evaluate and compare the results of our operations from period to period by removing the impact of our capital structure (primarily interest expense) and our asset base (primarily depreciation and amortization) from our operating results. A reconciliation of net income (loss) to EBITDA and Adjusted EBITDA and a reconciliation of segment operating income to segment Adjusted EBITDA are set forth below under “Supplemental Financial Results.” Our method of calculating Adjusted EBITDA as used herein differs from the method we used to calculate Adjusted EBITDA as presented in press releases covering periods prior to 2013. The $4.9 million loss on the call spread settlement recorded in the second quarter of 2013 related to our convertible notes repurchase does not result in a charge to net income. Therefore, Adjusted EBITDA does not reflect the impact of the loss.

We calculate Adjusted FFO to mean net income (loss) (computed in accordance with GAAP), excluding non-controlling interests, and gains and losses from sales of property; plus depreciation and amortization (excluding amortization of deferred financing costs and debt discounts) and impairment losses; we also exclude written-off deferred financing costs, non-cash ground lease expense, amortization of debt discounts and amortization of deferred financing costs; and gain (loss) on extinguishment of debt, and subtract certain capital expenditures (the required FF&E reserves for our managed properties plus maintenance capital expenditures for our non-managed properties). We also exclude the effect of the non-cash income tax benefit relating to the REIT conversion. We have presented Adjusted FFO both excluding and including REIT conversion costs. We believe that the presentation of Adjusted FFO provides useful information to investors regarding our operating performance because it is a measure of our operations without regard to specified non-cash items such as real estate depreciation and amortization, gain or loss on sale of assets and certain other items which we believe are not indicative of the performance of our underlying hotel properties. We believe that these items are more representative of our asset base than our ongoing operations. We also use Adjusted FFO as one measure in determining our results after taking into account the impact of our capital structure. A reconciliation of net income (loss) to Adjusted FFO is set forth below under “Supplemental Financial Results.” The $4.9 million loss on the call spread settlement recorded in the second quarter of 2013 related to our convertible notes repurchase does not result in a charge to net income. Therefore, Adjusted FFO does not reflect the impact of the loss.

We caution investors that amounts presented in accordance with our definitions of Adjusted EBITDA and Adjusted FFO may not be comparable to similar measures disclosed by other companies, because not all companies calculate these non-GAAP measures in the same manner. Adjusted EBITDA and Adjusted FFO, and any related per share measures, should not be considered as alternative measures of our net income (loss), operating performance, cash flow or liquidity. Adjusted EBITDA and Adjusted FFO may include funds that may not be available for our discretionary use due to functional requirements to conserve funds for capital expenditures and property acquisitions and other commitments and uncertainties. Although we believe that Adjusted EBITDA and Adjusted FFO can enhance an investor's understanding of our results of operations, these non-GAAP financial measures, when viewed individually, are not necessarily better indicators of any trend as compared to GAAP measures such as net income (loss) or cash flow from operations. In addition, you should be aware that adverse economic and market and other conditions may harm our cash flow.

 

RYMAN HOSPITALITY PROPERTIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Unaudited
(In thousands, except per share data)
 
        Three Months Ended     Nine Months Ended
Sept. 30, Sept. 30,
2013     2012 2013     2012
Revenues :
Rooms $ 83,804 $ 86,173 $ 265,386 $ 273,689
Food and beverage 88,193 89,865 285,690 299,165
Other hotel revenue 27,307 31,903 80,640 94,182
Opry and Attractions   21,892         20,188     56,776         53,237  
Total revenues   221,196         228,129     688,492         720,273  
 
Operating expenses:
Rooms 26,369 24,933 78,020 72,698
Food and beverage 55,920 56,791 177,574 179,049
Other hotel expenses 65,718 72,175 203,869 219,905
Management fees   3,253         -     10,446         -  
Total hotel operating expenses 151,260 153,899 469,909 471,652
Opry and Attractions 15,411 14,216 41,326 39,048
Corporate 5,699 11,217 19,001 37,483
REIT conversion costs 971 51,371 21,383 57,799
Casualty loss 26 173 75 719
Preopening costs - 1 - 340
Impairment and other charges (non-REIT conversion costs) 110 - 1,357 -
Depreciation and amortization   27,916         30,701     88,979         93,389  
Total operating expenses   201,393         261,578     642,030         700,430  
 
Operating income (loss) 19,803 (33,449 ) 46,462 19,843
 
Interest expense, net of amounts capitalized (15,187 ) (15,136 ) (45,934 ) (43,949 )
Interest income 3,020 3,081 9,123 9,256
Income from unconsolidated companies 10 - 10 109
Loss on extinguishment of debt (4,181 ) - (4,181 ) -
Other gains and (losses), net   2,318         2,251     2,365         2,251  
Income (loss) before income taxes 5,783 (43,253 ) 7,845 (12,490 )
 
Benefit for income taxes   12,450         16,581     80,526         798  
Income (loss) from continuing operations 18,233 (26,672 ) 88,371 (11,692 )
 
Loss from discontinued operations, net of taxes   (202 )       (2 )   (181 )       -  
Net income (loss) 18,031 (26,674 ) 88,190 (11,692 )
 
Loss on call spread modification related to convertible notes   -         -     (4,869 )       -  
Net income (loss) available to common shareholders $ 18,031       $ (26,674 ) $ 83,321       $ (11,692 )
 

Basic net income (loss) per share available to common shareholders:

Income (loss) from continuing operations $ 0.36 $ (0.57 ) $ 1.62 $ (0.24 )
Income from discontinued operations, net of taxes   -         -     -         -  
Net income (loss) $ 0.36       $ (0.57 ) $ 1.62       $ (0.24 )
 

Fully diluted net income (loss) per share available to common shareholders:

Income (loss) from continuing operations $ 0.30 $ (0.57 ) $ 1.33 $ (0.24 )
Income from discontinued operations, net of taxes   -         -     -         -  
Net income (loss) $ 0.30       $ (0.57 ) $ 1.33       $ (0.24 )
 

Weighted average common shares for the period:

Basic 50,524 46,546 51,392 48,073
Diluted (1) 60,102 46,546 62,713 48,073
 

(1)

 

Represents GAAP calculation of diluted shares and does not consider anti-dilutive effect of the Company's purchased call options associated with its convertible notes. For the three months and nine months ended September 30, 2013, the purchased call options effectively reduce dilution by approximately 5.4 million and 6.2 million shares of common stock, respectively.

 
 
RYMAN HOSPITALITY PROPERTIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
Unaudited
(In thousands)
           
Sept. 30, Dec. 31,
2013 2012
 
ASSETS:
Property and equipment, net of accumulated depreciation $ 2,084,247 $ 2,148,999
Cash and cash equivalents - unrestricted 52,090 97,170
Cash and cash equivalents - restricted 18,557 6,210
Notes receivable 145,206 149,400
Trade receivables, net 52,746 55,343
Deferred financing costs 20,527 11,347
Prepaid expenses and other assets   67,439   63,982
Total assets $ 2,440,812 $ 2,532,451
 
 
LIABILITIES AND STOCKHOLDERS' EQUITY:
Debt and capital lease obligations $ 1,174,813 $ 1,031,863
Accounts payable and accrued liabilities 156,376 218,461
Deferred income taxes 31,200 88,938
Deferred management rights proceeds 184,154 186,346
Dividends payable 25,652 -
Other liabilities 126,602 153,245
Stockholders' equity   742,015   853,598
Total liabilities and stockholders' equity $ 2,440,812 $ 2,532,451
 
 
RYMAN HOSPITALITY PROPERTIES, INC. AND SUBSIDIARIES
SUPPLEMENTAL FINANCIAL RESULTS
ADJUSTED EBITDA RECONCILIATION
Unaudited
(in thousands)
 
 
        Three Months Ended Sept. 30,       Nine Months Ended Sept. 30,
2013     2012 2013     2012
$     Margin $     Margin $     Margin $     Margin

Consolidated

               
Revenue $ 221,196 $ 228,129 $ 688,492 $ 720,273
Net income (loss) $ 18,031 $ (26,674 ) $ 88,190 $ (11,692 )
Loss from discontinued operations, net of taxes 202 2 181 -
Benefit for income taxes (12,450 ) (16,581 ) (80,526 ) (798 )
Other (gains) and losses, net (2,318 ) (2,251 ) (2,365 ) (2,251 )
Net loss on the extinguishment of debt 4,181 - 4,181 -
Income from unconsolidated companies (10 ) - (10 ) (109 )
Interest expense, net 12,167 12,055 36,811 34,693
Depreciation & amortization   27,916     30,701     88,979     93,389  
EBITDA 47,719 21.6 % (2,748 ) -1.2 % 135,441 19.7 % 113,232 15.7 %
Preopening costs - 1 - 340
Non-cash lease expense 1,399 1,427 4,196 4,279
Equity-based compensation 1,771 1,965 4,938 7,242
Impairment charges (non-REIT conversion costs) 110 - 1,357 -
Interest income on Gaylord National bonds 3,020 3,078 9,119 9,246
Other gains and (losses), net 2,318 2,251 2,365 2,251
Gain on disposal of assets - - (52 ) -
Casualty loss 26 173 75 719
REIT conversion costs   971           51,371           21,383           57,799        
Adjusted EBITDA $ 57,334       25.9 % $ 57,518       25.2 % $ 178,822       26.0 % $ 195,108       27.1 %
 

Hospitality segment

Revenue $ 199,304 $ 207,941 $ 631,716 $ 667,036
Operating income 21,906 17,769 75,109 103,890
Depreciation & amortization 25,599 26,095 77,928 80,977
Preopening costs - 1 - 340
Non-cash lease expense 1,399 1,427 4,196 4,279
Equity-based compensation - 252 - 1,979
Impairment charges (non-REIT conversion costs) 110 - 1,357 -
Interest income on Gaylord National bonds 3,020 3,078 9,119 9,246
Other gains and (losses), net 2,318 2,251 2,365 2,251
Gain on disposal of assets - - (52 ) -
REIT conversion costs   429           10,177           7,413           10,177        
Adjusted EBITDA $ 54,781       27.5 % $ 61,050       29.4 % $ 177,435       28.1 % $ 213,139       32.0 %
 

Opry and Attractions segment

Revenue $ 21,892 $ 20,188 $ 56,776 $ 53,237
Operating income 5,154 4,543 11,335 9,926
Depreciation & amortization 1,317 1,262 4,002 3,826
Equity-based compensation 150 87 412 231
Casualty loss - 128 - 398
REIT conversion costs   10           39           113           39        
Adjusted EBITDA $ 6,631       30.3 % $ 6,059       30.0 % $ 15,862       27.9 % $ 14,420       27.1 %
 

Corporate and Other segment

Operating loss (7,257 ) (55,761 ) (39,982 ) (93,973 )
Depreciation & amortization 1,000 3,344 7,049 8,586
Equity-based compensation 1,621 1,626 4,526 5,032
Casualty loss 26 45 75 321
REIT conversion costs   532     41,155     13,857     47,583  
Adjusted EBITDA $ (4,078 ) $ (9,591 ) $ (14,475 ) $ (32,451 )
 
 
RYMAN HOSPITALITY PROPERTIES, INC. AND SUBSIDIARIES
SUPPLEMENTAL FINANCIAL RESULTS
FUNDS FROM OPERATIONS ("FFO") AND ADJUSTED FFO RECONCILIATION
Unaudited
(in thousands, except per share data)
 
        Three Months Ended Sept. 30,     Nine Months Ended Sept. 30,
2013     2012 2013     2012
$ $ $ $

Consolidated

Net income (1) $ 18,031 $ (26,674 ) $ 88,190 $ (11,692 )
Depreciation & amortization 27,916 30,701 88,979 93,389
(Gains) losses on sale of real estate assets   -     -     (52 )   -  
FFO 45,947 4,027 177,117 81,697
 
Capital expenditures (2) (7,173 ) (14,928 ) (22,046 ) (42,814 )
Non-cash lease expense 1,399 1,427 4,196 4,279
Impairment charges 123 21,287 1,909 21,287
Loss on extinguishment of debt 4,181 - 4,181 -
Write-off of deferred financing costs - - 1,845 -
Amortization of deferred financing costs 1,441 1,225 4,083 3,648
Amortization of debt discounts 3,206 3,446 10,543 10,200
Noncash tax benefit resulting from REIT conversion   (5,629 )   -     (66,046 )   -  
Adjusted FFO (1) $ 43,495   $ 16,484   $ 115,782   $ 78,297  

REIT conversion costs (tax effected)

  2,241     19,030     16,328     23,118  
Adjusted FFO excluding REIT conversion costs (1) $ 45,736   $ 35,514   $ 132,110   $ 101,415  
 
 
FFO per basic share $ 0.91 $ 0.09 $ 3.45 $ 1.70
Adjusted FFO per basic share $ 0.86 $ 0.35 $ 2.25 $ 1.63
Adjusted FFO (excl. REIT conversion costs) per basic share $ 0.91 $ 0.76 $ 2.57 $ 2.11
 
FFO per diluted share (3) $ 0.76 $ 0.09 $ 2.82 $ 1.70
Adjusted FFO per diluted share (3) $ 0.72 $ 0.35 $ 1.85 $ 1.63
Adjusted FFO (excl. REIT conversion costs) per diluted share (3) $ 0.76 $ 0.76 $ 2.11 $ 2.11
 

(1)

 

As the impact of the loss on the call spread modification related to the repurchase of our convertible notes repurchase does not represent a charge to net income, net income, adjusted FFO and adjusted FFO excluding REIT conversion costs do not include this loss.

 

(2)

Represents FF&E reserve for managed properties and maintenance capital expenditures for non-managed properties.

 

(3)

The GAAP calculation of diluted shares does not consider the anti-dilutive effect of the Company's purchased call options associated with its convertible notes. For the three months and nine months ended September 30, 2013, the purchased call options effectively reduce dilution by approximately 5.4 million and 6.2 million shares, respectively.

 
 
RYMAN HOSPITALITY PROPERTIES, INC. AND SUBSIDIARIES
SUPPLEMENTAL FINANCIAL RESULTS
Unaudited
(in thousands, except operating metrics)
       
         
Three Months Ended Sept. 30, Nine Months Ended Sept. 30,
2013       2012 (1) 2013       2012 (1)
 
HOSPITALITY OPERATING METRICS:
 

Hospitality Segment

 
Occupancy 71.2 % 70.0 % 70.9 % 71.9 %
Average daily rate (ADR) $ 158.02 $ 165.18 $ 169.35 $ 171.66
RevPAR $ 112.49 $ 115.67 $ 120.04 $ 123.35
OtherPAR $ 155.03 $ 163.44 $ 165.71 $ 177.27
Total RevPAR $ 267.52 $ 279.11 $ 285.75 $ 300.62
 
Revenue $ 199,304 $ 207,941 $ 631,716 $ 667,036
Adjusted EBITDA $ 54,781 $ 61,050 $ 177,435 $ 213,139
Adjusted EBITDA Margin 27.5 % 29.4 % 28.1 % 32.0 %
 

Gaylord Opryland

 
Occupancy 75.5 % 67.5 % 72.2 % 70.6 %
Average daily rate (ADR) $ 152.29 $ 154.14 $ 156.02 $ 158.97
RevPAR $ 115.03 $ 104.01 $ 112.65 $ 112.30
OtherPAR $ 136.45 $ 135.30 $ 142.81 $ 151.48
Total RevPAR $ 251.48 $ 239.31 $ 255.46 $ 263.78
 
Revenue $ 66,678 $ 63,452 $ 200,993 $ 208,300
Adjusted EBITDA $ 20,927 $ 16,933 $ 61,331 $ 63,807
Adjusted EBITDA Margin 31.4 % 26.7 % 30.5 % 30.6 %
 

Gaylord Palms

 
Occupancy 68.6 % 70.7 % 75.5 % 77.5 %
Average daily rate (ADR) $ 143.93 $ 146.76 $ 163.21 $ 167.70
RevPAR $ 98.68 $ 103.81 $ 123.28 $ 130.01
OtherPAR $ 157.22 $ 169.26 $ 194.39 $ 210.57
Total RevPAR $ 255.90 $ 273.07 $ 317.67 $ 340.58
 
Revenue $ 33,101 $ 35,322 $ 121,932 $ 131,207
Adjusted EBITDA $ 6,049 $ 8,103 $ 30,684 $ 42,312
Adjusted EBITDA Margin 18.3 % 22.9 % 25.2 % 32.2 %
 

Gaylord Texan

 
Occupancy 74.1 % 78.0 % 71.9 % 72.9 %
Average daily rate (ADR) $ 158.42 $ 168.90 $ 170.02 $ 173.33
RevPAR $ 117.39 $ 131.82 $ 122.27 $ 126.39
OtherPAR $ 188.95 $ 203.78 $ 195.79 $ 210.32
Total RevPAR $ 306.34 $ 335.60 $ 318.06 $ 336.71
 
Revenue $ 42,585 $ 46,653 $ 131,200 $ 139,405
Adjusted EBITDA $ 11,886 $ 14,133 $ 35,699 $ 43,500
Adjusted EBITDA Margin 27.9 % 30.3 % 27.2 % 31.2 %
 

Gaylord National

 
Occupancy 64.1 % 69.0 % 65.3 % 70.4 %
Average daily rate (ADR) $ 187.12 $ 198.67 $ 204.93 $ 200.59
RevPAR $ 120.01 $ 137.07 $ 133.75 $ 141.16
OtherPAR $ 173.10 $ 189.71 $ 176.55 $ 188.80
Total RevPAR $ 293.11 $ 326.78 $ 310.30 $ 329.96
 
Revenue $ 53,824 $ 60,006 $ 169,086 $ 180,457
Adjusted EBITDA $ 15,090 $ 21,308 $ 47,552 $ 61,573
Adjusted EBITDA Margin 28.0 % 35.5 % 28.1 % 34.1 %
 

The Inn at Opryland (2)

 
Occupancy 73.9 % 57.8 % 68.6 % 61.6 %
Average daily rate (ADR) $ 105.96 $ 103.79 $ 107.74 $ 105.55
RevPAR $ 78.33 $ 59.97 $ 73.91 $ 65.00
OtherPAR $ 33.46 $ 32.05 $ 28.90 $ 28.97
Total RevPAR $ 111.79 $ 92.02 $ 102.81 $ 93.97
 
Revenue $ 3,116 $ 2,508 $ 8,505 $ 7,667
Adjusted EBITDA $ 829 $ 573 $ 2,169 $ 1,947
Adjusted EBITDA Margin 26.6 % 22.8 % 25.5 % 25.4 %
 

(1)

 

For purposes of comparability, both 2013 and 2012 occupancy, RevPAR, OtherPAR and Total RevPAR are calculated using Marriott's method of calculating available rooms and do not exclude renovation rooms from the calculation of rooms available, which is different from how the Company has previously accounted for renovation rooms prior to the Marriott transition. In addition, both 2013 and 2012 occupancy and ADR do not include complimentary room nights in the calculation of occupied rooms, which is different from how the Company has previously accounted for complimentary rooms.

 

(2)

Includes other hospitality revenue and expense.

 
 
RYMAN HOSPITALITY PROPERTIES, INC. AND SUBSIDIARIES
SUPPLEMENTAL FINANCIAL RESULTS
RECONCILIATION OF ADJUSTED RESULTS
Unaudited
(in thousands, except operating metrics)
               
Three Months Ended Sept. 30, Nine Months Ended Sept. 30,
2013     2012 2013     2012
Consolidated:        
Revenue $ 221,196 $ 228,129 $ 688,492 $ 720,273
Less: Retail Inventory Adjustment   -       (2,761 )   -       (7,896 )
Retail Adjusted Revenue $ 221,196 $ 225,368 $ 688,492 $ 712,377
 
Hospitality Segment:
Revenue $ 199,304 $ 207,941 $ 631,716 $ 667,036
Less: Retail Inventory Adjustment   -       (2,761 )   -       (7,896 )
Retail Adjusted Revenue $ 199,304 $ 205,180 $ 631,716 $ 659,140
 
Total RevPAR $ 267.52 $ 279.11 $ 285.75 $ 300.62
Retail Adjusted Total RevPAR $ 267.52 $ 275.40 $ 285.75 $ 297.06
 
Gaylord Opryland:
Revenue $ 66,678 $ 63,452 $ 200,993 $ 208,300
Less: Retail Inventory Adjustment   -       (1,524 )   -       (4,618 )
Retail Adjusted Revenue $ 66,678 $ 61,928 $ 200,993 $ 203,682
 
Total RevPAR $ 251.48 $ 239.31 $ 255.46 $ 263.78
Retail Adjusted Total RevPAR $ 251.48 $ 233.57 $ 255.46 $ 257.93
 
Gaylord Palms:
Revenue $ 33,101 $ 35,322 $ 121,932 $ 131,207
Less: Retail Inventory Adjustment   -       -     -       -  
Retail Adjusted Revenue $ 33,101 $ 35,322 $ 121,932 $ 131,207
 
Total RevPAR $ 255.90 $ 273.07 $ 317.67 $ 340.58
Retail Adjusted Total RevPAR $ 255.90 $ 273.07 $ 317.67 $ 340.58
 
Gaylord Texan:
Revenue $ 42,585 $ 46,653 $ 131,200 $ 139,405
Less: Retail Inventory Adjustment   -       (763 )   -       (1,887 )
Retail Adjusted Revenue $ 42,585 $ 45,890 $ 131,200 $ 137,518
 
Total RevPAR $ 306.34 $ 335.60 $ 318.06 $ 336.71
Retail Adjusted Total RevPAR $ 306.34 $ 330.11 $ 318.06 $ 332.16
 
Gaylord National:
Revenue $ 53,824 $ 60,006 $ 169,086 $ 180,457
Less: Retail Inventory Adjustment   -       (474 )   -       (1,390 )
Retail Adjusted Revenue $ 53,824 $ 59,532 $ 169,086 $ 179,067
 
Total RevPAR $ 293.11 $ 326.78 $ 310.30 $ 329.96
Retail Adjusted Total RevPAR $ 293.11 $ 324.20 $ 310.30 $ 327.42
 
Inn at Opryland (and Other Hospitality):
Revenue $ 3,116 $ 2,508 $ 8,505 $ 7,667
Less: Retail Inventory Adjustment   -       -     -       -  
Retail Adjusted Revenue $ 3,116 $ 2,508 $ 8,505 $ 7,667
 
Total RevPAR $ 111.79 $ 92.02 $ 102.81 $ 93.97
Retail Adjusted Total RevPAR $ 111.79 $ 92.02 $ 102.81 $ 93.97
 
 
Ryman Hospitality Properties, Inc. and Subsidiaries
Reconciliation of Forward-Looking Statements
Unaudited
(in thousands)
 
Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization ("Adjusted EBITDA")
and Adjusted Funds From Operations ("AFFO") reconciliation:
         
 
GUIDANCE RANGE
FOR FULL YEAR 2013
Low     High

Ryman Hospitality Properties, Inc.

Net Income 1 $ 112,700 $ 116,200
Provision (benefit) for income taxes (23,000 ) (22,000 )
Write off and Valuation Allowance (60,000 ) (60,000 )
Other (gains) and losses, net (2,300 ) (2,300 )
(Gain) Loss on debt extinguishment 3,000 3,000
Interest expense 61,000 63,000
Interest income   (12,000 )   (12,000 )
Operating Income 79,400 85,900
Depreciation and amortization   118,000     123,000  
EBITDA 197,400 208,900
Non-cash lease expense 5,600 5,600
Equity based compensation 6,500 7,000
Impairment charges (non-REIT conversion costs) 1,200 1,200
Other gains and (losses), net 2,300 2,300
Interest income 12,000 12,000
REIT conversion costs   25,000     24,000  
Adjusted EBITDA $ 250,000   $ 261,000  
 

Hospitality Segment 2

Operating Income $ 123,600 $ 128,100
Depreciation and amortization   103,000     107,000  
EBITDA 226,600 235,100
Non-cash lease expense 5,600 5,600
Equity based compensation - -
Other gains and (losses), net 2,300 2,300
Impairment 1,200 1,200
Interest income 12,000 12,000
REIT conversion costs   6,300     5,800  
Adjusted EBITDA $ 254,000   $ 262,000  

Opry and Attractions Segment

 
Operating Income $ 12,700 $ 13,600
Depreciation and amortization   5,500     5,500  
EBITDA 18,200 19,100
Non-cash lease expense - -
Equity based compensation 600 700
Interest income - -
REIT conversion costs   200     200  
Adjusted EBITDA $ 19,000   $ 20,000  

Corporate and Other Segment

 
Operating Income $ (56,900 ) $ (55,800 )
Depreciation and amortization   9,500     10,500  
EBITDA (47,400 ) (45,300 )
Non-cash lease expense - -
Equity based compensation 5,900 6,300
Interest income - -
REIT conversion costs   18,500     18,000  
Adjusted EBITDA $ (23,000 ) $ (21,000 )

Ryman Hospitality Properties, Inc.

 
Net Income 1 $ 112,700 $ 116,200
Depreciation & amortization 118,000 123,000
Capital expenditures (35,000 ) (33,000 )
Impairments 1,200 1,200
Non-cash lease expense 5,600 5,600
Amortization of debt premiums/disc. 15,000 15,000
Amortization of DFC 6,000 6,000
Write-off of DFC 2,000 2,000
Other non-recurring items (60,000 ) (60,000 )
Loss (gain) on debt extinguishment   3,000     3,000  
Adjusted FFO 168,500 179,000
REIT conversion costs (tax-effected)   19,000     18,000  
Adjusted FFO excl. REIT conversion costs $ 187,500   $ 197,000  
 
1   Does not include the impact of the loss on the call spread settlement related to the repurchase of a portion of the convertible notes.
 
2 Hospitality segment includes interest income from Gaylord National bonds.
 

Investor Relations:
Ryman Hospitality Properties, Inc.
Mark Fioravanti, 615-316-6588
Executive Vice President and Chief Financial Officer
mfioravanti@rymanhp.com
or
Ryman Hospitality Properties, Inc.
Todd Siefert, 615-316-6344
Vice President of Corporate Finance & Treasurer
tsiefert@rymanhp.com
or
Media:
Ryman Hospitality Properties, Inc.
Brian Abrahamson, 615-316-6302
Vice President of Corporate Communications
babrahamson@rymanhp.com
or
Sloane & Company
Josh Hochberg / Dan Zacchei
212-446-1892 / 212-446-1882
jhochberg@sloanepr.com / dzacchei@sloanepr.com

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