Delaware | | | 73-0664379 | Delaware | | 73-0664379 | (State or Other Jurisdiction of | | (I.R.S. Employer | Incorporation or Organization) | | Identification No.) |
One Gaylord Drive Nashville, Tennessee 37214 (Address of Principal Executive Offices) (Zip Code) (615)316-6000 (Registrant’s Telephone Number, Including Area Code) Securities registered pursuant to Section 12(b) of the Act: | | | | | | | | | Name of Each Exchange on | Title of Each Class | | Trading Symbol(s) | | Which Registered | Common stock, par value $.01 | | RHP | | New York Stock Exchange |
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes ☐ No Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of RegulationS-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). ☒ Yes ☐ No Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, anon-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company”company,” and “emerging growth company” in Rule12b-2 of the Exchange Act. | | | | | | | Large accelerated filer | | ☒ | | Accelerated filer | | ☐ | | | | | Non-accelerated filer | | ☐ | | Large accelerated filer ☒ Accelerated filer ☐ Non-accelerated filer ☐Smaller reporting company | | ☐ | | | | | | | | | Emerging growth company | | ☐ |
Indicate by check mark whether the registrant is a shell company (as defined in Rule12b-2 of the Exchange Act). ☐ Yes ☒ No Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐ Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☒ No Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date. | | | Class |
| Outstanding as of October 31, 2017July 29, 2022 | Common Stock, par value $.01 | | 51,196,25155,155,216 shares |
RYMAN HOSPITALITY PROPERTIES, INC. FORM10-Q For the Quarter Ended SeptemberJune 30, 20172022
INDEX Part I – FINANCIAL INFORMATION
Item 1. – FINANCIAL STATEMENTS. RYMAN HOSPITALITY PROPERTIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Unaudited)
(In thousands) | | | | | | | | | June 30, | | December 31, | | | 2022 | | 2021 | ASSETS: | | | | | | | Property and equipment, net | | $ | 3,200,732 | | $ | 3,031,844 | Cash and cash equivalents - unrestricted | | | 179,230 | | | 140,688 | Cash and cash equivalents - restricted | | | 52,539 | | | 22,312 | Notes receivable, net | | | 68,884 | | | 71,228 | Trade receivables, net | | | 125,400 | | | 74,745 | Prepaid expenses and other assets | | | 129,466 | | | 112,904 | Intangible assets, net | | | 108,449 | | | 126,804 | Total assets | | $ | 3,864,700 | | $ | 3,580,525 | | | | | | | | LIABILITIES AND EQUITY (DEFICIT): | | | | | | | Debt and finance lease obligations | | $ | 2,863,022 | | $ | 2,936,819 | Accounts payable and accrued liabilities | | | 343,618 | | | 304,719 | Dividends payable | | | 102 | | | 386 | Deferred management rights proceeds | | | 169,054 | | | 170,614 | Operating lease liabilities | | | 115,010 | | | 113,770 | Deferred income tax liabilities, net | | | 4,966 | | | 4,671 | Other liabilities | | | 66,461 | | | 71,939 | Total liabilities | | | 3,562,233 | | | 3,602,918 | Commitments and contingencies | | | | | | | Noncontrolling interest in consolidated joint venture | | | 296,236 | | | — | Equity (deficit): | | | | | | | Preferred stock, $.01 par value, 100,000 shares authorized, 0 shares issued or outstanding | | | — | | | — | Common stock, $.01 par value, 400,000 shares authorized, 55,155 and 55,072 shares issued and outstanding, respectively | | | 552 | | | 551 | Additional paid-in capital | | | 1,106,955 | | | 1,112,867 | Treasury stock of 648 and 648 shares, at cost | | | (18,467) | | | (18,467) | Distributions in excess of retained earnings | | | (1,062,442) | | | (1,088,105) | Accumulated other comprehensive loss | | | (20,392) | | | (29,080) | Total stockholders' equity (deficit) | | | 6,206 | | | (22,234) | Noncontrolling interest in Operating Partnership | | | 25 | | | (159) | Total equity (deficit) | | | 6,231 | | | (22,393) | Total liabilities and equity (deficit) | | $ | 3,864,700 | | $ | 3,580,525 |
| | | | | | | | | | | | September 30, | | | December 31, | | | | | 2017 | | | 2016 | | ASSETS: | | | | | | | | | Property and equipment, net of accumulated depreciation | | $ | 2,044,443 | | | $ | 1,998,012 | | Cash and cash equivalents - unrestricted | | | 62,672 | | | | 59,128 | | Cash and cash equivalents - restricted | | | 14,703 | | | | 22,062 | | Notes receivable | | | 150,493 | | | | 152,882 | | Investment in Gaylord Rockies joint venture | | | 88,378 | | | | 70,440 | | Trade receivables, less allowance of $611 and $629, respectively | | | 56,684 | | | | 47,818 | | Prepaid expenses and other assets | | | 75,129 | | | | 55,411 | | | | | | | | | | | Total assets | | $ | 2,492,502 | | | $ | 2,405,753 | | | | | | | | | | | LIABILITIES AND STOCKHOLDERS’ EQUITY: | | | | | | | | | Debt and capital lease obligations | | $ | 1,566,754 | | | $ | 1,502,554 | | Accounts payable and accrued liabilities | | | 198,290 | | | | 163,205 | | Dividends payable | | | 41,866 | | | | 39,404 | | Deferred management rights proceeds | | | 177,815 | | | | 180,088 | | Deferred income tax liabilities, net | | | 969 | | | | 1,469 | | Other liabilities | | | 155,412 | | | | 151,036 | | Commitments and contingencies | | | | | | | | | Stockholders’ equity: | | | | | | | | | Preferred stock, $.01 par value, 100,000 shares authorized, no shares issued or outstanding | | | — | | | | — | | Common stock, $.01 par value, 400,000 shares authorized, 51,196 and 51,017 shares issued and outstanding, respectively | | | 512 | | | | 510 | | Additionalpaid-in capital | | | 894,883 | | | | 893,102 | | Treasury stock of 541 shares, at cost | | | (11,542 | ) | | | (11,542 | ) | Accumulated deficit | | | (511,798 | ) | | | (491,805 | ) | Accumulated other comprehensive loss | | | (20,659 | ) | | | (22,268 | ) | | | | | | | | | | Total stockholders’ equity | | | 351,396 | | | | 367,997 | | | | | | | | | | | Total liabilities and stockholders’ equity | | $ | 2,492,502 | | | $ | 2,405,753 | | | | | | | | | | |
The accompanying notes are an integral part of these condensed consolidated financial statements. RYMAN HOSPITALITY PROPERTIES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (Unaudited) (In thousands, except per share data) | | | | | | | | | | | | | | | | Three Months Ended | | Six Months Ended | | | | June 30, | | June 30, | | | | 2022 | | 2021 | | 2022 | | 2021 | | Revenues: | | | | | | | | | | | | | | Rooms | | $ | 161,506 | | $ | 61,971 | | $ | 263,099 | | $ | 90,199 | | Food and beverage | | | 188,083 | | | 45,619 | | | 300,199 | | | 63,794 | | Other hotel revenue | | | 52,213 | | | 28,098 | | | 99,615 | | | 51,497 | | Entertainment | | | 68,402 | | | 35,173 | | | 106,426 | | | 49,546 | | Total revenues | | | 470,204 | | | 170,861 | | | 769,339 | | | 255,036 | | | | | | | | | | | | | | | | Operating expenses: | | | | | | | | | | | | | | Rooms | | | 41,238 | | | 15,039 | | | 71,374 | | | 24,516 | | Food and beverage | | | 97,489 | | | 33,748 | | | 168,818 | | | 53,077 | | Other hotel expenses | | | 99,284 | | | 61,365 | | | 185,927 | | | 115,922 | | Management fees, net | | | 11,202 | | | 2,149 | | | 16,266 | | | 2,902 | | Total hotel operating expenses | | | 249,213 | | | 112,301 | | | 442,385 | | | 196,417 | | Entertainment | | | 45,670 | | | 25,639 | | | 77,401 | | | 44,330 | | Corporate | | | 12,417 | | | 8,978 | | | 21,974 | | | 16,506 | | Preopening costs | | | 221 | | | 217 | | | 525 | | | 616 | | (Gain) loss on sale of assets | | | — | | | — | | | 469 | | | (317) | | Depreciation and amortization | | | 56,715 | | | 54,673 | | | 112,743 | | | 107,988 | | Total operating expenses | | | 364,236 | | | 201,808 | | | 655,497 | | | 365,540 | | | | | | | | | | | | | | | | Operating income (loss) | | | 105,968 | | | (30,947) | | | 113,842 | | | (110,504) | | Interest expense | | | (33,958) | | | (29,847) | | | (65,895) | | | (60,643) | | Interest income | | | 1,379 | | | 1,451 | | | 2,760 | | | 2,821 | | Loss on extinguishment of debt | | | (1,547) | | | — | | | (1,547) | | | (2,949) | | Loss from unconsolidated joint ventures | | | (3,001) | | | (1,910) | | | (5,628) | | | (3,519) | | Other gains and (losses), net | | | (283) | | | (173) | | | 164 | | | 201 | | Income (loss) before income taxes | | | 68,558 | | | (61,426) | | | 43,696 | | | (174,593) | | Provision for income taxes | | | (17,634) | | | (1,623) | | | (17,569) | | | (5,577) | | Net income (loss) | | | 50,924 | | | (63,049) | | | 26,127 | | | (180,170) | | | | | | | | | | | | | | | | Net (income) loss attributable to noncontrolling interest in consolidated joint venture | | | (280) | | | 4,708 | | | (280) | | | 16,501 | | Net (income) loss attributable to noncontrolling interest in Operating Partnership | | | (360) | | | 422 | | | (184) | | | 1,229 | | Net income (loss) available to common stockholders | | $ | 50,284 | | $ | (57,919) | | $ | 25,663 | | $ | (162,440) | | | | | | | | | | | | | | | | Basic income (loss) per share available to common stockholders | | $ | 0.91 | | $ | (1.05) | | $ | 0.47 | | $ | (2.95) | | Diluted income (loss) per share available to common stockholders | | $ | 0.91 | | $ | (1.05) | | $ | 0.46 | | $ | (2.95) | | | | | | | | | | | | | | | | Comprehensive income (loss), net of taxes | | $ | 49,626 | | $ | (51,845) | | $ | 34,815 | | $ | (162,866) | | Comprehensive (income) loss, net of taxes, attributable to noncontrolling interest in consolidated joint venture | | | (280) | | | 4,708 | | | (280) | | | 15,419 | | Comprehensive (income) loss, net of taxes, attributable to noncontrolling interest in Operating Partnership | | | (351) | | | 341 | | | (246) | | | 1,104 | | Comprehensive income (loss), net of taxes, available to common stockholders | | $ | 48,995 | | $ | (46,796) | | $ | 34,289 | | $ | (146,343) | |
The accompanying notes are an integral part of these condensed consolidated financial statements. RYMAN HOSPITALITY PROPERTIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONSCASH FLOWS (Unaudited) AND COMPREHENSIVE INCOME
(Unaudited)
(In thousands, except per share data)thousands) | | | | | | | | | | Six Months Ended | | | | June 30, | | | | 2022 | | 2021 | | Cash Flows from Operating Activities: | | | | | | | | Net income (loss) | | $ | 26,127 | | $ | (180,170) | | Amounts to reconcile net income (loss) to net cash flows provided by (used in) operating activities: | | | | | | | | Provision for deferred income taxes | | | 295 | | | 5,173 | | Depreciation and amortization | | | 112,743 | | | 107,988 | | Amortization of deferred financing costs | | | 4,538 | | | 4,379 | | Loss from unconsolidated joint ventures | | | 5,628 | | | 3,519 | | Stock-based compensation expense | | | 7,440 | | | 5,668 | | Changes in: | | | | | | | | Trade receivables | | | (49,250) | | | (16,831) | | Accounts payable and accrued liabilities | | | 23,934 | | | 35,827 | | Other assets and liabilities | | | (3,842) | | | 6,553 | | Net cash flows provided by (used in) operating activities | | | 127,613 | | | (27,894) | | | | | | | | | | Cash Flows from Investing Activities: | | | | | | | | Purchases of property and equipment | | | (24,715) | | | (53,493) | | Purchase of land adjacent to Gaylord Rockies | | | — | | | (22,000) | | Collection of notes receivable | | | 2,381 | | | — | | Purchase of Block 21, net of cash acquired | | | (93,992) | | | — | | Purchase of additional interest in Gaylord Rockies joint venture | | | — | | | (188,000) | | Investment in other joint ventures | | | (6,088) | | | (4,619) | | Other investing activities, net | | | 818 | | | 5,462 | | Net cash flows used in investing activities | | | (121,596) | | | (262,650) | | | | | | | | | | Cash Flows from Financing Activities: | | | | | | | | Net borrowings (repayments) under revolving credit facility | | | (190,000) | | | 119,000 | | Repayments under term loan A | | | (300,000) | | | — | | Repayments under term loan B | | | (2,500) | | | (2,500) | | Borrowings under OEG term loan B | | | 288,000 | | | — | | Repayments under Block 21 CMBS loan | | | (205) | | | — | | Issuance of senior notes | | | — | | | 600,000 | | Redemption of senior notes | | | — | | | (400,000) | | Deferred financing costs paid | | | (14,750) | | | (10,628) | | Redemption of noncontrolling interest in Operating Partnership | | | — | | | (2,438) | | Sale of noncontrolling interest in OEG | | | 286,489 | | | — | | Payment of dividends | | | (284) | | | (499) | | Payment of tax withholdings for share-based compensation | | | (3,885) | | | (3,407) | | Other financing activities, net | | | (113) | | | (113) | | Net cash flows provided by financing activities | | | 62,752 | | | 299,415 | | | | | | | | | | Net change in cash, cash equivalents, and restricted cash | | | 68,769 | | | 8,871 | | Cash, cash equivalents, and restricted cash, beginning of period | | | 163,000 | | | 79,754 | | Cash, cash equivalents, and restricted cash, end of period | | $ | 231,769 | | $ | 88,625 | | | | | | | | | | Reconciliation of cash, cash equivalents, and restricted cash to balance sheet: | | | | | | | | Cash and cash equivalents - unrestricted | | $ | 179,230 | | $ | 71,612 | | Cash and cash equivalents - restricted | | | 52,539 | | | 17,013 | | Cash, cash equivalents, and restricted cash, end of period | | $ | 231,769 | | $ | 88,625 | |
| | | | | | | | | | | | | | | | | | | | Three Months Ended | | | Nine Months Ended | | | | | September 30, | | | September 30, | | | | | 2017 | | | 2016 | | | 2017 | | | 2016 | | Revenues: | | | | | | | | | | | | | | | | | Rooms | | $ | 100,534 | | | $ | 101,085 | | | $ | 314,577 | | | $ | 309,385 | | Food and beverage | | | 104,437 | | | | 113,100 | | | | 359,047 | | | | 362,550 | | Other hotel revenue | | | 24,619 | | | | 26,834 | | | | 73,493 | | | | 75,604 | | Entertainment | | | 35,134 | | | | 30,701 | | | | 92,427 | | | | 81,893 | | | | | | | | | | | | | | | | | | | Total revenues | | | 264,724 | | | | 271,720 | | | | 839,544 | | | | 829,432 | | Operating expenses: | | | | | �� | | | | | | | | | | | | Rooms | | | 27,575 | | | | 28,371 | | | | 83,962 | | | | 82,492 | | Food and beverage | | | 62,649 | | | | 64,790 | | | | 200,091 | | | | 201,045 | | Other hotel expenses | | | 72,119 | | | | 73,331 | | | | 219,580 | | | | 219,510 | | Management fees, net | | | 4,708 | | | | 4,408 | | | | 16,417 | | | | 15,246 | | | | | | | | | | | | | | | | | | | Total hotel operating expenses | | | 167,051 | | | | 170,900 | | | | 520,050 | | | | 518,293 | | Entertainment | | | 22,621 | | | | 19,100 | | | | 61,559 | | | | 54,630 | | Corporate | | | 9,220 | | | | 8,447 | | | | 24,324 | | | | 22,315 | | Preopening costs | | | 877 | | | | — | | | | 1,587 | | | | — | | Depreciation and amortization | | | 28,546 | | | | 26,706 | | | | 83,862 | | | | 81,888 | | | | | | | | | | | | | | | | | | | Total operating expenses | | | 228,315 | | | | 225,153 | | | | 691,382 | | | | 677,126 | | | | | | | | | | | | | | | | | | | Operating income | | | 36,409 | | | | 46,567 | | | | 148,162 | | | | 152,306 | | Interest expense | | | (16,621 | ) | | | (15,947 | ) | | | (49,640 | ) | | | (48,002 | ) | Interest income | | | 2,957 | | | | 2,965 | | | | 8,874 | | | | 9,116 | | Loss from joint ventures | | | (899 | ) | | | (638 | ) | | | (2,616 | ) | | | (2,086 | ) | Other gains and (losses), net | | | 2,554 | | | | 2,468 | | | | 1,024 | | | | 2,288 | | | | | | | | | | | | | | | | | | | Income before income taxes | | | 24,400 | | | | 35,415 | | | | 105,804 | | | | 113,622 | | Provision for income taxes | | | (530 | ) | | | (1,822 | ) | | | (2,022 | ) | | | (2,352 | ) | | | | | | | | | | | | | | | | | | Net income | | $ | 23,870 | | | $ | 33,593 | | | $ | 103,782 | | | $ | 111,270 | | | | | | | | | | | | | | | | | | | Basic income per share | | $ | 0.47 | | | $ | 0.66 | | | $ | 2.03 | | | $ | 2.18 | | | | | | | | | | | | | | | | | | | Fully diluted income per share | | $ | 0.46 | | | $ | 0.66 | | | $ | 2.02 | | | $ | 2.17 | | | | | | | | | | | | | | | | | | | Dividends declared per common share | | $ | 0.80 | | | $ | 0.75 | | | $ | 2.40 | | | $ | 2.25 | | | | | | | | | | | | | | | | | | | Comprehensive income, net of taxes | | $ | 25,434 | | | $ | 29,979 | | | $ | 105,391 | | | $ | 107,704 | | | | | | | | | | | | | | | | | | |
The accompanying notes are an integral part of these condensed consolidated financial statements. RYMAN HOSPITALITY PROPERTIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWSEQUITY (DEFICIT)
AND NONCONTROLLING INTEREST (Unaudited) (Unaudited)
(In thousands) | | | | | | | | | | | | Nine Months Ended | | | | | September 30, | | | | | 2017 | | | 2016 | | Cash Flows from Operating Activities: | | | | | | | | | Net income | | $ | 103,782 | | | $ | 111,270 | | Amounts to reconcile net income to net cash flows provided by operating activities: | | | | | | | | | Provision (benefit) for deferred income taxes | | | (500 | ) | | | 279 | | Depreciation and amortization | | | 83,862 | | | | 81,888 | | Amortization of deferred financing costs | | | 3,958 | | | | 3,647 | | Write-off of deferred financing costs | | | 925 | | | | — | | Stock-based compensation expense | | | 4,954 | | | | 4,594 | | Changes in: | | | | | | | | | Trade receivables | | | (8,865 | ) | | | (3,220 | ) | Accounts payable and accrued liabilities | | | 31,994 | | | | 2,647 | | Other assets and liabilities | | | (4,340 | ) | | | (1,989 | ) | | | | | | | | | | Net cash flows provided by operating activities | | | 215,770 | | | | 199,116 | | | | | | | | | | | Cash Flows from Investing Activities: | | | | | | | | | Purchases of property and equipment | | | (127,148 | ) | | | (84,557 | ) | Investment in Gaylord Rockies joint venture | | | (16,309 | ) | | | (50,443 | ) | Investment in other joint ventures | | | (6,819 | ) | | | (750 | ) | Proceeds from sale of Peterson LOI | | | — | | | | 6,785 | | (Increase) decrease in restricted cash and cash equivalents | | | 7,359 | | | | (3,517 | ) | Other investing activities | | | (4,139 | ) | | | 1,023 | | | | | | | | | | | Net cash flows used in investing activities | | | (147,056 | ) | | | (131,459 | ) | | | | | | | | | | Cash Flows from Financing Activities: | | | | | | | | | Net borrowings (repayments) under revolving credit facility | | | (235,900 | ) | | | 60,500 | | Borrowings under term loan A | | | 200,000 | | | | — | | Borrowings under term loan B | | | 500,000 | | | | — | | Repayments under term loan B | | | (392,500 | ) | | | (3,000 | ) | Deferred financing costs paid | | | (12,268 | ) | | | — | | Repayment of note payable related to purchase of AC Hotel | | | — | | | | (6,000 | ) | Repurchase of Company stock for retirement | | | — | | | | (24,811 | ) | Payment of dividends | | | (120,740 | ) | | | (112,900 | ) | Payment of tax withholdings for share-based compensation | | | (3,775 | ) | | | (3,150 | ) | Other financing activities | | | 13 | | | | 1,271 | | | | | | | | | | | Net cash flows used in financing activities | | | (65,170 | ) | | | (88,090 | ) | | | | | | | | | | Net change in cash and cash equivalents | | | 3,544 | | | | (20,433 | ) | Cash and cash equivalents - unrestricted, beginning of period | | | 59,128 | | | | 56,291 | | | | | | | | | | | Cash and cash equivalents - unrestricted, end of period | | $ | 62,672 | | | $ | 35,858 | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Distributions | | Accumulated | | | | | Noncontrolling | | | | | Noncontrolling | | | | | | Additional | | | | | in Excess of | | Other | | Total | | Interest in | | Total | | Interest in | | | Common | | Paid-in | | Treasury | | Retained | | Comprehensive | | Stockholders' | | Operating | | Equity | | Consolidated | | | Stock | | Capital | | Stock | | Earnings | | Loss | | Equity (Deficit) | | Partnership | | (Deficit) | | Joint Venture | BALANCE, December 31, 2021 | | $ | 551 | | $ | 1,112,867 | | $ | (18,467) | | $ | (1,088,105) | | $ | (29,080) | | $ | (22,234) | | $ | (159) | | $ | (22,393) | | $ | — | Net loss | | | — | | | — | | | — | | | (24,621) | | | — | | | (24,621) | | | (176) | | | (24,797) | | | — | Other comprehensive income, net of income taxes | | | — | | | — | | | — | | | — | | | 9,986 | | | 9,986 | | | — | | | 9,986 | | | — | Restricted stock units and stock options surrendered | | | — | | | (3,761) | | | — | | | — | | | — | | | (3,761) | | | — | | | (3,761) | | | — | Equity-based compensation expense | | | — | | | 3,786 | | | — | | | — | | | — | | | 3,786 | | | — | | | 3,786 | | | — | BALANCE, March 31, 2022 | | $ | 551 | | $ | 1,112,892 | | $ | (18,467) | | $ | (1,112,726) | | $ | (19,094) | | $ | (36,844) | | $ | (335) | | $ | (37,179) | | $ | — | Net income | | | — | | | — | | | — | | | 50,284 | | | — | | | 50,284 | | | 360 | | | 50,644 | | | 280 | Other comprehensive loss, net of income taxes | | | — | | | — | | | — | | | — | | | (1,298) | | | (1,298) | | | — | | | (1,298) | | | — | Sale of noncontrolling interest in OEG | | | — | | | (9,467) | | | — | | | — | | | — | | | (9,467) | | | — | | | (9,467) | | | 295,956 | Restricted stock units and stock options surrendered | | | 1 | | | (124) | | | — | | | — | | | — | | | (123) | | | — | | | (123) | | | — | Equity-based compensation expense | | | — | | | 3,654 | | | — | | | — | | | — | | | 3,654 | | | — | | | 3,654 | | | — | BALANCE, June 30, 2022 | | $ | 552 | | $ | 1,106,955 | | $ | (18,467) | | $ | (1,062,442) | | $ | (20,392) | | $ | 6,206 | | $ | 25 | | $ | 6,231 | | $ | 296,236 |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Distributions | | Accumulated | | | | | Noncontrolling | | | | | Noncontrolling | | | | | | Additional | | | | | in Excess of | | Other | | Total | | Interest in | | | | Interest in | | | Common | | Paid-in | | Treasury | | Retained | | Comprehensive | | Stockholders' | | Operating | | Total | | Consolidated | | | Stock | | Capital | | Stock | | Earnings | | Loss | | Equity | | Partnership | | Equity | | Joint Venture | BALANCE, December 31, 2020 | | $ | 550 | | $ | 1,192,261 | | $ | (18,467) | | $ | (911,092) | | $ | (57,951) | | $ | 205,301 | | $ | 14,516 | | $ | 219,817 | | $ | 100,969 | Net loss | | | — | | | — | | | — | | | (104,521) | | | — | | | (104,521) | | | (807) | | | (105,328) | | | (11,793) | Other comprehensive income, net of income taxes | | | — | | | — | | | — | | | — | | | 6,100 | | | 6,100 | | | — | | | 6,100 | | | — | Redemption of noncontrolling interest in Operating Partnership | | | — | | | — | | | — | | | (1,352) | | | — | | | (1,352) | | | (1,086) | | | (2,438) | | | — | Contribution to consolidated joint venture | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | 4,425 | Restricted stock units and stock options surrendered | | | — | | | (3,357) | | | — | | | 12 | | | — | | | (3,345) | | | — | | | (3,345) | | | — | Equity-based compensation expense | | | — | | | 2,522 | | | — | | | — | | | — | | | 2,522 | | | — | | | 2,522 | | | — | BALANCE, March 31, 2021 | | $ | 550 | | $ | 1,191,426 | | $ | (18,467) | | $ | (1,016,953) | | $ | (51,851) | | $ | 104,705 | | $ | 12,623 | | $ | 117,328 | | $ | 93,601 | Net loss | | | — | | | — | | | — | | | (57,919) | | | — | | | (57,919) | | | (422) | | | (58,341) | | | (4,708) | Other comprehensive income, net of income taxes | | | — | | | — | | | — | | | — | | | 11,204 | | | 11,204 | | | — | | | 11,204 | | | — | Purchase of remaining interest in consolidated joint venture | | | — | | | (99,107) | | | — | | | — | | | — | | | (99,107) | | | — | | | (99,107) | | | (88,893) | Restricted stock units and stock options surrendered | | | 1 | | | (50) | | | — | | | — | | | — | | | (49) | | | — | | | (49) | | | — | Equity-based compensation expense | | | — | | | 3,146 | | | — | | | — | | �� | — | | | 3,146 | | | — | | | 3,146 | | | — | BALANCE, June 30, 2021 | | $ | 551 | | $ | 1,095,415 | | $ | (18,467) | | $ | (1,074,872) | | $ | (40,647) | | $ | (38,020) | | $ | 12,201 | | $ | (25,819) | | $ | — |
The accompanying notes are an integral part of these condensed consolidated financial statements. RYMAN HOSPITALITY PROPERTIES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 1. BASIS OF PRESENTATION: On January 1, 2013, Ryman Hospitality Properties, Inc. (“Ryman”) and its subsidiaries (collectively with Ryman, the “Company”) began operating as a real estate investment trust (“REIT”) for federal income tax purposes, specializing in group-oriented, destination hotel assets in urban and resort markets. The Company’s owned assets include a network of upscale, meetings-focused resorts that are managed by Marriott International, Inc. (“Marriott”) under the Gaylord Hotels brand. These resorts, which the Company refers to as the Gaylord Hotels properties, consist of the Gaylord Opryland Resort & Convention Center in Nashville, Tennessee (“Gaylord Opryland”), the Gaylord Palms Resort & Convention Center near Orlando, Florida (“Gaylord Palms”), the Gaylord Texan Resort & Convention Center near Dallas, Texas (“Gaylord Texan”) and, the Gaylord National Resort & Convention Center near Washington D.C. (“Gaylord National”)., and the Gaylord Rockies Resort & Convention Center near Denver, Colorado (“Gaylord Rockies”), which prior to May 2021 was owned by a joint venture (the “Gaylord Rockies joint venture”) in which the Company owned a 65% interest. The Company’s other owned hotel assets managed by Marriott include Gaylord Springs Golf Links (“Gaylord Springs”), the Wildhorse Saloon, the General Jackson Showboat (“General Jackson”), the Inn at Opryland, an overflow hotel adjacent to Gaylord Opryland, and the AC Hotel at National Harbor, Washington D.C. (“AC Hotel”), an overflow hotel adjacent to Gaylord National. In April 2021, the Company entered into an agreement with RIDA Development Corporation to acquire the remaining 35% ownership interest in the Gaylord Rockies joint venture not previously owned by the Company for $188.0 million and approximately 130 acres of undeveloped, adjacent land for $22.0 million in cash (the “JV Purchase”). The JV Purchase closed in May 2021 and was funded through cash on hand and borrowings under the Company’s $700 million revolving credit facility. As discussed below, the Company consolidated the Gaylord Rockies joint venture both before and after the purchase in the accompanying condensed consolidated financial statements. As further discussed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, for periods prior to its ownership of 100% ownership of the asset in May 2021, management concluded that the Company was the primary beneficiary of the Gaylord Rockies joint venture, which was a variable interest entity (“VIE”). As such, the Company consolidated the assets, liabilities and results of operations of the Gaylord Rockies joint venture in the accompanying condensed consolidated financial statements. The portion of the Gaylord Rockies joint venture that the Company did not previously own was recorded as noncontrolling interest in consolidated joint venture in the accompanying condensed consolidated balance sheet, and any previous adjustment necessary to reflect the noncontrolling interest at its redemption value is shown in the accompanying condensed consolidated statements of equity. As the Gaylord Rockies joint venture is wholly-owned by the Company as of May 2021, it is no longer considered as a VIE. The Company also owns and operatesa business holding a number of media and entertainment assets, includingknown as the Opry Entertainment Group, reported as the Company’s Entertainment segment. These assets include the Grand Ole Opry, the legendary weekly showcase of country music’s finest performers; the Ryman Auditorium, the storied live music venue and former home of the Grand Ole Opry; andWSM-AM, the Opry’s radio home.home; Ole Red, a brand of Blake Shelton-themed bar, music venue and event spaces; 2 Nashville-based assets managed by Marriott – the Wildhorse Saloon and the General Jackson Showboat; and as of May 31, 2022, Block 21, a mixed-use entertainment, lodging, office, and retail complex located in Austin, Texas (“Block 21”). The Company also owns a 50% interest in a joint venture that creates and distributes a linear multicast and over-the-top channel dedicated to the country music lifestyle (“Circle”), which launched its broadcast network on January 1, 2020. Beginning June 16, 2022, the Company owns 70% of Opry Entertainment Group. See Note 2, “OEG Transaction,” Note 3, “Block 21 Transaction,” and Note 15, “Commitments and Contingencies,” to the condensed consolidated financial statements included herein for further disclosure. The condensed consolidated financial statements include the accounts of Ryman and its subsidiaries and have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted from this report pursuant to such rules and regulations. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto included in the Company’s Annual Report on Form10-K for the year ended December 31, 2016.2021. In the opinion of management, all adjustments necessary for a fair statement of the results of operations for the interim periods have been included. All adjustments are of a normal, recurring nature. The results of operations for such interim periods are not necessarily indicative of the results for the full year because of seasonal and short-term variations. The Company conducts its business through an umbrella partnership REIT, in which substantially all of its assets are held by, and all of its operations are conducted through, RHP Hotel Properties, LP, a subsidiary operating partnership (the “Operating Partnership”) that the Company formed in connection with its REIT conversion. Ryman is the sole limited partner of the Operating Partnership and currently owns, either directly or indirectly, all of the partnership units of the Operating Partnership. RHP Finance Corporation, a Delaware corporation (“Finco”), was formed as a wholly-owned subsidiary of the Operating Partnership for the sole purpose of being aco-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 Form10-Q and Ryman’s other reports, documents or other information filed with the SEC pursuant to the Securities Exchange Act of 1934, as amended. The Company principally operates, through its subsidiaries and its property managers, as applicable, in the following business segments: Hospitality, Entertainment, and Corporate and Other.
Impact of COVID-19 Pandemic The novel coronavirus disease (COVID-19) pandemic has been and continues to be a complex and evolving situation, causing unprecedented levels of disruption to the Company’s business. Although the Company’s assets are currently open and operating without capacity restrictions and business levels continue to recover, there remains significant uncertainty surrounding the full extent of the impact of the COVID-19 pandemic on the Company’s future results of operations and financial position. All of the Company’s assets are open and have been operating throughout 2022. The majority of the Company’s businesses were open and operating throughout 2021. However, Gaylord National remained closed during the first half of 2021 and reopened July 1, 2021. The Grand Ole Opry and Ryman Auditorium reopened for limited-capacity publicly attended performances in September 2020, and reopened for full-capacity publicly attended performances in May 2021. In addition, subsequent to the December 2020 downtown Nashville bombing, the Wildhorse Saloon reopened in April 2021. Throughout 2020 and 2021 and continuing to date, the Company has paid all required debt service payments on its indebtedness, lease payments, taxes and other payables. Beginning in July 2020 and continuing to date, Gaylord Rockies was in a cash sweep position pursuant to and as defined in the Gaylord Rockies $800 million term loan agreement. At June 30, 2022, the Company had $689.6 million available for borrowing under its revolving credit facility, $65.0 million available for borrowing under the OEG revolving credit facility, and $179.2 million in unrestricted cash on hand. The Company’s quarterly dividend is currently suspended. The Company’s board of directors will consider a future dividend as permitted by the Company’s credit agreement, and any future dividend is subject to the Company’s board of directors’ determinations as to the amount of distributions and timing thereof. Newly Issued Accounting Standards In May 2014,March 2020, the FASB issued ASU No. 2020-04, “Reference Rate Reform – Facilitation of the Effects of Reference Rate Reform on Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”)No. 2014-09, “Revenue from Contracts with CustomersReporting,” which provides temporary optional expedients and exceptions to the core principleexisting guidance on contract modifications and hedge accounting to ease the financial reporting burdens of the expected market transition from the London Interbank Offered Rate (“LIBOR”) and other interbank offered rates to alternative reference rates, such as the Secured Overnight Financing Rate (“SOFR”). The guidance in ASU 2020-04 is optional, effective immediately, and may be elected over time as reference rate reform activities occur generally through December 31, 2022. During 2020, the Company elected to apply the hedge accounting expedients related to probability and the assessments of effectiveness for future LIBOR-indexed cash flows to assume that the index upon which future hedged transactions will be based matches the index on the corresponding derivatives. Application of these expedients preserves the presentation of derivatives consistent with past presentation. The Company continues to evaluate the impact of this guidance and may apply other elections as applicable as additional market changes occur. 2. OEG TRANSACTION: On June 16, 2022, the Company and certain of its subsidiaries, including OEG Attractions Holdings, LLC (“OEG”), which directly or indirectly owns the assets that comprise the Company’s Entertainment segment, consummated the transactions pursuant to an investment agreement (the “Investment Agreement”) with Atairos Group, Inc. (“Atairos”) and A-OEG Holdings, LLC, an affiliate of Atairos (the “OEG Investor”), pursuant to which OEG issued and sold to the OEG Investor, and the OEG Investor acquired, 30% of the equity interests of OEG for approximately $296.0 million (the “OEG Transaction”). The purchase price payable to the Company for the OEG Transaction may be increased by $30.0 million if OEG achieves certain financial objectives in 2023 or 2024. The Company retains a controlling 70% equity interest in OEG and continues to consolidate the assets, liabilities and results of operations of OEG in the accompanying condensed consolidated financial statements. The portion of OEG that the Company does not own is recorded as noncontrolling interest in consolidated joint venture, which is classified as mezzanine equity in the accompanying condensed consolidated balance sheet, and any adjustment necessary to reflect the noncontrolling interest at its redemption value is shown in the accompanying condensed consolidated statements of equity. After the payment of transaction expenses, the Company used substantially all of the net proceeds from the OEG Transaction, together with the net proceeds the Company received from the OEG Term Loan (as defined below), to repay the outstanding balance of the Company’s existing $300 million term loan A and to pay down substantially all borrowings outstanding under the Company’s revolving credit facility. Pursuant to the Second Amended and Restated Limited Liability Company Agreement for OEG entered into at the closing of the OEG Transaction (the “OEG LLC Agreement”), OEG will be governed by a Board of Managers (the “Board”), subject to member consent to certain actions. The Board will initially consist of 6 members, 4 designated by the Company and 2 designated by the OEG Investor. Board membership may be modified from time to time to reflect the proportional ownership of outstanding units by each party. Subject to certain ownership thresholds, the approval of both parties will be required with respect to certain “major decisions” affecting OEG, including, but not limited to, approval of OEG’s annual operating budget in the event of changes exceeding certain thresholds, the incurrence of certain debt, the issuance of new equity securities, and mergers, acquisitions or dispositions in excess of a certain dollar threshold. The OEG Investor will have the option to acquire additional common units of OEG from the Company (the “Purchase Option”) in each of the fourth quarters of 2023, 2024 and 2025 in an amount equal to the lesser of $125 million or the maximum amount of proceeds that the Company may receive with respect to its compliance with applicable REIT tests, provided that the OEG Investor may not purchase an amount of common units that would result in the Company owning less than 51% of the outstanding common units after giving effect to the purchase. If the OEG Investor elects to exercise the Purchase Option, then (i) beginning on June 19, 2027 (the fifth anniversary of the OEG Investor’s original investment in OEG (the “Fifth Anniversary”), the OEG Investor will have the right to demand that OEG undertake a companyQualified IPO and (ii) the OEG Investor’s rights with respect to the IPO Request Put Right, the Seven-Year Put Right, an IPO Payment and a Sale Payment, each as defined in the OEG LLC Agreement and described below, will recognize revenue when it transfers promisedexpire. The Purchase Option will terminate upon the occurrence of a Qualified IPO, a Sale of OEG or a Qualified Spinoff, each as defined in the OEG LLC Agreement. IPO Request Put Right. If OEG has not completed a Qualified IPO prior to June 16, 2026 (the fourth anniversary of the OEG Investor’s original investment in OEG (the “Fourth Anniversary”)), the OEG Investor may request that OEG undertake a Qualified IPO. If the Company, through its subsidiary RHP Hotels, LLC (the “Ryman Member”), declines to undertake such Qualified IPO, the OEG Investor may cause the Ryman Member to acquire all of the OEG Investor’s interest in OEG at a price equal to 1.5 times the OEG Investor’s equity investment (the “IPO Request Put Price”). Seven-Year Put Right. If OEG has not completed a Qualified IPO, Sale of OEG or a Qualified Spinoff prior to June 16, 2029 (the seventh anniversary of the OEG Investor’s original investment in OEG (the “Seventh Anniversary”)), the OEG Investor may cause the Ryman Member to acquire all of the OEG Investor’s interest in OEG at a price equal to the fair value of the OEG Investor’s equity interest (the “Seven-Year Put Price”). The IPO Request Put Price and the Seven-Year Put Price may each be settled in either cash or Company stock, at the Company’s option, and the IPO Request Put Right and the Seven-Year Put Right will each terminate at the first closing of the Purchase Option. IPO Payment. Upon a Qualified IPO that occurs on or before the Seventh Anniversary, the OEG Investor will be entitled to an IPO Payment if the Post IPO Investor Stake Value (as defined in OEG LLC Agreement) measured on the 120th trading day post-IPO does not equal or exceed the Minimum Investor Stake Value (as defined in the OEG LLC Agreement). If the IPO occurs after the Fourth Anniversary, the IPO Payment will be capped at 50% of the OEG Investor’s investment in OEG (the “Payment Cap”). Any IPO Payment may be satisfied in either cash, OEG equity owned by the Ryman Member, or Company stock. Sale Payment. Upon a sale of OEG (but excluding a Qualified Spinoff) that occurs on or before the Seventh Anniversary, the OEG Investor will be entitled to a Sale Payment if the value of the OEG Investor’s retained invested equity (implied by the sale) does not equal or exceed the Minimum Investor Sale Value (as defined in the OEG LLC Agreement). If a sale of OEG occurs after the Fifth Anniversary, any Sale Payment will be capped at the Payment Cap. Any Sale Payment may be satisfied in either cash, a preferential cash distribution, additional consideration in the Sale of OEG or Company stock. The above descriptions related to the OEC LLC Agreement do not purport to be complete and are qualified in their entirety by reference to the OEG LLC Agreement filed as Exhibit 10.4 to this Quarterly Report on Form 10-Q and incorporated herein by reference. Also on June 16, 2022, OEG Borrower, LLC (“OEG Borrower”) and OEG Finance, LLC (“OEG Finance”), each a wholly owned direct or indirect subsidiary of OEG, entered into a credit agreement (the “OEG Credit Agreement”) among OEG Borrower, as borrower, OEG Finance, certain subsidiaries of OEG Borrower from time to time party thereto as guarantors, the lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent. The OEG Credit Agreement provides for (i) a senior secured term loan facility in the aggregate principal amount of $300.0 million (the “OEG Term Loan”) and (ii) a senior secured revolving credit facility in an aggregate principal amount not to exceed $65.0 million (the “OEG Revolver”). The OEG Term Loan matures on June 16, 2029 and the OEG Revolver matures on June 16, 2027. The OEG Term Loan bears interest at a rate equal to either, at OEG Borrower’s election, (i) the Alternate Base Rate plus 4.00% or (b) Adjusted Term SOFR plus 5.00% (all as specifically more described in the OEG Credit Agreement). The OEG Revolver bears interest at a rate equal to either, at OEG Borrower’s election, (i) the Alternate Base Rate plus 3.75% or (b) Adjusted Term SOFR plus 4.75%, which shall be subject to reduction in the applicable margin based upon OEG’s First Lien Leverage Ratio (all as specifically more described in the OEG Credit Agreement). The OEG Term Loan and OEG Revolver are each secured by substantially all of the assets of OEG Finance and each of its subsidiaries (other than Block 21 and Circle, as more specifically described in the OEG Credit Agreement). NaN revolving credit advances were made under the OEG Revolver at closing. 3. BLOCK 21 TRANSACTION: On May 31, 2022, the Company purchased Block 21 for a stated purchase price of $260 million, as subsequently adjusted to $255 million pursuant to the terms of the purchase agreement, which includes the assumption of approximately $136 million of existing mortgage debt. Block 21 is the home of the Austin City Limits Live at The Moody Theater (“ACL Live”), a 2,750-seat entertainment venue that serves as the filming location for the Austin City Limits television series. The Block 21 complex also includes the 251-room W Austin Hotel, which Marriott manages, the 3TEN at ACL Live club and approximately 53,000 square feet of other Class A commercial space. The Company funded the cash portion of the purchase price with cash on hand and borrowings under its revolving credit facility. The acquisition was accounted for as a business combination, given the different nature of the principal operations acquired (a hotel and an entertainment venue). Block 21 assets are reflected in the Company’s Entertainment segment as of May 31, 2022. The Company performed a preliminary valuation of the fair value of the acquired assets and liabilities as of May 31, 2022. The valuations of the various components of property and equipment were determined principally based on the cost approach, which uses assumptions regarding replacement values from established indices. The valuation of intangible assets was based on various methods to evaluate the values of leases in place and advanced bookings previously received for the hotel. The valuation of assumed debt was principally based on a discounted cash flow approach using market interest rates at the time of the transaction. The Company considers each of these estimates as Level 3 fair value measurements. Other acquired assets were valued at carrying value. Based on the aggregation of fair values as compared to consideration transferred, the Company concluded that there was no goodwill or bargain purchase gain related to the business combination. The Company preformed an income approach evaluation of the acquired set which corroborated the conclusion that there was no goodwill related to the acquisition. Such evaluation included assumptions of future projected cash flows, which was based on the future projected occupancy and average daily rate for the W Hotel Austin, future anticipated cash flows at ACL Live, and market discount rates. Utilizing the valuation, the Company performed a purchase price allocation for the acquired assets and liabilities of Block 21. As a result, the Company preliminarily allocated the purchase price, adjusted for working capital adjustments as defined in the purchase agreement, in the Company’s balance sheet at May 31, 2022 as follows (amounts in thousands): | | | | Property and equipment | | $ | 237,159 | Cash and cash equivalents - unrestricted | | | 8,493 | Cash and cash equivalents - restricted | | | 12,450 | Trade receivables | | | 1,405 | Prepaid expenses and other assets | | | 1,085 | Intangible assets | | | 1,723 | Total assets acquired | | | 262,315 | | | | | Debt (Note 9) | | | (132,531) | Accounts payable and accrued liabilities | | | (14,774) | Other liabilities | | | (75) | Total liabilities assumed | | | (147,380) | | | | | Net assets acquired | | $ | 114,935 |
The estimated fair values for the assets acquired and liabilities assumed are preliminary and are subject to change during the one-year measurement period as additional information related to the inputs and assumptions used in determining the fair value of the assets and liabilities becomes available. The Company will continue to review the underlying inputs and assumptions. Therefore, the purchase price allocation is not yet complete as of the date of this filing. Once the allocation is complete, an additional adjustment to the allocation may occur. The Company incurred $1.2 million and $1.3 million in acquisition-related expenses in the three months and six months ended June 30, 2022, respectively, which are included in entertainment expenses in the accompanying condensed consolidated statement of operations. 4. REVENUES: Revenues from occupied hotel rooms are recognized over time as the daily hotel stay is provided to hotel groups and guests. Revenues from concessions, food and beverage sales, and group meeting services are recognized over the period or at the point in time those goods or services are delivered to customers in an amount that reflects the consideration to whichhotel group or guest. Revenues from ancillary services at the company expects to be entitled in exchange for thoseCompany’s hotels, such as spa, parking, and transportation services, are generally recognized at the time the goods or services. Under this guidance, companies will needservices are provided. Cancellation fees and attrition fees, which are charged to use more judgmentgroups when they do not fulfill the minimum number of room nights or minimum food and make more estimates than under today’s guidance. These judgments may include identifying performance obligationsbeverage spending requirements originally contracted for, are generally recognized as revenue in the contract, estimatingperiod the Company determines it is probable that a significant reversal in the amount of variable considerationrevenue recognized will not occur, which is typically the period these fees are collected. The Company generally recognizes revenues from the Entertainment segment at the point in time that services are provided or goods are delivered or shipped to includethe customer, as applicable. Entertainment segment revenues from licenses of content are recognized at the point in time the transaction pricecontent is delivered to the licensee and allocating the transaction pricelicensee can use and benefit from the content. Revenue related to each separate performance obligation. The ASUcontent provided to Circle is effectiveeliminated for the Company in the first quarterportion of 2018, andCircle that the Company plans to adopt this standard at that time using the modified retrospective approach. The Company has completed a revenue stream scoping process and has made significant progress toward completing its assessment of how the new ASU will impact the amount and timing of the various revenue streams recorded in its financial statements. While the Company is still finalizing the assessment in conjunction with Marriott, due to the short-term,day-to-day natureowns. Almost all of the Company’s hospitalityrevenues are either cash-based or, for meeting and entertainment segment revenues, the pattern of revenue recognition is not expected to change significantly. In February 2016, the FASB issued ASUNo. 2016-02, “Leases,” that requires lessees to put most leases on their balance sheet, but recognize expenses on their income statements in a manner similar to previous accounting. The ASU also eliminates the required use of bright-line tests for determining lease classification. The ASU is effective for the Company in the first quarter of 2019 and requires a modified retrospective approach, with restatement of prior periods. The primary impact of the adoption will be the inclusion of the Company’s75-year ground lease at Gaylord Palms on its balance sheet. See Note 12 inconvention groups who meet the Company’s Annual Reportcredit criteria, billed and collected on Form10-K for the year ended December 31, 2016 for a further disclosure of the Company’s outstanding leases.
In June 2016, the FASB issued ASUNo. 2016-13, “Financial Instruments – Credit Losses – Measurement of Credit Losses on Financial Instruments,” which will change how entities measure credit losses for most financial assets and certain other instruments that are not measured at fair value through net income. The ASU will replace the current “incurred loss” approach with an “expected loss” model for instruments measured at amortized cost. For trade and othershort-term receivablesheld-to-maturity debt securities, loans and other instruments, entities will be required to use a new forward-looking “expected loss” model that generally will result in the earlier recognition of allowances for losses. The ASU is effective for the Company in the first quarter of 2020. basis. The Company is currently evaluatingrequired to collect certain taxes from customers on behalf of government agencies and remit these to the effectsapplicable governmental entity on a periodic basis. These taxes are collected from customers at the time of this ASU on its financial statements,purchase but are not included in revenue. The Company records a liability upon collection of such taxes from the customer and such effects have not yet been determined.
In March 2017,relieves the FASB issued ASUNo. 2017-07, “Compensation – Retirement Benefits: Improvingliability when payments are remitted to the Presentationapplicable governmental agency.
The weighted average number of common shares outstanding is calculatedCompany’s revenues disaggregated by major source are as follows (in thousands): | | | | | | | | | | | | | | | Three Months Ended | | Six Months Ended | | | June 30, | | June 30, | | | 2022 | | 2021 | | 2022 | | 2021 | Hotel group rooms | | $ | 110,464 | | $ | 20,079 | | $ | 172,942 | | $ | 24,591 | Hotel transient rooms | | | 51,042 | | | 41,892 | | | 90,157 | | | 65,608 | Hotel food and beverage - banquets | | | 130,510 | | | 18,251 | | | 203,334 | | | 22,220 | Hotel food and beverage - outlets | | | 57,573 | | | 27,368 | | | 96,865 | | | 41,574 | Hotel other | | | 52,213 | | | 28,098 | | | 99,615 | | | 51,497 | Entertainment admissions/ticketing | | | 26,733 | | | 12,655 | | | 42,282 | | | 15,815 | Entertainment food and beverage | | | 24,036 | | | 12,160 | | | 38,397 | | | 16,956 | Entertainment produced content | | | 1,091 | | | 1,165 | | | 2,559 | | | 3,291 | Entertainment retail and other | | | 16,542 | | | 9,193 | | | 23,188 | | | 13,484 | Total revenues | | $ | 470,204 | | $ | 170,861 | | $ | 769,339 | | $ | 255,036 |
| | | | | | | | | | | | | | | | | | | | Three Months Ended | | | Nine Months Ended | | | | | September 30, | | | September 30, | | | | | 2017 | | | 2016 | | | 2017 | | | 2016 | | Weighted average shares outstanding—basic | | | 51,191 | | | | 51,004 | | | | 51,131 | | | | 51,009 | | Effect of dilutive stock-based compensation | | | 185 | | | | 266 | | | | 200 | | | | 270 | | | | | | | | | | | | | | | | | | | Weighted average shares outstanding—diluted | | | 51,376 | | | | 51,270 | | | | 51,331 | | | | 51,279 | | | | | | | | | | | | | | | | | | |
3.The Company’s Hospitality segment revenues disaggregated by location are as follows (in thousands):
| | | | | | | | | | | | | | | Three Months Ended | | Six Months Ended | | | June 30, | | June 30, | | | 2022 | | 2021 | | 2022 | | 2021 | Gaylord Opryland | | $ | 105,497 | | $ | 45,002 | | $ | 179,016 | | $ | 66,761 | Gaylord Palms | | | 68,289 | | | 32,702 | | | 128,137 | | | 47,819 | Gaylord Texan | | | 77,665 | | | 34,069 | | | 134,301 | | | 52,427 | Gaylord National | | | 72,223 | | | 2,311 | | | 104,810 | | | 3,568 | Gaylord Rockies | | | 70,755 | | | 18,338 | | | 105,542 | | | 30,308 | AC Hotel | | | 3,261 | | | 1,459 | | | 4,868 | | | 2,264 | Inn at Opryland | | | 4,112 | | | 1,807 | | | 6,239 | | | 2,343 | Total Hospitality segment revenues | | $ | 401,802 | | $ | 135,688 | | $ | 662,913 | | $ | 205,490 |
The majority of the Company’s Entertainment segment revenues are concentrated in Tennessee. The Company records deferred revenues when cash payments are received in advance of its performance obligations, primarily related to advanced deposits on hotel rooms and advanced ticketing at its OEG venues. At June 30, 2022 and December 31, 2021, the Company had $138.5 million and $116.8 million, respectively, in deferred revenues, which are included in accounts payable and accrued liabilities in the accompanying condensed consolidated balance sheets. Of the amount outstanding at December 31, 2021, approximately $37.6 million was recognized in revenue during the six months ended June 30, 2022. 5. INCOME (LOSS) PER SHARE: The computation of basic and diluted earnings per common share is as follows (in thousands, except per share data): | | | | | | | | | | | | | | | | Three Months Ended | | | Six Months Ended | | | | June 30, | | | June 30, | | | | 2022 | | | 2021 | | | 2022 | | | 2021 | Numerator: | | | | | | | | | | | | | Net income (loss) available to common shareholders | | $ | 50,284 | | $ | (57,919) | | $ | 25,663 | | $ | (162,440) | Net income attributable to noncontrolling interest in consolidated joint venture | | | 280 | | | — | | | — | | | — | Net income (loss) available to common shareholders - if-converted method | | $ | 50,564 | | $ | (57,919) | | $ | 25,663 | | $ | (162,440) | | | | | | | | | | | | | | Denominator: | | | | | | | | | | | | | Weighted average shares outstanding - basic | | | 55,150 | | | 55,058 | | | 55,118 | | | 55,026 | Effect of dilutive stock-based compensation | | | 170 | | | — | | | 203 | | | — | Effect of dilutive put rights | | | 542 | | | — | | | — | | | — | Weighted average shares outstanding - diluted | | | 55,862 | | | 55,058 | | | 55,321 | | | 55,026 | | | | | | | | | | | | | | Basic income (loss) per share available to common stockholders | | $ | 0.91 | | $ | (1.05) | | $ | 0.47 | | $ | (2.95) | Diluted income (loss) per share available to common stockholders | | $ | 0.91 | | $ | (1.05) | | $ | 0.46 | | $ | (2.95) |
For each of the three months and six months ended June 30, 2021, the effect of dilutive stock-based compensation was the equivalent of 0.1 million shares of common stock outstanding. Because the Company had a loss available to common stockholders in the three months and six months ended June 30, 2021, these incremental shares were excluded from the computation of dilutive earnings per share as the effect of their inclusion would have been anti-dilutive. As more fully discussed in Note 2, “OEG Transaction,” the OEG Investor will have certain put rights to require the Company to purchase its equity interest in OEG, which the Company may pay in cash or Company stock, at the Company’s option. The Company calculated potential dilution for the put rights based on the if-converted method, which assumes the put rights were converted on the first day of the period or the date of issuance. For the six months ended June 30, 2022, the effect of these put rights was the equivalent of 0.3 million shares of Company common stock outstanding. Because these put rights were anti-dilutive for the six months ended June 30, 2022, these incremental shares were excluded from the computation of dilutive earnings per share. The operating partnership units (“OP Units”) held by the noncontrolling interest holders in the Operating Partnership have been excluded from the denominator of the diluted income (loss) per share calculation for the three months and six months ended June 30, 2022 and 2021 as there would be no effect on the calculation of diluted income (loss) per share because the income (loss) attributable to the OP Units held by the noncontrolling interest holders would also be subtracted to derive net income (loss) available to common stockholders. 6. ACCUMULATED OTHER COMPREHENSIVE LOSS: The Company’s balance in accumulated other comprehensive loss is composedcomprised of amounts related to the Company’s minimum pension liability. Duringliability discussed in Note 13, “Pension Plans,” interest rate derivatives designated as cash flow hedges related to the three monthsCompany’s outstanding debt as discussed in Note 9, “Debt,” and nine months ended September 30, 2017,amounts related to an other-than-temporary impairment of a held-to-maturity investment that existed prior to 2020 with respect to the Company recorded $1.6 millionnotes receivable discussed in other comprehensive income, and duringNote 8, “Notes Receivable,” to the three months and nine months ended September 30, 2016, the Company recorded $3.7 millioncondensed consolidated financial statements included herein. Changes in accumulated other comprehensive loss which primarily representsby component for the changes insix months ended June 30, 2022 and 2021 consisted of the Company’s pension plan liability as described in Note 10.following (in thousands): 4.
| | | | | | | | | | | | | | | | | | Other-Than- | | | | | | | | Minimum | | Temporary | | | | | | | | Pension | | Impairment of | | Interest Rate | | | | | | Liability | | Investment | | Derivatives | | Total | Balance, December 31, 2021 | | $ | (16,419) | | $ | (3,298) | | $ | (9,363) | | $ | (29,080) | Gains (losses) arising during period | | | (6,437) | | | — | | | 8,189 | | | 1,752 | Amounts reclassified from accumulated other comprehensive loss | | | 707 | | | 105 | | | 6,124 | | | 6,936 | Net other comprehensive income (loss) | | | (5,730) | | | 105 | | | 14,313 | | | 8,688 | Balance, June 30, 2022 | | $ | (22,149) | | $ | (3,193) | | $ | 4,950 | | $ | (20,392) |
| | | | | | | | | | | | | | | | | | Other-Than- | | | | | | | | Minimum | | Temporary | | | | | | | | Pension | | Impairment of | | Interest Rate | | | | | | Liability | | Investment | | Derivatives | | Total | Balance, December 31, 2020 | | $ | (26,623) | | $ | (3,509) | | $ | (27,819) | | $ | (57,951) | Gains arising during period | | | 8,324 | | | — | | | 176 | | | 8,500 | Amounts reclassified from accumulated other comprehensive loss | | | 588 | | | 105 | | | 8,111 | | | 8,804 | Net other comprehensive income | | | 8,912 | | | 105 | | | 8,287 | | | 17,304 | Balance, June 30, 2021 | | $ | (17,711) | | $ | (3,404) | | $ | (19,532) | | $ | (40,647) |
7. PROPERTY AND EQUIPMENT: Property and equipment, including right-of-use finance lease assets, at SeptemberJune 30, 20172022 and December 31, 20162021 is recorded at cost (except for right-of-use finance lease assets) and summarized as follows (in thousands): | | | | September 30, | | | December 31, | | | | | | 2017 | | | 2016 | | | | | | | | | | | | | | 2022 | | 2021 | Land and land improvements | | $ | 266,427 | | | $ | 266,053 | | | $ | 439,722 | | $ | 378,598 | Buildings | | | 2,436,294 | | | | 2,398,117 | | | | 3,778,930 | | | 3,601,974 | Furniture, fixtures and equipment | | | 636,362 | | | | 604,876 | | | | 999,824 | | | 981,589 | Right-of-use finance lease assets | | | | 1,613 | | | 1,613 | Construction-in-progress | | | 106,245 | | | | 50,273 | | | | 16,030 | | | 14,337 | | | | | | | | | | | | 3,445,328 | | | | 3,319,319 | | | Accumulated depreciation | | | (1,400,885 | ) | | | (1,321,307 | ) | | | | | | | | | | | | | | 5,236,119 | | | 4,978,111 | Accumulated depreciation and amortization | | | | (2,035,387) | | | (1,946,267) | Property and equipment, net | | $ | 2,044,443 | | | $ | 1,998,012 | | | $ | 3,200,732 | | $ | 3,031,844 | | | | | | | | |
In June 2017, the Company entered into an agreement with the Industrial Development Board of the Metropolitan Government of Nashville and Davidson County (the “Board”) to implement a tax abatement plan related to Gaylord Opryland. The tax abatement plan provides for the capping of real property taxes for a period of eight years by legally transferring title to the Gaylord Opryland real property to the Board. The Board financed the acquisition of the Gaylord Opryland real property by issuing a $650 million industrial revenue bond to the Company. The Board then leased this property back to the Company. The Company is obligated to make lease payments equal to the debt service on the industrial revenue bond. No cash was exchanged and no cash will be exchanged in connection with the Company’s lease payments under the lease. The tax abatement period extends through the term of the lease, which coincides with the nine-year maturity of the bond. At any time, the Company has the option to repurchase the real property at a de minimis amount.
Due to the form of these transactions, the Company has not recorded the bond or the lease obligation associated with the sale lease-back transaction, and the cost of the Gaylord Opryland real property remains recorded on the balance sheet and is being depreciated over its estimated useful life.
5.8. NOTES RECEIVABLE:
As further discussed in the Company’s Annual Report on Form10-K for the year ended December 31, 2016,2021, in connection with the development of Gaylord National, the Company is currently holdingholds two issuances of governmental bonds (“Series A bond” and “Series B bond”) with a total carrying value and approximate fair value of $68.9 million and $71.2 million at June 30, 2022 and December 31, 2021, respectively, net of credit loss reserve of $38.0 million at each of June 30, 2022 and December 31, 2021. The Company receives debt service and principal payments thereon, payable from property tax increments, hotel taxes and special hotel rental taxes generated from Gaylord National through the maturity date.dates of July 1, 2034 and September 1, 2037, respectively. The Company is recording the amortization of discount on these notes receivable asrecords interest income over the life of the notes.notes using the effective interest method. The Company has the intent and ability to hold these bonds to maturity. The Company’s quarterly assessment of credit losses considers the estimate of projected tax revenues that will service the bonds over their remaining terms. These tax revenue projections are updated each quarter to reflect updated industry projections as to future anticipated operations of the hotel. As a result of reduced tax revenue projections over the remaining life of the bonds, the Series B bond is fully reserved. The Series A bond is of higher priority than other tranches which fall between the Company’s two issuances. During the three months ended SeptemberJune 30, 20172022 and 2016,2021, the Company recorded interest income of $2.9$1.3 million and $3.0$1.4 million, respectively, on these bonds. During each of the ninesix months ended SeptemberJune 30, 20172022 and 2016,2021, the Company recorded interest income of $8.7$2.7 million and $9.0 million, respectively, on these bonds. The Company received payments of $11.1$5.1 million and $2.8 million during each of the ninesix months ended SeptemberJune 30, 20172022 and 2016,2021, respectively, relating to these notes receivable. See additional discussion regarding the fair valuebonds. At each of these notes receivable in Note 14. 6. INVESTMENT IN GAYLORD ROCKIES JOINT VENTURE:
In March 2016, certain subsidiariesJune 30, 2022 and December 31, 2021, before consideration of the Company entered into a series of agreements with affiliates of RIDA Development Corporation (“RIDA”) and Ares Management, L.P. (“Ares”) with respect to an equity investment in the Gaylord Rockies Resort & Convention Center in Aurora, Colorado (“Gaylord Rockies”), which is being developed by RIDA and Ares. The hotel will be managed by Marriott pursuant to a long-term management contract and is expected to consist of a1,500-room resort hotel with over 485,000 square feet of exhibition, meeting,pre-function and outdoor space. The hotel is expected to be completed in late 2018 and has a total estimated project cost of approximately $800 million.
The Company owns a 35% interest in a limited liability company that owns the real property comprising the hotel, which the Company purchased for a capital contribution of approximately $86.5 million, of which the final portion was funded in the first quarter of 2017. The Company also owns a 35% interest in a limited liability company which will lease the hotel from the property owner and assume the Marriott management agreement prior to the opening of the hotel.
A subsidiary of the Company is providing designated asset management services on behalf of the hotel during the construction period in exchange for a flat fee and after opening of the hotel in exchange for a fee based on the hotel’s gross revenues on an annual basis.
In connection with the agreements, the Company agreed to provide guarantees of the hotel’s construction loan, including a principal repayment guarantee of up to $21 million of the total $500 million principal amount of the construction loan previously obtained from a consortium of eight banks, with such amount reducing to $14 million and further reducing to $8.75 million upon the hotel’s satisfaction of designated debt service coverage requirements following completion and opening of the hotel. The Company has also provided a completion guarantee under the construction loan capped at its pro rata share of all costs necessary to complete the project within the time specified in the joint venture’s loan documents. Further, the Company has agreed to a guarantee capped at its 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 guarantees related to the construction loan, the Company agreed to provide a guarantee of the mezzanine debt related to the hotel including a payment guarantee capped at $8.75 million for which the Company is only liable in the event there is a casualty or condemnation event at the hotel and the construction lenders elect to apply those proceeds to the construction loan balance and release the construction loan guarantees and liens. The guarantee related to the mezzanine debt also includes an uncapped completion guarantee and an uncapped guarantee of the joint 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 guarantees related to the construction loan. As of September 30, 2017,credit loss reserve, the Company had not recorded any liability in the consolidated balance sheet associated withaccrued interest receivable related to these guarantees.bonds of $41.0 million, respectively.
7.9. DEBT:
The Company’s debt and capitalfinance lease obligations at SeptemberJune 30, 20172022 and December 31, 20162021 consisted of (in thousands): | | | | | | | | | | | | September 30, | | | December 31, | | | | | 2017 | | | 2016 | | $700 Million Revolving Credit Facility, terms as set forth below, less unamortized deferred financing costs of $9,696 and $5,267 | | $ | 136,804 | | | $ | 377,133 | | $200 Million Term Loan A, terms as set forth below, less unamortized deferred financing costs of $1,641 and $0 | | | 198,359 | | | | — | | $500 Million Term Loan B, terms as set forth below, less unamortized deferred financing costs of $7,860 and $0 | | | 489,640 | | | | — | | $400 Million Term Loan B, interest at LIBOR plus 2.75%, originally maturing January 15, 2021, less unamortized deferred financing costs of $0 and $5,273 | | | — | | | | 384,727 | | $350 Million Senior Notes, interest at 5.0%, maturing April 15, 2021, less unamortized deferred financing costs of $3,566 and $4,246 | | | 346,434 | | | | 345,754 | | $400 Million Senior Notes, interest at 5.0%, maturing April 15, 2023, less unamortized deferred financing costs of $5,126 and $5,719 | | | 394,874 | | | | 394,281 | | Capital lease obligations | | | 643 | | | | 659 | | | | | | | | | | | Total debt | | $ | 1,566,754 | | | $ | 1,502,554 | | | | | | | | | | |
| | | | | | | | | June 30, | | December 31, | | | 2022 | | 2021 | $700M Revolving Credit Facility, interest at LIBOR plus 1.55%, maturing March 31, 2024 | | $ | — | | $ | 190,000 | $300M Term Loan A, interest at LIBOR plus 2.25%, original maturity March 31, 2025 | | | — | | | 300,000 | $500M Term Loan B, interest at LIBOR plus 2.00%, maturing May 11, 2024 | | | 373,750 | | | 376,250 | $600M Senior Notes, interest at 4.50%, maturing February 15, 2029 | | | 600,000 | | | 600,000 | $700M Senior Notes, interest at 4.75%, maturing October 15, 2027 | | | 700,000 | | | 700,000 | $800M Gaylord Rockies Term Loan, interest at LIBOR plus 2.50%, maturing July 2, 2023 | | | 800,000 | | | 800,000 | $300M OEG Term Loan, interest at SOFR plus 5.00%, maturing June 16, 2029 (Note 2) | | | 300,000 | | | — | $65M OEG Revolver, interest at SOFR plus 4.75%, maturing June 16, 2027 (Note 2) | | | — | | | — | Block 21 CMBS Loan, interest at 5.58%, maturing January 5, 2026 | | | 135,950 | | | — | Finance lease obligations | | | 771 | | | 884 | Unamortized deferred financing costs | | | (33,702) | | | (32,203) | Unamortized premium (discount) | | | (13,747) | | | 1,888 | Total debt | | $ | 2,863,022 | | $ | 2,936,819 |
The majority of amounts
Amounts due within one year consist of the amortization payments for the Term Loan$500 million term loan B of 1.0% of the original principal balance, as described below.amortization payments for the $300 million OEG Term Loan of 1.0% of the original principal balance, and amortization of the Block 21 CMBS Loan (as defined below) based on a 30-year amortization. At SeptemberJune 30, 2017,2022, there were no defaults under the Company was in compliance with all of its covenants related to the Company’s outstanding debt based on the amended terms of the Company’s credit agreement. As a result of the Company’s repayment of its outstanding debt.$300 million term loan A with the proceeds from the OEG Term Loan, the Company recognized a loss on extinguishment of debt of $1.5 million in the three months and six months ended June 30, 2022. As a result of the Company’s February 2021 purchase and redemption of its previous $400 million 5% senior notes due 2023, the Company recognized a loss on extinguishment of debt of $2.9 million in the six months ended June 30, 2021. Credit Facility On May 11, 2017,April 4, 2022, the Company entered into a FifthAmendment No. 5 (the “Fifth Amendment”) to the Sixth Amended and Restated Credit Agreement (the “Amendeddated as of October 31, 2019 (as amended prior to the Fifth Amendment, the “Existing Credit Agreement” and the Existing Credit Agreement, as amended by the Fifth Amendment, the “Credit Agreement”), among the Company, as a guarantor, the Operating Partnership,its subsidiary RHP Hotel Properties, LP, 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.,National Association, as administrative agent,agent. The Fifth Amendment provides for certain amendments to the Existing Credit Agreement, each of which amendswas effective upon the closing of the OEG Transaction. These amendments include, among others, the exclusion of OEG and restatesits subsidiaries from negative covenants and certain restrictions related to certain equity issuances, investments, acquisitions, dispositions and indebtedness; changes to certain financial covenant requirements through December 2022; and a requirement that, following January 1, 2023, the Company’s existing credit facility. In addition,Company satisfy the financial covenants currently provided for in the Credit Agreement. Block 21 CMBS Loan At the closing of the purchase of Block 21 on May 23, 2017, the Company entered into an Amendment No. 1 (the “Amendment”) to the Amended Credit Agreement among the same parties. As amended, the Company’s credit facility consists of31, 2022, a $700.0 million senior secured revolving credit facility (the “Revolver”), a new $200.0 million senior secured term loan A (the “Term Loan A”), and an increased $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 the Company, each of the four wholly-owned subsidiaries that own the Gaylord Hotels properties, and certain other of the Company’s subsidiaries. Each is secured by (i) a first mortgage lien on the real property of each of the Gaylord Hotels properties, (ii) pledges of equity interests in the Company’s subsidiaries that own the Gaylord Hotels properties, (iii) the personal propertysubsidiary of the Company assumed a $136 million, ten-year, non-recourse term loan secured by a mortgage on Block 21 (the “Block 21 CMBS Loan”). The Block 21 CMBS Loan has a fixed interest rate of 5.58% per annum, payable monthly, matures January 5, 2026, and payments are due monthly based on a 30-year amortization.
The Block 21 CMBS Loan contains customary financial covenants and other restrictions, including sponsor net worth and liquidity requirements, and debt service coverage ratio targets that Block 21 must meet in order to avoid a “Trigger Period,” the Operating Partnershipoccurrence of which does not constitute a default. Block 21 was in a Trigger Period as of the date of its purchase by the Company. During the Trigger Period, any cash generated by Block 21 in excess of amounts necessary to fund loan obligations, budgeted operating expenses and the subsidiaries that guarantee the Amended Credit Agreement and (iv) all proceeds and products fromspecified reserves will not be distributed to Block 21. Interest Rate Derivatives The Company has entered into interest rate swaps to manage interest rate risk associated with the Company’s 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 Hotel 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.
If an event of default shall occur and be continuing under the Amended Credit Agreement, the commitments under the Amended Credit Agreement may be terminated and the principal amount outstanding under the Amended 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 the Amendment, the Company extended the maturity of the Revolver to May 23, 2021. Borrowings under the Revolver bear interest at an annual rate equal to, at the Company’s option, either (i) LIBOR plus the applicable margin ranging from 1.55% to 2.40%, dependent upon the Company’s funded debt to total asset value ratio (as defined in the Amended Credit Agreement) or (ii) a base rate as set in the Amended Credit Agreement. At September 30, 2017, the interest rate on the Revolver is LIBOR plus 1.55%. No additional amounts were borrowed under the Revolver at closing.
$200 Million Term Loan A
The Amendment also provides for the Term Loan A, which has a maturity date of May 23, 2022. Borrowings under the Term Loan A bear interest at an annual rate equal to, at the Company’s option, either (i) LIBOR plus the applicable margin ranging from 1.50% to 2.35%, dependent upon the Company’s funded debt to total asset value ratio (as defined in the Amended Credit Agreement) or (ii) a base rate as set in the Amended Credit Agreement. At September 30, 2017, 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, the Company 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
Pursuant to the Amended Credit Agreement, the Company increased its original $400 million term loan B facility to a $500 million term loan B facility and extended the maturityGaylord Rockies $800 million term loan. Each swap has been designated as a cash flow hedge whereby the Company receives variable-rate amounts in exchange for fixed-rate payments over the life of the agreement without exchange of the underlying principal amount. The Company does not use derivatives for trading or speculative purposes and currently does not hold any derivatives that are not designated as hedges.
For derivatives designated as and that qualify as cash flow hedges of interest rate risk, the gain or loss on the derivative is recorded in accumulated other comprehensive loss and subsequently reclassified to May 11, 2024. Borrowingsinterest expense in the same period during which the hedged transaction affects earnings. These amounts reported in accumulated other comprehensive loss will be reclassified to interest expense as interest payments are made on the related variable-rate debt. The Company estimates that $4.9 million will be reclassified from accumulated other comprehensive income as a reduction to interest expense in the next twelve months. The estimated fair value of the Company’s derivative financial instruments at June 30, 2022 and December 31, 2021 is as follows (in thousands): | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Estimated Fair Value | | | | | | | | | | | | | Asset (Liability) Balance | | | | | Strike | | | | | | Notional | | June 30, | | December 31, | Hedged Debt | | Type | | Rate | | Index | | Maturity Date | | Amount | | 2022 | | 2021 | Term Loan B | | Interest Rate Swap | | 1.2235% | | 1-month LIBOR | | May 11, 2023 | | $ 87,500 | | $ | 1,380 | | $ | (733) | Term Loan B | | Interest Rate Swap | | 1.2235% | | 1-month LIBOR | | May 11, 2023 | | $ 87,500 | | | 1,380 | | | (733) | Term Loan B | | Interest Rate Swap | | 1.2235% | | 1-month LIBOR | | May 11, 2023 | | $ 87,500 | | | 1,380 | | | (733) | Term Loan B | | Interest Rate Swap | | 1.2315% | | 1-month LIBOR | | May 11, 2023 | | $ 87,500 | | | 1,371 | | | (742) | Gaylord Rockies Term Loan | | Interest Rate Swap | | 1.6500% | | 1-month LIBOR | | August 1, 2022 | | $ 800,000 | | | 44 | | | (6,421) | Gaylord Rockies Term Loan | | Interest Rate Swap | | 3.3410% | | 1-month LIBOR | | August 1, 2023 | | $ 800,000 | | | (604) | | | - | | | | | | | | | | | | | $ | 4,951 | | $ | (9,362) |
Derivative financial instruments in an asset position are included in prepaid expenses and other assets, and those in a liability position are included in other liabilities in the accompanying condensed consolidated balance sheets. The effect of the Company’s derivative financial instruments on the accompanying condensed consolidated statements of operations for the respective periods is as follows (in thousands): | | | | | | | | | | | | | | | | | | | | Amount of Gain (Loss) | | | | | | Amount of Gain (Loss) | | | | Recognized in OCI | | | | | | Reclassified from Accumulated | | | | on Derivative | | Location of Gain (Loss) | | OCI into Income (Expense) | | | | Three Months Ended | | Reclassified from | Three Months Ended | | | | June 30, | | Accumulated OCI | | June 30, | | | | 2022 | | 2021 | | into Income (Expense) | | 2022 | | 2021 | | Derivatives in Cash Flow Hedging Relationships: | | | | | | | | | | | | | | | | | | Interest rate swaps | | $ | 2,119 | | $ | (426) | | Interest expense | | $ | (2,175) | | $ | (4,110) | | Total derivatives | | $ | 2,119 | | $ | (426) | | | | | | $ | (2,175) | | $ | (4,110) | |
| | | | | | | | | | | | | | | | | | | | Amount of Gain (Loss) | | | | | | Amount of Gain (Loss) | | | | Recognized in OCI on | | | | | | Reclassified from Accumulated | | | | Derivative | | Location of Gain (Loss) | | OCI into Income (Expense) | | | | Six Months Ended | | Reclassified from | | Six Months Ended | | | | June 30, | | Accumulated OCI | | June 30, | | | | 2022 | | 2021 | | into Income (Expense) | | 2022 | | 2021 | | Derivatives in Cash Flow Hedging Relationships: | | | | | | | | | | | | | | | | | | Interest rate swaps | | $ | 8,189 | | $ | 176 | | Interest expense | | $ | (6,124) | | $ | (8,111) | | Total derivatives | | $ | 8,189 | | $ | 176 | | | | | | $ | (6,124) | | $ | (8,111) | |
Reclassifications from accumulated other comprehensive loss for interest rate swaps are shown in the table above and included in interest expense. Total consolidated interest expense for the three months ended June 30, 2022 and 2021 was $34.0 million and $29.8 million, respectively, and for the six months ended June 30, 2022 and 2021 was $65.9 million and $60.6 million, respectively. At June 30, 2022, the fair value of derivatives in a net liability position including accrued interest but excluding any adjustment for nonperformance risk related to these agreements was $1.0 million. As of June 30, 2022, the Company has not posted any collateral related to these agreements and was not in breach of any agreement provisions. If the Company had breached any of these provisions, it could have been required to settle its obligations under the Term Loan B bear interest at an annual rate equal to,agreements at the Company’s option, either (i) LIBOR plus 2.25% or (ii) a base rate as set in the Amended Credit Agreement. At September 30, 2017, the interest rate on the Term Loan B was LIBOR plus 2.25%. The Term Loan B amortizes in equal quarterly installments in aggregate annual amounts equal to 1.0%termination value of the original principal amount of $500.0 million, with the balance due at maturity. Amounts borrowed under the Term Loan B that are repaid or prepaid may not be reborrowed. At closing,$1.0 million. In addition, the Company drew downhas an agreement with its derivative counterparty that contains a provision whereby the Company could be declared in default on the Term Loan B in full. Net proceeds, after theits derivative obligations if repayment of the original $400 million term loan B and certain transaction expenses payable at closing, were approximately $114.3 million and were usedunderlying indebtedness is accelerated by the lender due to pay down a portion of the Revolver.Company’s default on the indebtedness. 8.
10. DEFERRED MANAGEMENT RIGHTS PROCEEDS: On October 1, 2012, the Company consummated its agreement to sell the Gaylord Hotels brand and rights to manage the Gaylord Opryland, Gaylord Palms, Gaylord Texan and Gaylord NationalHotels properties (the “Management Rights”) to Marriott for $210.0 million in cash. Effective October 1, 2012, Marriott assumed responsibility for managing theday-to-day operations of the Gaylord Hotels properties pursuant to a management agreement for each Gaylord Hotel property. On October 1, 2012, the Company received $210.0 million in cash from Marriott in exchange for rights to manage the Gaylord Hotels properties (the “Management Rights”) and certain intellectual property (the “IP Rights”). The Company allocated $190.0 million of the purchase price to the Management Rights, and $20.0 million to the IP Rights. The allocation was based on the Company’s estimates of the fair values for the respective components. The Company estimated the fair value of each component by constructing distinct discounted cash flow models.
For financial accounting purposes, the amount related to the Management Rights was deferred and is amortized on a straight linestraight-line basis over the65-year term of the hotel management agreements, including extensions, as a reduction in management fee expense. 11. LEASES: The amountCompany is a lessee of a 65.3 acre site in Osceola County, Florida on which Gaylord Palms is located, building or land leases for Ole Red Gatlinburg, Ole Red Orlando, Ole Red Tishomingo, Ole Red Nashville International Airport, and various warehouse, general office and other equipment leases. The Gaylord Palms land lease has a term through 2074, which may be extended through January 2101, at the Company’s discretion. The leases for Ole Red locations range from five to ten years, with renewal options ranging from five to fifty-five years, at the Company’s discretion. Extension options are not considered reasonably assured and as a result are not included in the Company’s calculation of its right-of-use assets and lease liabilities. The terms of the Gaylord Palms lease include variable lease payments based upon net revenues at Gaylord Palms and certain other of the Company’s leases include rental payments adjusted periodically for inflation. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants. As the discount rate implicit in the Company’s operating leases is not readily determinable, the Company applies judgments related to the IP Rights was recognized into incomedetermination of the discount rates used to calculate the lease liability as other gainsrequired by Accounting Standards Codification Topic 842, “Leases”. The Company calculates its incremental borrowing rates by utilizing judgments and losses duringestimates regarding the fourth quarter of 2012.Company’s secured borrowing rates, market credit rating, comparable bond yield curve, and adjustments to market yield curves to determine a securitized rate. 9.The Company’s lease costs for the three months ended June 30, 2022 and 2021 are as follows (in thousands):
| | | | | | | | | | | | | Three Months Ended | | Six Months Ended | | June 30, | | June 30, | | 2022 | | 2021 | | 2022 | | 2021 | Operating lease cost | $ | 3,809 | | $ | 3,243 | | $ | 7,345 | | $ | 6,370 | Finance lease cost: | | | | | | | | | | | | Amortization of right-of-use assets | | 30 | | | 37 | | | 61 | | | 74 | Interest on lease liabilities | | 10 | | | 10 | | | 18 | | | 21 | Net lease cost | $ | 3,849 | | $ | 3,290 | | $ | 7,424 | | $ | 6,465 |
Future minimum lease payments under non-cancelable leases at June 30, 2022 are as follows (in thousands): | | | | | | | | | Operating | | Finance | | | Leases | | Leases | Year 1 | | $ | 7,046 | | $ | 232 | Year 2 | | | 6,893 | | | 106 | Year 3 | | | 6,746 | | | 46 | Year 4 | | | 6,786 | | | 46 | Year 5 | | | 6,841 | | | 46 | Years thereafter | | | 561,701 | | | 497 | Total future minimum lease payments | | | 596,013 | | | 973 | Less amount representing interest | | | (481,003) | | | (202) | Total present value of minimum payments | | $ | 115,010 | | $ | 771 |
The remaining lease term and discount rate for the Company’s leases are as follows: | | | Weighted-average remaining lease term: | | | Operating leases | 47.6 | years | Finance leases | 11.2 | years | Weighted-average discount rate: | | | Operating leases | 6.8 | % | Finance leases | 4.0 | % |
12. STOCK PLANS: During the ninesix months ended SeptemberJune 30, 2017,2022, the Company granted 0.10.2 million restricted stock units with a weighted-average grant date fair value of $66.52$83.18 per award.unit. There were 0.4 million and 0.50.6 million restricted stock units outstanding at Septembereach of June 30, 20172022 and December 31, 2016,2021, respectively. The compensationCompensation expense that has been charged againstpre-tax income for all of the Company’s stock-based compensation plans was $1.7$3.7 million and $1.5$3.1 million for the three months ended SeptemberJune 30, 20172022 and 2016,2021, respectively, and $5.0$7.4 million and $4.6$5.7 million for the ninesix months ended SeptemberJune 30, 20172022 and 2016,2021, respectively.
10. PENSION AND POSTRETIREMENT BENEFITS OTHER THAN18
13. PENSION PLANS: Net periodic pension expense reflected in other gains and (losses), net in the accompanying condensed consolidated statements of operations included the following components for the respective periods (in thousands): | | | | | | | | | | | | | | | | Three Months Ended | | Six Months Ended | | | | June 30, | | June 30, | | | | 2022 | | 2021 | | 2022 | | 2021 | | Interest cost | | $ | 540 | | $ | 478 | | $ | 1,066 | | $ | 950 | | Expected return on plan assets | | | (1,031) | | | (1,028) | | | (2,062) | | | (2,047) | | Amortization of net actuarial loss | | | 223 | | | 295 | | | 423 | | | 584 | | Net settlement loss | | | 853 | | | 566 | | | 853 | | | 566 | | Total net periodic pension expense | | $ | 585 | | $ | 311 | | $ | 280 | | $ | 53 | |
| | | | | | | | | | | | | | | | | | | | Three Months Ended | | | Nine Months Ended | | | | | September 30, | | | September 30, | | | | | 2017 | | | 2016 | | | 2017 | | | 2016 | | Interest cost | | $ | 891 | | | $ | 966 | | | $ | 2,706 | | | $ | 2,896 | | Expected return on plan assets | | | (1,051 | ) | | | (1,021 | ) | | | (3,098 | ) | | | (3,061 | ) | Amortization of net actuarial loss | | | 282 | | | | 307 | | | | 861 | | | | 921 | | Net settlement loss | | | 1,218 | | | | 1,567 | | | | 1,218 | | | | 1,567 | | | | | | | | | | | | | | | | | | | Total net periodic pension expense | | $ | 1,340 | | | $ | 1,819 | | | $ | 1,687 | | | $ | 2,323 | | | | | | | | | | | | | | | | | | |
As a result of increasedlump-sum distributions from the Company’s qualified retirement plan during 20172022 and 2016,2021, a net settlement lossesloss of $1.2$0.9 million and $1.6$0.6 million werewas recognized in the three months and ninesix months ended SeptemberJune 30, 20172022 and 2016,2021, respectively. These net settlement losses have been classified as corporate operating expenses in the accompanying condensed consolidated statements of operations. In addition, the increase inlump-sum distributions required the Company tore-measure its liability under its pension plan as of SeptemberJune 30, 2017.2022. As a result of there-measurement, including a reduction in the valuation of plan assets during 2022, partially offset by a decreasean increase in the pension plan’s assumed discount rate from 3.7%2.42% at December 31, 20162021 to 3.3%4.23% at SeptemberJune 30, 2017,2022, the Company recorded a $0.3$6.4 million decrease inincrease to its liability under the pension plan and a corresponding decreaseincrease in accumulated other comprehensive loss in the accompanying condensed consolidated balance sheet at SeptemberJune 30, 2017. 2022.Net postretirement benefit income reflected in the accompanying condensed consolidated statements of operations included the following components for the respective periods (in thousands):
| | | | | | | | | | | | | | | | | | | | Three Months Ended | | | Nine Months Ended | | | | | September 30, | | | September 30, | | | | | 2017 | | | 2016 | | | 2017 | | | 2016 | | Interest cost | | $ | 27 | | | $ | 30 | | | $ | 81 | | | $ | 90 | | Amortization of net actuarial loss | | | 61 | | | | 60 | | | | 184 | | | | 181 | | Amortization of prior service credit | | | (328 | ) | | | (328 | ) | | | (985 | ) | | | (985 | ) | | | | | | | | | | | | | | | | | | Total net postretirement benefit income | | $ | (240 | ) | | $ | (238 | ) | | $ | (720 | ) | | $ | (714 | ) | | | | | | | | | | | | | | | | | |
11.14. INCOME TAXES:
The Company elected to be taxed as a REIT effective January 1, 2013, pursuant to the U.S. Internal Revenue Code of 1986, as amended. As a REIT, generally the Company willis not be subject to federal corporate income taxes on ordinary taxable income and capital gains income from real estate investments that it distributes to its stockholders. The Company will, however, be subject to corporate income taxes onbuilt-in gains (the excess of fair market value over tax basis at January 1, 2013) that result from gains on the sale of certain assets occurring prior to January 1, 2018. In addition, the Company will continuecontinues to be required to pay federal and state corporate income taxes on earnings of its taxable REIT subsidiaries (“TRSs”). TheFor each of the three months and six months ended June 30, 2022, the Company recorded an income tax provision of $0.5$17.6 million and $1.8 million forrelated to its TRSs.
For the three months and six months ended SeptemberJune 30, 2017 and 2016, respectively, and $2.02021, the Company recorded an income tax provision of $1.6 million and $2.4$5.6 million, respectively. The income tax provision for the ninesix months ended SeptemberJune 30, 2017 and 2016, respectively,2021 includes the recording of a valuation allowance of $3.6 million related to the current period operationsCompany’s reassessment of the Company. These results differ from the statutory rate primarilyrealizability of its deferred tax assets due to the REIT dividends paid deduction andimpact of the change in valuation allowance required at the TRSs.COVID-19 pandemic. At SeptemberJune 30, 20172022 and December 31, 2016,2021, the Company had no0 unrecognized tax benefits. 12.15. COMMITMENTS AND CONTINGENCIES:
The Company has entered into limited repayment and carry guaranties related to the Gaylord Rockies Loan that, in the aggregate, guarantee repayment of 10% of the principal debt, together with interest and operating expenses, which are to be released once Gaylord Rockies achieves a certain debt service coverage threshold as defined in the Gaylord Rockies Loan. Generally, the Gaylord Rockies Loan is non-recourse to the Company, subject to (i) those limited guaranties, (ii) a completion guaranty in the event a property expansion is pursued, and (iii) customary non-recourse carve-outs. In connection with the purchase of Block 21, the Company provided (i) limited guarantees to the Block 21 lenders under the Block 21 CMBS Loan via a guaranty agreement, a guaranty of completion agreement and an environmental indemnity, and (2) a letter of credit drawable by the Block 21 lenders in the event of a default of the Block 21 CMBS Loan. In April 2019, a subsidiary of the Company entered into a joint venture with Gray Television, Inc. that creates and distributes a linear multicast and over-the-top channel dedicated to the country music lifestyle, Circle. The Company acquired a 50% equity interest in this joint venture and has made capital contributions of $27.0 million. In addition, the Company intends to contribute up to an additional $6.0 million through December 31, 2022 for working capital needs. The Company accounts for its investment in this joint venture under the equity method of accounting. The Company has entered into employment agreements with certain officers, which provide for severance payments upon certain events, including certain terminations in connection with a change of control. The Company, in the ordinary course of business, is involved in certain legal actions and claims on a variety of matters. It is the opinion of management that such legal actionscontingencies will not have a material effect on the results of operations, financial condition or liquiditystatements of the Company. 13. STOCKHOLDERS’16. EQUITY:
Dividends On February 28, 2017,Due to the COVID-19 pandemic, the Company has suspended its regular quarterly dividend payments. The Company’s board of directors will consider a future dividend as permitted by the Company’s credit agreement, and any future dividend is subject to the Company’s board of directors declared the Company’s first quarter 2017 cash dividend indirectors’ determination as to the amount of $0.80 per sharedistributions and the timing thereof.
Noncontrolling Interest in the Operating Partnership The Company consolidates the Operating Partnership, which is a majority-owned limited partnership that has a noncontrolling interest. The outstanding OP Units held by the noncontrolling limited partners are redeemable for cash, or if the Company so elects, in shares of the Company’s common stock on a 1-for-one basis, subject to certain adjustments. At June 30, 2022, 0.4 million outstanding OP Units, or an aggregate of approximately $40.9 million in cash, which was paid on April 14, 2017 to stockholders of record asless than 1% of the closeoutstanding OP Units, were held by the noncontrolling limited partners and are included as a component of business on March 31, 2017.equity in the accompanying condensed consolidated balance sheet. The Company owns, directly or indirectly, the remaining 99.3% of the outstanding OP Units. At-the-Market (“ATM”) Equity Distribution Agreement On June 9, 2017, the Company’s board of directors declared the Company’s second quarter 2017 cash dividend in the amount of $0.80 per share of common stock, or an aggregate of approximately $41.0 million in cash, which was paid on July 14, 2017 to stockholders of record as of the close of business on June 19, 2017. On September 18, 2017, the Company’s board of directors declared the Company’s third quarter 2017 cash dividend in the amount of $0.80 per share of common stock, or an aggregate of approximately $41.0 million in cash, which was paid on October 13, 2017 to stockholders of record as of the close of business on September 29, 2017.
Previous Stock Repurchase Authorization
During the nine months ended September 30, 2016,May 27, 2021, the Company repurchased 0.5 million sharesentered into an ATM equity distribution agreement (the “ATM Agreement”) with a consortium of its common stock for an aggregate purchase price of $24.8 million,banks (each a “Sales Agent” and collectively, the “Sales Agents”), pursuant to which the Company funded using cashmay offer and sell to or through the Sales Agents (the “ATM Offering”), from time to time, up to 4.0 million shares (the “Shares”) of the Company’s common stock in such share amounts as the Company may specify by notice to the Sales Agents, in accordance with the terms and conditions set forth in the ATM Agreement.
Under the ATM Agreement, the Company will set the parameters for the sale of the Shares, including the number of the Shares to be issued, the time period during which sales are requested to be made, limitation on handthe number of the Shares that may be sold in any one trading day and borrowingsany minimum price below which sales may not be made. Each Sales Agent will use its commercially reasonable efforts, consistent with its normal trading and sales practices, to sell such Shares up to the amount specified, and otherwise in accordance with mutually agreed terms between the Sales Agent and the Company. Neither the Company nor any of the Sales Agents are obligated to sell any specific number or dollar amount of Shares under its previousthe ATM Agreement. The Sales Agents will be paid a commission of up to 2.0% of the gross sales price from the sale of any Shares. The Company intends to use the net proceeds from any sale of Sharesfor the repayment of outstanding indebtedness, which may include the repayment of amounts outstanding under the Company’s credit agreement governing the Company’s revolving credit facility. The repurchased stock,Net proceeds which representsare not used for the entiretyrepayment of outstanding indebtedness (to the extent then permitted by the Company’s credit agreement) may be used for general corporate purposes. NaN shares that were repurchasedissued under the authorization, was cancelled byATM Agreement during the Company. The share repurchase program authorization expired assix months ended June 30, 2022. 14.17. FAIR VALUE MEASUREMENTS:
The Company uses a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include: Level 1, defined as observable inputs such as quoted prices in active markets; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions. At September 30, 2017 and December 31, 2016,The investments held by the Company held certain assets that are required to be measured at fair value on a recurring basis. These included investments held in conjunctionconnection with the Company’snon-qualified contributoryits deferred compensation plan. These investmentsplan consist of mutual funds traded in an active market. The Company determined the fair value of these mutual funds based on the net asset value per unit of the funds or the portfolio, which is based upon quoted market prices in an active market. Therefore, the Company has categorized these investments as Level 1.
The Company’s interest rate swaps consist of over-the-counter swap contracts, which are not traded on a public exchange. The Company determines the fair value of these swap contracts based on a widely accepted valuation methodology of netting the discounted future fixed cash flows and the discounted expected variable cash flows, using interest rates derived from observable market interest rate curves and volatilities, with appropriate adjustments for any significant impact of non-performance risk of the parties to the swap contracts. Therefore, these swap contracts have been classified as Level 2. The Company has consistently applied the above valuation techniques in all periods presented and believes it has obtained the most accurate information available for each type of instrument. The Company had no liabilities required to be measured at fair value at September 30, 2017 and December 31, 2016. The Company’s assets and liabilities measured at fair value on a recurring basis at SeptemberJune 30, 20172022 and December 31, 2016,2021, were as follows (in thousands): | | | | | | | | | | | | | | | | | | Markets for | | Observable | | Unobservable | | | June 30, | | Identical Assets | | Inputs | | Inputs | | | 2022 | | (Level 1) | | (Level 2) | | (Level 3) | Deferred compensation plan investments | | $ | 28,516 | | $ | 28,516 | | $ | — | | $ | — | Variable to fixed interest rate swaps | | | 5,555 | | | — | | | 5,555 | | | — | Total assets measured at fair value | | $ | 34,071 | | $ | 28,516 | | $ | 5,555 | | $ | — | | | | | | | | | | | | | | Variable to fixed interest rate swaps | | $ | 604 | | $ | — | | $ | 604 | | $ | — | Total liabilities measured at fair value | | $ | 604 | | $ | — | | $ | 604 | | $ | — |
| | | | | | | Markets for | | | Observable | | | Unobservable | | | | | | September 30, | | | Identical Assets | | | Inputs | | | Inputs | | | | | | 2017 | | | (Level 1) | | | (Level 2) | | | (Level 3) | | | | | | | | | | | | | | | | | | | | | | | Markets for | | Observable | | Unobservable | | | | December 31, | | Identical Assets | | Inputs | | Inputs | | | | 2021 | | (Level 1) | | (Level 2) | | (Level 3) | Deferred compensation plan investments | | $ | 24,339 | | | $ | 24,339 | | | $ | — | | | $ | — | | | $ | 31,183 | | $ | 31,183 | | $ | — | | $ | — | | | | | | | | | | | | | | | Total assets measured at fair value | | $ | 24,339 | | | $ | 24,339 | | | $ | — | | | $ | — | | | $ | 31,183 | | $ | 31,183 | | $ | — | | $ | — | | | | | | | | | | | | | | | | | | | | | | Markets for | | | Observable | | | Unobservable | | | | | | December 31, | | | Identical Assets | | | Inputs | | | Inputs | | | | | | 2016 | | | (Level 1) | | | (Level 2) | | | (Level 3) | | | Deferred compensation plan investments | | $ | 22,204 | | | $ | 22,204 | | | $ | — | | | $ | — | | | | | | | | | | | | | | | | | Total assets measured at fair value | | $ | 22,204 | | | $ | 22,204 | | | $ | — | | | $ | — | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Variable to fixed interest rate swaps | | | $ | 9,362 | | $ | — | | $ | 9,362 | | $ | — | Total liabilities measured at fair value | | | $ | 9,362 | | $ | — | | $ | 9,362 | | $ | — |
The remainder of the assets and liabilities held by the Company at SeptemberJune 30, 20172022 are not required to be recorded at fair value. Thevalue, and the carrying value of certain of these assets and liabilities do not approximateapproximates fair value, except as described below. As further discussedThe Company has outstanding $600.0 million in aggregate principal amount of $600 million 4.50% senior notes. The carrying value of these notes at June 30, 2022 was $591.2 million, net of unamortized deferred financing costs (“DFCs”). The fair value of these notes, based upon quoted market prices (Level 1), was $509.0 million at June 30, 2022.
The Company has outstanding $700.0 million in aggregate principal amount of $700 million 4.75% senior notes. The carrying value of these notes at June 30, 2022 was $693.1 million, net of unamortized DFCs and premiums. The fair value of these notes, based upon quoted market prices (Level 1), was $621.9 million at June 30, 2022. See Note 5 and in the Company’s Annual Report on Form10-K3, “Block 21 Transaction,” for the year ended December 31, 2016, in connection with the development of Gaylord National, the Company received two bonds (“Series A Bond” and “Series B Bond”) from Prince George’s County, Maryland which had aggregate carrying values of $78.7 million and $71.8 million, respectively, at September 30, 2017. The maturity dates of the Series A Bond and the Series B Bond are July 1, 2034 and September 1, 2037, respectively. Based upon current market interest rates of notes receivable with comparable market ratings and current expectations about the timing of debt service payments under the notes, which the Company considers as Level 3,additional disclosures related to the fair value measurements used in accounting for the purchase of the Series A Bond, which has the senior claim to the cash flows supporting these bonds, approximated carrying value at September 30, 2017 and the fair value of the Series B Bond was approximately $54 million at September 30, 2017. While the fair value of the Series B Bond decreased to less than its carrying value during 2011 due to a change in the timing of the debt service payments, the Company has the intent and ability to hold this bond to maturity and expects to receive all debt service payments due under the note. Therefore, the Company does not consider the Series B Bond to be other than temporarily impaired at September 30, 2017.Block 21. 15.18. FINANCIAL REPORTING BY BUSINESS SEGMENTS:
The Company’s operations are organized into three3 principal business segments: | • | ● | Hospitality, which includes the Gaylord Opryland, Gaylord Palms, Gaylord Texan, Gaylord National,Hotels properties, the Inn at Opryland and the AC Hotel, and the Company’s investment in the Gaylord Rockies joint venture;Hotel; |
| • | ● | Entertainment, which includes the OEG business, specifically the Grand Ole Opry, the Ryman Auditorium,WSM-AM, Ole Red, Block 21, the Company’s equity investment in Circle, and the Company’s other attractionsNashville-based attractions; and media and entertainment businesses, as well as the Company’s investment in a joint venture associated with a Times Square restaurant and entertainment venue; and |
| • | ● | Corporate and Other, which includes the Company’s corporate expenses. |
The following information is derived directly from the segments’ internal financial reports used for corporate management purposes (amounts in thousands): | | | | | | | | | | | | | | | | Three Months Ended | | Six Months Ended | | | | June 30, | | June 30, | | | | 2022 | | 2021 | | 2022 | | 2021 | | Revenues: | | | | | | | | | | | | | | Hospitality | | $ | 401,802 | | $ | 135,688 | | $ | 662,913 | | $ | 205,490 | | Entertainment | | | 68,402 | | | 35,173 | | | 106,426 | | | 49,546 | | Corporate and Other | | | — | | | — | | | — | | | — | | Total | | $ | 470,204 | | $ | 170,861 | | $ | 769,339 | | $ | 255,036 | | | | | | | | | | | | | | | | Depreciation and amortization: | | | | | | | | | | | | | | Hospitality | | $ | 52,016 | | $ | 50,487 | | $ | 104,287 | | $ | 99,635 | | Entertainment | | | 4,492 | | | 3,621 | | | 8,044 | | | 7,222 | | Corporate and Other | | | 207 | | | 565 | | | 412 | | | 1,131 | | Total | | $ | 56,715 | | $ | 54,673 | | $ | 112,743 | | $ | 107,988 | | | | | | | | | | | | | | | | Operating income (loss): | | | | | | | | | | | | | | Hospitality | | $ | 100,573 | | $ | (27,100) | | $ | 116,241 | | $ | (90,562) | | Entertainment | | | 18,240 | | | 5,913 | | | 20,981 | | | (2,006) | | Corporate and Other | | | (12,624) | | | (9,543) | | | (22,386) | | | (17,637) | | Preopening costs | | | (221) | | | (217) | | | (525) | | | (616) | | Gain (loss) on sale of assets | | | — | | | — | | | (469) | | | 317 | | Total operating income (loss) | | | 105,968 | | | (30,947) | | | 113,842 | | | (110,504) | | | | | | | | | | | | | | | | Interest expense | | | (33,958) | | | (29,847) | | | (65,895) | | | (60,643) | | Interest income | | | 1,379 | | | 1,451 | | | 2,760 | | | 2,821 | | Loss on extinguishment of debt | | | (1,547) | | | — | | | (1,547) | | | (2,949) | | Loss from unconsolidated joint ventures | | | (3,001) | | | (1,910) | | | (5,628) | | | (3,519) | | Other gains and (losses), net | | | (283) | | | (173) | | | 164 | | | 201 | | Income (loss) before income taxes | | $ | 68,558 | | $ | (61,426) | | $ | 43,696 | | $ | (174,593) | |
| | | | | | | | | | | | | | | | | | | | Three Months Ended | | | Nine Months Ended | | | | | September 30, | | | September 30, | | | | | 2017 | | | 2016 | | | 2017 | | | 2016 | | Revenues: | | | | | | | | | | | | | | | | | Hospitality | | $ | 229,590 | | | $ | 241,019 | | | $ | 747,117 | | | $ | 747,539 | | Entertainment | | | 35,134 | | | | 30,701 | | | | 92,427 | | | | 81,893 | | Corporate and Other | | | — | | | | — | | | | — | | | | — | | | | | | | | | | | | | | | | | | | Total | | $ | 264,724 | | | $ | 271,720 | | | $ | 839,544 | | | $ | 829,432 | | | | | | | | | | | | | | | | | | | Depreciation and amortization: | | | | | | | | | | | | | | | | | Hospitality | | $ | 26,061 | | | $ | 24,401 | | | $ | 76,786 | | | $ | 75,051 | | Entertainment | | | 1,965 | | | | 1,637 | | | | 5,465 | | | | 4,845 | | Corporate and Other | | | 520 | | | | 668 | | | | 1,611 | | | | 1,992 | | | | | | | | | | | | | | | | | | | Total | | $ | 28,546 | | | $ | 26,706 | | | $ | 83,862 | | | $ | 81,888 | | | | | | | | | | | | | | | | | | | Operating income: | | | | | | | | | | | | | | | | | Hospitality | | $ | 36,478 | | | $ | 45,718 | | | $ | 150,281 | | | $ | 154,195 | | Entertainment | | | 10,548 | | | | 9,964 | | | | 25,403 | | | | 22,418 | | Corporate and Other | | | (9,740 | ) | | | (9,115 | ) | | | (25,935 | ) | | | (24,307 | ) | Preopening costs | | | (877 | ) | | | — | | | | (1,587 | ) | | | — | | | | | | | | | | | | | | | | | | | Total operating income | | | 36,409 | | | | 46,567 | | | | 148,162 | | | | 152,306 | | Interest expense | | | (16,621 | ) | | | (15,947 | ) | | | (49,640 | ) | | | (48,002 | ) | Interest income | | | 2,957 | | | | 2,965 | | | | 8,874 | | | | 9,116 | | Loss from joint ventures | | | (899 | ) | | | (638 | ) | | | (2,616 | ) | | | (2,086 | ) | Other gains and (losses), net | | | 2,554 | | | | 2,468 | | | | 1,024 | | | | 2,288 | | | | | | | | | | | | | | | | | | | Income before income taxes | | $ | 24,400 | | | $ | 35,415 | | | $ | 105,804 | | | $ | 113,622 | | | | | | | | | | | | | | | | | | |
16. INFORMATION CONCERNING GUARANTOR ANDNON-GUARANTOR SUBSIDIARIES:
The $350 Million 5% Senior Notes and the $400 Million 5% Senior Notes were each issued by the Operating Partnership and Finco and are guaranteed on a senior unsecured basis by the Company, each
| | | | | | | | | June 30, | | December 31, | | | 2022 | | 2021 | Identifiable assets: | | | | | | | Hospitality | | $ | 3,218,334 | | $ | 3,266,679 | Entertainment | | | 480,250 | | | 214,270 | Corporate and Other | | | 166,116 | | | 99,576 | Total identifiable assets | | $ | 3,864,700 | | $ | 3,580,525 |
Table of the Company’s four wholly-owned subsidiaries that own the Gaylord Hotels properties, and certain other of the Company’s subsidiaries, each of which guarantees the Operating Partnership’s Amended Credit Agreement (such subsidiary guarantors, together with the Company, the “Guarantors”). The subsidiary Guarantors are 100% owned, and the guarantees are full and unconditional and joint and several. Not all of the Company’s subsidiaries have guaranteed the Company’s $350 Million 5% Senior Notes and the $400 Million 5% Senior Notes.Contents The following condensed consolidating financial information includes certain allocations of expenses based on management’s best estimates, which are not necessarily indicative of financial position, results of operations and cash flows that these entities would have achieved on a stand-alone basis.
RYMAN HOSPITALITY PROPERTIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATING BALANCE SHEET
September 30, 2017
| | | | | | | | | | | | | | | | | | | | | | | | | | | | Parent | | | | | | | | | Non- | | | | | | | | | (in thousands) | | Guarantor | | | Issuer | | | Guarantors | | | Guarantors | | | Eliminations | | | Consolidated | | ASSETS: | | | | | | | | | | | | | | | | | | | | | | | | | Property and equipment, net of accumulated depreciation | | $ | — | | | $ | — | | | $ | 1,626,061 | | | $ | 418,382 | | | $ | — | | | $ | 2,044,443 | | Cash and cash equivalents—unrestricted | | | 130 | | | | 311 | | | | 522 | | | | 61,709 | | | | — | | | | 62,672 | | Cash and cash equivalents—restricted | | | — | | | | — | | | | — | | | | 14,703 | | | | — | | | | 14,703 | | Notes receivable | | | — | | | | — | | | | — | | | | 150,493 | | | | — | | | | 150,493 | | Investment in Gaylord Rockies joint venture | | | — | | | | — | | | | — | | | | 88,378 | | | | — | | | | 88,378 | | Trade receivables, less allowance | | | — | | | | — | | | | — | | | | 56,684 | | | | — | | | | 56,684 | | Prepaid expenses and other assets | | | — | | | | — | | | | — | | | | 85,722 | | | | (10,593 | ) | | | 75,129 | | Intercompany receivables, net | | | — | | | | — | | | | 1,670,070 | | | | — | | | | (1,670,070 | ) | | | — | | Investments | | | 979,917 | | | | 2,886,063 | | | | 647,247 | | | | 768,523 | | | | (5,281,750 | ) | | | — | | | | | | | | | | | | | | | | | | | | | | | | | | | Total assets | | $ | 980,047 | | | $ | 2,886,374 | | | $ | 3,943,900 | | | $ | 1,644,594 | | | $ | (6,962,413 | ) | | $ | 2,492,502 | | | | | | | | | | | | | | | | | | | | | | | | | | | LIABILITIES AND STOCKHOLDERS’ EQUITY: | | | | | | | | | | | | | | | | | | | | | | | | | Debt and capital lease obligations | | $ | — | | | $ | 1,566,110 | | | $ | — | | | $ | 644 | | | $ | — | | | $ | 1,566,754 | | Accounts payable and accrued liabilities | | | 702 | | | | 20,487 | | | | 8,802 | | | | 178,892 | | | | (10,593 | ) | | | 198,290 | | Dividends payable | | | 41,866 | | | | — | | | | — | | | | — | | | | — | | | | 41,866 | | Deferred management rights proceeds | | | — | | | | — | | | | — | | | | 177,815 | | | | — | | | | 177,815 | | Deferred income tax liabilities, net | | | 209 | | | | — | | | | (201 | ) | | | 961 | | | | — | | | | 969 | | Other liabilities | | | — | | | | — | | | | 93,798 | | | | 61,614 | | | | — | | | | 155,412 | | Intercompany payables, net | | | 585,874 | | | | 847,692 | | | | — | | | | 236,504 | | | | (1,670,070 | ) | | | — | | Commitments and contingencies | | | | | | | | | | | | | | | | | | | | | | | | | Stockholders’ equity: | | | | | | | | | | | | | | | | | | | | | | | | | Preferred stock | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | Common stock | | | 512 | | | | 1 | | | | 1 | | | | 2,387 | | | | (2,389 | ) | | | 512 | | Additionalpaid-in-capital | | | 894,883 | | | | 713,735 | | | | 2,831,499 | | | | 1,473,558 | | | | (5,018,792 | ) | | | 894,883 | | Treasury stock | | | (11,542 | ) | | | — | | | | — | | | | — | | | | — | | | | (11,542 | ) | Accumulated deficit | | | (511,798 | ) | | | (261,651 | ) | | | 1,010,001 | | | | (467,122 | ) | | | (281,228 | ) | | | (511,798 | ) | Accumulated other comprehensive loss | | | (20,659 | ) | | | — | | | | — | | | | (20,659 | ) | | | 20,659 | | | | (20,659 | ) | | | | | | | | | | | | | | | | | | | | | | | | | | Total stockholders’ equity | | | 351,396 | | | | 452,085 | | | | 3,841,501 | | | | 988,164 | | | | (5,281,750 | ) | | | 351,396 | | | | | | | | | | | | | | | | | | | | | | | | | | | Total liabilities and stockholders’ equity | | $ | 980,047 | | | $ | 2,886,374 | | | $ | 3,943,900 | | | $ | 1,644,594 | | | $ | (6,962,413 | ) | | $ | 2,492,502 | | | | | | | | | | | | | | | | | | | | | | | | | | |
RYMAN HOSPITALITY PROPERTIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATING BALANCE SHEET
December 31, 2016
| | | | | | | | | | | | | | | | | | | | | | | | | | | | Parent | | | | | | | | | Non- | | | | | | | | | (in thousands) | | Guarantor | | | Issuer | | | Guarantors | | | Guarantors | | | Eliminations | | | Consolidated | | ASSETS: | | | | | | | | | | | | | | | | | | | | | | | | | Property and equipment, net of accumulated depreciation | | $ | — | | | $ | — | | | $ | 1,600,288 | | | $ | 397,724 | | | $ | — | | | $ | 1,998,012 | | Cash and cash equivalents - unrestricted | | | 28 | | | | 1,234 | | | | 23 | | | | 57,843 | | | | — | | | | 59,128 | | Cash and cash equivalents - restricted | | | — | | | | — | | | | — | | | | 22,062 | | | | — | | | | 22,062 | | Notes receivable | | | — | | | | — | | | | — | | | | 152,882 | | | | — | | | | 152,882 | | Investment in Gaylord Rockies joint venture | | | — | | | | — | | | | — | | | | 70,440 | | | | — | | | | 70,440 | | Trade receivables, less allowance | | | — | | | | — | | | | — | | | | 47,818 | | | | — | | | | 47,818 | | Prepaid expenses and other assets | | | 460 | | | | 42 | | | | 5 | | | | 55,407 | | | | (503 | ) | | | 55,411 | | Intercompany receivables, net | | | — | | | | — | | | | 1,640,220 | | | | — | | | | (1,640,220 | ) | | | — | | Investments | | | 988,467 | | | | 2,886,113 | | | | 546,007 | | | | 803,618 | | | | (5,224,205 | ) | | | — | | | | | | | | | | | | | | | | | | | | | | | | | | | Total assets | | $ | 988,955 | | | $ | 2,887,389 | | | $ | 3,786,543 | | | $ | 1,607,794 | | | $ | (6,864,928 | ) | | $ | 2,405,753 | | | | | | | | | | | | | | | | | | | | | | | | | | | LIABILITIES AND STOCKHOLDERS’ EQUITY: | | | | | | | | | | | | | | | | | | | | | | | | | Debt and capital lease obligations | | $ | — | | | $ | 1,501,895 | | | $ | — | | | $ | 659 | | | $ | — | | | $ | 1,502,554 | | Accounts payable and accrued liabilities | | | 740 | | | | 8,152 | | | | 11,863 | | | | 142,940 | | | | (490 | ) | | | 163,205 | | Dividends payable | | | 39,404 | | | | — | | | | — | | | | — | | | | — | | | | 39,404 | | Deferred management rights proceeds | | | — | | | | — | | | | — | | | | 180,088 | | | | — | | | | 180,088 | | Deferred income tax liabilities, net | | | 828 | | | | — | | | | 573 | | | | 68 | | | | — | | | | 1,469 | | Other liabilities | | | — | | | | — | | | | 89,989 | | | | 61,060 | | | | (13 | ) | | | 151,036 | | Intercompany payables, net | | | 579,986 | | | | 752,852 | | | | — | | | | 307,382 | | | | (1,640,220 | ) | | | — | | Commitments and contingencies | | | | | | | | | | | | | | | | | | | | | | | | | Stockholders’ equity: | | | | | | | | | | | | | | | | | | | | | | | | | Preferred stock | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | Common stock | | | 510 | | | | 1 | | | | 1 | | | | 2,387 | | | | (2,389 | ) | | | 510 | | Additionalpaid-in-capital | | | 893,102 | | | | 835,294 | | | | 2,827,692 | | | | 1,410,611 | | | | (5,073,597 | ) | | | 893,102 | | Treasury stock | | | (11,542 | ) | | | — | | | | — | | | | — | | | | — | | | | (11,542 | ) | Accumulated deficit | | | (491,805 | ) | | | (210,805 | ) | | | 856,425 | | | | (475,133 | ) | | | (170,487 | ) | | | (491,805 | ) | Accumulated other comprehensive loss | | | (22,268 | ) | | | — | | | | — | | | | (22,268 | ) | | | 22,268 | | | | (22,268 | ) | | | | | | | | | | | | | | | | | | | | | | | | | | Total stockholders’ equity | | | 367,997 | | | | 624,490 | | | | 3,684,118 | | | | 915,597 | | | | (5,224,205 | ) | | | 367,997 | | | | | | | | | | | | | | | | | | | | | | | | | | | Total liabilities and stockholders’ equity | | $ | 988,955 | | | $ | 2,887,389 | | | $ | 3,786,543 | | | $ | 1,607,794 | | | $ | (6,864,928 | ) | | $ | 2,405,753 | | | | | | | | | | | | | | | | | | | | | | | | | | |
RYMAN HOSPITALITY PROPERTIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
AND COMPREHENSIVE INCOME
For the Three Months Ended September 30, 2017
| | | | | | | | | | | | | | | | | | | | | | | | | | | | Parent | | | | | | | | | Non- | | | | | | | | | (in thousands) | | Guarantor | | | Issuer | | | Guarantors | | | Guarantors | | | Eliminations | | | Consolidated | | Revenues: | | | | | | | | | | | | | | | | | | | | | | | | | Rooms | | $ | — | | | $ | — | | | $ | — | | | $ | 100,534 | | | $ | — | | | $ | 100,534 | | Food and beverage | | | — | | | | — | | | | — | | | | 104,437 | | | | — | | | | 104,437 | | Other hotel revenue | | | — | | | | — | | | | 78,196 | | | | 28,701 | | | | (82,278 | ) | | | 24,619 | | Entertainment | | | — | | | | — | | | | — | | | | 35,134 | | | | — | | | | 35,134 | | | | | | | | | | | | | | | | | | | | | | | | | | | Total revenues | | | — | | | | — | | | | 78,196 | | | | 268,806 | | | | (82,278 | ) | | | 264,724 | | Operating expenses: | | | | | | | | | | | | | | | | | | | | | | | | | Rooms | | | — | | | | — | | | | — | | | | 27,575 | | | | — | | | | 27,575 | | Food and beverage | | | — | | | | — | | | | — | | | | 62,649 | | | | — | | | | 62,649 | | Other hotel expenses | | | — | | | | — | | | | 11,177 | | | | 139,029 | | | | (78,087 | ) | | | 72,119 | | Management fees, net | | | — | | | | — | | | | — | | | | 4,708 | | | | — | | | | 4,708 | | | | | | | | | | | | | | | | | | | | | | | | | | | Total hotel operating expenses | | | — | | | | — | | | | 11,177 | | | | 233,961 | | | | (78,087 | ) | | | 167,051 | | Entertainment | | | — | | | | — | | | | — | | | | 22,622 | | | | (1 | ) | | | 22,621 | | Corporate | | | 101 | | | | 424 | | | | — | | | | 8,695 | | | | — | | | | 9,220 | | Preopening costs | | | — | | | | — | | | | — | | | | 877 | | | | — | | | | 877 | | Corporate overhead allocation | | | 2,339 | | | | — | | | | 1,851 | | | | — | | | | (4,190 | ) | | | — | | Depreciation and amortization | | | — | | | | — | | | | 14,933 | | | | 13,613 | | | | — | | | | 28,546 | | | | | | | | | | | | | | | | | | | | | | | | | | | Total operating expenses | | | 2,440 | | | | 424 | | | | 27,961 | | | | 279,768 | | | | (82,278 | ) | | | 228,315 | | | | | | | | | | | | | | | | | | | | | | | | | | | Operating income (loss) | | | (2,440 | ) | | | (424 | ) | | | 50,235 | | | | (10,962 | ) | | | — | | | | 36,409 | | | | | | | | | | | | | | | | | | | | | | | | | | | Interest expense | | | — | | | | (16,614 | ) | | | — | | | | (7 | ) | | | — | | | | (16,621 | ) | Interest income | | | — | | | | — | | | | — | | | | 2,957 | | | | — | | | | 2,957 | | Loss from joint ventures | | | — | | | | — | | | | — | | | | (899 | ) | | | — | | | | (899 | ) | Other gains and (losses), net | | | — | | | | — | | | | — | | | | 2,554 | | | | — | | | | 2,554 | | | | | | | | | | | | | | | | | | | | | | | | | | | Income (loss) before income taxes | | | (2,440 | ) | | | (17,038 | ) | | | 50,235 | | | | (6,357 | ) | | | — | | | | 24,400 | | (Provision) benefit for income taxes | | | — | | | | — | | | | 590 | | | | (1,120 | ) | | | — | | | | (530 | ) | Equity in subsidiaries’ earnings, net | | | 26,310 | | | | — | | | | — | | | | — | | | | (26,310 | ) | | | — | | | | | | | | | | | | | | | | | | | | | | | | | | | Net income (loss) | | $ | 23,870 | | | $ | (17,038 | ) | | $ | 50,825 | | | $ | (7,477 | ) | | $ | (26,310 | ) | | $ | 23,870 | | | | | | | | | | | | | | | | | | | | | | | | | | | Comprehensive income (loss) | | $ | 25,434 | | | $ | (17,038 | ) | | $ | 50,825 | | | $ | (5,913 | ) | | $ | (27,874 | ) | | $ | 25,434 | | | | | | | | | | | | | | | | | | | | | | | | | | |
RYMAN HOSPITALITY PROPERTIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
AND COMPREHENSIVE INCOME
For the Three Months Ended September 30, 2016
| | | | | | | | | | | | | | | | | | | | | | | | | | | | Parent | | | | | | | | | Non- | | | | | | | | | (in thousands) | | Guarantor | | | Issuer | | | Guarantors | | | Guarantors | | | Eliminations | | | Consolidated | | Revenues: | | | | | | | | | | | | | | | | | | | | | | | | | Rooms | | $ | — | | | $ | — | | | $ | — | | | $ | 101,085 | | | $ | — | | | $ | 101,085 | | Food and beverage | | | — | | | | — | | | | — | | | | 113,100 | | | | — | | | | 113,100 | | Other hotel revenue | | | — | | | | — | | | | 74,738 | | | | 30,724 | | | | (78,628 | ) | | | 26,834 | | Entertainment | | | 46 | | | | — | | | | — | | | | 30,701 | | | | (46 | ) | | | 30,701 | | | | | | | | | | | | | | | | | | | | | | | | | | | Total revenues | | | 46 | | | | — | | | | 74,738 | | | | 275,610 | | | | (78,674 | ) | | | 271,720 | | Operating expenses: | | | | | | | | | | | | | | | | | | | | | | | | | Rooms | | | — | | | | — | | | | — | | | | 28,371 | | | | — | | | | 28,371 | | Food and beverage | | | — | | | | — | | | | — | | | | 64,790 | | | | — | | | | 64,790 | | Other hotel expenses | | | — | | | | — | | | | 10,860 | | | | 137,101 | | | | (74,630 | ) | | | 73,331 | | Management fees, net | | | — | | | | — | | | | — | | | | 4,408 | | | | — | | | | 4,408 | | | | | | | | | | | | | | | | | | | | | | | | | | | Total hotel operating expenses | | | — | | | | — | | | | 10,860 | | | | 234,670 | | | | (74,630 | ) | | | 170,900 | | Entertainment | | | — | | | | — | | | | — | | | | 19,146 | | | | (46 | ) | | | 19,100 | | Corporate | | | 98 | | | | 410 | | | | — | | | | 7,939 | | | | — | | | | 8,447 | | Corporate overhead allocation | | | 2,278 | | | | — | | | | 1,720 | | | | — | | | | (3,998 | ) | | | — | | Depreciation and amortization | | | 55 | | | | — | | | | 14,765 | | | | 11,886 | | | | — | | | | 26,706 | | | | | | | | | | | | | | | | | | | | | | | | | | | Total operating expenses | | | 2,431 | | | | 410 | | | | 27,345 | | | | 273,641 | | | | (78,674 | ) | | | 225,153 | | | | | | | | | | | | | | | | | | | | | | | | | | | Operating income (loss) | | | (2,385 | ) | | | (410 | ) | | | 47,393 | | | | 1,969 | | | | — | | | | 46,567 | | | | | | | | | | | | | | | | | | | | | | | | | | | Interest expense | | | 18 | | | | (16,444 | ) | | | 119 | | | | 360 | | | | — | | | | (15,947 | ) | Interest income | | | — | | | | — | | | | — | | | | 2,965 | | | | — | | | | 2,965 | | Loss from joint ventures | | | — | | | | — | | | | — | | | | (638 | ) | | | — | | | | (638 | ) | Other gains and (losses), net | | | — | | | | — | | | | — | | | | 2,468 | | | | — | | | | 2,468 | | | | | | | | | | | | | | | | | | | | | | | | | | | Income (loss) before income taxes | | | (2,367 | ) | | | (16,854 | ) | | | 47,512 | | | | 7,124 | | | | — | | | | 35,415 | | (Provision) benefit for income taxes | | | (352 | ) | | | — | | | | 36 | | | | (1,506 | ) | | | — | | | | (1,822 | ) | Equity in subsidiaries’ earnings, net | | | 36,312 | | | | — | | | | — | | | | — | | | | (36,312 | ) | | | — | | | | | | | | | | | | | | | | | | | | | | | | | | | Net income (loss) | | $ | 33,593 | | | $ | (16,854 | ) | | $ | 47,548 | | | $ | 5,618 | | | $ | (36,312 | ) | | $ | 33,593 | | | | | | | | | | | | | | | | | | | | | | | | | | | Comprehensive income (loss) | | $ | 29,979 | | | $ | (16,854 | ) | | $ | 47,548 | | | $ | 2,004 | | | $ | (32,698 | ) | | $ | 29,979 | | | | | | | | | | | | | | | | | | | | | | | | | | |
RYMAN HOSPITALITY PROPERTIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
AND COMPREHENSIVE INCOME
For the Nine Months Ended September 30, 2017
| | | | | | | | | | | | | | | | | | | | | | | | | | | | Parent | | | | | | | | | Non- | | | | | | | | | (in thousands) | | Guarantor | | | Issuer | | | Guarantors | | | Guarantors | | | Eliminations | | | Consolidated | | Revenues: | | | | | | | | | | | | | | | | | | | | | | | | | Rooms | | $ | — | | | $ | — | | | $ | — | | | $ | 314,577 | | | $ | — | | | $ | 314,577 | | Food and beverage | | | — | | | | — | | | | — | | | | 359,047 | | | | — | | | | 359,047 | | Other hotel revenue | | | — | | | | — | | | | 236,517 | | | | 85,278 | | | | (248,302 | ) | | | 73,493 | | Entertainment | | | — | | | | — | | | | — | | | | 92,451 | | | | (24 | ) | | | 92,427 | | | | | | | | | | | | | | | | | | | | | | | | | | | Total revenues | | | — | | | | — | | | | 236,517 | | | | 851,353 | | | | (248,326 | ) | | | 839,544 | | Operating expenses: | | | | | | | | | | | | | | | | | | | | | | | | | Rooms | | | — | | | | — | | | | — | | | | 83,962 | | | | — | | | | 83,962 | | Food and beverage | | | — | | | | — | | | | — | | | | 200,091 | | | | — | | | | 200,091 | | Other hotel expenses | | | — | | | | — | | | | 33,533 | | | | 422,239 | | | | (236,192 | ) | | | 219,580 | | Management fees, net | | | — | | | | — | | | | — | | | | 16,417 | | | | — | | | | 16,417 | | | | | | | | | | | | | | | | | | | | | | | | | | | Total hotel operating expenses | | | — | | | | — | | | | 33,533 | | | | 722,709 | | | | (236,192 | ) | | | 520,050 | | Entertainment | | | — | | | | — | | | | — | | | | 61,583 | | | | (24 | ) | | | 61,559 | | Corporate | | | 191 | | | | 1,226 | | | | 2 | | | | 22,905 | | | | — | | | | 24,324 | | Preopening costs | | | — | | | | — | | | | — | | | | 1,587 | | | | — | | | | 1,587 | | Corporate overhead allocation | | | 6,768 | | | | — | | | | 5,342 | | | | — | | | | (12,110 | ) | | | — | | Depreciation and amortization | | | — | | | | — | | | | 44,617 | | | | 39,245 | | | | — | | | | 83,862 | | | | | | | | | | | | | | | | | | | | | | | | | | | Total operating expenses | | | 6,959 | | | | 1,226 | | | | 83,494 | | | | 848,029 | | | | (248,326 | ) | | | 691,382 | | | | | | | | | | | | | | | | | | | | | | | | | | | Operating income (loss) | | | (6,959 | ) | | | (1,226 | ) | | | 153,023 | | | | 3,324 | | | | — | | | | 148,162 | | | | | | | | | | | | | | | | | | | | | | | | | | | Interest expense | | | — | | | | (49,620 | ) | | | — | | | | (20 | ) | | | — | | | | (49,640 | ) | Interest income | | | — | | | | — | | | | — | | | | 8,874 | | | | — | | | | 8,874 | | Loss from joint ventures | | | — | | | | — | | | | — | | | | (2,616 | ) | | | — | | | | (2,616 | ) | Other gains and (losses), net | | | — | | | | — | | | | — | | | | 1,024 | | | | — | | | | 1,024 | | | | | | | | | | | | | | | | | | | | | | | | | | | Income (loss) before income taxes | | | (6,959 | ) | | | (50,846 | ) | | | 153,023 | | | | 10,586 | | | | — | | | | 105,804 | | (Provision) benefit for income taxes | | | — | | | | — | | | | 553 | | | | (2,575 | ) | | | — | | | | (2,022 | ) | Equity in subsidiaries’ earnings, net | | | 110,741 | | | | — | | | | — | | | | — | | | | (110,741 | ) | | | — | | | | | | | | | | | | | | | | | | | | | | | | | | | Net income (loss) | | $ | 103,782 | | | $ | (50,846 | ) | | $ | 153,576 | | | $ | 8,011 | | | $ | (110,741 | ) | | $ | 103,782 | | | | | | | | | | | | | | | | | | | | | | | | | | | Comprehensive income (loss) | | $ | 105,391 | | | $ | (50,846 | ) | | $ | 153,576 | | | $ | 9,620 | | | $ | (112,350 | ) | | $ | 105,391 | | | | | | | | | | | | | | | | | | | | | | | | | | |
RYMAN HOSPITALITY PROPERTIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
AND COMPREHENSIVE INCOME
For the Nine Months Ended September 30, 2016
| | | | | | | | | | | | | | | | | | | | | | | | | | | | Parent | | | | | | | | | Non- | | | | | | | | | (in thousands) | | Guarantor | | | Issuer | | | Guarantors | | | Guarantors | | | Eliminations | | | Consolidated | | Revenues: | | | | | | | | | | | | | | | | | | | | | | | | | Rooms | | $ | — | | | $ | — | | | $ | — | | | $ | 309,385 | | | $ | — | | | $ | 309,385 | | Food and beverage | | | — | | | | — | | | | — | | | | 362,550 | | | | — | | | | 362,550 | | Other hotel revenue | | | — | | | | — | | | | 231,074 | | | | 87,183 | | | | (242,653 | ) | | | 75,604 | | Entertainment | | | 194 | | | | — | | | | — | | | | 81,867 | | | | (168 | ) | | | 81,893 | | | | | | | | | | | | | | | | | | | | | | | | | | | Total revenues | | | 194 | | | | — | | | | 231,074 | | | | 840,985 | | | | (242,821 | ) | | | 829,432 | | Operating expenses: | | | | | | | | | | | | | | | | | | | | | | | | | Rooms | | | — | | | | — | | | | — | | | | 82,492 | | | | — | | | | 82,492 | | Food and beverage | | | — | | | | — | | | | — | | | | 201,045 | | | | — | | | | 201,045 | | Other hotel expenses | | | — | | | | — | | | | 32,749 | | | | 417,510 | | | | (230,749 | ) | | | 219,510 | | Management fees, net | | | — | | | | — | | | | — | | | | 15,246 | | | | — | | | | 15,246 | | | | | | | | | | | | | | | | | | | | | | | | | | | Total hotel operating expenses | | | — | | | | — | | | | 32,749 | | | | 716,293 | | | | (230,749 | ) | | | 518,293 | | Entertainment | | | — | | | | — | | | | — | | | | 54,798 | | | | (168 | ) | | | 54,630 | | Corporate | | | 292 | | | | 1,217 | | | | 2 | | | | 20,804 | | | | — | | | | 22,315 | | Corporate overhead allocation | | | 6,748 | | | | — | | | | 5,156 | | | | — | | | | (11,904 | ) | | | — | | Depreciation and amortization | | | 135 | | | | — | | | | 44,263 | | | | 37,490 | | | | — | | | | 81,888 | | | | | | | | | | | | | | | | | | | | | | | | | | | Total operating expenses | | | 7,175 | | | | 1,217 | | | | 82,170 | | | | 829,385 | | | | (242,821 | ) | | | 677,126 | | | | | | | | | | | | | | | | | | | | | | | | | | | Operating income (loss) | | | (6,981 | ) | | | (1,217 | ) | | | 148,904 | | | | 11,600 | | | | — | | | | 152,306 | | | | | | | | | | | | | | | | | | | | | | | | | | | Interest expense | | | 18 | | | | (48,896 | ) | | | 254 | | | | 622 | | | | — | | | | (48,002 | ) | Interest income | | | 28 | | | | — | | | | — | | | �� | 9,088 | | | | — | | | | 9,116 | | Loss from joint ventures | | | — | | | | — | | | | — | | | | (2,086 | ) | | | — | | | | (2,086 | ) | Other gains and (losses), net | | | — | | | | — | | | | (87 | ) | | | 2,375 | | | | — | | | | 2,288 | | | | | | | | | | | | | | | | | | | | | | | | | | | Income (loss) before income taxes | | | (6,935 | ) | | | (50,113 | ) | | | 149,071 | | | | 21,599 | | | | — | | | | 113,622 | | Provision for income taxes | | | (352 | ) | | | — | | | | (54 | ) | | | (1,946 | ) | | | — | | | | (2,352 | ) | Equity in subsidiaries’ earnings, net | | | 118,557 | | | | — | | | | — | | | | — | | | | (118,557 | ) | | | — | | | | | | | | | | | | | | | | | | | | | | | | | | | Net income (loss) | | $ | 111,270 | | | $ | (50,113 | ) | | $ | 149,017 | | | $ | 19,653 | | | $ | (118,557 | ) | | $ | 111,270 | | | | | | | | | | | | | | | | | | | | | | | | | | | Comprehensive income (loss) | | $ | 107,704 | | | $ | (50,113 | ) | | $ | 149,017 | | | $ | 16,087 | | | $ | (114,991 | ) | | $ | 107,704 | | | | | | | | | | | | | | | | | | | | | | | | | | |
RYMAN HOSPITALITY PROPERTIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
For the Nine Months Ended September 30, 2017
| | | | | | | | | | | | | | | | | | | | | | | | | | | | Parent | | | | | | | | | Non- | | | | | | | | | (in thousands) | | Guarantor | | | Issuer | | | Guarantors | | | Guarantors | | | Eliminations | | | Consolidated | | Net cash provided by (used in) operating activities | | $ | 124,589 | | | $ | (60,255 | ) | | $ | 64,269 | | | $ | 87,167 | | | $ | — | | | $ | 215,770 | | | | | | | | | | | | | | | | | | | | | | | | | | | Purchases of property and equipment | | | — | | | | — | | | | (63,770 | ) | | | (63,378 | ) | | | — | | | | (127,148 | ) | Investment in Gaylord Rockies joint venture | | | — | | | | — | | | | — | | | | (16,309 | ) | | | — | | | | (16,309 | ) | Investment in other joint ventures | | | — | | | | — | | | | — | | | | (6,819 | ) | | | — | | | | (6,819 | ) | Decrease in restricted cash and cash equivalents | | | — | | | | — | | | | — | | | | 7,359 | | | | — | | | | 7,359 | | Other investing activities | | | — | | | | — | | | | — | | | | (4,139 | ) | | | — | | | | (4,139 | ) | | | | | | | | | | | | | | | | | | | | | | | | | | Net cash used in investing activities | | | — | | | | — | | | | (63,770 | ) | | | (83,286 | ) | | | — | | | | (147,056 | ) | | | | | | | | | | | | | | | | | | | | | | | | | | Net repayments under revolving credit facility | | | — | | | | (235,900 | ) | | | — | | | | — | | | | — | | | | (235,900 | ) | Borrowings under term loan A | | | — | | | | 200,000 | | | | — | | | | — | | | | — | | | | 200,000 | | Borrowings under term loan B | | | — | | | | 500,000 | | | | — | | | | — | | | | — | | | | 500,000 | | Repayments under term loan B | | | — | | | | (392,500 | ) | | | — | | | | — | | | | — | | | | (392,500 | ) | Deferred financing costs paid | | | — | | | | (12,268 | ) | | | — | | | | — | | | | — | | | | (12,268 | ) | Payment of dividends | | | (120,740 | ) | | | — | | | | — | | | | — | | | | — | | | | (120,740 | ) | Payment of tax withholdings for share-based compensation | | | (3,775 | ) | | | — | | | | — | | | | — | | | | — | | | | (3,775 | ) | Other financing activities | | | 28 | | | | — | | | | — | | | | (15 | ) | | | — | | | | 13 | | | | | | | | | | | | | | | | | | | | | | | | | | | Net cash provided by (used in) financing activities | | | (124,487 | ) | | | 59,332 | | | | — | | | | (15 | ) | | | — | | | | (65,170 | ) | | | | | | | | | | | | | | | | | | | | | | | | | | Net change in cash and cash equivalents | | | 102 | | | | (923 | ) | | | 499 | | | | 3,866 | | | | — | | | | 3,544 | | Cash and cash equivalents at beginning of period | | | 28 | | | | 1,234 | | | | 23 | | | | 57,843 | | | | — | | | | 59,128 | | | | | | | | | | | | | | | | | | | | | | | | | | | Cash and cash equivalents at end of period | | $ | 130 | | | $ | 311 | | | $ | 522 | | | $ | 61,709 | | | $ | — | | | $ | 62,672 | | | | | | | | | | | | | | | | | | | | | | | | | | |
RYMAN HOSPITALITY PROPERTIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
For the Nine Months Ended September 30, 2016
| | | | | | | | | | | | | | | | | | | | | | | | | | | | Parent | | | | | | | | | Non- | | | | | | | | | (in thousands) | | Guarantor | | | Issuer | | | Guarantors | | | Guarantors | | | Eliminations | | | Consolidated | | Net cash provided by (used in) operating activities | | $ | 141,202 | | | $ | (51,999 | ) | | $ | 23,151 | | | $ | 86,762 | | | $ | — | | | $ | 199,116 | | | | | | | | | | | | | | | | | | | | | | | | | | | Purchases of property and equipment | | | (8,374 | ) | | | — | | | | (23,304 | ) | | | (52,879 | ) | | | — | | | | (84,557 | ) | Investment in Gaylord Rockies joint venture | | | — | | | | — | | | | — | | | | (50,443 | ) | | | — | | | | (50,443 | ) | Investment in other joint ventures | | | — | | | | — | | | | — | | | | (750 | ) | | | — | | | | (750 | ) | Proceeds from sale of Peterson LOI | | | 6,785 | | | | — | | | | — | | | | — | | | | — | | | | 6,785 | | Increase in restricted cash and cash equivalents | | | — | | | | — | | | | — | | | | (3,517 | ) | | | — | | | | (3,517 | ) | Other investing activities | | | — | | | | — | | | | 28 | | | | 995 | | | | — | | | | 1,023 | | | | | | | | | | | | | | | | | | | | | | | | | | | Net cash provided by (used in) investing activities | | | (1,589 | ) | | | — | | | | (23,276 | ) | | | (106,594 | ) | | | — | | | | (131,459 | ) | | | | | | | | | | | | | | | | | | | | | | | | | | Net repayments under revolving credit facility | | | — | | | | 60,500 | | | | — | | | | — | | | | — | | | | 60,500 | | Net borrowings under term loan B | | | — | | | | (3,000 | ) | | | — | | | | — | | | | — | | | | (3,000 | ) | Repayment of note payable related to purchase of AC Hotel | | | — | | | | (6,000 | ) | | | — | | | | — | | | | — | | | | (6,000 | ) | Repurchase of Company stock for retirement | | | (24,811 | ) | | | — | | | | — | | | | — | | | | — | | | | (24,811 | ) | Payment of dividends | | | (112,900 | ) | | | — | | | | — | | | | — | | | | — | | | | (112,900 | ) | Payment of tax withholdings for share-based compensation | | | (3,150 | ) | | | — | | | | — | | | | — | | | | — | | | | (3,150 | ) | Other financing activities | | | 1,284 | | | | — | | | | — | | | | (13 | ) | | | — | | | | 1,271 | | | | | | | | | | | | | | | | | | | | | | | | | | | Net cash provided by (used in) financing activities | | | (139,577 | ) | | | 51,500 | | | | — | | | | (13 | ) | | | — | | | | (88,090 | ) | | | | | | | | | | | | | | | | | | | | | | | | | | Net change in cash and cash equivalents | | | 36 | | | | (499 | ) | | | (125 | ) | | | (19,845 | ) | | | — | | | | (20,433 | ) | Cash and cash equivalents at beginning of period | | | 23 | | | | 1,578 | | | | 158 | | | | 54,532 | | | | — | | | | 56,291 | | | | | | | | | | | | | | | | | | | | | | | | | | | Cash and cash equivalents at end of period | | $ | 59 | | | $ | 1,079 | | | $ | 33 | | | $ | 34,687 | | | $ | — | | | $ | 35,858 | | | | | | | | | | | | | | | | | | | | | | | | | | |
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 substantially 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 aco-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%-ownedthe Operating Partnership’s owned subsidiaries. As 100%-owned subsidiaries of Ryman, neitherNeither 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 Form10-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, 2016,2021, included in our Annual Report on Form10-K that was filed with the SEC on February 28, 2017.25, 2022. Cautionary Note Regarding Forward-Looking Statements This Quarterly Report on Form10-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 anticipated impact of the novel coronavirus disease (COVID-19) pandemic on future travel, transient and group demand, our results of operations and liquidity, and efforts to rebook customers for future dates; (ii) the effect of our election to be taxed as a REIT and maintain REIT status for federal income tax purposes; (ii)(iii) the holding of ournon-qualifying REIT assets in one or more taxable REIT subsidiaries (“TRSs”); (iii)(iv) the suspension of our announceddividend and our dividend policy, including the frequency and amount of any dividend we may pay; (iv)(v) our strategic goals and potential growth opportunities, including future expansion of the geographic diversity of our existing asset portfolio through acquisitions and our investment in the Gaylord Rockies joint venture (defined below); (v)ventures; (vi) Marriott International, Inc.’s (“Marriott”) ability to effectively manage our hotels and other properties; (vi)(vii) our anticipated capital expenditures and investments; (vii)(viii) the potential operating and financial restrictions imposed on our activities under existing and future financing agreements including our credit facility and other contractual arrangements with third parties, including management agreements with Marriott; (ix) our use of cash during the remainder of 2022; (x) our ability to borrow available funds under our credit facility; (xi) our expectations about successfully amending the agreements governing our indebtedness should the need arise; (xii) the effects of inflation and (viii)increased costs on our business; and (xiii) any other business or operational matters. We have based these forward-looking statements on our current expectations and projections about future events. We caution the reader that forward-looking statements involve risks and uncertainties that cannot be predicted or quantified, and, consequently, actual results may differ materially from those expressed or implied by such forward-looking statements. Important factors that could cause actual results to differ materially from those in the forward-looking statements include, among other things, the risks and uncertainties associated with the COVID-19 pandemic, including the effects of the COVID-19 pandemic on us and the hospitality and entertainment industries generally, the effects of the COVID-19 pandemic on the demand for travel, transient and group business (including government-imposed restrictions or guidelines), levels of consumer confidence in the safety of travel and group gatherings as a result of COVID-19, the length and severity of the COVID-19 pandemic in the United States and the pace of recovery following the COVID-19 pandemic, the duration and severity of the COVID-19 pandemic in the markets where our assets are located, the economic conditions affecting the hospitality business generally, the geographic concentration of our hotel properties, business levels at our hotels, the effecteffects of inflation on our election to be taxed as a REIT for federal income tax purposes commencing withbusiness, including the year ended December 31, 2013,effects on costs of labor and supplies, 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/or to successfully amend the agreements governing our indebtedness in the future, changes in interest rates, including future changes from the London Inter-Bank Offered Rate (“LIBOR”) to a different base rate, and those factors described elsewhere in this Quarterly Report on Form 10-Q, including in Item 1A, “Risk Factors,” and our Annual Report on Form10-K for the year ended December 31, 20162021 or described from time to time in our other reports filed with the SEC.
Any forward-looking statement made in this Quarterly Report on Form10-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 Form10-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 assetscore holdings include a network of fourfive upscale, meetings-focused resorts totaling 7,8119,917 rooms that are managed by Marriott under the Gaylord Hotels brand. These fourfive 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”)., and the Gaylord Rockies Resort & Convention Center (“Gaylord Rockies”), which was previously owned by a joint venture (the “Gaylord Rockies joint venture”), in which we owned a 65% interest. On May 7, 2021, we purchased the remaining 35% interest in the Gaylord Rockies joint venture. Our other owned hotel assets managed by Marriott include Gaylord Springs Golf Links (“Gaylord Springs”), the Wildhorse Saloon, the General Jackson Showboat (“General Jackson”), the Inn at Opryland, a303-rooman overflow hotel adjacent to Gaylord Opryland, and the AC Hotel at National Harbor, Washington D.C. (“AC Hotel”), a192-rooman overflow hotel adjacent to Gaylord National. 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 9096 years; the Ryman Auditorium, the storied live music venue and former home of the Grand Ole Opry located in downtown Nashville; andWSM-AM, the Opry’s radio home.home; Ole Red, a brand of Blake Shelton-themed bar, music venue and event spaces; two Nashville-based assets managed by Marriott – the Wildhorse Saloon and the General Jackson Showboat; and as of May 31, 2022, Block 21, a mixed-use entertainment, lodging, office, and retail complex located in Austin, Texas (“Block 21”). We also own a 50% interest in a joint venture that creates and distributes a linear multicast and over-the-top channel dedicated to the country music lifestyle (“Circle”). See “OEG Transaction” below for additional disclosure regarding our sale of a 30% interest in the business effective June 16, 2022. 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. Marriott manages theday-to-day operations of our Gaylord Hotels properties, the Inn at Opryland, the AC Hotel, and certain of our Nashville attractions. As a result, we rely upon Marriott to generate occupancy and revenue levels at our hotel properties.
See “Cautionary Note Regarding Forward-Looking Statements” in this Item 2 and Item 1A, “Risk Factors,” in Part II of this Quarterly Report on Form 10-Q and Item 1A, “Risk Factors,” in our Annual Report on Form10-K for the year ended December 31, 20162021 for important information regarding forward-looking statements made in this report and risks and uncertainties we face. Impact of COVID-19 Pandemic The COVID-19 pandemic has been and continues to be a complex and evolving situation, causing unprecedented levels of disruption of our business. Although our assets are currently open and operating without capacity restrictions and business levels continue to recover, there remains significant uncertainty surrounding the full extent of the impact of the COVID-19 pandemic on our future results of operations and financial position. The majority of our businesses have been open and operating throughout 2021 and 2022. However, Gaylord Rockies Resort & Convention CenterNational remained closed during the first half of 2021 and reopened July 1, 2021. The Grand Ole Opry and Ryman Auditorium reopened for full-capacity publicly attended performances in May 2021. In addition, subsequent to the December 2020 downtown Nashville bombing, the Wildhorse saloon reopened in April 2021. Cancelled room nights in the six months ended June 30, 2022 decreased 49% from the six months ended June 30, 2021. Occupancy and average daily rate (“ADR”) increased 35.4 points of occupancy and 17.4%, respectively, in the six months ended June 30, 2022 as compared to the same period in 2021. Outside-the-room spend in the six months ended June 30, 2022 increased 246.8% compared to the same period in 2021. Group stays have steadily increased in 2021 and 2022 and group nights on the books at June 30, 2022 for the next five years is approximately 98% of total group room nights that were on the books at June 30, 2019 for the corresponding following five years. In addition, the ADR of group room nights on the books at June 30, 2022 is almost 8% higher than the ADR of the corresponding group room nights at June 30, 2019. Throughout the COVID-19 pandemic, we have continued to pay all required debt service payments on our indebtedness, lease payments, taxes and other payables. At June 30, 2022, we had $754.6 million available for borrowing under our revolving credit facility and the OEG revolving credit facility and $179.2 million in unrestricted cash on hand. Our regular quarterly dividend is currently suspended. Our board of directors will consider a future dividend as permitted by our credit agreement and subject to our board of directors’ determinations as to the amount of distributions and the timing thereof. For additional discussion of the impact of the COVID-19 pandemic on our business, see “Risk Factors” under Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2021. OEG Transaction As further discussedmore fully described in Note 62, “OEG Transaction,” to the condensed consolidated financial statements included herein, in March 2016,on June 16, 2022, we and certain of our subsidiaries, ofincluding OEG Attractions Holdings, LLC, which directly or indirectly owns the Company entered into a series of agreementsassets that comprise our Entertainment Segment (“OEG”), consummated the transactions pursuant to an investment agreement (the “Investment Agreement”) with affiliates of RIDA Development CorporationAtairos Group, Inc. (“RIDA”Atairos”) and Ares Management, L.P. (“Ares”) with respect to an equity investment in the Gaylord Rockies Resort & Convention Center in Aurora, Colorado (“Gaylord Rockies”), which is being developed by RIDA and Ares. The hotel will be managed byA-OEG Holdings, LLC, an affiliate of MarriottAtairos (the “OEG Investor”) and pursuant to a long-term management contractwhich OEG issued and is expectedsold to consistthe OEG Investor, and the OEG Investor acquired, 30% of a1,500-room resort hotel with over 485,000 square feetthe equity interests of exhibition, meeting,pre-function and outdoor space.OEG for approximately $296.0 million (the “OEG Transaction”). The hotel is expected topurchase price for the OEG Transaction may be completedincreased by $30.0 million if OEG achieves certain financial objectives in late 2018 and has a total estimated project cost of approximately $800 million. 2023 or 2024. We acquiredretained a 35%controlling 70% equity interest in OEG and will continue to consolidate OEG and the project for a capital contributionother subsidiaries comprising our Entertainment segment in our consolidated financial statements. After the payment of approximately $86.5 million,transaction expenses, we used substantially all of which the final portion was funded innet proceeds from the first quarter of 2017. The termsOEG Transaction, together with the net proceeds we received from the OEG Term Loan (as defined below), to repay the outstanding balance of our investment provide that we will have the abilityexisting $300 million term loan A and to approve certain major decisions affecting the hotel, including, but not limited to, operating budgets, major capital expenditures, material transactions involving the hotel, and approval of designated hotel senior management. We also have a right of first offer to acquire the remainder of the project and designated rights to participate in any sales process with respect to the project after exercise ofpay down substantially all borrowings outstanding under our first offer rights.revolving credit facility. A subsidiary of the Company is providing designated asset management services on behalf of the hotel during the construction period in exchange for a flat fee, and after opening of the hotel, in exchange for a fee based on the hotel’s gross revenues on an annual basis.
In connection with the agreements, we agreedOEG Transaction, OEG Borrower, LLC (“OEG Borrower”) and OEG Finance, LLC (“OEG Finance”), each a wholly owned direct or indirect subsidiary of OEG, entered into a credit agreement (the “OEG Credit Agreement”) with JPMorgan Chase Bank, N.A. that provides for (i) a senior secured term loan facility in an aggregate principal amount of $300.0 million (the “OEG Term Loan”) and (ii) a senior secured revolving credit facility in an aggregate principal amount not to provide certain guaranteesexceed $65.0 million (the “OEG Revolver”). The OEG Term Loan matures on June 16, 2029 and the OEG Revolver matures on June 16, 2027. The OEG Term Loan bears interest at a rate equal to either, at OEG Borrower’s election, (i) the Alternate Base Rate plus 4.00% or (b) Adjusted Term SOFR plus 5.00% (all as specifically more described in the OEG Credit Agreement). The OEG Revolver bears interest at a rate equal to either, at OEG Borrower’s election, (i) the Alternate Base Rate plus 3.75% or (b) Adjusted Term SOFR plus 4.75%, which shall be subject to reduction in the applicable margin based upon OEG’s First Lien Leverage Ratio (all as specifically more described in the OEG Credit Agreement). The OEG Term Loan and OEG Revolver are each secured by substantially all of the hotel’s construction loanassets of OEG Finance and mezzanine debt. See Note 6each of its subsidiaries (other than Block 21 and Circle, as more specifically described in the OEG Credit Agreement). No revolving credit advances were made under the OEG Revolver at closing. Block 21 Acquisition On May 31, 2022, we purchased Block 21 for a stated purchase price of $260 million, as subsequently adjusted to $255 million pursuant to the condensed consolidated financial statements included hereinterms of the purchase agreement, which includes the assumption of approximately $136 million of existing mortgage debt. Block 21 is the home of the Austin City Limits Live at The Moody Theater (“ACL Live”), a 2,750-seat entertainment venue that serves as the filming location for additional discussion of these guarantees. Gaylord Opryland Luxury Waterpark
In January 2017, we announced plans for a proposed $90 million investment to create a luxury indoor/outdoor waterpark adjacent to Gaylord Opryland that is expected to open in 2018.the Austin City Limits television series. The projectBlock 21 complex also includes the 251-room W Austin Hotel, the 3TEN at ACL Live club and approximately 111,00053,000 square feet of indoor water attractions and activities over three levels and approximately 106,000 square feetother Class A commercial space. We funded the cash portion of outdoor water amenities. The project will include areas for adults, children and families, as well as dining options and bars. The project will be fundedthe purchase price with cash on hand and borrowings under our revolving credit facility.
Dividend Policy
Pursuant to Block 21 assets are reflected in our current dividend policy, we plan 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 28, 2017, our board of directors declared our first quarter 2017 cash dividend in the amount of $0.80 per share of common stock, or an aggregate of approximately $40.9 million in cash, which was paid on April 14, 2017 to stockholders of recordEntertainment segment as of the close of business on MarchMay 31, 2017. On June 9, 2017, our board of directors declared our second quarter 2017 cash dividend in the amount of $0.80 per share of common stock, or an aggregate of approximately $41.0 million in cash, which was paid on July 14, 2017 to stockholders of record as of the close of business on June 19, 2017. On September 18, 2017, our board of directors declared our third quarter 2017 cash dividend in the amount of $0.80 per share of common stock, or an aggregate of approximately $41.0 million in cash, which was paid on October 13, 2017 to stockholders of record as of the close of business on September 29, 2017. We currently plan to pay a quarterly cash dividend of $0.80 per share of common stock in January 2018. 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.2022.
Credit Facility RefinancingGaylord Rockies Joint Venture
In May 2017,2021, we refinanced our existing credit facility to (i) extendpurchased the maturity of our existing $700 million revolving credit facilityremaining 35% ownership interest in the Gaylord Rockies joint venture. Prior to May 2021, (ii) upsizewe had a 65% ownership interest in the Gaylord Rockies joint venture, and our existing $400management concluded that the Company was the primary beneficiary of this previous variable interest entity (“VIE”). The financial position and results of operations of this previous VIE have been consolidated in the accompanying condensed consolidated financial statements included herein. We also purchased 130 acres of undeveloped land, adjacent to Gaylord Rockies in May 2021. Gaylord Palms Expansion In April 2021, we completed a $158 million term loan B to $500 million, improve its pricing,expansion of Gaylord Palms, which includes an additional 302 guest rooms and extend the maturity to May 202496,000 square feet of meeting space, an expanded resort pool and (iii) addevents lawn, and a new $200multi-level parking structure. Circle In 2019, we acquired a 50% equity interest in Circle, and we have made $27.0 million term loan A that matures in Maycapital contributions through June 30, 2022. Net proceeds, after repaymentIn addition, we intend to contribute up to an additional $6.0 million in the remainder of the existing term loan B2022 for working capital needs. Circle launched its broadcast network on January 1, 2020, with sixteen original shows and closing costs, were approximately $308.9two major distribution partnerships. As of July 2022, Circle is available to more than 70% of U.S. television households via over-the-air and cable television and is available through multiple online streaming services covering over 193 million and were used to pay down a portion of our revolving credit facility. See a detailed discussion of the refinanced terms of our credit facility under the “Principal Debt Agreements” section of “Liquidity and Capital Resources” below. monthly average users.Our Long-Term Strategic Plan Our goal is to becomebe the nation’s premier hospitality REIT for group-oriented meeting hotel assets in urban and resort markets. Existing Hotel Property Design. Our hotelGaylord 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 hotelGaylord 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, partPart of our long-term growth strategy includes acquisitions or developments 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 pursuewill consider attractive investment opportunities which meet our acquisition parameters, specifically, group-oriented large hotels and overflow hotels with existing or potential leisure appeal. We are generally interested in highly accessible upper-upscale or luxury assets with over 400 hotel rooms in urban and resort group destination markets. We also consider assets that possess significant meeting space 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 Continued Investment in Our Existing Properties. We continuously evaluate and convention hotelsinvest in our current portfolio, and consider enhancements or expansions as a part of our long-term growth strategy.strategic plan. In 2021, we completed our $158 million expansion of Gaylord Palms and we also completed our renovation of all of the guestrooms at Gaylord National. In 2022, we began a re-concepting of the food and beverage options at Gaylord National and have begun enhancements at Gaylord Rockies to better position the property for our group customers. 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 ourWSM-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 believe that licensing our brand for products may provide an opportunity to increase revenues and cash flow with relatively little capital investment. We are continuously exploring additional products, such as television specials and retail products, through which we can capitalize on our brand affinity and awareness. We believe that licensing our brand for products may provide an opportunity to increase revenues and cash flow with relatively little capital investment. To this end, we are investinghave invested in the Opry City Stage, a joint venture to open a four-level entertainment complex in Times Square,six Ole Red locations, as well as Circle, and purchased Block 21. Further, as discussed above, we recently completed the OEG Transaction, which we believe will expand the distribution of our OEG brands. Short-Term Capital Allocation. Prior to the COVID-19 pandemic, our short-term capital allocation strategy focused on returning capital to stockholders through the payment of dividends, in addition to investing in our assets and operations. However, in March 2020, we suspended our regular quarterly dividend payments. Our board of directors will consider a Company-owned, Blake Shelton-themed five-level bar, music venuefuture dividend as permitted by our credit agreement. Any future dividend is subject to our board of directors’ determinations as to the amount and event space in Nashville named after the Shelton hit “Ole Red.”timing thereof. Our Current Operations Our ongoing operations are organized into three principal business segments: | ● | Hospitality, consisting of our Gaylord Hotels properties, the Inn at Opryland and the AC Hotel. |
| ● | Entertainment, consisting of the Grand Ole Opry, the Ryman Auditorium, WSM-AM, Ole Red, Block 21, our equity investment in Circle, and our other Nashville-based attractions. |
| ● | Corporate and Other, consisting of our corporate expenses. |
Hospitality, consisting of Gaylord Opryland, Gaylord Palms, Gaylord Texan, Gaylord National, 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, our other attractions, media and entertainment businesses, and our investment in the Opry City Stage joint venture.
Corporate and Other, consisting of our corporate expenses.
For the three months and ninesix months ended SeptemberJune 30, 20172022 and 2016,2021, our total revenues were divided among these business segments as follows: | | | | | | | | | | | | | | Three Months Ended | | | Six Months Ended | | | | | June 30, | | | June 30, | | | Segment | | 2022 | | 2021 | | | 2022 | | 2021 | | | Hospitality | | 85 | % | 79 | % | | 86 | % | 81 | % | | Entertainment | | 15 | % | 21 | % | | 14 | % | 19 | % | | Corporate and Other | | 0 | % | 0 | % | | 0 | % | 0 | % | |
| | | | | | | | | | | | | | | | | | | | Three Months Ended | | | Nine Months Ended | | | | | September 30, | | | September 30, | | Segment | | 2017 | | | 2016 | | | 2017 | | | 2016 | | Hospitality | | | 87 | % | | | 89 | % | | | 89 | % | | | 90 | % | Entertainment | | | 13 | % | | | 11 | % | | | 11 | % | | | 10 | % | Corporate and Other | | | 0 | % | | | 0 | % | | | 0 | % | | | 0 | % |
Key Performance Indicators The operating results of our Hospitality segment are highly dependent on the volume of customers at our hotels and the quality of the customer mix at our hotels, which are managed by Marriott. These factors impact the price that Marriott can charge for our hotel rooms and other amenities, such as food and beverage and meeting space. The following key performance indicators are commonly used in the hospitality REIT industry: industry and are used by management to evaluate hotel occupancy – a volume indicator; performance and allocate capital expenditures: | ● | hotel occupancy – a volume indicator calculated by dividing total rooms sold by total rooms available; |
| ● | average daily rate (“ADR”) – a price indicator calculated by dividing room revenue by the number of rooms sold; |
| ● | revenue per available room (“RevPAR”) – 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 the total number of definite group bookings for future room nights at our hotels confirmed during the applicable period, net of cancellations. |
For the three months and six months ended June 30, 2022 and 2021, the method of calculation of these indicators has not been changed as a result of the COVID-19 pandemic and the Gaylord National closure and is consistent with historical periods. As such, performance metrics include closed hotel room nights available to guestsavailable. We also use certain “non-GAAP financial measures,” which are measures of our historical performance that are not calculated and presented in accordance with GAAP, within the meaning of applicable SEC rules. These measures include: | ● | Earnings Before Interest Expense, Income Taxes, Depreciation and Amortization for Real Estate (“EBITDAre”), Adjusted EBITDAre and Adjusted EBITDAre, Excluding Noncontrolling Interest in Consolidated Joint Venture, and |
| ● | Funds From Operations (“FFO”) available to common shareholders and unit holders and Adjusted FFO available to common shareholders and unitholders. |
See “Non-GAAP Financial Measures” below for further discussion. The closure and pandemic-constrained business levels of our Gaylord Hotels properties have resulted in the significant decrease in performance reflected in these key performance indicators and non-GAAP financial measures for the period; Total Revenue per Available Room (“Total RevPAR”) – a summary measure of hotel results calculated by dividingthree months and six months ended June 30, 2021, as compared to the sum of room, foodcurrent period and beverage and other ancillary service revenue by room nights availablehistorical periods prior 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 hotel properties confirmed during the applicable period, net of cancellations.
Hospitality segment revenue from our occupied hotel rooms is recognized as earned on the close of business each day and from concessions and food and beverage sales at the time of sale. 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 recognized as revenue in the period they are collected. Almost all of our Hospitality segment revenues are either cash-based or, for meeting and convention groups meeting 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.2020.
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 (and applicable room rates) 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. Increases in costs, including labor costs, costs of food and other supplies, and energy costs can negatively affect our results, particularly during an inflationary economic environment. 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 ninesix months ended SeptemberJune 30, 20172022 and 2016.2021. 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, | | | | | 2017 | | | % | | | 2016 | | | % | | | 2017 | | | % | | | 2016 | | | % | | Income Statement Data: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | REVENUES: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Rooms | | $ | 100,534 | | | | 38.0 | % | | $ | 101,085 | | | | 37.2 | % | | $ | 314,577 | | | | 37.5 | % | | $ | 309,385 | | | | 37.3 | % | Food and beverage | | | 104,437 | | | | 39.5 | % | | | 113,100 | | | | 41.6 | % | | | 359,047 | | | | 42.8 | % | | | 362,550 | | | | 43.7 | % | Other hotel revenue | | | 24,619 | | | | 9.3 | % | | | 26,834 | | | | 9.9 | % | | | 73,493 | | | | 8.8 | % | | | 75,604 | | | | 9.1 | % | Entertainment | | | 35,134 | | | | 13.3 | % | | | 30,701 | | | | 11.3 | % | | | 92,427 | | | | 11.0 | % | | | 81,893 | | | | 9.9 | % | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Total revenues | | | 264,724 | | | | 100.0 | % | | | 271,720 | | | | 100.0 | % | | | 839,544 | | | | 100.0 | % | | | 829,432 | | | | 100.0 | % | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | OPERATING EXPENSES: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Rooms | | | 27,575 | | | | 10.4 | % | | | 28,371 | | | | 10.4 | % | | | 83,962 | | | | 10.0 | % | | | 82,492 | | | | 9.9 | % | Food and beverage | | | 62,649 | | | | 23.7 | % | | | 64,790 | | | | 23.8 | % | | | 200,091 | | | | 23.8 | % | | | 201,045 | | | | 24.2 | % | Other hotel expenses | | | 72,119 | | | | 27.2 | % | | | 73,331 | | | | 27.0 | % | | | 219,580 | | | | 26.2 | % | | | 219,510 | | | | 26.5 | % | Hotel management fees, net | | | 4,708 | | | | 1.8 | % | | | 4,408 | | | | 1.6 | % | | | 16,417 | | | | 2.0 | % | | | 15,246 | | | | 1.8 | % | Entertainment | | | 22,621 | | | | 8.5 | % | | | 19,100 | | | | 7.0 | % | | | 61,559 | | | | 7.3 | % | | | 54,630 | | | | 6.6 | % | Corporate | | | 9,220 | | | | 3.5 | % | | | 8,447 | | | | 3.1 | % | | | 24,324 | | | | 2.9 | % | | | 22,315 | | | | 2.7 | % | Preopening costs | | | 877 | | | | 0.3 | % | | | — | | | | 0.0 | % | | | 1,587 | | | | 0.2 | % | | | — | | | | 0.0 | % | Depreciation and amortization: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Hospitality | | | 26,061 | | | | 9.8 | % | | | 24,401 | | | | 9.0 | % | | | 76,786 | | | | 9.1 | % | | | 75,051 | | | | 9.0 | % | Entertainment | | | 1,965 | | | | 0.7 | % | | | 1,637 | | | | 0.6 | % | | | 5,465 | | | | 0.7 | % | | | 4,845 | | | | 0.6 | % | Corporate and Other | | | 520 | | | | 0.2 | % | | | 668 | | | | 0.2 | % | | | 1,611 | | | | 0.2 | % | | | 1,992 | | | | 0.2 | % | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Total depreciation and amortization | | | 28,546 | | | | 10.8 | % | | | 26,706 | | | | 9.8 | % | | | 83,862 | | | | 10.0 | % | | | 81,888 | | | | 9.9 | % | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Total operating expenses | | | 228,315 | | | | 86.2 | % | | | 225,153 | | | | 82.9 | % | | | 691,382 | | | | 82.4 | % | | | 677,126 | | | | 81.6 | % | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | OPERATING INCOME: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Hospitality | | | 36,478 | | | | 15.9 | % | | | 45,718 | | | | 19.0 | % | | | 150,281 | | | | 20.1 | % | | | 154,195 | | | | 20.6 | % | Entertainment | | | 10,548 | | | | 30.0 | % | | | 9,964 | | | | 32.5 | % | | | 25,403 | | | | 27.5 | % | | | 22,418 | | | | 27.4 | % | Corporate and Other | | | (9,740 | ) | | | (A | ) | | | (9,115 | ) | | | (A | ) | | | (25,935 | ) | | | (A | ) | | | (24,307 | ) | | | (A | ) | Preopening costs | | | (877 | ) | | | (A | ) | | | — | | | | (A | ) | | | (1,587 | ) | | | (A | ) | | | — | | | | (A | ) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Total operating income | | | 36,409 | | | | 13.8 | % | | | 46,567 | | | | 17.1 | % | | | 148,162 | | | | 17.6 | % | | | 152,306 | | | | 18.4 | % | Interest expense | | | (16,621 | ) | | | (A | ) | | | (15,947 | ) | | | (A | ) | | | (49,640 | ) | | | (A | ) | | | (48,002 | ) | | | (A | ) | Interest income | | | 2,957 | | | | (A | ) | | | 2,965 | | | | (A | ) | | | 8,874 | | | | (A | ) | | | 9,116 | | | | (A | ) | Loss from joint ventures | | | (899 | ) | | | (A | ) | | | (638 | ) | | | (A | ) | | | (2,616 | ) | | | (A | ) | | | (2,086 | ) | | | (A | ) | Other gains and (losses), net | | | 2,554 | | | | (A | ) | | | 2,468 | | | | (A | ) | | | 1,024 | | | | (A | ) | | | 2,288 | | | | (A | ) | Provision for income taxes | | | (530 | ) | | | (A | ) | | | (1,822 | ) | | | (A | ) | | | (2,022 | ) | | | (A | ) | | | (2,352 | ) | | | (A | ) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Net income | | $ | 23,870 | | | | (A | ) | | $ | 33,593 | | | | (A | ) | | $ | 103,782 | | | | (A | ) | | $ | 111,270 | | | | (A | ) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | Unaudited | | Unaudited | | | | | Three Months Ended June 30, | | Six Months Ended June 30, | | | | | 2022 | | % | | | 2021 | | % | | 2022 | | % | | | 2021 | | % | | | REVENUES: | | | | | | | | | | | | | | | | | | | | | | | | | Rooms | | $ | 161,506 | | 34.3 | % | | $ | 61,971 | | 36.3 | % | $ | 263,099 | | 34.2 | % | | $ | 90,199 | | 35.4 | % | | Food and beverage | | | 188,083 | | 40.0 | % | | | 45,619 | | 26.7 | % | | 300,199 | | 39.0 | % | | | 63,794 | | 25.0 | % | | Other hotel revenue | | | 52,213 | | 11.1 | % | | | 28,098 | | 16.4 | % | | 99,615 | | 12.9 | % | | | 51,497 | | 20.2 | % | | Entertainment | | | 68,402 | | 14.5 | % | | | 35,173 | | 20.6 | % | | 106,426 | | 13.8 | % | | | 49,546 | | 19.4 | % | | Total revenues | | | 470,204 | | 100.0 | % | | | 170,861 | | 100.0 | % | | 769,339 | | 100.0 | % | | | 255,036 | | 100.0 | % | | OPERATING EXPENSES: | | | | | | | | | | | | | | | | | | | | | | | | | Rooms | | | 41,238 | | 8.8 | % | | | 15,039 | | 8.8 | % | | 71,374 | | 9.3 | % | | | 24,516 | | 9.6 | % | | Food and beverage | | | 97,489 | | 20.7 | % | | | 33,748 | | 19.8 | % | | 168,818 | | 21.9 | % | | | 53,077 | | 20.8 | % | | Other hotel expenses | | | 99,284 | | 21.1 | % | | | 61,365 | | 35.9 | % | | 185,927 | | 24.2 | % | | | 115,922 | | 45.5 | % | | Hotel management fees, net | | | 11,202 | | 2.4 | % | | | 2,149 | | 1.3 | % | | 16,266 | | 2.1 | % | | | 2,902 | | 1.1 | % | | Entertainment | | | 45,670 | | 9.7 | % | | | 25,639 | | 15.0 | % | | 77,401 | | 10.1 | % | | | 44,330 | | 17.4 | % | | Corporate | | | 12,417 | | 2.6 | % | | | 8,978 | | 5.3 | % | | 21,974 | | 2.9 | % | | | 16,506 | | 6.5 | % | | Preopening costs | | | 221 | | 0.0 | % | | | 217 | | 0.1 | % | | 525 | | 0.1 | % | | | 616 | | 0.2 | % | | Gain (loss) on sale of assets | | | — | | — | % | | | — | | — | % | | 469 | | 0.1 | % | | | (317) | | (0.1) | % | | Depreciation and amortization: | | | | | | | | | | | | | | | | | | | | | | | | | Hospitality | | | 52,016 | | 11.1 | % | | | 50,487 | | 29.5 | % | | 104,287 | | 13.6 | % | | | 99,635 | | 39.1 | % | | Entertainment | | | 4,492 | | 1.0 | % | | | 3,621 | | 2.1 | % | | 8,044 | | 1.0 | % | | | 7,222 | | 2.8 | % | | Corporate and Other | | | 207 | | 0.0 | % | | | 565 | | 0.3 | % | | 412 | | 0.1 | % | | | 1,131 | | 0.4 | % | | Total depreciation and amortization | | | 56,715 | | 12.1 | % | | | 54,673 | | 32.0 | % | | 112,743 | | 14.7 | % | | | 107,988 | | 42.3 | % | | Total operating expenses | | | 364,236 | | 77.5 | % | | | 201,808 | | 118.1 | % | | 655,497 | | 85.2 | % | | | 365,540 | | 143.3 | % | | OPERATING INCOME (LOSS): | | | | | | | | | | | | | | | | | | | | | | | | | Hospitality | | | 100,573 | | 25.0 | % | | | (27,100) | | (20.0) | % | | 116,241 | | 17.5 | % | | | (90,562) | | (44.1) | % | | Entertainment | | | 18,240 | | 26.7 | % | | | 5,913 | | 16.8 | % | | 20,981 | | 19.7 | % | | | (2,006) | | (4.0) | % | | Corporate and Other | | | (12,624) | | (A) | | | | (9,543) | | (A) | | | (22,386) | | (A) | | | | (17,637) | | (A) | | | Preopening costs | | | (221) | | (0.0) | % | | | (217) | | (0.1) | % | | (525) | | (0.1) | % | | | (616) | | (0.2) | % | | Gain (loss) on sale of assets | | | — | | — | % | | | — | | — | % | | (469) | | (0.1) | % | | | 317 | | 0.1 | % | | Total operating income (loss) | | | 105,968 | | 22.5 | % | | | (30,947) | | (18.1) | % | | 113,842 | | 14.8 | % | | | (110,504) | | (43.3) | % | | Interest expense | | | (33,958) | | (A) | | | | (29,847) | | (A) | | | (65,895) | | (A) | | | | (60,643) | | (A) | | | Interest income | | | 1,379 | | (A) | | | | 1,451 | | (A) | | | 2,760 | | (A) | | | | 2,821 | | (A) | | | Loss on extinguishment of debt | | | (1,547) | | (A) | | | | — | | (A) | | | (1,547) | | (A) | | | | (2,949) | | (A) | | | Loss from unconsolidated joint ventures | | | (3,001) | | (A) | | | | (1,910) | | (A) | | | (5,628) | | (A) | | | | (3,519) | | (A) | | | Other gains and (losses), net | | | (283) | | (A) | | | | (173) | | (A) | | | 164 | | (A) | | | | 201 | | (A) | | | Provision for income taxes | | | (17,634) | | (A) | | | | (1,623) | | (A) | | | (17,569) | | (A) | | | | (5,577) | | (A) | | | Net income (loss) | | | 50,924 | | (A) | | | | (63,049) | | (A) | | | 26,127 | | (A) | | | | (180,170) | | (A) | | | Net (income) loss attributable to noncontrolling interest in consolidated joint venture | | | (280) | | (A) | | | | 4,708 | | (A) | | | (280) | | (A) | | | | 16,501 | | (A) | | | Net (income) loss attributable to noncontrolling interest in the Operating Partnership | | | (360) | | (A) | | | | 422 | | (A) | | | (184) | | (A) | | | | 1,229 | | (A) | | | Net income (loss) available to common stockholders | | $ | 50,284 | | (A) | | | $ | (57,919) | | (A) | | $ | 25,663 | | (A) | | | $ | (162,440) | | (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 ninesix months ended SeptemberJune 30, 20172022 and 20162021 (in thousands, except percentages and per share data): | | | | | | | | | | | | | | | | | | | | | | Three Months Ended | | | Six Months Ended | | | | | June 30, | | | June 30, | | | | | | | | | | | % | | | | | | | | | % | | | | | 2022 | | 2021 | | Change | | | 2022 | | 2021 | | Change | | | Total revenues | | $ | 470,204 | | $ | 170,861 | | 175.2 | % | | $ | 769,339 | | $ | 255,036 | | 201.7 | % | | Total operating expenses | | | 364,236 | | | 201,808 | | 80.5 | % | | | 655,497 | | | 365,540 | | 79.3 | % | | Operating income (loss) | | | 105,968 | | | (30,947) | | 442.4 | % | | | 113,842 | | | (110,504) | | 203.0 | % | | Net income (loss) | | | 50,924 | | | (63,049) | | 180.8 | % | | | 26,127 | | | (180,170) | | 114.5 | % | | Net income (loss) available to common stockholders | | | 50,284 | | | (57,919) | | 186.8 | % | | | 25,663 | | | (162,440) | | 115.8 | % | | Net income (loss) available to common stockholders per share - diluted | | | 0.91 | | | (1.05) | | 186.7 | % | | | 0.46 | | | (2.95) | | 115.6 | % | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | Three Months Ended | | | Nine Months Ended | | | | | September 30, | | | September 30, | | | | | 2017 | | | 2016 | | | %
Change | | | 2017 | | | 2016 | | | %
Change | | Total revenues | | $ | 264,724 | | | $ | 271,720 | | | | -2.6 | % | | $ | 839,544 | | | $ | 829,432 | | | | 1.2 | % | Total operating expenses | | | 228,315 | | | | 225,153 | | | | 1.4 | % | | | 691,382 | | | | 677,126 | | | | 2.1 | % | Operating income | | | 36,409 | | | | 46,567 | | | | -21.8 | % | | | 148,162 | | | | 152,306 | | | | -2.7 | % | Net income | | | 23,870 | | | | 33,593 | | | | -28.9 | % | | | 103,782 | | | | 111,270 | | | | -6.7 | % | Net income per share—fully diluted | | | 0.46 | | | | 0.66 | | | | -30.3 | % | | | 2.02 | | | | 2.17 | | | | -6.9 | % |
Total Revenues The decreaseincrease in our total revenues for the three months ended SeptemberJune 30, 2017,2022, as compared to the same period in 2016,2021, is attributable to a $11.4 million decreaseincreases in our Hospitality segment revenues, partially offset by an increase in ourand Entertainment segment revenues of $4.4$266.1 million each as discussed more fully below.and $33.2 million, respectively. The increase in our total revenues for the ninesix months ended SeptemberJune 30, 2017,2022, as compared to the same period in 2016,2021, is attributable to an increase in our Entertainment segment revenues of $10.5 million, partially offset by a decreaseincreases in our Hospitality segment revenuesand Entertainment segment of $0.4$457.4 million each as discussed more fully below.and $56.9 million, respectively. Total Operating Expenses The increase in our total operating expenses for the three months ended SeptemberJune 30, 2017,2022, as compared to the same period in 2016,2021, is primarily the result of an increase in our Entertainment segment expenses of $3.5 million and an increase of $1.8 million in depreciation and amortization expense, partially offset by a decreaseincreases in our Hospitality segment expensesand Entertainment segment of $3.8$136.9 million each as discussed more fully below.and $20.0 million, respectively. The increase in our total operating expenses for the ninesix months ended SeptemberJune 30, 2017,2022, as compared to the same period in 2016,2021, is primarily the result of an increaseincreases in our Hospitality segment and Entertainment segment Corporate segment, and Hospitality segment expenses of $6.9 million, $2.0$246.0 million and $1.8$33.1 million, respectively, as well as an increase in depreciation and amortization and preopening expenses of $2.0 million and $1.6 million, respectively, each as discussed more fully below.respectively. Net Income (Loss) The decrease in ourOur net income to $23.9of $50.9 million for the three months ended SeptemberJune 30, 2017,2022, as compared to $33.6a net loss of $63.0 million for the same period in 2016,2021, was primarily due to the changes in our revenues and operating expenses reflected above, and the following factors, each as described more fully below:
| ● | A $16.0 million increase in provision for income taxes in the 2022 period. |
| ● | A $4.1 million increase in interest expense in the 2022 period. |
A $1.3 million decrease in the provision for income taxes in the 2017 period.
A $0.7 million increase in interest expense for the 2017 period, due primarily to increased interest expense associated with our new term loan A and increased borrowings under our refinanced term loan B. These increases were partially offset by increased capitalized interest in the current period.
The decrease in ourOur net income to $103.8of $26.1 million for the ninesix months ended SeptemberJune 30, 2017,2022, as compared to $111.3a net loss of $180.2 million for the same period in 2016,2021, was primarily due to the changes in our revenues and operating expenses reflected above, and the following factors, each as described more fully below:
| ● | A $12.0 million increase in provision for income taxes in the 2022 period. |
| ● | A $5.3 million increase in interest expense in the 2022 period. |
A $1.6 million increase in interest expense, due primarily to the 2017 period including thewrite-off
A $1.3 million decrease in Other gains and losses, net, primarily due to the 2017 period including a loss on certain assets that were disposed of in our Entertainment and Corporate segments.
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, 2017 described herein were:
Decreasedoutside-the-room spending at Gaylord Palms during the 2017 periods, as compared to the 2016 periods (a decrease of 18.7% and 7.4%, respectively), primarily due to the impacts of Hurricane Irma during September 2017. The nine-month 2017 decrease was partially offset by an increase in ADR during the 2017 period (an increase of 5.6%), due to an increase in both group and transient rates.
Decreasedoutside-the-room spending at Gaylord Opryland during the 2017 periods, as compared to the 2016 periods (a decrease of 9.4% and 1.8%, respectively), primarily due to a decrease in banquets, as well as a decrease in attrition and cancellation fee collections.
Decreased occupancy at Gaylord Texan during the 2017 periods, as compared to the 2016 periods (a decrease of 7.0 and 2.6 points of occupancy, respectively), due primarily to a decrease in groups.
Increased occupancy andoutside-the-room spending at Gaylord National during the nine-month 2017 period, as compared to the nine-month 2016 period. The increase in occupancy (an increase of 5.3 points of occupancy) is primarily the result of an increase in groups. The increase inoutside-the-room spending (an increase of 3.1%) is primarily attributable to an increase in banquets, including inauguration-related banquets.
Increased revenue for our Entertainment segment during the 2017 periods, as compared to the 2016 periods (an increase of 14.4% and 12.9%, respectively), due primarily to increased shows, attendance and ancillary business, such as tours and retail, at the Grand Ole Opry and Ryman Auditorium, and increased revenues at the Wildhorse Saloon, due primarily to increased business attributable to the achieved benefits of a 2016 renovation.
Increased attrition levels for the three-month 2017 period, as compared to the three-month 2016 period. Attrition for the three-month 2017 period was 15.5%, compared to 13.4% in the three-month 2016 period. The primary driver for this increase was Hurricane Irma and its impact on Gaylord Palms.
Decreased net definite group room nights booked during the 2017 periods, as compared to the 2016 periods (a decrease of 3.9% and 5.7%, respectively). The three-month 2017 decrease was primarily the result of the current period impact of Hurricane Irma on Gaylord Palms. The nine-month decrease was primarily the current period result of Hurricane Irma, as well as the future cancellation of an individual group that had booked 17 different meetings through 2025.
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 ninesix months ended SeptemberJune 30, 20172022 and 20162021 (in thousands, except percentages and performance metrics): | | | | | | | | | | | | | | | | | | | | | | | | | | | | Three Months Ended | | | Nine Months Ended | | | | | September 30, | | | September 30, | | | | | 2017 | | | 2016 | | | %
Change | | | 2017 | | | 2016 | | | %
Change | | Revenues: | | | | | | | | | | | | | | | | | | | | | | | | | Rooms | | $ | 100,534 | | | $ | 101,085 | | | | -0.5 | % | | $ | 314,577 | | | $ | 309,385 | | | | 1.7 | % | Food and beverage | | | 104,437 | | | | 113,100 | | | | -7.7 | % | | | 359,047 | | | | 362,550 | | | | -1.0 | % | Other hotel revenue | | | 24,619 | | | | 26,834 | | | | -8.3 | % | | | 73,493 | | | | 75,604 | | | | -2.8 | % | | | | | | | | | | | | | | | | | | | | | | | | | | Total hospitality revenue | | | 229,590 | | | | 241,019 | | | | -4.7 | % | | | 747,117 | | | | 747,539 | | | | -0.1 | % | Hospitality operating expenses: | | | | | | | | | | | | | | | | | | | | | | | | | Rooms | | | 27,575 | | | | 28,371 | | | | -2.8 | % | | | 83,962 | | | | 82,492 | | | | 1.8 | % | Food and beverage | | | 62,649 | | | | 64,790 | | | | -3.3 | % | | | 200,091 | | | | 201,045 | | | | -0.5 | % | Other hotel expenses | | | 72,119 | | | | 73,331 | | | | -1.7 | % | | | 219,580 | | | | 219,510 | | | | 0.0 | % | Management fees, net | | | 4,708 | | | | 4,408 | | | | 6.8 | % | | | 16,417 | | | | 15,246 | | | | 7.7 | % | Depreciation and amortization | | | 26,061 | | | | 24,401 | | | | 6.8 | % | | | 76,786 | | | | 75,051 | | | | 2.3 | % | | | | | | | | | | | | | | | | | | | | | | | | | | Total Hospitality operating expenses | | | 193,112 | | | | 195,301 | | | | -1.1 | % | | | 596,836 | | | | 593,344 | | | | 0.6 | % | | | | | | | | | | | | | | | | | | | | | | | | | | Hospitality operating income (1) | | $ | 36,478 | | | $ | 45,718 | | | | -20.2 | % | | $ | 150,281 | | | $ | 154,195 | | | | -2.5 | % | | | | | | | | | | | | | | | | | | | | | | | | | | Hospitality performance metrics: | | | | | | | | | | | | | | | | | | | | | | | | | Occupancy | | | 75.5 | % | | | 75.5 | % | | | 0.0 | % | | | 75.0 | % | | | 74.6 | % | | | 0.5 | % | ADR | | $ | 174.20 | | | $ | 175.22 | | | | -0.6 | % | | $ | 185.08 | | | $ | 182.46 | | | | 1.4 | % | RevPAR (2) | | $ | 131.56 | | | $ | 132.32 | | | | -0.6 | % | | $ | 138.73 | | | $ | 136.08 | | | | 1.9 | % | Total RevPAR (3) | | $ | 300.45 | | | $ | 315.50 | | | | -4.8 | % | | $ | 329.48 | | | $ | 328.79 | | | | 0.2 | % | Net Definite Group Room Nights Booked | | | 482,732 | | | | 502,564 | | | | -3.9 | % | | | 1,179,521 | | | | 1,251,086 | | | | -5.7 | % |
| | | | | | | | | | | | | | | | | | | | | | Three Months Ended | | | Six Months Ended | | | | | June 30, | | | June 30, | | | | | | | | | | | % | | | | | | | | | % | | | | | 2022 | | 2021 | | Change | | | 2022 | | 2021 | | Change | | | Revenues: | | | | | | | | | | | | | | | | | | | | Rooms | | $ | 161,506 | | $ | 61,971 | | 160.6 | % | | $ | 263,099 | | $ | 90,199 | | 191.7 | % | | Food and beverage | | | 188,083 | | | 45,619 | | 312.3 | % | | | 300,199 | | | 63,794 | | 370.6 | % | | Other hotel revenue | | | 52,213 | | | 28,098 | | 85.8 | % | | | 99,615 | | | 51,497 | | 93.4 | % | | Total hospitality revenue | | | 401,802 | | | 135,688 | | 196.1 | % | | | 662,913 | | | 205,490 | | 222.6 | % | | Hospitality operating expenses: | | | | | | | | | | | | | | | | | | | | Rooms | | | 41,238 | | | 15,039 | | 174.2 | % | | | 71,374 | | | 24,516 | | 191.1 | % | | Food and beverage | | | 97,489 | | | 33,748 | | 188.9 | % | | | 168,818 | | | 53,077 | | 218.1 | % | | Other hotel expenses | | | 99,284 | | | 61,365 | | 61.8 | % | | | 185,927 | | | 115,922 | | 60.4 | % | | Management fees, net | | | 11,202 | | | 2,149 | | 421.3 | % | | | 16,266 | | | 2,902 | | 460.5 | % | | Depreciation and amortization | | | 52,016 | | | 50,487 | | 3.0 | % | | | 104,287 | | | 99,635 | | 4.7 | % | | Total Hospitality operating expenses | | | 301,229 | | | 162,788 | | 85.0 | % | | | 546,672 | | | 296,052 | | 84.7 | % | | Hospitality operating income (loss) (1) | | $ | 100,573 | | $ | (27,100) | | 471.1 | % | | $ | 116,241 | | $ | (90,562) | | 228.4 | % | | Hospitality performance metrics (2): | | | | | | | | | | | | | | | | | | | | Occupancy | | | 72.7 | % | | 32.9 | % | 39.8 | pts | | | 60.1 | % | | 24.7 | % | 35.4 | pts | | ADR | | $ | 234.50 | | $ | 202.12 | | 16.0 | % | | $ | 232.41 | | $ | 197.97 | | 17.4 | % | | RevPAR (3) | | $ | 170.46 | | $ | 66.51 | | 156.3 | % | | $ | 139.61 | | $ | 48.98 | | 185.0 | % | | Total RevPAR (4) | | $ | 424.07 | | $ | 145.63 | | 191.2 | % | | $ | 351.76 | | $ | 111.58 | | 215.3 | % | | Net Definite Group Room Nights Booked (5) | | | 413,042 | | | 371,540 | | 11.2 | % | | | 578,710 | | | 337,831 | | 71.3 | % | |
| (1) | Hospitality segment operating incomeloss does not include the effectpreopening costs of $0.2 million of preopening costsand $0.6 million in the nine-month 2017 period.three months and six months ended June 30, 2021, respectively. Hospitality segment operating loss also does not include gain on sale of assets of $0.3 million in the six months ended June 30, 2021. See discussion of preopening coststhese items below. |
| (2) | Hospitality segment metrics include the addition of 302 additional guest rooms at Gaylord Palms beginning in June 2021. |
| (3) | We calculate Hospitality RevPAR by dividing room revenue by room nights available to guests for the period. Room nights available to guests include nights the hotels are closed. Hospitality RevPAR is not comparable to similarly titled measures such as revenues. |
(3)(4) | 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. Room nights available to guests include nights the hotels are closed. Hospitality Total RevPAR is not comparable to similarly titled measures such as revenues. |
The decrease in total Hospitality segment revenue in the three months ended September 30, 2017, as compared to the same period in 2016, is primarily due to decreases of $5.0 million, $2.6 million, $2.3 million and $2.1 million at Gaylord Palms, Gaylord Opryland, Gaylord Texan and Gaylord National, respectively. The decrease in total Hospitality segment revenue in the nine months ended September 30, 2017, as compared to the same period in 2016, is primarily due to decreases of $4.0 million, $2.8 million and $2.6 million at Gaylord Palms, Gaylord Texan and Gaylord Opryland, respectively, partially offset by increases of $6.7 million and $1.6 million at Gaylord National and the AC Hotel, respectively. See below for further discussion.
| (5) | Net definite group room nights booked includes approximately 72,000 and 169,000 group room cancellations in the three months ended June 30, 2022 and 2021, respectively, and 250,000 and 490,000 group room cancellations in the six months ended June 30, 2022 and 2021, respectively. |
Total Hospitality segment revenues in the three months and ninesix months ended SeptemberJune 30, 20172022 include $2.4$15.4 million and $6.6$35.0 million, respectively, in attrition and cancellation fee collections, a decreaserevenue, an increase of $1.2$7.8 million and $2.1$17.3 million, respectively, from the 2016 periods.2021 period. Since the beginning of 2020, we have recorded $116.3 million in attrition and cancellation fee revenue. The percentage of group versus transient business based on rooms sold for our Hospitality segment for the periods presented was approximately as follows: | | | | | | | | | | | | | | Three Months Ended | | | Six Months Ended | | | | | June 30, | | | June 30, | | | | | 2022 | | 2021 | | | 2022 | | 2021 | | | Group | | 74 | % | 37 | % | | 71 | % | 31 | % | | Transient | | 26 | % | 63 | % | | 29 | % | 69 | % | |
| | | | | | | | | | | | | | | | | | | | Three Months Ended | | | Nine Months Ended | | | | | September 30, | | | September 30, | | | | | 2017 | | | 2016 | | | 2017 | | | 2016 | | Group | | | 69 | % | | | 73 | % | | | 74 | % | | | 75 | % | Transient | | | 31 | % | | | 27 | % | | | 26 | % | | | 25 | % |
Rooms operating expenses decreased slightly in the three months ended September 30, 2017, as compared to the same period in 2016. Rooms operating expenses increased in the nine months ended September 30, 2017, as compared to the same period in 2016, due primarily to an increase at Gaylord National, as described below.
Food and beverage operating expenses decreased in the three months ended September 30, 2017, as compared to the same period in 2016, primarily attributable to a decrease at Gaylord Palms. The decrease in food and beverage operating expenses in the nine months ended September 30, 2017, as compared to the same period in 2016, is primarily attributable to decreases at Gaylord Palms and Gaylord Opryland, partially offset by an increase at Gaylord National, as described below.
Other hotel expenses for the three months and ninesix months ended SeptemberJune 30, 20172022 and 20162021 consist of the following (in thousands): | | | | | | | | | | | | | | | | | | | | | | Three Months Ended | | | Six Months Ended | | | | | June 30, | | | June 30, | | | | | | | | | | | % | | | | | | | | | % | | | | | 2022 | | 2021 | | Change | | | 2022 | | 2021 | | Change | | | Administrative employment costs | | $ | 37,604 | | $ | 18,757 | | 100.5 | % | | $ | 70,816 | | $ | 36,379 | | 94.7 | % | | Utilities | | | 9,690 | | | 6,542 | | 48.1 | % | | | 17,237 | | | 12,151 | | 41.9 | % | | Property taxes | | | 9,549 | | | 7,780 | | 22.7 | % | | | 19,020 | | | 17,179 | | 10.7 | % | | Other | | | 42,441 | | | 28,286 | | 50.0 | % | | | 78,854 | | | 50,213 | | 57.0 | % | | Total other hotel expenses | | $ | 99,284 | | $ | 61,365 | | 61.8 | % | | $ | 185,927 | | $ | 115,922 | | 60.4 | % | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | Three Months Ended | | | Nine Months Ended | | | | | September 30, | | | September 30, | | | | | 2017 | | | 2016 | | | %
Change | | | 2017 | | | 2016 | | | %
Change | | Administrative employment costs | | $ | 26,416 | | | $ | 25,941 | | | | 1.8 | % | | $ | 80,008 | | | $ | 78,641 | | | | 1.7 | % | Utilities | | | 7,440 | | | | 7,548 | | | | -1.4 | % | | | 20,768 | | | | 20,682 | | | | 0.4 | % | Property taxes | | | 8,312 | | | | 8,396 | | | | -1.0 | % | | | 25,118 | | | | 24,050 | | | | 4.4 | % | Other | | | 29,951 | | | | 31,446 | | | | -4.8 | % | | | 93,686 | | | | 96,137 | | | | -2.5 | % | | | | | | | | | | | | | | | | | | | | | | | | | | Total other hotel expenses | | $ | 72,119 | | | $ | 73,331 | | | | -1.7 | % | | $ | 219,580 | | | $ | 219,510 | | | | 0.0 | % | | | | | | | | | | | | | | | | | | | | | | | | | |
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 ninesix months ended SeptemberJune 30, 2017,2022, as compared to the same periods in 2016,2021, primarily due to slightan increase at Gaylord National, which reopened on July 1, 2021, as well as increases at each of our other Gaylord Opryland and Gaylord National.Hotels properties associated with increased business levels. Utility costs remained stableincreased during the three months and ninesix months ended SeptemberJune 30, 2017,2022, as compared to the same periods in 2016.2021, primarily due to an increase at Gaylord National, which reopened on July 1, 2021, as well as slight increases at our other Gaylord Hotels properties associated with increased usage. Property taxes were stableincreased during the three months and six months ended SeptemberJune 30, 2017,2022, as compared to the same period in 2016, and increased during the nine months ended September 30, 2017, as compared to the same period in 2016,2021 periods, primarily due to increasesan increase at Gaylord Texan and Gaylord National due toPalms as a result of increased property valuations.taxes related to the 2021 expansion. Other expenses, which include supplies, advertising, maintenance costs and consulting costs, decreasedincreased during the three months and ninesix months ended SeptemberJune 30, 2017,2022, as compared to the same periods in 2016,2021, primarily as a result of various decreases at Gaylord Palms, Gaylord Texan and Gaylord National, partially offset by various increases at each of our Gaylord Opryland.Hotels properties. Each of our management agreements with Marriott for our Gaylord Hotels properties, excluding Gaylord Rockies, 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, excluding Gaylord Rockies, calculated on a pooled basis. The Gaylord Rockies’s management agreement with Marriott requires Gaylord Rockies to pay a base management fee of 3% of gross revenues for each fiscal year or portion thereof, as well as an incentive management fee based on the profitability of the hotel. In the three months ended SeptemberJune 30, 20172022 and 2016,2021, we incurred $4.7$9.0 million and $4.8$2.9 million, respectively, and in the ninesix months ended SeptemberJune 30, 20172022 and 2016,2021, we incurred $15.1 $14.6 million and $15.0$4.5 million, respectively, related to base management fees for our Hospitality segment. In the three months ended SeptemberJune 30, 20172022 and 2016,2021, we also incurred $0.8$3.0 million and $0.3 million,$0, respectively, and in the ninesix months ended SeptemberJune 30, 20172022 and 2016,2021, we incurred $3.6$3.2 million and $2.5 million,$0, respectively, related to incentive management fees for our Hospitality segment. Management fees are presented throughout this Quarterly Report on Form10-Q net of the amortization of the deferred management rights proceeds discussed in Note 810, “Deferred Management Rights Proceeds,” to the accompanying condensed consolidated financial statements included herein. Total Hospitality segment depreciation and amortization expense increased in the three months and ninesix months ended SeptemberJune 30, 2017,2022, as compared to the same periodsperiod in 2016. The increase during the three-month 2017 period was2021, primarily a result of an increase at Gaylord Opryland and the nine-month 2017 increase was primarilyas a result of the increase atexpansion of Gaylord Opryland, partially offset by a decreasePalms and the rooms renovation at Gaylord National as described below.and the associated increase in depreciable asset levels. Property-Level Results.The following presents the property-level financial results of our Hospitality segment for the three months and ninesix months ended SeptemberJune 30, 20172022 and 2016.2021. The Gaylord Hotels properties experienced higher levels of attrition and cancellations and lower occupancy levels, which are directly related to the COVID-19 pandemic, in the three months and six months ended June 30, 2021. Therefore, the property-level financial results for the three months and six months ended June 30, 2021 are not comparable to historical periods or the 2022 periods. Total revenue at each of our Gaylord Hotels properties was lower than that of historical periods for the three months and six months ended June 30, 2021 due to the COVID-19 pandemic. Operating costs at each of our Gaylord Hotels properties were lower for the three months and six months ended June 30, 2021 as a result of cost containment initiatives and lower variable costs due to lower occupancies due to the COVID-19 pandemic. Gaylord Opryland Results.The results of Gaylord Opryland for the three months and ninesix months ended SeptemberJune 30, 20172022 and 20162021 are as follows (in thousands, except percentages and performance metrics): | | | | | | | | | | | | | | | | | | | | | | Three Months Ended | | | Six Months Ended | | | | | June 30, | | | June 30, | | | | | | | | | | | % | | | | | | | | | % | | | | | 2022 | | 2021 | | Change | | | 2022 | | 2021 | | Change | | | Revenues: | | | | | | | | | | | | | | | | | | | | Rooms | | $ | 46,125 | | $ | 22,832 | | 102.0 | % | | $ | 76,531 | | $ | 32,806 | | 133.3 | % | | Food and beverage | | | 42,469 | | | 12,519 | | 239.2 | % | | | 69,508 | | | 17,906 | | 288.2 | % | | Other hotel revenue | | | 16,903 | | | 9,651 | | 75.1 | % | | | 32,977 | | | 16,049 | | 105.5 | % | | Total revenue | | | 105,497 | | | 45,002 | | 134.4 | % | | | 179,016 | | | 66,761 | | 168.1 | % | | Operating expenses: | | | | | | | | | | | | | | | | | | | | Rooms | | | 11,461 | | | 4,990 | | 129.7 | % | | | 19,703 | | | 8,196 | | 140.4 | % | | Food and beverage | | | 21,672 | | | 8,776 | | 146.9 | % | | | 38,585 | | | 14,595 | | 164.4 | % | | Other hotel expenses | | | 28,324 | | | 18,831 | | 50.4 | % | | | 51,174 | | | 34,857 | | 46.8 | % | | Management fees, net | | | 3,612 | | | 650 | | 455.7 | % | | | 4,982 | | | 842 | | 491.7 | % | | Depreciation and amortization | | | 8,557 | | | 8,554 | | 0.0 | % | | | 17,146 | | | 17,137 | | 0.1 | % | | Total operating expenses (1) | | | 73,626 | | | 41,801 | | 76.1 | % | | | 131,590 | | | 75,627 | | 74.0 | % | | Performance metrics: | | | | | | | | | | | | | | | | | | | | Occupancy | | | 75.1 | % | | 40.2 | % | 34.9 | pts | | | 62.0 | % | | 29.3 | % | 32.7 | pts | | ADR | | $ | 233.68 | | $ | 216.09 | | 8.1 | % | | $ | 236.06 | | $ | 214.22 | | 10.2 | % | | RevPAR | | $ | 175.51 | | $ | 86.88 | | 102.0 | % | | $ | 146.41 | | $ | 62.76 | | 133.3 | % | | Total RevPAR | | $ | 401.42 | | $ | 171.23 | | 134.4 | % | | $ | 342.46 | | $ | 127.71 | | 168.2 | % | |
| (1) | Gaylord Opryland operating expenses do not include a gain on sale of assets of $0.3 million in the six months ended June 30, 2021. |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | Three Months Ended | | | Nine Months Ended | | | | | September 30, | | | September 30, | | | | | 2017 | | | 2016 | | | %
Change | | | 2017 | | | 2016 | | | %
Change | | Revenues: | | | | | | | | | | | | | | | | | | | | | | | | | Rooms | | $ | 36,009 | | | $ | 34,414 | | | | 4.6 | % | | $ | 101,956 | | | $ | 102,121 | | | | -0.2 | % | Food and beverage | | | 30,227 | | | | 32,817 | | | | -7.9 | % | | | 101,899 | | | | 103,237 | | | | -1.3 | % | Other hotel revenue | | | 10,001 | | | | 11,609 | | | | -13.9 | % | | | 27,604 | | | | 28,704 | | | | -3.8 | % | | | | | | | | | | | | | | | | | | | | | | | | | | Total revenue | | | 76,237 | | | | 78,840 | | | | -3.3 | % | | | 231,459 | | | | 234,062 | | | | -1.1 | % | Operating expenses: | | | | | | | | | | | | | | | | | | | | | | | | | Rooms | | | 8,715 | | | | 8,801 | | | | -1.0 | % | | | 24,961 | | | | 25,414 | | | | -1.8 | % | Food and beverage | | | 17,315 | | | | 17,513 | | | | -1.1 | % | | | 54,604 | | | | 55,606 | | | | -1.8 | % | Other hotel expenses | | | 22,520 | | | | 21,949 | | | | 2.6 | % | | | 67,369 | | | | 66,003 | | | | 2.1 | % | Management fees, net | | | 1,766 | | | | 1,460 | | | | 21.0 | % | | | 5,716 | | | | 5,125 | | | | 11.5 | % | Depreciation and amortization | | | 8,765 | | | | 7,460 | | | | 17.5 | % | | | 25,235 | | | | 22,349 | | | | 12.9 | % | | | | | | | | | | | | | | | | | | | | | | | | | | Total operating expenses | | | 59,081 | | | | 57,183 | | | | 3.3 | % | | | 177,885 | | | | 174,497 | | | | 1.9 | % | Performance metrics: | | | | | | | | | | | | | | | | | | | | | | | | | Occupancy | | | 76.9 | % | | | 75.0 | % | | | 2.5 | % | | | 72.7 | % | | | 74.5 | % | | | -2.4 | % | ADR | | $ | 176.13 | | | $ | 172.90 | | | | 1.9 | % | | $ | 177.82 | | | $ | 173.41 | | | | 2.5 | % | RevPAR | | $ | 135.53 | | | $ | 129.63 | | | | 4.6 | % | | $ | 129.32 | | | $ | 129.27 | | | | 0.0 | % | Total RevPAR | | $ | 286.93 | | | $ | 296.98 | | | | -3.4 | % | | $ | 293.57 | | | $ | 296.28 | | | | -0.9 | % |
Rooms revenue and RevPAR increased at Gaylord Opryland during the three months ended September 30, 2017, as compared to the same period in 2016, as the result33
Table of an increase in occupancy and ADR for transient. Rooms revenue and RevPAR were stable in the nine-month 2017 period, as an increase in ADR for both group and transient rates offset a decrease in occupancy for both group and transient. 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. In addition, the three- and nine-month 2016 periods were also negatively impacted by a separate rooms renovation project that resulted in approximately 19,700 and 28,300 room nights out of service during the three-month and nine-month periods, respectively. Rooms expenses remained stable during the 2017 periods, as compared to the same periods in 2016.Contents The decrease in food and beverage revenue at Gaylord Opryland during the three months and nine months ended September 30, 2017, as compared to the same periods in 2016, was primarily due to a decrease in banquets. Food and beverage expenses decreased in the 2017 periods, as compared to the same periods in 2016, due to decreased variable costs associated with the decrease in revenue.
Other hotel revenue decreased at Gaylord Opryland during the three months and nine months ended September 30, 2017, as compared to the same periods in 2016, primarily due to a decrease in collections of attrition and cancellation fees. Other hotel expenses increased in the 2017 periods, as compared to the same periods in 2016, primarily due to increased utility costs due to an increase in rates.
Depreciation and amortization increased at Gaylord Opryland during the three months and nine months ended September 30, 2017, as compared to the same periods in 2016, primarily as a result of rooms renovations in both 2016 and 2017 that resulted in increased depreciable asset levels in 2017.
Gaylord Palms Results.Gaylord Palms results include 302 expansion rooms beginning in June 2021. The results of Gaylord Palms for the three months and ninesix months ended SeptemberJune 30, 20172022 and 20162021 are as follows (in thousands, except percentages and performance metrics): | | | | | | | | | | | | | | | | | | | | | | Three Months Ended | | | Six Months Ended | | | | | June 30, | | | June 30, | | | | | | | | | | | % | | | | | | | | | % | | | | | 2022 | | 2021 | | Change | | | 2022 | | 2021 | | Change | | | Revenues: | | | | | | | | | | | | | | | | | | | | Rooms | | $ | 27,012 | | $ | 14,643 | | 84.5 | % | | $ | 49,024 | | $ | 20,589 | | 138.1 | % | | Food and beverage | | | 32,046 | | | 13,056 | | 145.5 | % | | | 59,442 | | | 16,774 | | 254.4 | % | | Other hotel revenue | | | 9,231 | | | 5,003 | | 84.5 | % | | | 19,671 | | | 10,456 | | 88.1 | % | | Total revenue | | | 68,289 | | | 32,702 | | 108.8 | % | | | 128,137 | | | 47,819 | | 168.0 | % | | Operating expenses: | | | | | | | | | | | | | | | | | | | | Rooms | | | 5,556 | | | 3,001 | | 85.1 | % | | | 10,047 | | | 4,654 | | 115.9 | % | | Food and beverage | | | 16,823 | | | 8,109 | | 107.5 | % | | | 30,862 | | | 11,683 | | 164.2 | % | | Other hotel expenses | | | 20,317 | | | 13,178 | | 54.2 | % | | | 39,135 | | | 24,394 | | 60.4 | % | | Management fees, net | | | 1,809 | | | 515 | | 251.3 | % | | | 2,899 | | | 684 | | 323.8 | % | | Depreciation and amortization | | | 5,566 | | | 5,302 | | 5.0 | % | | | 11,118 | | | 9,426 | | 18.0 | % | | Total operating expenses (1) | | | 50,071 | | | 30,105 | | 66.3 | % | | | 94,061 | | | 50,841 | | 85.0 | % | | Performance metrics: | | | | | | | | | | | | | | | | | | | | Occupancy | | | 74.6 | % | | 52.2 | % | 22.4 | pts | | | 65.1 | % | | 38.9 | % | 26.2 | pts | | ADR | | $ | 231.53 | | $ | 199.63 | | 16.0 | % | | $ | 241.99 | | $ | 197.28 | | 22.7 | % | | RevPAR | | $ | 172.78 | | $ | 104.17 | | 65.9 | % | | $ | 157.65 | | $ | 76.82 | | 105.2 | % | | Total RevPAR | | $ | 436.80 | | $ | 232.64 | | 87.8 | % | | $ | 412.07 | | $ | 178.42 | | 131.0 | % | |
| (1) | Gaylord Palms operating expenses do not include preopening costs of $0.2 million and $0.6 million in the three months and six months ended June 30, 2021. See discussion of this item below. |
34 | | | | | | | | | | | | | | | | | | | | | | | | | | | | Three Months Ended | | | Nine Months Ended | | | | | September 30, | | | September 30, | | | | | 2017 | | | 2016 | | | %
Change | | | 2017 | | | 2016 | | | %
Change | | Revenues: | | | | | | | | | | | | | | | | | | | | | | | | | Rooms | | $ | 14,667 | | | $ | 14,445 | | | | 1.5 | % | | $ | 54,526 | | | $ | 51,724 | | | | 5.4 | % | Food and beverage | | | 18,330 | | | | 22,677 | | | | -19.2 | % | | | 71,635 | | | | 76,557 | | | | -6.4 | % | Other hotel revenue | | | 4,241 | | | | 5,085 | | | | -16.6 | % | | | 13,458 | | | | 15,368 | | | | -12.4 | % | | | | | | | | | | | | | | | | | | | | | | | | | | Total revenue | | | 37,238 | | | | 42,207 | | | | -11.8 | % | | | 139,619 | | | | 143,649 | | | | -2.8 | % | Operating expenses: | | | | | | | | | | | | | | | | | | | | | | | | | Rooms | | | 3,572 | | | | 3,973 | | | | -10.1 | % | | | 12,192 | | | | 11,787 | | | | 3.4 | % | Food and beverage | | | 11,292 | | | | 12,741 | | | | -11.4 | % | | | 38,550 | | | | 39,862 | | | | -3.3 | % | Other hotel expenses | | | 13,821 | | | | 15,202 | | | | -9.1 | % | | | 45,882 | | | | 47,129 | | | | -2.6 | % | Management fees, net | | | 692 | | | | 802 | | | | -13.7 | % | | | 3,079 | | | | 2,971 | | | | 3.6 | % | Depreciation and amortization | | | 4,753 | | | | 4,773 | | | | -0.4 | % | | | 14,307 | | | | 14,243 | | | | 0.4 | % | | | | | | | | | | | | | | | | | | | | | | | | | | Total operating expenses | | | 34,130 | | | | 37,491 | | | | -9.0 | % | | | 114,010 | | | | 115,992 | | | | -1.7 | % | Performance metrics: | | | | | | | | | | | | | | | | | | | | | | | | | Occupancy | | | 73.3 | % | | | 73.4 | % | | | -0.1 | % | | | 77.8 | % | | | 77.8 | % | | | 0.0 | % | ADR | | $ | 153.62 | | | $ | 151.02 | | | | 1.7 | % | | $ | 181.32 | | | $ | 171.70 | | | | 5.6 | % | RevPAR | | $ | 112.59 | | | $ | 110.88 | | | | 1.5 | % | | $ | 141.05 | | | $ | 133.63 | | | | 5.6 | % | Total RevPAR | | $ | 285.85 | | | $ | 323.99 | | | | -11.8 | % | | $ | 361.18 | | | $ | 371.11 | | | | -2.7 | % |
Rooms revenue and RevPAR increased at Gaylord Palms during the three months and nine months ended September 30, 2017, as compared to the same periods in 2016, due to an increase in ADR for both 2017 periods for both group and transient rates, and an increase in transient occupancy for both 2017 periods. Rooms expenses decreased during the three-month 2017 period and increased during the nine-month 2017 period, as compared to the same periods in 2016. The three-month 2017 decrease was primarily due to decreased commission costs, and the nine-month 2017 increase was primarily due to increased commission costs.
Food and beverage revenue decreased at Gaylord Palms during the three months and nine months ended September 30, 2017, as compared to the same periods in 2016, due primarily to a decrease in banquets from group cancellations related to Hurricane Irma in September 2017. Food and beverage expenses decreased in the three months and nine months ended September 30, 2017, as compared to the same periods in 2016, primarily as a resultTable of a decrease in variable costs associated with the decrease in revenue.Contents
Other hotel revenue at Gaylord Palms decreased during the three months and nine months ended September 30, 2017, as compared to the same periods in 2016. The three-month 2017 decrease is primarily the result of the 2016 period including the collection of a group contract settlement. The nine-month 2017 decrease is primarily due to decreased collection of attrition and cancellation fees. Other hotel expenses decreased in the 2017 periods, as compared to the same periods in 2016, primarily as a result of a decrease in sales and marketing costs.
Depreciation and amortization were stable at Gaylord Palms during the three months and nine months ended September 30, 2017, as compared to the same periods in 2016.
Gaylord Texan Results.The results of Gaylord Texan for the three months and ninesix months ended SeptemberJune 30, 20172022 and 20162021 are as follows (in thousands, except percentages and performance metrics): | | | | | | | | | | | | | | | | | | | | | | Three Months Ended | | | Six Months Ended | | | | | June 30, | | | June 30, | | | | | | | | | | | % | | | | | | | | | % | | | | | 2022 | | 2021 | | Change | | | 2022 | | 2021 | | Change | | | Revenues: | | | | | | | | | | | | | | | | | | | | Rooms | | $ | 28,350 | | $ | 14,672 | | 93.2 | % | | $ | 49,258 | | $ | 21,690 | | 127.1 | % | | Food and beverage | | | 38,979 | | | 13,013 | | 199.5 | % | | | 65,129 | | | 18,122 | | 259.4 | % | | Other hotel revenue | | | 10,336 | | | 6,384 | | 61.9 | % | | | 19,914 | | | 12,615 | | 57.9 | % | | Total revenue | | | 77,665 | | | 34,069 | | 128.0 | % | | | 134,301 | | | 52,427 | | 156.2 | % | | Operating expenses: | | | | | | | | | | | | | | | | | | | | Rooms | | | 6,401 | | | 3,162 | | 102.4 | % | | | 11,361 | | | 5,143 | | 120.9 | % | | Food and beverage | | | 20,174 | | | 9,317 | | 116.5 | % | | | 35,605 | | | 13,877 | | 156.6 | % | | Other hotel expenses | | | 17,533 | | | 11,618 | | 50.9 | % | | | 33,160 | | | 21,795 | | 52.1 | % | | Management fees, net | | | 2,081 | | | 500 | | 316.2 | % | | | 3,085 | | | 692 | | 345.8 | % | | Depreciation and amortization | | | 5,742 | | | 6,194 | | (7.3) | % | | | 12,440 | | | 12,423 | | 0.1 | % | | Total operating expenses | | | 51,931 | | | 30,791 | | 68.7 | % | | | 95,651 | | | 53,930 | | 77.4 | % | | Performance metrics: | | | | | | | | | | | | | | | | | | | | Occupancy | | | 74.3 | % | | 43.7 | % | 30.6 | pts | | | 66.1 | % | | 33.2 | % | 32.9 | pts | | ADR | | $ | 231.22 | | $ | 203.43 | | 13.7 | % | | $ | 226.94 | | $ | 198.82 | | 14.1 | % | | RevPAR | | $ | 171.74 | | $ | 88.88 | | 93.2 | % | | $ | 150.02 | | $ | 66.06 | | 127.1 | % | | Total RevPAR | | $ | 470.48 | | $ | 206.39 | | 128.0 | % | | $ | 409.04 | | $ | 159.68 | | 156.2 | % | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | Three Months Ended | | | Nine Months Ended | | | | | September 30, | | | September 30, | | | | | 2017 | | | 2016 | | | %
Change | | | 2017 | | | 2016 | | | %
Change | | Revenues: | | | | | | | | | | | | | | | | | | | | | | | | | Rooms | | $ | 19,178 | | | $ | 21,266 | | | | -9.8 | % | | $ | 58,682 | | | $ | 61,621 | | | | -4.8 | % | Food and beverage | | | 25,289 | | | | 26,055 | | | | -2.9 | % | | | 84,902 | | | | 85,038 | | | | -0.2 | % | Other hotel revenue | | | 5,699 | | | | 5,161 | | | | 10.4 | % | | | 16,099 | | | | 15,844 | | | | 1.6 | % | | | | | | | | | | | | | | | | | | | | | | | | | | Total revenue | | | 50,166 | | | | 52,482 | | | | -4.4 | % | | | 159,683 | | | | 162,503 | | | | -1.7 | % | Operating expenses: | | | | | | | | | | | | | | | | | | | | | | | | | Rooms | | | 4,212 | | | | 4,482 | | | | -6.0 | % | | | 12,792 | | | | 12,691 | | | | 0.8 | % | Food and beverage | | | 14,141 | | | | 14,601 | | | | -3.2 | % | | | 44,151 | | | | 44,398 | | | | -0.6 | % | Other hotel expenses | | | 15,286 | | | | 15,682 | | | | -2.5 | % | | | 44,959 | | | | 45,293 | | | | -0.7 | % | Management fees, net | | | 951 | | | | 870 | | | | 9.3 | % | | | 3,434 | | | | 3,288 | | | | 4.4 | % | Depreciation and amortization | | | 5,175 | | | | 5,060 | | | | 2.3 | % | | | 15,425 | | | | 15,090 | | | | 2.2 | % | | | | | | | | | | | | | | | | | | | | | | | | | | Total operating expenses | | | 39,765 | | | | 40,695 | | | | -2.3 | % | | | 120,761 | | | | 120,760 | | | | 0.0 | % | Performance metrics: | | | | | | | | | | | | | | | | | | | | | | | | | Occupancy | | | 75.0 | % | | | 82.0 | % | | | -8.5 | % | | | 75.7 | % | | | 78.3 | % | | | -3.3 | % | ADR | | $ | 183.90 | | | $ | 186.55 | | | | -1.4 | % | | $ | 187.80 | | | $ | 190.09 | | | | -1.2 | % | RevPAR | | $ | 137.96 | | | $ | 152.98 | | | | -9.8 | % | | $ | 142.26 | | | $ | 148.84 | | | | -4.4 | % | Total RevPAR | | $ | 360.87 | | | $ | 377.54 | | | | -4.4 | % | | $ | 387.11 | | | $ | 392.51 | | | | -1.4 | % |
Rooms revenue and RevPAR decreased at Gaylord Texan during the three months and nine months ended September 30, 2017, as compared to the same periods in 2016, due to decreased occupancy due to a decrease in group rooms, partially attributable to Hurricane Harvey in August 2017, and decreased ADR for both group and transient rates. Rooms expenses decreased during the three-month 2017 period, as compared to the same period in 2016, primarily due to decreased variable expenses associated with the decrease in occupancy. Rooms expenses increased during the nine-month 2017 period, as compared to the same period in 2016, as decreased variable expenses associated with the decrease in occupancy were offset by increased group commissions.
Food and beverage revenue decreased at Gaylord Texan during the three months and nine months ended September 30, 2017, as compared to the same periods in 2016, due primarily to decreases in both banquets and food and beverage outlet revenue. Food and beverage expenses decreased in the 2017 periods, as compared to the same periods in 2016, primarily due to the decrease in variable costs associated with the decrease in revenue.
Other hotel revenue at Gaylord Texan increased during the three months and nine months ended September 30, 2017, as compared to the same periods in 2016, primarily as a result of an increase in attrition and cancellation fee collections. Other hotel expenses decreased in the 2017 periods, as compared to the same periods in 2016, due primarily to a decrease in sales and marketing expense, partially offset by an increase in property taxes due to an increased property valuation.
Depreciation and amortization increased slightly at Gaylord Texan during the three months and nine months ended September 30, 2017, as compared to the same periods in 2016.
Gaylord National Results.Gaylord National was closed from late March 2020 and reopened July 1, 2021. The results of Gaylord National for the three months and ninesix months ended SeptemberJune 30, 20172022 and 20162021 are as follows (in thousands, except percentages and performance metrics): | | | | | | | | | | | | | | | | | | | | | | Three Months Ended | | | Six Months Ended | | | | | June 30, | | | June 30, | | | | | | | | | | | % | | | | | | | | | % | | | | | 2022 | | 2021 | | Change | | | 2022 | | 2021 | | Change | | | Revenues: | | | | | | | | | | | | | | | | | | | | Rooms | | $ | 29,317 | | $ | — | | 100.0 | % | | $ | 43,281 | | $ | — | | 100.0 | % | | Food and beverage | | | 36,316 | | | 34 | | 106,711.8 | % | | | 50,869 | | | 57 | | 89,143.9 | % | | Other hotel revenue | | | 6,590 | | | 2,277 | | 189.4 | % | | | 10,660 | | | 3,511 | | 203.6 | % | | Total revenue (1) | | | 72,223 | | | 2,311 | | 3,025.2 | % | | | 104,810 | | | 3,568 | | 2,837.5 | % | | Operating expenses: | | | | | | | | | | | | | | | | | | | | Rooms | | | 10,132 | | | 835 | | 1,113.4 | % | | | 17,482 | | | 1,035 | | 1,589.1 | % | | Food and beverage | | | 18,955 | | | 1,149 | | 1,549.7 | % | | | 31,415 | | | 1,588 | | 1,878.3 | % | | Other hotel expenses | | | 20,210 | | | 8,362 | | 141.7 | % | | | 35,673 | | | 16,814 | | 112.2 | % | | Management fees, net | | | 1,242 | | | (157) | | 891.1 | % | | | 1,692 | | | (334) | | 606.6 | % | | Depreciation and amortization | | | 8,860 | | | 7,173 | | 23.5 | % | | | 16,999 | | | 14,039 | | 21.1 | % | | Total operating expenses | | | 59,399 | | | 17,362 | | 242.1 | % | | | 103,261 | | | 33,142 | | 211.6 | % | | Performance metrics: | | | | | | | | | | | | | | | | | | | | Occupancy | | | 64.2 | % | | — | % | 64.2 | pts | | | 49.9 | % | | — | % | 49.9 | pts | | ADR | | $ | 251.45 | | $ | — | | 100.0 | % | | $ | 240.22 | | $ | — | | 100.0 | % | | RevPAR | | $ | 161.40 | | $ | — | | 100.0 | % | | $ | 119.80 | | $ | — | | 100.0 | % | | Total RevPAR | | $ | 397.62 | | $ | 12.72 | | 3,025.9 | % | | $ | 290.11 | | $ | 9.87 | | 2,839.3 | % | |
| (1) | Gaylord National revenue for the three months and six months ended June 30, 2021 consists primarily of attrition and cancellation fee revenue. |
35 | | | | | | | | | | | | | | | | | | | | | | | | | | | | Three Months Ended | | | Nine Months Ended | | | | | September 30, | | | September 30, | | | | | 2017 | | | 2016 | | | %
Change | | | 2017 | | | 2016 | | | %
Change | | Revenues: | | | | | | | | | | | | | | | | | | | | | | | | | Rooms | | $ | 25,181 | | | $ | 25,851 | | | | -2.6 | % | | $ | 82,537 | | | $ | 79,253 | | | | 4.1 | % | Food and beverage | | | 29,177 | | | | 30,298 | | | | -3.7 | % | | | 96,776 | | | | 94,097 | | | | 2.8 | % | Other hotel revenue | | | 4,578 | | | | 4,851 | | | | -5.6 | % | | | 16,075 | | | | 15,355 | | | | 4.7 | % | | | | | | | | | | | | | | | | | | | | | | | | | | Total revenue | | | 58,936 | | | | 61,000 | | | | -3.4 | % | | | 195,388 | | | | 188,705 | | | | 3.5 | % | Operating expenses: | | | | | | | | | | | | | | | | | | | | | | | | | Rooms | | | 9,617 | | | | 9,752 | | | | -1.4 | % | | | 29,798 | | | | 28,837 | | | | 3.3 | % | Food and beverage | | | 18,884 | | | | 19,036 | | | | -0.8 | % | | | 59,957 | | | | 58,563 | | | | 2.4 | % | Other hotel expenses | | | 18,465 | | | | 18,503 | | | | -0.2 | % | | | 55,161 | | | | 55,301 | | | | -0.3 | % | Management fees, net | | | 960 | | | | 999 | | | | -3.9 | % | | | 3,244 | | | | 3,114 | | | | 4.2 | % | Depreciation and amortization | | | 6,701 | | | | 6,462 | | | | 3.7 | % | | | 19,830 | | | | 21,423 | | | | -7.4 | % | | | | | | | | | | | | | | | | | | | | | | | | | | Total operating expenses | | | 54,627 | | | | 54,752 | | | | -0.2 | % | | | 167,990 | | | | 167,238 | | | | 0.4 | % | Performance metrics: | | | | | | | | | | | | | | | | | | | | | | | | | Occupancy | | | 74.2 | % | | | 72.4 | % | | | 2.5 | % | | | 75.1 | % | | | 69.8 | % | | | 7.6 | % | ADR | | $ | 184.89 | | | $ | 194.37 | | | | -4.9 | % | | $ | 201.77 | | | $ | 207.48 | | | | -2.8 | % | RevPAR | | $ | 137.13 | | | $ | 140.78 | | | | -2.6 | % | | $ | 151.47 | | | $ | 144.91 | | | | 4.5 | % | Total RevPAR | | $ | 320.95 | | | $ | 332.19 | | | | -3.4 | % | | $ | 358.57 | | | $ | 345.04 | | | | 3.9 | % |
Gaylord National duringRockies Results. The results of Gaylord Rockies for the three months ended September 30, 2017, as compared to the same period in 2016, due to a decrease in transient ADR, partially offset by an increase in transient occupancy. Rooms revenue and RevPAR increased at Gaylord National during the ninesix months ended SeptemberJune 30, 2017,2022 and 2021 are as compared to the same period in 2016, due to an increase in group occupancy, partially offset by a decrease in transient ADR. The increase in group occupancy in the nine-month 2017 period, as compared to 2016, was partially attributed to a large winter storm during the first quarter of 2016 that caused a decrease in 2016 occupancy. Rooms expenses decreased at Gaylord National during the three-month 2017 period, as compared to the same period in 2016, primarily due to a decrease in commission cost. Rooms expenses at Gaylord National increased during the nine-month 2017 period, as compared to the same period in 2016, primarily due to the increase in variable costs associated with the increase in occupancy.follows (in thousands, except percentages and performance metrics): | | | | | | | | | | | | | | | | | | | | | | Three Months Ended | | | Six Months Ended | | | | | June 30, 2022 | | | June 30, | | | | | | | | | | | % | | | | | | | | | % | | | | | 2022 | | 2021 | | Change | | | 2022 | | 2021 | | Change | | | Revenues: | | | | | | | | | | | | | | | | | | | | Rooms | | $ | 24,648 | | $ | 7,019 | | 251.2 | % | | $ | 35,942 | | $ | 11,134 | | 222.8 | % | | Food and beverage | | | 37,207 | | | 6,602 | | 463.6 | % | | | 53,528 | | | 10,411 | | 414.1 | % | | Other hotel revenue | | | 8,900 | | | 4,717 | | 88.7 | % | | | 16,072 | | | 8,763 | | 83.4 | % | | Total revenue | | | 70,755 | | | 18,338 | | 285.8 | % | | | 105,542 | | | 30,308 | | 248.2 | % | | Operating expenses: | | | | | | | | | | | | | | | | | | | | Rooms | | | 6,237 | | | 2,207 | | 182.6 | % | | | 10,188 | | | 4,082 | | 149.6 | % | | Food and beverage | | | 19,091 | | | 6,008 | | 217.8 | % | | | 30,986 | | | 10,747 | | 188.3 | % | | Other hotel expenses | | | 10,460 | | | 7,648 | | 36.8 | % | | | 22,515 | | | 14,674 | | 53.4 | % | | Management fees, net | | | 2,102 | | | 133 | | 1,480.5 | % | | | 3,124 | | | 588 | | 431.3 | % | | Depreciation and amortization | | | 22,650 | | | 22,617 | | 0.1 | % | | | 45,298 | | | 45,308 | | (0.0) | % | | Total operating expenses | | | 60,540 | | | 38,613 | | 56.8 | % | | | 112,111 | | | 75,399 | | 48.7 | % | | Performance metrics: | | | | | | | | | | | | | | | | | | | | Occupancy | | | 76.6 | % | | 25.7 | % | 50.9 | pts | | | 58.0 | % | | 21.6 | % | 36.4 | pts | | ADR | | $ | 235.69 | | $ | 199.69 | | 18.0 | % | | $ | 228.22 | | $ | 189.92 | | 20.2 | % | | RevPAR | | $ | 180.45 | | $ | 51.38 | | 251.2 | % | | $ | 132.29 | | $ | 40.98 | | 222.8 | % | | Total RevPAR | | $ | 518.01 | | $ | 134.25 | | 285.9 | % | | $ | 388.48 | | $ | 111.55 | | 248.3 | % | |
Food and beverage revenue decreased at Gaylord National during the three months ended September 30, 2017, as compared to the same period in 2016, primarily as a result of a decrease in banquets. Food and beverage revenue increased at Gaylord National during the nine months ended September 30, 2017, as compared to the same period in 2016, primarily as a result of an increase in banquets, including inauguration-related banquets. Food and beverage expenses decreased in the three-month 2017 period, and increased in the nine-month 2017 period, as compared to the same periods in 2016, primarily due to the change in variable costs associated with the change in revenue.
Other hotel revenue decreased during the three months ended September 30, 2017, as compared to the same period in 2016, primarily due to a decrease in attrition and cancellation fee collections, partially offset by an increase in ancillary revenue, such as parking and resort fees, associated with the increase in occupancy. Other hotel revenue increased during the nine months ended September 30, 2017, as compared to the same period in 2016, primarily due to an increase in ancillary revenue, partially offset by a decrease in attrition and cancellation fee collections. Other hotel expenses remained stable in the 2017 periods, as compared to the same periods in 2016.
Depreciation and amortization at Gaylord National increased during the three months ended September 30, 2017, as compared to the same period in 2016, primarily due to the completion of a new riverfront ballroom in 2017, and the resulting increase in depreciable asset levels. Depreciation and amortization decreased during the nine months ended September 30, 2017, as compared to the same period in 2016, primarily due to the increased depreciation as a result of the riverfront ballroom being offset by a portion of the initial furniture, fixtures and equipment placed in service at the property’s opening in 2008 becoming fully depreciated during 2016.
Entertainment Segment Total Segment Results.Due to the COVID-19 pandemic, we temporarily closed our Entertainment segment assets in mid-March 2020 and they did not return to full capacity until May 2021. In addition, subsequent to the December 2020 downtown Nashville bombing, the Wildhorse Saloon reopened in April 2021. Therefore, Entertainment segment financial results for the three months and six months ended June 30, 2022 are not comparable to the corresponding 2021 period and the results for 2021 are not comparable to historical periods because of the COVID-19 pandemic. The following presents the financial results of our Entertainment segment for the three months and ninesix months ended SeptemberJune 30, 20172022 and 20162021 (in thousands, except percentages): | | | | | | | | | | | | | | | | | | | | | | | | | | | | Three Months Ended | | | Nine Months Ended | | | | | September 30, | | | September 30, | | | | | 2017 | | | 2016 | | | %
Change | | | 2017 | | | 2016 | | | %
Change | | Revenues | | $ | 35,134 | | | $ | 30,701 | | | | 14.4 | % | | $ | 92,427 | | | $ | 81,893 | | | | 12.9 | % | Operating expenses | | | 22,621 | | | | 19,100 | | | | 18.4 | % | | | 61,559 | | | | 54,630 | | | | 12.7 | % | Depreciation and amortization | | | 1,965 | | | | 1,637 | | | | 20.0 | % | | | 5,465 | | | | 4,845 | | | | 12.8 | % | | | | | | | | | | | | | | | | | | | | | | | | | | Operating income (1) | | $ | 10,548 | | | $ | 9,964 | | | | 5.9 | % | | $ | 25,403 | | | $ | 22,418 | | | | 13.3 | % | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | Three Months Ended | | | Six Months Ended | | | | | June 30, | | | June 30, | | | | | | | | | | | % | | | | | | | | | % | | | | | 2022 | | 2021 | | Change | | | 2022 | | 2021 | | Change | | | Revenues | | $ | 68,402 | | $ | 35,173 | | 94.5 | % | | $ | 106,426 | | $ | 49,546 | | 114.8 | % | | Operating expenses | | | 45,670 | | | 25,639 | | 78.1 | % | | | 77,401 | | | 44,330 | | 74.6 | % | | Depreciation and amortization | | | 4,492 | | | 3,621 | | 24.1 | % | | | 8,044 | | | 7,222 | | 11.4 | % | | Operating income (loss) (1) | | $ | 18,240 | | $ | 5,913 | | 208.5 | % | | $ | 20,981 | | $ | (2,006) | | 1,145.9 | % | |
| (1) | Entertainment segment operating income does not include the effectpreopening costs of $0.9$0.2 million and $1.4$0.5 million of preopening costs in the 2017 periods,three months and six months ended June 30, 2022, respectively. See discussion of preopening coststhis item below. |
Entertainment segment revenue increased during the three months and nine months ended September 30, 2017, as compared to the same periods in 2016, primarily due to increases at the Grand Ole Opry and Ryman Auditorium, due to increased shows and attendance and increased ancillary business such as tours and retail. Included in the nine-month 2017 increase are increased revenues at the Wildhorse Saloon, due primarily to increased business attributable to the achieved benefits36
Entertainment operating expenses increased during the three months and nine months ended September 30, 2017, as compared to the same periods in 2016, primarily as a result of increased compensation and consulting costs, as well as increased variable costs associated with the increase in revenue.
Entertainment depreciation expense increased in the three months and nine months ended September 30, 2017, as compared to the same periods in 2016, primarily due to an increase at the Wildhorse Saloon associated with increased depreciable asset levels as a result of the 2016 renovation.
Corporate and Other Segment Total Segment Results.The following presents the financial results of our Corporate and Other segment for the three months and ninesix months ended SeptemberJune 30, 20172022 and 20162021 (in thousands, except percentages): | | | | Three Months Ended | | Nine Months Ended | | | | | | September 30, | | September 30, | | | | | | 2017 | | 2016 | | %
Change | | 2017 | | 2016 | | %
Change | | | Operating expenses | | $ | 9,220 | | | $ | 8,447 | | | 9.2 | % | | $ | 24,324 | | | $ | 22,315 | | | 9.0 | % | | | | | | | | | | | | | | | | | | | | | | | | | Three Months Ended | | Six Months Ended | | | | | | June 30, | | June 30, | | | | | | | | | | | | % | | | | | | | | % | | | | | | 2022 | | 2021 | | Change | | 2022 | | 2021 | | Change | | | Operating expenses (1) | | | $ | 12,417 | | $ | 8,978 | | 38.3 | % | $ | 21,974 | | $ | 16,506 | | 33.1 | % | | Depreciation and amortization | | | 520 | | | 668 | | | -22.2 | % | | 1,611 | | | 1,992 | | | -19.1 | % | | | 207 | | | 565 | | (63.4) | % | | 412 | | | 1,131 | | (63.6) | % | | | | | | | | | | | | | | | | | | | | Operating loss | | $ | (9,740 | ) | | $ | (9,115 | ) | | 6.9 | % | | $ | (25,935 | ) | | $ | (24,307 | ) | | 6.7 | % | | $ | (12,624) | | $ | (9,543) | | (32.3) | % | $ | (22,386) | | $ | (17,637) | | (26.9) | % | | | | | | | | | | | | | | | | | | | |
| (1) | Corporate segment operating expenses do not include a loss on sale of assets of $0.5 million in the six months ended June 30, 2022. |
Corporate and Other operating expenses which consist primarily of costs associated with senior management salaries and benefits, legal, human resources, accounting, pension, information technology, consulting and other administrative costs,costs. Corporate and Other segment operating expenses increased in the three months and ninesix months ended SeptemberJune 30, 2017,2022, as compared to the sameprior year periods, in 2016, primarily due toas a result of increased administrative and employment costs associated with supporting our growth initiatives within our Hospitality and Entertainment segments.expenses. Corporate and Other depreciation and amortization expense decreased in the three months and nine months ended September 30, 2017, as compared with the same periods in 2016.
Operating Results – Preopening Costs Preopening costs during the three months and ninesix months ended SeptemberJune 30, 20172022 primarily include costs associated with a riverfront ballroom at Gaylord National,Ole Red Nashville International Airport, which openedwas completed in May 2022. Preopening costs during the second quarter of 2017,three months and six months ended June 30, 2021 primarily include costs associated with our various Entertainment segment projects.the Gaylord Palms expansion, which was completed in April 2021. Operating Results – Gain (Loss) on Sale of Assets Loss on sale of assets during the six months ended June 30, 2022 includes the sale of a parcel of land in Nashville, Tennessee. Gain on sale of assets during the six months ended June 30, 2021 includes the sale of certain assets at Gaylord Opryland. Non-Operating Results Affecting Net Income (Loss) General The following table summarizes the other factors which affected our net income (loss) for the three months and ninesix months ended SeptemberJune 30, 20172022 and 20162021 (in thousands, except percentages): | | | | | | | | | | | | | | | | | | | | | | Three Months Ended | | | Six Months Ended | | | | | June 30, | | | June 30, | | | | | | | | | | | % | | | | | | | | | % | | | | | 2022 | | 2021 | | Change | | | 2022 | | 2021 | | Change | | | Interest expense | | $ | 33,958 | | $ | 29,847 | | 13.8 | % | | $ | 65,895 | | $ | 60,643 | | 8.7 | % | | Interest income | | | 1,379 | | | 1,451 | | (5.0) | % | | | 2,760 | | | 2,821 | | (2.2) | % | | Loss on extinguishment of debt | | | (1,547) | | | — | | (100.0) | % | | | (1,547) | | | (2,949) | | 47.5 | % | | Loss from unconsolidated joint ventures | | | (3,001) | | | (1,910) | | (57.1) | % | | | (5,628) | | | (3,519) | | (59.9) | % | | Other gains and (losses), net | | | (283) | | | (173) | | (63.6) | % | | | 164 | | | 201 | | (18.4) | % | | Provision for income taxes | | | (17,634) | | | (1,623) | | (986.5) | % | | | (17,569) | | | (5,577) | | (215.0) | % | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | Three Months Ended | | | Nine Months Ended | | | | | September 30, | | | September 30, | | | | | 2017 | | | 2016 | | | %
Change | | | 2017 | | | 2016 | | | %
Change | | Interest expense | | $ | (16,621 | ) | | $ | (15,947 | ) | | | 4.2 | % | | $ | (49,640 | ) | | $ | (48,002 | ) | | | 3.4 | % | Interest income | | | 2,957 | | | | 2,965 | | | | -0.3 | % | | | 8,874 | | | | 9,116 | | | | -2.7 | % | Loss from joint ventures | | | (899 | ) | | | (638 | ) | | | -40.9 | % | | | (2,616 | ) | | | (2,086 | ) | | | -25.4 | % | Other gains and (losses), net | | | 2,554 | | | | 2,468 | | | | 3.5 | % | | | 1,024 | | | | 2,288 | | | | -55.2 | % | Provision for income taxes | | | (530 | ) | | | (1,822 | ) | | | 70.9 | % | | | (2,022 | ) | | | (2,352 | ) | | | 14.0 | % |
Interest Expense Interest expense increased $0.7$4.1 million and $5.3 million during the three months and six months ended SeptemberJune 30, 2017,2022, respectively, as compared to the same periodperiods in 2016,2021, due primarily to increased interest expense associated with ourthe new termOEG Term Loan and the Block 21 CMBS loan, A and increased borrowings under our refinanced term loan B. These increases were partially offset by increased capitalized interest in the current period. Interest expense increased $1.6 million during the nine months ended September 30, 2017, as compared to the same period in 2016, due primarily to thewrite-off of $0.9 million in deferred financing costs associated with the refinancing of our credit facility, as well as increased interest expense associated with our revolving credit facility due to higher average borrowings, our new term loan Athe prior year including $1.5 million and increased borrowings under our refinanced term loan B. These increases were partially offset by increased$2.9 million, respectively, in capitalized interest that did not recur in the current year.2022.
Cash interest expense increased $1.6$2.3 million to $16.9$31.6 million in the three months and increased $3.8$2.0 million to $49.1$61.4 million in the ninesix months ended SeptemberJune 30, 2017,2022, as compared to the same periods in 2016.2021. Non-cash interest expense, which includes amortization and write-off of deferred financing costs and debt discounts and thewrite-off of deferred financing costs,is offset by capitalized interest, decreased $1.0increased $1.8 million to $(0.2)$2.4 million in the three months and decreased $2.2increased $3.2 million to $0.5$4.5 million in the ninesix months ended SeptemberJune 30, 2017,2022, as compared to the same periods in 2016.2021. Our weighted average interest rate on our borrowings, excluding capitalized interest, but including thewrite-off impact of $0.9 million in deferred financing costs during the nine-month 2017 period,interest rate swaps, was 4.5% and 4.2%4.3% for the three months ended June 30, 2022 and 2021, respectively, and 4.4% and 4.3%4.5% for the ninesix months ended SeptemberJune 30, 20172022 and 2016,2021, respectively. Interest Income Interest income for the three months and ninesix months ended SeptemberJune 30, 20172022 and 20162021 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 8, “Notes Receivable,” to the accompanying condensed consolidated financial statements included herein for additional discussion of interest income on these bonds. Loss on Extinguishment of Debt As a result of our repayment of our $300 million term loan A with the proceeds from the OEG Term Loan, we recognized a loss on extinguishment of debt of $1.5 million in the three months and six months ended June 30, 2022. In February 2021, we commenced a cash tender offer for any and all outstanding $400 million 5% senior notes due 2023 (“$400 Million 5% Senior Notes”) at a redemption price of $1,005.00 per $1,000 principal amount. Pursuant to the tender offer, $161.9 million aggregate principal amount of these notes were validly tendered. As a result of our purchase of these tendered notes, and the subsequent redemption of all untendered $400 Million 5% Senior Notes, we recognized a loss on extinguishment of debt of $2.9 million in the six months ended June 30, 2021. Loss from Unconsolidated Joint Ventures The loss from unconsolidated joint ventures for the three months and ninesix months ended SeptemberJune 30, 20172022 and 2016 primarily2021 represents preopening expenses related to joint ventures that we entered into related to Opry City Stage in Times Square in New York City and the investment in Gaylord Rockies. Opry City Stage is anticipated to open in fourth quarter 2017, and Gaylord Rockies is anticipated to open in late 2018.our equity method share of losses associated with Circle. Other Gains and (Losses), net Other gains and (losses), net for the three months and ninesix months ended SeptemberJune 30, 20172022 and 2016 primarily includes gains of $2.6 million and $2.5 million from a fund associated with the Gaylord National bonds to reimburse us for certain marketing and maintenance expenses. The nine-month 2017 period also includes a loss on certain assets that were disposed of in our Entertainment and Corporate segments.2021 represents various miscellaneous items. Provision for Income Taxes As a REIT, we generally willare 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, however, be subject to corporate income taxes onbuilt-in gains (the excess of fair market value over tax basis at January 1, 2013) that result from gains on the sale of certain assets occurring prior to January 1, 2018. In addition, we will continue to beare required to pay federal and state corporate income taxes on earnings of our TRSs. For each of the three months and six months ended SeptemberJune 30, 2017 and 2016,2022, we recorded an income tax provision of $0.5$17.6 million and $1.8 million, respectively. related to our TRSs. For the ninethree months and six months ended SeptemberJune 30, 2017 and 2016,2021, we recorded an income tax provision of $2.0$1.6 million and $2.4$5.6 million, respectively. These results differ fromThe income tax provision for the statutory rate primarilysix months ended June 30, 2021 includes the recording of a valuation allowance of $3.6 million related to our reassessment of the realizability of our deferred tax assets due to the REIT dividends paid deductionimpact of the COVID-19 pandemic. Non-GAAP Financial Measures We present the following non-GAAP financial measures, which we believe are useful to investors as key measures of our operating performance: EBITDAre, Adjusted EBITDAre and Adjusted EBITDAre, Excluding Noncontrolling Interest in Consolidated Joint Venture Definition We calculate EBITDAre, which is defined by the National Association of Real Estate Investment Trusts (“NAREIT”) in its September 2017 white paper as net income (calculated in accordance with GAAP) plus interest expense, income tax expense, depreciation and amortization, gains or losses on the disposition of depreciated property (including gains or losses on change in valuation allowance required atcontrol), impairment write-downs of depreciated property and of investments in unconsolidated affiliates caused by a decrease in the TRSs. value of depreciated property or the affiliate, and adjustments to reflect the entity’s share of EBITDAre of unconsolidated affiliates.Adjusted EBITDAre is then calculated as EBITDAre, plus to the extent the following adjustments occurred during the periods presented: | ● | Equity-based compensation expense; |
| ● | Impairment charges that do not meet the NAREIT definition above; |
| ● | Credit losses on held-to-maturity securities; |
| ● | Any transactions costs of acquisitions; |
| ● | Loss on extinguishment of debt; |
| ● | Pension settlement charges; |
| ● | Pro rata adjusted EBITDAre from unconsolidated joint ventures; and |
| ● | Any other adjustments we have identified herein. |
We then exclude the pro rata share of Adjusted EBITDAre related to noncontrolling interests in consolidated joint ventures to calculate Adjusted EBITDAre, Excluding Noncontrolling Interest in Consolidated Joint Venture. We use EBITDAre, Adjusted EBITDAre and Adjusted EBITDAre, Excluding Noncontrolling Interest in Consolidated Joint Venture to evaluate our operating performance. We believe that the presentation of these non-GAAP financial measures provides useful information to investors regarding our operating performance and debt leverage metrics, and that the presentation of these non-GAAP financial measures, when combined with the primary GAAP presentation of net income, is beneficial to an investor’s complete understanding of our operating performance. We make additional adjustments to EBITDAre when evaluating our performance because we believe that presenting Adjusted EBITDAre and Adjusted EBITDAre, Excluding Noncontrolling Interest in Consolidated Joint Venture provides useful information to investors regarding our operating performance and debt leverage metrics. FFO, Adjusted FFO, and Adjusted FFO available to common shareholders and unit holders Definition We calculate FFO, which definition is clarified by NAREIT in its December 2018 white paper as net income (calculated in accordance with GAAP) excluding depreciation and amortization (excluding amortization of deferred financing costs and debt discounts), gains and losses from the sale of certain real estate assets, gains and losses from a change in control, impairment write-downs of certain real estate assets and investments in entities when the impairment is directly attributable to decreases in the value of depreciated real estate held by the entity, income (loss) from consolidated joint ventures attributable to noncontrolling interest, and pro rata adjustments for unconsolidated joint ventures. To calculate Adjusted FFO available to common shareholders and unit holders, we then exclude, to the extent the following adjustments occurred during the periods presented: | ● | Right-of-use asset amortization; |
| ● | Impairment charges that do not meet the NAREIT definition above; |
| ● | Write-offs of deferred financing costs; |
| ● | Amortization of debt discounts or premiums and amortization of deferred financing costs; |
| ● | Loss on extinguishment of debt; |
| ● | Credit loss on held-to-maturity securities; |
| ● | Pension settlement charges; |
| ● | Additional pro rata adjustments from unconsolidated joint ventures; |
| ● | (Gains) losses on other assets; |
| ● | Transactions costs on acquisitions; |
| ● | Deferred income tax expense (benefit); and |
| ● | Any other adjustments we have identified herein. |
FFO available to common shareholders and unit holders and Adjusted FFO available to common shareholders and unit holders exclude the ownership portion of the Gaylord Rockies joint venture not controlled or owned by the Company. We believe that the presentation of FFO available to common shareholders and unit holders and Adjusted FFO available to common shareholders and unit holders provides useful information to investors regarding the performance of our ongoing operations because they are 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 these non-GAAP financial measures as measures in determining our results after considering the impact of our capital structure. We caution investors that amounts presented in accordance with our definitions of Adjusted EBITDAre, Adjusted EBITDAre, Excluding Noncontrolling Interest, FFO available to common shareholders and unit holders, and Adjusted FFO available to common shareholders and unit holders may not be comparable to similar measures disclosed by other companies, because not all companies calculate these non-GAAP measures in the same manner. These non-GAAP financial measures, and any related per share measures, should not be considered as alternative measures of our Net Income (Loss), operating performance, cash flow or liquidity. These non-GAAP financial measures 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 these non-GAAP financial measures 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), Operating Income (Loss), or cash flow from operations. The following is a reconciliation of our consolidated GAAP net income (loss) to EBITDAre and Adjusted EBITDAre for the three months and six months ended June 30, 2022 and 2021 (in thousands): | | | | | | | | | | | | | | | | Three Months Ended | | Six Months Ended | | | | June 30, | | June 30, | | | | 2022 | | 2021 | | 2022 | | 2021 | | Net income (loss) | | $ | 50,924 | | $ | (63,049) | | $ | 26,127 | | $ | (180,170) | | Interest expense, net | | | 32,579 | | | 28,396 | | | 63,135 | | | 57,822 | | Provision for income taxes | | | 17,634 | | | 1,623 | | | 17,569 | | | 5,577 | | Depreciation and amortization | | | 56,715 | | | 54,673 | | | 112,743 | | | 107,988 | | (Gain) loss on sale of assets | | | (142) | | | — | | | 327 | | | (317) | | Pro rata EBITDAre from unconsolidated joint ventures | | | 23 | | | 19 | | | 45 | | | 34 | | EBITDAre | | | 157,733 | | | 21,662 | | | 219,946 | | | (9,066) | | Preopening costs | | | 221 | | | 217 | | | 525 | | | 616 | | Non-cash lease expense | | | 1,108 | | | 1,085 | | | 2,281 | | | 2,173 | | Equity-based compensation expense | | | 3,654 | | | 3,146 | | | 7,440 | | | 5,668 | | Pension settlement charge | | | 853 | | | 566 | | | 853 | | | 566 | | Interest income on Gaylord National bonds | | | 1,339 | | | 1,404 | | | 2,679 | | | 2,725 | | Loss on extinguishment of debt | | | 1,547 | | | — | | | 1,547 | | | 2,949 | | Transaction costs of acquisitions | | | 1,170 | | | 75 | | | 1,348 | | | 75 | | Adjusted EBITDAre | | | 167,625 | | | 28,155 | | | 236,619 | | | 5,706 | | Adjusted EBITDAre of noncontrolling interest in consolidated joint venture | | | (1,131) | | | 273 | | | (1,131) | | | 1,017 | | Adjusted EBITDAre, excluding noncontrolling interest in consolidated joint venture | | $ | 166,494 | | $ | 28,428 | | $ | 235,488 | | $ | 6,723 | |
The following is a reconciliation of our consolidated GAAP net income (loss) to FFO and Adjusted FFO for the three months and six months ended June 30, 2022 and 2021 (in thousands): | | | | | | | | | | | | | | | | Three Months Ended | | Six Months Ended | | | | June 30, | | June 30, | | | | 2022 | | 2021 | | 2022 | | 2021 | | Net income (loss) | | $ | 50,924 | | $ | (63,049) | | $ | 26,127 | | $ | (180,170) | | Noncontrolling interest in consolidated joint venture | | | (280) | | | 4,708 | | | (280) | | | 16,501 | | Net income (loss) available to common shareholders and unit holders | | | 50,644 | | | (58,341) | | | 25,847 | | | (163,669) | | Depreciation and amortization | | | 56,685 | | | 54,636 | | | 112,682 | | | 107,914 | | Adjustments for noncontrolling interest | | | (233) | | | (3,139) | | | (233) | | | (11,069) | | Pro rata adjustments from joint ventures | | | 23 | | | 19 | | | 45 | | | 34 | | FFO available to common shareholders and unit holders | | | 107,119 | | | (6,825) | | | 138,341 | | | (66,790) | | Right-of-use asset amortization | | | 30 | | | 37 | | | 61 | | | 74 | | Non-cash lease expense | | | 1,108 | | | 1,085 | | | 2,281 | | | 2,173 | | Pension settlement charge | | | 853 | | | 566 | | | 853 | | | 566 | | (Gain) loss on other assets | | | — | | | — | | | 469 | | | (317) | | Amortization of deferred financing costs | | | 2,309 | | | 2,170 | | | 4,538 | | | 4,379 | | Amortization of debt discounts and premiums | | | 61 | | | (70) | | | (12) | | | (140) | | Loss on extinguishment of debt | | | 1,547 | | | — | | | 1,547 | | | 2,949 | | Adjustments for noncontrolling interest | | | (32) | | | (77) | | | (32) | | | (294) | | Transaction costs of acquisitions | | | 1,170 | | | 75 | | | 1,348 | | | 75 | | Deferred tax expense | | | 710 | | | 1,392 | | | 295 | | | 5,173 | | Adjusted FFO available to common shareholders and unit holders | | $ | 114,875 | | $ | (1,647) | | $ | 149,689 | | $ | (52,152) | |
Liquidity and Capital Resources Cash Flows FromProvided By (Used In) Operating Activities. CashHistorically, cash flow from operating activities ishas been the principal source of cash used to fund our operating expenses, interest payments on debt, maintenance capital expenditures, and dividends to stockholders. During the ninesix months ended SeptemberJune 30, 2017,2022, our net cash flows provided by operating activities were $215.8$127.6 million, primarily reflecting cash provided by our net income before depreciation expense, amortization expense and othernon-cash charges of approximately $197.0$156.8 million, and favorableoffset by unfavorable changes in working capital of approximately $18.8$29.2 million. The favorableunfavorable changes in working capital primarily resulted from an increase in accounts receivable due to an increase in group business at our Gaylord Hotels properties, partially offset by a increase in accounts payable and accrued liabilities primarily attributablerelated to an increase in deferred revenues associated withincreased advanced ticket purchases at our Christmas-related programsOEG venues and an increase in accrued interestadvanced deposits on our outstanding debt.future hotel room stays. During the ninesix months ended SeptemberJune 30, 2016,2021, with most of our hotels and other assets operating at limited capacity, our net cash flows provided byused in operating activities were $199.1$27.9 million, primarily reflecting cash provided by our incomenet loss before depreciation expense, amortization expense and othernon-cash charges of approximately $201.7$53.4 million, partially offset by unfavorablefavorable changes in working capital of approximately $2.6$25.5 million. The favorable changes in working capital primarily resulted from a decrease in property tax rebates receivable at Gaylord Rockies. Cash Flows FromUsed In Investing Activities.During the ninesix months ended SeptemberJune 30, 2017,2022, our primary uses of funds for investing activities were the use of $94.0 million in net cash to fund a portion of the purchase price of Block 21 and purchases of property and equipment, which totaled $127.1$24.7 million, and consisted primarily of a re-concepting of the food and beverage options at Gaylord National, enhancements at Gaylord Rockies to better position the property for our investmentgroup customers, the construction of $16.3Ole Red Nashville International Airport, and ongoing maintenance capital expenditures for our existing properties. During the six months ended June 30, 2021, our primary use of funds for investing activities was the $210.0 million purchase of the remaining 35% interest in the Gaylord Rockies joint venture. Purchasesventure and adjacent, undeveloped land. In addition, we spent $53.5 million for purchases of property and equipment, which consisted primarily of the expansion of the guestGaylord Palms, a rooms and convention space at Gaylord Texan, the renovation of a portion of the guest rooms at Gaylord Opryland, the commencement of construction of 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. During the nine months ended September 30, 2016, our primary uses of funds for investing activities were purchases of property and equipment, which totaled $84.6 million, our investment of $50.4 million in the Gaylord Rockies joint venture, and an increase in restricted cash and cash equivalents associated with the furniture, fixtures, and equipment (“FF&E”) reserve that we are obligated to maintain for future planned and emergency-related capital expenditures at the properties that Marriott manages for us. These uses of cash were partially offset by the receipt of $6.8 million in proceeds related to the sale of our rights in a letter of intent which entitled us to a portion of an economic interest in the income from the land underlying the new MGM casino project in National Harbor, Maryland. Purchases of property and equipment consisted primarily of the renovation of a portion of the guest rooms at Gaylord Opryland, the freestanding event ballroom and expanded event space at Gaylord National, the expansion of the guest rooms and convention space at Gaylord Texan, a renovation of the Wildhorse Saloon, and ongoing maintenance capital expenditures for our existing properties.
Cash Flows FromProvided By Financing Activities. Our cash flows from financing activities primarily reflect the incurrence of debt, the repayment of long-term debt and, prior to the COVID-19 pandemic, the payment of cash dividends. During the ninesix months ended SeptemberJune 30, 2017,2022, our net cash flows used inprovided by financing activities were approximately $65.2$62.8 million, primarily reflecting the net proceeds from the OEG Transaction of $286.5 million and the issuance of the OEG Term Loan and the repayment of $235.9our existing term loan A, partially offset by the net repayment of $204.7 million under our refinanced revolving credit facility, the payment of $120.7 million in cash dividendsvarious debt agreements and the payment of $12.3$14.8 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.costs. During the ninesix months ended SeptemberJune 30, 2016,2021, our net cash flows used inprovided by financing activities were approximately $88.1$299.4 million, primarily reflecting the paymentnet senior note borrowing of $112.9$200.0 million in cash dividends and the payment of $24.8 million to repurchase and retire 0.5 million shares of our common stock, partially offset by $57.5 million in net borrowings under our credit facility. facility of $116.5 million, partially offset by the payment of $10.6 million in deferred financing costs.Liquidity At SeptemberJune 30, 2017,2022, we had $62.7$179.2 million in unrestricted cash and $551.4$754.6 million available for borrowing under our revolving credit facility and the OEG revolving credit facility. During the ninesix months ended SeptemberJune 30, 2017,2022, we received net borrowed $71.6proceeds of $286.5 million related to the OEG Transaction, repaid $492.5 million under our credit facility,existing debt agreements, borrowed $288.0 million under the new OEG Term Loan, paid $94.0 million in net cash dividendsfor the purchase of $120.7 million,Block 21 after the assumption of the Block 21 CMBS Loan and incurred capital expenditures of $127.1 million, invested $16.3 million in$24.7 million. These changes, and the Gaylord Rockies joint venture, and paid $12.3 million in deferred financing costs associated with the refinancing of our credit facility. These net outflows were offset by cash flows from operating activitiesprovided by operations discussed above, resultingwere the primary factors in the increase in our cash balance from December 31, 20162021 to SeptemberJune 30, 2017.2022. We currently plan to pay a quarterly cash dividend of $0.80 per share in January 2018, subject to determinations as to the timing and amount by our board of directors. We anticipate investing in our operations during the remainder of 20172022 by spending between approximately $60 million and $80$90 million in capital expenditures, which primarily includes enhancements at Gaylord Rockies to better position the property for our group customers, enhancements to the offerings at Block 21, the construction of Ole Red Las Vegas,
and ongoing maintenance capital of our current facilities,facilities. In addition, we intend to contribute up to an additional $6.0 million in capital to the expansion of the guest rooms and convention space at Gaylord Texan, and a luxury indoor/outdoor waterpark at Gaylord Opryland.Circle joint venture for working capital needs. We currently have no debt maturities until July 2023. We believe we will be able to refinance our debt agreements prior to their maturities. We believe that our cash on hand, together with amounts available for borrowing under our revolving credit facility and cash from operationsthe OEG revolving credit facility, will be adequate to fund our general short-term commitments, as well as: (i) normalcurrent operating expenses, (ii) interest expense on long-term debt obligations, (iii) capitalfinancing 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 asthe capital expenditures we coulddescribed above. Our ability to draw on our credit facility,facilities is subject to the satisfaction of covenants inprovisions of the credit facility.facilities, as amended. Our outstanding principal debt agreements at September 30, 2017 are described below. Based on current projections for complianceAt June 30, 2022, there were no defaults under our financial covenants contained in these agreements, we do not foresee a maturity issue prior to their scheduled maturity date. At September 30, 2017, we were in compliance with allthe covenants related to our outstanding debt.debt based on the amended terms of our credit agreement.
Principal Debt Agreements Credit Facility. On May 11, 2017,October 31, 2019, we entered into a FifthSixth Amended and Restated Credit Agreement (the “Amended“Base 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.,National Association, as administrative agent, which amendsamended and restatesrestated the Company’s existing credit facility. In addition, on May 23, 2017, we entered into an Amendment No. 1 (the “Amendment”) to the Amended Credit Agreement among the same parties. As amended, our credit facility consists of a $700.0 million senior secured revolving credit facility (the “Revolver”), prior to its repayment on June 16, 2022, a new $200.0$300.0 million senior secured term loan A (the “Term Loan A”), and an increaseda $500.0 million senior secured term loan B (the “Term Loan B”), each as discussed below. In 2020, we entered into three amendments (the “2020 Amendments”) to the Base Credit Agreement among the same parties, as discussed below. Additionally, we further amended the Base Credit Agreement in April 2021 and further in October 2021 to permit an acquisition during the Credit Agreement’s Restricted Period (as defined below) and an assumption of indebtedness, subject to certain conditions (such amendments, together with the 2020 Amendments, the “Amendments”; the Base Credit Agreement, as amended by the Amendments, the “Existing Credit Agreement”; the Existing Credit Agreement, as amended by the Fifth Amendment (as hereinafter defined), the “Credit Agreement”). 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, other than Gaylord Rockies, and certain other of our other subsidiaries. Each is secured by (i) a first mortgage lien on the real property of each of our Gaylord Hotels properties, excluding Gaylord Rockies, (ii) pledges of equity interests in our subsidiaries that own the Gaylord Hotels properties, excluding Gaylord Rockies, (iii) pledges of equity interests in the Operating Partnership, our subsidiaries that guarantee the Credit Agreement, and certain other of our subsidiaries, (iv) our personal property and the personal property of the Operating Partnership and our guarantor subsidiaries and (iv)(v) all proceeds and products from our Gaylord Hotels properties.properties, excluding Gaylord Rockies. 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 HotelHotels properties is sold)., excluding Gaylord Rockies. Assets of Gaylord Rockies are not subject to the liens of our credit facility. In addition, eachEach 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 Amended Credit Agreement are as follows (and are unchanged fromfollows:
| ● | 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 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. |
The Amendments provided for a waiver of the previous credit agreement): Weforegoing financial covenants through March 31, 2022 (the “Temporary Waiver Period”) and modified covenants through June 30, 2022. In addition, the Amendments contain a covenant that we must maintain unrestricted liquidity (in the form of unrestricted cash on hand or undrawn availability under the Revolver) of at least $100 million. In the event we are unable to comply with the Credit Agreement’s financial covenants, we expect to further amend the Credit Agreement or take other mitigating actions prior to a consolidated funded indebtednesspotential breach.Beginning with the quarter ended June 30, 2022, we calculate compliance with the financial covenants in the Credit Agreement using a designated annualized calculation based on our most recently completed fiscal quarter. Thereafter, we will be required to total asset value ratiosatisfy financial covenants at the levels set forth in the Credit Agreement using a designated annualized calculation based on our most recently completed fiscal quarters, as applicable. Pursuant to the Amendments, we are required to use any proceeds from borrowings drawn until we demonstrate financial covenant compliance following the expiration of the endTemporary Waiver Period (the “Restricted Period”) to fund operating expenses, debt service of the Company and its subsidiaries, and permitted capital expenditures and investments. We demonstrated such financial compliance in May 2022 and thereby ended the restricted period. On April 4, 2022, we entered into Amendment No. 5 (the “Fifth Amendment”) to the Existing Credit Agreement, among the Company, as a guarantor, its subsidiary RHP Hotel Properties, LP, 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, National Association, as administrative agent. The Fifth Amendment provides for certain amendments to the Existing Credit Agreement, each calendar quarter of not more than .65which was effective upon the closing of the OEG Transaction. These amendments include, among others, the exclusion of OEG from negative covenants and certain restrictions related to 1.0. We must maintaincertain equity issuances, investments, acquisitions, dispositions and indebtedness; changes to certain financial covenant requirements through December 2022; and a consolidated tangible net worth (as definedrequirement that, following January 1, 2023, the Company satisfy the financial covenants currently provided for in the Amended 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.
Agreement. We must maintain a consolidated fixed charge coverage ratio (as defined in the Amended 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 Amended Credit Agreement, the commitments under the Amended Credit Agreement may be terminated, and the principal amount outstanding under the Amended 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 the Amendment, we extended theThe maturity date of the Revolver to May 23, 2021,is March 31, 2024, with two additionalsix-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%1.40% to 2.40%1.95%, dependent upon our funded debt to total asset value ratio (as defined in the Amended Credit Agreement) or (ii) a base rate as set forth in the Amended Credit Agreement. At SeptemberJune 30, 2017,2022, the interest rate on LIBOR-based borrowings under the Revolver wasis LIBOR plus 1.55%. Principal is payable in full at maturity. No additional amounts were borrowed under the Revolver at closing.
At SeptemberJune 30, 2017, $146.5 million of borrowings2022, no amounts were outstanding under the Revolver, and the lending banks had issued $2.1$10.4 million of letters of credit under the Amended Credit Agreement, which left $551.4$689.6 million of availability under the Revolver (subject to the satisfaction of debt incurrence tests under the indentures governing our $350$600 million in aggregate principal amount of senior notes due 20212029 (the “$350600 Million 5%4.50% Senior Notes”) and $400our $700 million in aggregate principal amount of senior notes due 20232027 (the “$400700 Million 5%4.75% Senior Notes”), which we met at SeptemberJune 30, 2017)2022). $200 Million Term Loan A Facility.The Amendment also provides fororiginal maturity date of the Term Loan A which has a maturity date of May 23, 2022.was March 31, 2025. Borrowings bearbore interest at an annual rate equal to, at our option, either (i) LIBOR plus the applicable margin ranging from 1.50%1.35% to 2.35%1.90%, dependent upon our funded debt to total asset value ratio (as defined in the Amended Credit Agreement) or (ii) a base rate as set forth in the Amended Credit Agreement. At September 30, 2017, the interest rate onAs discussed below, in June 2022, we paid off the Term Loan A was LIBOR plus 1.50%. Amounts borrowed underwith proceeds from the OEG 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.Loan.
$500 Million Term Loan B Facility.In May 2017, as part of the Amended 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 and2024. The applicable interest rate margins for borrowings bear interest at an annual rate equal to,under the Term Loan B are, at our option, either (i) LIBOR plus 2.25%2.00% or (ii) a base rate as set forth in the Amended Credit Agreement. At SeptemberJune 30, 2017,2022, the interest rate on the Term Loan B was LIBOR plus 2.25%2.00%. In October 2019, we entered into four interest rate swaps with a total notional amount of $350.0 million to fix the LIBOR portion of the interest rate, at rates between 1.2235% and 1.2315%, through May 11, 2023. We have designated these interest rate swaps as effective cash flow hedges. 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 Amended Credit Agreement), an additional principal amount is required. Amounts borrowed under the Term Loan B that are repaid or prepaid may not be reborrowed. At closing, we drew down onJune 30, 2022, $373.8 million in borrowings were outstanding under 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 approximately $114.3 million and were used to pay down a portion of the Revolver.B.
$350700 Million 5%4.75% Senior Notes.In 2013,September 2019, the Operating Partnership and Finco completed the private placement of $350.0$500.0 million in aggregate principal amount of senior notes due 2021,2027 (the “$500 Million 4.75% Senior Notes”), which are guaranteed by the Company and its subsidiaries that guarantee the Amended Credit Agreement. The $350$500 Million 5%4.75% 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$500 Million 5%4.75% Senior Notes have a maturity date of AprilOctober 15, 20212027 and bear interest at 5%4.75% per annum, payable semi-annually in cash in arrears on April 15 and October 15 of each year. The $350$500 Million 5%4.75% 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 $600 Million 4.50% Senior Notes, and senior in right of payment to future subordinated indebtedness, if any. The $350$500 Million 5%4.75% 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$500 Million 5%4.75% Senior Notes will beare 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$500 Million 5%4.75% Senior Notes. In October 2019, we completed a tack-on private placement of $200.0 million in aggregate principal amount of 4.75% senior notes due 2027 (the “additional 2027 notes”) at an issue price of 101.250% of their aggregate principal amount plus accrued interest from the September 19, 2019 issue date for the $500 Million 4.75% Senior Notes. The $350additional 2027 notes and the $500 Million 5%4.75% Senior Notes constitute a single class of securities (collectively, the “$700 Million 4.75% Senior Notes”). All other terms and conditions of the additional 2027 notes are identical to the $500 Million 4.75% Senior Notes. The $700 Million 4.75% Senior Notes are redeemable before October 15, 2022, in whole or in part, at 100.00%, plus accrued and unpaid interest thereon to, but not including, the redemption date, plus a make-whole premium. The $700 Million 4.75% Senior Notes will be redeemable, in whole or in part, at any time on or after October 15, 2022 at a redemption price expressed as a percentage of the principal amount thereof, which percentage is 102.50%103.563%, 101.25%102.375%, 101.188%, and 100.00% beginning on AprilOctober 15 of 2017, 2018,2022, 2023, 2024, and 2019,2025, 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, weWe completed a registered offer to exchange the $350$700 Million 5%4.75% Senior Notes for registered notes with substantially identical terms as the $350$700 Million 5%4.75% Senior Notes in November 2013.July 2020.
$400600 Million 5%4.50% Senior Notes.NotesIn 2015,. On February 17, 2021, the Operating Partnership and Finco completed the private placement of $400.0$600.0 million in aggregate principal amount of 4.50% senior notes due 2023. The $400 Million 5% Senior Notes are general unsecured senior obligations of the Company’s issuing subsidiaries and2029, which are guaranteed by the Company and its subsidiaries that guarantee the Amended Credit Agreement. The $400$600 Million 5%4.50% 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$600 Million 5% Senior Notes have a maturity date of AprilFebruary 15, 20232029 and bear interest at 5%4.50% per annum, payable semi-annually in cash in arrears on AprilFebruary 15 and OctoberAugust 15 of each year. The $400$600 Million 5%4.50% 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$700 Million 5%4.75% Senior Notes, and senior in right of payment to future subordinated indebtedness, if any. The $400$600 Million 5%4.50% 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$600 Million 5%4.50% 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$600 Million 5%4.50% Senior Notes. The issuing subsidiaries may redeem the $400$600 Million 5%4.50% Senior Notes are redeemable before AprilFebruary 15, 2018,2024, in whole or in part, at a redemption price equal to 100% of the principal amount100.00%, plus accrued and unpaid interest if any, upthereon to, but excluding,not including, the applicable redemption date, plus a make-whole redemption premium. The $400$600 Million 5% 4.50% Senior Notes will be redeemable, in whole or in part, at any time on or after AprilFebruary 15, 20182024 at a redemption price expressed as a percentage of the principal amount thereof, which percentage is 103.75%102.250%, 102.50%101.500%, 101.25%100.750%, and 100.00%100.000% beginning on AprilFebruary 15 of 2018, 2019, 2020,2024, 2025, 2026, and 2021,2027, respectively, plus accrued and unpaid interest thereon to, but not including, the redemption date. In connection$800 Million Term Loan (Gaylord Rockies). On July 2, 2019, Aurora Convention Center Hotel, LLC (“Hotel Owner”) and Aurora Convention Center Hotel Lessee, LLC (“Tenant” and collectively, with Hotel Owner, the issuance“Loan Parties”), subsidiaries of the $400 Million 5% Senior Notes,entities that comprised the Gaylord Rockies joint venture, entered into a Second Amended and Restated Loan Agreement (the “Gaylord Rockies Loan”) with Wells Fargo Bank, National Association, as administrative agent, which refinanced the Gaylord Rockies joint venture’s existing $500 million construction loan and $39 million mezzanine loan, which were scheduled to mature in December 2019. The Gaylord Rockies Loan consists of an $800.0 million secured term loan facility and also includes the option for an additional $80.0 million of borrowing capacity should we completedpursue an expansion of Gaylord Rockies, which was announced in February 2020 but has been postponed as a registered offerresult of the COVID-19 pandemic. The Gaylord Rockies Loan matures July 2, 2023 with three, one-year extension options, subject to exchangecertain requirements in the $400 Million 5% Senior NotesGaylord Rockies Loan, and bears interest at LIBOR plus 2.50%. Simultaneous with closing, the Gaylord Rockies joint venture entered into an interest rate swap to fix the LIBOR portion of the interest rate at 1.65% for registered notesthe first three years of the loan. Additionally, we have entered into an additional interest rate swap to fix the LIBOR portion of the interest rate at 3.3410% for the fourth year of the loan. We have designated these interest rate swaps as effective cash flow hedges.
The Gaylord Rockies Loan is secured by a deed of trust lien on the Gaylord Rockies real estate and related assets. We have entered into limited repayment and carry guaranties that, in the aggregate, guarantee repayment of 10% of the principal debt, together with interest and operating expenses, which are to be released once Gaylord Rockies achieves a certain debt service coverage threshold as defined in the Gaylord Rockies Loan. Generally, the Gaylord Rockies Loan is non-recourse to the Company, subject to (i) those limited guaranties, (ii) a completion guaranty in the event the expansion is pursued, and (iii) customary non-recourse carve-outs. On June 30, 2020, the Loan Parties entered into Amendment No. 1 (the “Loan Amendment”) to the Gaylord Rockies Loan, by and among the Loan Parties, Wells Fargo Bank, National Association, as administrative agent, and the lenders from time to time party thereto. The Loan Amendment modified the Gaylord Rockies Loan to (i) provide for the ability to use cash for certain purposes, even during a Cash Sweep Period (as defined in the Loan Agreement), which the Gaylord Rockies joint venture was in beginning in July 2020, (ii) extend the deadline for Hotel Owner to commence construction of an expansion to Gaylord Rockies, and (iii) provide favorable changes to the debt service coverage ratio provisions. The Loan Amendment includes restrictions on distributions to our subsidiaries that own Gaylord Rockies and requires a certain level of equity financing for a Gaylord Rockies expansion. OEG Credit Agreement. On June 16, 2022, OEG Borrower, LLC (“OEG Borrower”) and OEG Finance, LLC (“OEG Finance”), each a wholly owned direct or indirect subsidiary of OEG, entered into a credit agreement (the “OEG Credit Agreement”) among OEG Borrower, as borrower, OEG Finance, certain subsidiaries of OEG Borrower from time to time party thereto as guarantors, the lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent. The OEG Credit Agreement provides for (i) a senior secured term loan facility in the aggregate principal amount of $300.0 million (the “OEG Term Loan”) and (ii) a senior secured revolving credit facility in an aggregate principal amount not to exceed $65.0 million (the “OEG Revolver”). The OEG Term Loan matures on June 16, 2029 and the OEG Revolver matures on June 16, 2027. The OEG Term Loan bears interest at a rate equal to either, at OEG Borrower’s election, (i) the Alternate Base Rate plus 4.00% or (b) Adjusted Term SOFR plus 5.00% (all as specifically more described in the OEG Credit Agreement). The OEG Revolver bears interest at a rate equal to either, at OEG Borrower’s election, (i) the Alternate Base Rate plus 3.75% or (b) Adjusted Term SOFR plus 4.75%, which shall be subject to reduction in the applicable margin based upon OEG’s First Lien Leverage Ratio (all as specifically more described in the OEG Credit Agreement). The OEG Term Loan and OEG Revolver are each secured by substantially identical termsall of the assets of OEG Finance and each of its subsidiaries (other than Block 21 and Circle, as more specifically described in the $400 Million 5% Senior NotesOEG Credit Agreement). The net proceeds we received from the OEG Term Loan were used to repay the outstanding balance of our existing $300 million Term Loan A. No revolving credit advances were made under the OEG Revolver at closing. Block 21 CMBS Loan. At the closing of the purchase of Block 21 on May 31, 2022, a subsidiary of the Company a assumed $136 million, ten-year, non-recourse term loan secured by a mortgage on Block 21 (the “Block 21 CMBS Loan”). The Block 21 CMBS Loan has a fixed interest rate of 5.58% per annum, payable monthly, matures January 5, 2026, and payments are due monthly based on a 30-year amortization. The Block 21 CMBS Loan contains customary financial covenants and other restrictions, including sponsor net worth and liquidity requirements, and debt service coverage ratio targets that Block 21 must meet in September 2015.order to avoid a “Trigger Period,” the occurrence of which does not constitute a default. Block 21 was in a Trigger Period as of our purchase date. During the Trigger Period, any cash generated in excess of amounts necessary to fund loan obligations, budgeted operating expenses and specified reserves will not be distributed to Block 21. Additional Debt Limitations. Pursuant to the terms of the management agreements and pooling agreement with Marriott for our Gaylord Hotels properties, excluding Gaylord Rockies, 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 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 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. |
Gaylord Rockies is not a Pooled Hotel for this purpose. Estimated Interest on Principal Debt Agreements Based on the stated interest rates on our fixed-rate debt and the rates in effect at June 30, 2022 for our variable-rate debt after considering interest rate swaps, our estimated interest obligations through 2026 are $446.2 million. These estimated obligations are $66.8 million for the Pooled Hotels, shall equal or exceed 1.2:1. Off-Balance Sheet Arrangements
As describedremainder of 2022, $117.5 million in Note 6 to our condensed consolidated financial statements included herein, we have invested2023, $93.2 million in a joint venture that will build2024, $88.2 million in 2025, and subsequently own 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$80.5 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, 2017, we have not recorded any liability in the condensed consolidated balance sheet associated with these guarantees.
In addition, we enter into commitments under letters of credit, primarily for the purpose of securing our deductible obligations with our insurers, and lending banks under our Amended Credit Agreement had issued $2.1 million of letters of credit at September 30, 2017. Except as set forth in these paragraphs, we do not have anyoff-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, 2017, including long-term debt and operating and capital lease commitments (amounts in thousands):
| | | | | | | | | | | | | | | | | | | | | | | | | | | Payment due by Period | | | | | Total
amounts | | | Less than | | | | | | | | | More than | | Contractual obligations | | committed | | | 1 year | | | 1-3 years | | | 3-5 years | | | 5 years | | Long-term debt (1) | | $ | 1,594,000 | | | $ | 5,000 | | | $ | 10,000 | | | $ | 706,500 | | | $ | 872,500 | | Capital leases | | | 643 | | | | 20 | | | | 43 | | | | 46 | | | | 534 | | Operating leases (2) | | | 616,463 | | | | 4,563 | | | | 9,533 | | | | 10,090 | | | | 592,277 | | Construction commitments (3) | | | 13,553 | | | | 13,553 | | | | — | | | | — | | | | — | | | | | | | | | | | | | | | | | | | | | | | Total contractual obligations | | $ | 2,224,659 | | | $ | 23,136 | | | $ | 19,576 | | | $ | 716,636 | | | $ | 1,465,311 | | | | | | | | | | | | | | | | | | | | | | |
(1) | Long-term debt commitments do not include approximately $327.2 million in interest payments projected to be due in future years (less than 1 year – $64.9 million;1-3 years – $129.2 million;3-5 years – $95.4 million; more than 5 years – $37.7 million) based on the stated interest rates on our fixed-rate debt and the rates in effect at September 30, 2017 for our variable-rate debt.2026. 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 Form10-K for the year ended December 31, 2016 for a discussion of the interest we paid during the fiscal years 2016, 2015 and 2014. |
(2) | Total operating lease commitments of $616.5 million includes the75-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. |
(3) | 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 5.0% of the respective property’s total annual revenue. At September 30, 2017, $13.6 million was held in FF&E reserve accounts for future capital expenditures at our properties. According to the terms of each management agreement with Marriott, the reserve funds are to be held by Marriott in a restricted cash account. Although it is not required that such funds be expended in a given year, each management agreement provides any excess funds will carry over for use in future years. |
The expected cash flows under our defined benefit pension plan, ournon-qualified retirement plan, ournon-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 Form10-K for the year ended December 31, 20162021 for furthera discussion relatedof the interest we paid during 2021, 2020 and 2019.
Supplemental Guarantor Financial Information The Company’s $600 Million 4.50% Senior Notes and $700 Million 4.75% Senior Notes were each issued by the Operating Partnership and RHP Finance Corporation, a Delaware corporation (collectively, the “Issuers”), and are guaranteed on a senior unsecured basis by the Company (as the parent company), each of the Operating Partnership’s subsidiaries that own the Gaylord Hotels properties, excluding Gaylord Rockies, and certain other of the Company’s subsidiaries, each of which also guarantees the Operating Partnership’s Credit Agreement, as amended (such subsidiary guarantors, together with the Company, the “Guarantors”). The Guarantors are 100% owned by the Operating Partnership or the Company, and the guarantees are full and unconditional and joint and several. The guarantees rank equally in right of payment with each Guarantor’s existing and future senior unsecured indebtedness and senior in right of payment to all future subordinated indebtedness, if any, of such Guarantor. Not all of the Company’s subsidiaries have guaranteed the Company’s $600 Million 4.50% Senior Notes and $700 Million 4.75% Senior Notes, and the guarantees are structurally subordinated to all indebtedness and other obligations of such subsidiaries that have not guaranteed the Company’s $600 Million 4.50% Senior Notes and $700 Million 4.75% Senior Notes. The following tables present summarized financial information for the Issuers and the Guarantors on a combined basis. The intercompany balances and transactions between these obligations.parties, as well as any investments in or equity in earnings from non-guarantor subsidiaries, have been eliminated (amounts in thousands). | | | | | | June 30, | | | 2022 | Total assets | | $ | 1,608,011 | | | | | Net payables due to non-guarantor subsidiaries | | | 29,263 | Other liabilities | | | 1,789,650 | Total liabilities | | $ | 1,818,913 | Total noncontrolling interest | | $ | 24 |
| | | | | | Six Months Ended | | | June 30, 2022 | Revenues from third-parties | | $ | 243 | Revenues from non-guarantor subsidiaries | | | 91,986 | Operating expenses (excluding expenses to non-guarantor subsidiaries) | | | 60,819 | Expenses to non-guarantor subsidiaries | | | 6,696 | Operating income | | | 24,714 | Interest income from non-guarantor subsidiaries | | | 12,332 | Net loss | | | (10,712) | Net loss available to common stockholders | | | (11,176) |
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, credit losses on financial assets, stock-based compensation, derivative financial instruments, depreciation and amortization, income taxes, pension plans, acquisitions and postretirement benefits other than pension plans,purchase price allocations, 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, information provided by our customers 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 Form10-K for the year ended December 31, 2016.2021. There were no newly identified critical accounting policies in the first ninesix months of 20172022, nor were there any material changes to the critical accounting policies and estimates discussed in our Annual Report on Form10-K for the year ended December 31, 2016.2021. 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 outstandingAt June 30, 2022, borrowings under the Revolver bearOEG Term Loan bore interest at an annual rate of LIBORSOFR plus 1.55%, subject to adjustment as described in the agreement.5.00%. If LIBORSOFR were to increase by 100 basis points, our annual interest cost on the $146.5$300.0 million in borrowings outstanding under the RevolverOEG Term Loan at SeptemberJune 30, 20172022 would increase by approximately $1.5$3.0 million.
Borrowings outstanding under48
Other than the above, there have been no material changes in our Term Loan A currently bear interest at an annual ratequantitative and qualitative market risks since December 31, 2021. For a discussion of LIBOR plus 1.50%, subject to adjustment as described in the 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, 2017 would increase by approximately $2.0 million. Borrowings outstanding under our Term Loan B currently bear interest at an annual rate of LIBOR plus 2.25%, subject to adjustment as described in the agreement. If LIBOR were to increase by 100 basis points, our annual interest cost on the $497.5 million in borrowings outstanding under our Term Loan B at September 30, 2017 would increase by approximately $5.0 million.
Certain of our outstanding cash balances are occasionally invested overnight with high credit quality financial institutions. We do not have significantCompany’s exposure to changing interest rates on invested cash at September 30, 2017. As a result, the interest rate market risk, implicitrefer to the Company’s market risk disclosures set forth in these investments at September 30, 2017, 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 allocationPart II, Item 7A. “Quantitative and Qualitative Disclosures About Market Risk” of the plan andCompany’s Annual Report on Form 10-K for the long-term projected return on those assets, which represent a diversified mix of equity securities, fixed income securities and cash. At September 30, 2017, the value of the investments in the pension fund was $69.5 million, and an immediate 10% decrease in this value would have reduced the value of the investments in the pension fund by approximately $6.9 million.year ended December 31, 2021.
ITEM 4. CONTROLS AND PROCEDURES. The Company maintains disclosure controls and procedures, as defined in Rule13a-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. On May 31, 2022, we acquired Block 21 through a business combination. We are currently in the process of assessing Block 21’s internal control over financial reporting and integrating Block 21’s internal control over financial reporting with our existing internal control over financial reporting. As permitted by SEC regulations, we intend to exclude Block 21 from our assessment of internal control over financial reporting as of December 31, 2022 since we acquired Block 21 in May 2022. PART II — OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS. The Company is a party to certain litigation in the ordinary course, as described in Note 12,15, “Commitments and Contingencies,” to our condensed consolidated financial statements included herein and which our management deems immaterial and will not have a material effect on our results of operations, financial condition or liquidity.statements. ITEM 1A. RISK FACTORS. ThereExcept as otherwise described herein, there have been no material changes from the risk factors disclosed in ourPart I, Item 1A, “Risk Factors” as previously set forth in the Company’sFactors,” of our Annual Report on Form10-K for the fiscal year ended December 31, 2016.2021.
We may not realize the intended long-term economic benefits of the OEG Transaction or the Block 21 Acquisition. An inability to realize the full extent of the anticipated long-term economic benefits of the OEG Transaction or the Block 21 Acquisition could have an adverse effect on our business, financial condition, results of operations and our public reputation. We conduct the operations of our Entertainment segment through OEG and our ownership is subject to the terms of agreements with Atairos. Any disagreement with Atairos may adversely affect our interest in OEG. The limited liability company agreement for OEG gives Atairos certain rights, including consent rights regarding certain major decisions, which may limit our flexibility with respect to OEG. Atairos may have economic or other business interests or goals which are inconsistent with ours, and we could become engaged in a dispute or disagreement with them that might affect our ability to develop or operate the Entertainment business in any manner in which we see fit, thereby adversely affecting our ownership interest in OEG. 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. | | | Exhibit
Number | | Description | | | | 3.1 | | 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 Form8-K filed October 1, 2012). | | | | 3.2 | | Amended and Restated Bylaws of Ryman Hospitality Properties, Inc. (incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form8-K filed October 1, 2012). | | | | 31.1*10.1 | | Investment Agreement, dated as of April 4, 2022, by and among the Company, OEG Attractions Holdings, LLC, RHP Hotels, LLC, RHP Hotel Properties, LP, A-OEG Holdings, LLC and Atairos Group, Inc. (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed April 5, 2022). | | | | 10.2* | | First Amendment to Investment Agreement, dated as of May 26, 2022, by and among the Company, OEG Attractions Holdings, LLC, RHP Hotels, LLC, RHP Hotel Properties, LP, A-OEG Holdings, LLC and Atairos Group, Inc. | | | | 10.3* | | Second Amendment to Investment Agreement, dated as of June 15, 2022, by and among the Company, OEG Attractions Holdings, LLC, RHP Hotels, LLC, RHP Hotel Properties, LP, A-OEG Holdings, LLC and Atairos Group, Inc. | | | | 10.4 | | Second Amended and Restated Limited Liability Company Agreement for OEG Attractions Holdings, LLC dated June 16, 2022 (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed June 16, 2022). | | | | 10.5 | | Amendment No. 5 to Sixth Amended and Restated Credit Agreement, dated as of April 4, 2022, among Ryman Hospitality Properties, Inc., as guarantor, RHP Hotel Properties, LP, as borrower, certain other subsidiary of Ryman Hospitality Properties, Inc. party thereto, as guarantors, certain subsidiaries of Ryman Hospitality Properties, Inc. party thereto, as pledgors, the lenders party thereto and Wells Fargo Bank, National Association, as administrative agent (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed April 5, 2022). | | | | 22 | | List of Parent and Subsidiary Guarantors (incorporated by reference to Exhibit 22 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, filed February 25, 2022). | | | | 31.1* | | Certification of Colin V. Reed pursuant to Section 302 of Sarbanes-Oxley Act of 2002. |
| | | 31.2* | | 31.2* | | Certification of Mark FioravantiJennifer Hutcheson pursuant to Section 302 of Sarbanes-Oxley Act of 2002. | | | | 32.1** | | Certification of Colin V. Reed and Mark FioravantiJennifer Hutcheson pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of Sarbanes-Oxley Act of 2002. | | | | 101* | | The following materials from Ryman Hospitality Properties, Inc.’s Quarterly Report on Form10-Q for the quarterly period ended SeptemberJune 30, 2017,2022, formatted in Inline XBRL (eXtensible Business Reporting Language): (i) Condensed Consolidated Balance Sheets (unaudited) at SeptemberJune 30, 20172022 and December 31, 2016,2021, (ii) Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) (unaudited) for the three months and ninesix months ended SeptemberJune 30, 20172022 and 2016,2021, (iii) Condensed Consolidated Statements of Cash Flows (unaudited) for the ninesix months ended SeptemberJune 30, 20172022 and 2016,2021, (iv) Condensed Consolidated Statements of Equity (Deficit) (unaudited) for the three months and (iv)six months ended June 30, 2022 and 2021, and (v) Notes to Condensed Consolidated Financial Statements (unaudited).
| 104* | | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). |
** 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. | | | | | | | | | | | RYMAN HOSPITALITY PROPERTIES, INC. | | | | | Date: November 7, 2017August 2, 2022 | | | | By: | | /s/ Colin V. Reed | | | | | | | Colin V. Reed | | | | | | | Chairman of the Board of Directors and | | | | | | | Chief Executive Officer | | | | | | | (Principal Executive Officer) | | | | | | | | | By: | | /s/ Mark Fioravanti
| | | | | | | Mark Fioravanti | | | | | | | President and Chief Financial Officer | | | | | | | (Principal Financial Officer) | | | | | | | | | By: | | /s/ Jennifer Hutcheson | | | | | | | Jennifer Hutcheson | | | | | | | SeniorExecutive Vice President, andChief Financial | | | | | | | Corporate Controller | | | | | | | (PrincipalOfficer and Chief Accounting Officer)Officer |
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