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Gaylord Entertainment Company Reports Second Quarter 2012 Results

Development Update

As a REIT, the Company will no longer view large scale development of resort and convention center hotels as a means for growth. As a result, the Company will not proceed with its previously announced development projects in the form previously anticipated. Gaylord is reexamining how previously announced projects could be completed with minimal financial commitment through the development phase. This examination will be undertaken with investor expectations at the forefront, and management will keep investors informed as the process evolves.

Liquidity

As of June 30, 2012, the Company had long-term debt outstanding, including current portion, of $1,035.2 million and unrestricted cash of $29.5 million. At June 30, 2012, $370.0 million of borrowings were undrawn under the Company’s $925.0 million credit facility, and the lending banks had issued $8.0 million in letters of credit, which left $362.0 million of availability under the credit facility.

Outlook

The following business performance outlook is based on current information as of August 7, 2012. The Company does not expect to update the guidance provided below before next quarter’s earnings release. However, the Company may update its full business outlook or any portion thereof at any time for any reason.

Reed concluded, “With our announcement of our planned REIT conversion this quarter, our focus remains on delivering solid results at our properties while ensuring a smooth transition to Marriott and a successful reorganization as a REIT. The profitability performance of our properties and our solid advance group bookings production in the second quarter reinforces our confidence that our business is well positioned as we move through 2012. Our guidance for Gaylord Hotels RevPAR remains as an increase of 3 percent to 6 percent, and a Total RevPAR increase of 3 percent to 6 percent year-over-year. We are reaffirming our Gaylord Hotels CCF guidance as a range of $274 million to $286 million. We are also reaffirming our expectations for the Opry and Attractions segment as a CCF range of $15 million to $17 million. In the first quarter of 2012, we incurred $3.1 million of expense as part of our effort to explore opportunities to unlock shareholder value, and we have incurred an additional $3.4 million as a result of that same process during the second quarter. As we stated last quarter, we are not including the expense we incurred in the second quarter or the expenses we will incur in the second half of the year as a result of this process in our Corporate and Other CCF guidance. Therefore, we reaffirm our Corporate and Other segment expectations as a CCF loss range of $54 million to $51 million. On a consolidated basis, total Company CCF expectations remain as a range of $235 million to $252 million in 2012.”

       

Full Year 2012 Guidance

Consolidated Cash Flow

     
Gaylord Hotels $274 - 286 million
Opry and Attractions $15 - 17 million
Corporate and Other $(54 - 51) million

Totals

$235 - 252 million

 

Gaylord Hotels RevPAR

3.0% - 6.0 %

Gaylord Hotels Total RevPAR

3.0% - 6.0 %

Note: The guidance above assumes 9,529 room nights out of service in 2012 due to the renovation of rooms at Gaylord Palms and a revised room count at Gaylord Opryland of 2,882 for 2012. The guidance above includes $3.1 million of expense incurred in the first quarter of 2012 as part of our effort to explore opportunities to unlock shareholder value, but excludes the $3.4 million of expense incurred in the second quarter of 2012 and any additional expenses that may be incurred in the third and fourth quarter of 2012 as part of this process. The guidance above does not include the potential impact on fourth quarter results from Marriott management fees, Marriott centralized/shared service fees or revenue and expense synergies that may be actualized once Marriott begins managing the resorts on October 1, 2012.

Webcast and Replay

Gaylord Entertainment will hold a conference call to discuss this release today at 10:00 a.m. ET. Investors can listen to the conference call over the Internet at www.gaylordentertainment.com. To listen to the live call, please go to the Investor Relations section of the website (Investor Relations/Presentations, Earnings, and Webcasts) at least 15 minutes prior to the call to register, download and install any necessary audio software. For those who cannot listen to the live broadcast, a replay will be available shortly after the call and will run for at least 30 days.

About Gaylord Entertainment

Gaylord Entertainment, a leading hospitality and entertainment company based in Nashville, Tenn., owns and operates Gaylord Hotels ( www.gaylordhotels.com), its network of upscale, meetings-focused resorts, and the Grand Ole Opry ( www.opry.com), the weekly showcase of country music’s finest performers for more than 80 consecutive years. The Company's entertainment brands and properties include the Radisson Hotel Opryland, Ryman Auditorium, General Jackson Showboat, Gaylord Springs Golf Links, Wildhorse Saloon, and WSM-AM. For more information about the Company, visit www.GaylordEntertainment.com.

Cautionary Note Regarding Forward-Looking Statements

This press release contains statements as to the Company’s beliefs and expectations of the outcome of future events that are forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. You can identify these statements by the fact that they do not relate strictly to historical or current facts. Examples of these statements include, but are not limited to, statements regarding the Marriott sale transaction, the Company’s expectation to elect REIT status, the timing and effect of that election, the amount of conversion or other costs relating to the transactions, and other business or operational issues. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from the statements made. These include the risks and uncertainties associated with refinancing our indebtedness prior to its various maturities, economic conditions affecting the hospitality business generally, rising labor and benefits costs, the geographic concentration of the Company’s hotel properties, business levels at the Company’s hotels, the Company’s ability to successfully operate its hotels, the failure to receive on a timely basis or otherwise the required approvals of the Company’s stockholders, the Company’s ability to elect and qualify for REIT status and the timing and effect(s) of that election, the Company’s ability to remain qualified as a REIT, the timing and amount of the special distribution of the Company’s accumulated earnings and profits and receipt of a private letter ruling from the Internal Revenue Service with respect thereto, the Company’s and Marriott’s ability to consummate the Marriott sale transaction, operating costs and business disruption may be greater than expected, and the Company’s ability to realize cost savings and revenue enhancements from the proposed REIT conversion and the Marriott sale transaction. Other factors that could cause operating and financial results to differ are described in the filings made from time to time by the Company with the U.S. Securities and Exchange Commission (SEC) and include the risk factors described in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2011 and our Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2012. The Company does not undertake any obligation to release publicly any revisions to forward-looking statements made by it to reflect events or circumstances occurring after the date hereof or the occurrence of unanticipated events.

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