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Gaylord Entertainment Company Reports Second Quarter 2012 Results

1The Company calculates revenue per available room (“RevPAR”) for its hotels by dividing room sales by room nights available to guests for the period.

2The Company calculates total revenue per available room (“Total RevPAR”) for its hotels by dividing the sum of room sales, food & beverage, and other ancillary services revenue by room nights available to guests for the period.

3 Adjusted EBITDA (defined as earnings before interest, taxes, depreciation, amortization, as well as certain unusual items) is a non-GAAP financial measure which is used herein because we believe it allows for a more complete analysis of operating performance by presenting an analysis of operations separate from the earnings impact of capital transactions and without certain items that do not impact our ongoing operations such as gains on the sale of assets. In accordance with generally accepted accounting principles, these items are not included in determining our operating income. The information presented should not be considered as an alternative to any measure of performance as promulgated under accounting principles generally accepted in the United States (such as operating income, net income, or cash from operations), nor should it be considered as an indicator of overall financial performance. Adjusted EBITDA does not fully consider the impact of investing or financing transactions, as it specifically excludes depreciation and interest charges, which should also be considered in the overall evaluation of our results of operations. Our method of calculating Adjusted EBITDA may be different from the method used by other companies and therefore comparability may be limited. A reconciliation of Adjusted EBITDA to net income is presented in the Supplemental Financial Results contained in this press release.

4As discussed in footnote 3 above, Adjusted EBITDA is used herein as essentially operating income/(loss) plus depreciation and amortization. Consolidated Cash Flow (which is used in this release as that term is defined in the Indentures governing the Company’s 6.75 percent senior notes) is a non-GAAP financial measure which also excludes the impact of preopening costs, the non-cash portion of the Florida ground lease expense, stock option expense, the non-cash gains and losses on the disposal of certain fixed assets, and adds (subtracts) other gains (losses). The Consolidated Cash Flow measure is one of the principal tools used by management in evaluating the operating performance of the Company’s business and represents the method by which the Indentures calculate whether or not the Company can incur additional indebtedness (for instance in order to incur certain additional indebtedness, Consolidated Cash Flow for the most recent four fiscal quarters as a ratio to debt service must be at least 2 to 1). The calculation of these amounts as well as a reconciliation of those amounts to net income (loss) or segment operating income (loss) is included as part of the Supplemental Financial Results contained in this press release. CCF Margin is defined as CCF divided by revenue.

               

GAYLORD ENTERTAINMENT COMPANY AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

Unaudited

(In thousands, except per share data)

 
Three Months Ended Six Months Ended
Jun. 30, Jun. 30,
2012       2011   2012       2011  
Revenues $ 253,229 $ 236,775 $ 492,144 $ 457,513
Operating expenses:
Operating costs 139,216 132,746 274,199 266,624
Selling, general and administrative 51,771 43,048 101,080 86,126
Casualty loss 372 469 546 468
Preopening costs 8 41 339 41
Depreciation and amortization   30,254         29,271     62,688         58,328  
Operating income   31,608         31,200     53,292         45,926  
 
Interest expense, net of amounts capitalized (14,451 ) (21,377 ) (28,813 ) (42,186 )
Interest income 3,021 3,316 6,175 6,489
Income from unconsolidated companies 109 152 109 325
Other gains and (losses), net   -         141     -         (50 )
 
Income before income taxes 20,287 13,432 30,763 10,504
 
Provision for income taxes   (11,314 )       (4,799 )   (15,783 )       (3,832 )
 
Income from continuing operations 8,973 8,633 14,980 6,672
 
Income (loss) from discontinued operations, net of taxes   (19 )       4     2         8  
 
Net income $ 8,954       $ 8,637   $ 14,982       $ 6,680  
 
 

Basic net income per share:

Income from continuing operations $ 0.18 $ 0.18 $ 0.31 $ 0.14
Income from discontinued operations, net of taxes   -         -     -         -  
Net income $ 0.18       $ 0.18   $ 0.31       $ 0.14  
 

Fully diluted net income per share:

Income from continuing operations $ 0.17 $ 0.17 $ 0.29 $ 0.13

Income from discontinued operations, net of taxes

  -         -     -         -  
Net income $ 0.17       $ 0.17   $ 0.29       $ 0.13  

 

Weighted average common shares for the period:

Basic 48,974 48,370 48,844 48,296
Fully-diluted 53,174 50,944 51,402 51,923
 
GAYLORD ENTERTAINMENT COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
Unaudited
(In thousands)
                 
Jun. 30, Dec. 31,
2012 2011
ASSETS
Current assets:
Cash and cash equivalents - unrestricted $ 29,504 $ 44,388
Cash and cash equivalents - restricted 1,150 1,150
Trade receivables, net 54,194 41,939
Deferred income taxes 4,993 8,641
Other current assets   44,397   48,538
Total current assets 134,238 144,656
 
Property and equipment, net of accumulated depreciation 2,200,616 2,209,127
Notes receivable, net of current portion 145,271 142,567
Long-term deferred financing costs 13,602 15,947
Other long-term assets 52,285 50,713
Long-term assets of discontinued operations   335   390
 
Total assets $ 2,546,347 $ 2,563,400
 
 
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt and capital lease obligations $ 750 $ 755
Accounts payable and accrued liabilities 151,735 168,975
Current liabilities of discontinued operations   147   186
Total current liabilities 152,632 169,916
 
Long-term debt and capital lease obligations, net of current portion 1,034,456 1,073,070
Deferred income taxes 119,817 108,219
Other long-term liabilities 170,779 166,209
Long-term liabilities of discontinued operations 451 451
Stockholders' equity   1,068,212   1,045,535
 
Total liabilities and stockholders' equity $ 2,546,347 $ 2,563,400
                               

GAYLORD ENTERTAINMENT COMPANY AND SUBSIDIARIES

SUPPLEMENTAL FINANCIAL RESULTS

Unaudited

(in thousands, except operating metrics)

 
Adjusted Earnings Before Interest, Taxes, Depreciation
and Amortization ("Adjusted EBITDA") and Consolidated
Cash Flow ("CCF") reconciliation: Three Months Ended Jun. 30, Six Months Ended Jun. 30,
  2012   2011   2012   2011
  $       Margin   $       Margin   $       Margin   $       Margin

Consolidated

Revenue $ 253,229 100.0 % $ 236,775 100.0 % $ 492,144 100.0 % $ 457,513 100.0 %
 
Net income (loss) $ 8,954 3.5 % $ 8,637 3.6 % $ 14,982 3.0 % $ 6,680 1.5 %
(Income) loss from discontinued operations, net of taxes 19 0.0 % (4 ) 0.0 % (2 ) 0.0 % (8 ) 0.0 %
Provision for income taxes 11,314 4.5 % 4,799 2.0 % 15,783 3.2 % 3,832 0.8 %
Other (gains) and losses, net - 0.0 % (141 ) -0.1 % - 0.0 % 50 0.0 %
Income from unconsolidated companies (109 ) 0.0 % (152 ) -0.1 % (109 ) 0.0 % (325 ) -0.1 %
Interest expense, net   11,430       4.5 %   18,061       7.6 %   22,638       4.6 %   35,697       7.8 %
Operating income 31,608 12.5 % 31,200 13.2 % 53,292 10.8 % 45,926 10.0 %
Depreciation & amortization   30,254       11.9 %   29,271       12.4 %   62,688       12.7 %   58,328       12.7 %
Adjusted EBITDA 61,862 24.4 % 60,471 25.5 % 115,980 23.6 % 104,254 22.8 %
Preopening costs 8 0.0 % 41 0.0 % 339 0.1 % 41 0.0 %
Other non-cash expenses 1,426 0.6 % 1,453 0.6 % 2,852 0.6 % 2,906 0.6 %
Stock option expense 749 0.3 % 798 0.3 % 1,496 0.3 % 1,595 0.3 %
Other gains and (losses), net - 0.0 % 141 0.1 % - 0.0 % (50 ) 0.0 %
(Gain) loss on sales of assets   -       0.0 %   (141 )     -0.1 %   -       0.0 %   50       0.0 %
CCF $ 64,045       25.3 % $ 62,763       26.5 % $ 120,667       24.5 % $ 108,796       23.8 %
 

Hospitality segment (a)

Revenue $ 233,047 100.0 % $ 218,173 100.0 % $ 459,095 100.0 % $ 427,515 100.0 %
Operating income 46,415 19.9 % 41,672 19.1 % 86,120 18.8 % 71,126 16.6 %
Depreciation & amortization 26,346 11.3 % 25,291 11.6 % 54,882 12.0 % 50,566 11.8 %
Preopening costs 8 0.0 % 41 0.0 % 339 0.1 % 41 0.0 %
Other non-cash expenses 1,426 0.6 % 1,453 0.7 % 2,852 0.6 % 2,906 0.7 %
Stock option expense 185 0.1 % 252 0.1 % 394 0.1 % 536 0.1 %
Other gains and (losses), net - 0.0 % 138 0.1 % - 0.0 % (3 ) 0.0 %
(Gain) loss on sales of assets   -       0.0 %   (138 )     -0.1 %   -       0.0 %   3       0.0 %
CCF $ 74,380       31.9 % $ 68,709       31.5 % $ 144,587       31.5 % $ 125,175       29.3 %
 

Opry and Attractions segment (a)

Revenue $ 20,153 100.0 % $ 18,569 100.0 % $ 32,988 100.0 % $ 29,936 100.0 %
Operating income 4,800 23.8 % 3,866 20.8 % 5,593 17.0 % 3,223 10.8 %
Depreciation & amortization 1,278 6.3 % 1,340 7.2 % 2,563 7.8 % 2,672 8.9 %
Stock option expense 31 0.2 % 29 0.2 % 58 0.2 % 72 0.2 %
Other gains and (losses), net - 0.0 % 2 0.0 % - 0.0 % - 0.0 %
Gain on sales of assets   -       0.0 %   (2 )     0.0 %   -       0.0 %   -       0.0 %
CCF $ 6,109       30.3 % $ 5,235       28.2 % $ 8,214       24.9 % $ 5,967       19.9 %
 

Corporate and Other segment (a)

Revenue $ 29 $ 33 $ 61 $ 62
Operating loss (19,235 ) (13,869 ) (37,875 ) (27,955 )
Depreciation & amortization 2,630 2,640 5,243 5,090
Stock option expense 533 517 1,044 987
Other gains and (losses), net - 1 - (47 )
(Gain) loss on sales of assets   -     (1 )   -           47        
CCF $ (16,072 ) $ (10,712 ) $ (31,588 )       $ (21,878 )      
 

Casualty Loss (a)

Casualty loss $ (372 ) $ (469 ) $ (546 ) $ (468 )
Insurance proceeds   -     -     -     -  

Operating loss

  (372 )   (469 )   (546 )         (468 )      
CCF $ (372 ) $ (469 ) $

(546

)       $ (468 )      
 

(a) Individual segments exclude effect of Casualty Loss, which is shown separately.

 
GAYLORD ENTERTAINMENT COMPANY AND SUBSIDIARIES
SUPPLEMENTAL FINANCIAL RESULTS
Unaudited
(in thousands, except operating metrics)
               
               
Three Months Ended Jun. 30, Six Months Ended Jun. 30,
  2012     2011     2012     2011  
 
HOSPITALITY OPERATING METRICS:
 

Hospitality Segment

 
Occupancy 79.2 % 73.3 % 74.6 % 71.5 %
Average daily rate (ADR) $ 172.60 $ 173.60 $ 171.33 $ 169.18
RevPAR $ 136.75 $ 127.20 $ 127.75 $ 120.89
OtherPAR $ 181.97 $ 171.64 $ 185.01 $ 174.87
Total RevPAR $ 318.72 $ 298.84 $ 312.76 $ 295.76
 
Revenue $ 233,047 $ 218,173 $ 459,095 $ 427,515
CCF $ 74,380 $ 68,709 $ 144,587 $ 125,175
CCF Margin 31.9 % 31.5 % 31.5 % 29.3 %
 

Gaylord Opryland

 
Occupancy 81.6 % 75.8 % 74.8 % 72.2 %
Average daily rate (ADR) $ 157.31 $ 159.83 $ 155.66 $ 149.17
RevPAR $ 128.41 $ 121.08 $ 116.48 $ 107.71
OtherPAR $ 154.43 $ 157.80 $ 159.67 $ 148.24
Total RevPAR $ 282.84 $ 278.88 $ 276.15 $ 255.95
 
Revenue $ 74,179 $ 73,064 $ 144,848 $ 133,374
CCF $ 23,541 $ 26,316 $ 46,269 $ 40,194
CCF Margin 31.7 % 36.0 % 31.9 % 30.1 %
 

Gaylord Palms (a)

 
Occupancy 85.8 % 73.8 % 84.4 % 76.0 %
Average daily rate (ADR) $ 168.73 $ 165.32 $ 174.65 $ 165.70
RevPAR $ 144.78 $ 122.02 $ 147.38 $ 125.95
OtherPAR $ 221.36 $ 173.00 $ 238.10 $ 201.14
Total RevPAR $ 366.14 $ 295.02 $ 385.48 $ 327.09
 
Revenue $ 44,353 $ 37,747 $ 95,885 $ 83,239
CCF $ 13,891 $ 10,301 $ 34,001 $ 25,516
CCF Margin 31.3 % 27.3 % 35.5 % 30.7 %
 

Gaylord Texan

 
Occupancy 71.3 % 76.2 % 70.7 % 74.3 %
Average daily rate (ADR) $ 172.53 $ 172.15 $ 174.30 $ 180.88
RevPAR $ 122.96 $ 131.24 $ 123.16 $ 134.38
OtherPAR $ 198.15 $ 201.05 $ 212.77 $ 216.82
Total RevPAR $ 321.11 $ 332.29 $ 335.93 $ 351.20
 
Revenue $ 44,478 $ 45,690 $ 92,752 $ 96,050
CCF $ 12,637 $ 14,560 $ 29,157 $ 32,517
CCF Margin 28.4 % 31.9 % 31.4 % 33.9 %

 

Gaylord National

 
Occupancy 78.5 % 67.9 % 72.0 % 66.1 %
Average daily rate (ADR) $ 207.62 $ 211.25 $ 198.96 $ 199.97
RevPAR $ 162.94 $ 143.39 $ 143.22 $ 132.11
OtherPAR $ 206.14 $ 186.46 $ 188.35 $ 178.64
Total RevPAR $ 369.08 $ 329.85 $ 331.57 $ 310.75
 
Revenue $ 67,038 $ 59,914 $ 120,451 $ 112,268
CCF $ 23,357 $ 17,236 $ 33,789 $ 26,901
CCF Margin 34.8 % 28.8 % 28.1 % 24.0 %
 

Nashville Radisson (b)

 
Occupancy 72.4 % 66.6 % 64.3 % 60.9 %
Average daily rate (ADR) $ 107.03 $ 102.90 $ 104.99 $ 97.39
RevPAR $ 77.53 $ 68.53 $ 67.54 $ 59.35
OtherPAR $ 30.31 $ 14.97 $ 27.42 $ 14.03
Total RevPAR $ 107.84 $ 83.50 $ 94.96 $ 73.38
 
Revenue $ 2,999 $ 1,758 $ 5,159 $ 2,584
CCF $ 954 $ 296 $ 1,371 $ 47
CCF Margin 31.8 % 16.8 % 26.6 % 1.8 %
 
(a) Excludes 6,808 room nights that were taken out of service during the three months and six months
ended June 30, 2012 as a result of a rooms renovation program at Gaylord Palms.
 
(b) Includes other hospitality revenue and expense.
           

Gaylord Entertainment Company and Subsidiaries

Reconciliation of Forward-Looking Statements

Unaudited

(in thousands)

 

Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization ("Adjusted EBITDA")

and Consolidated Cash Flow ("CCF") reconciliation:

 
GUIDANCE RANGE
FOR FULL YEAR 2012

Gaylord Hotels

Low High
Estimated Operating Income/(Loss) $ 159,950 $ 169,700
Estimated Depreciation & Amortization   106,000     108,000  
Estimated Adjusted EBITDA $ 265,950 $ 277,700
Estimated Pre-Opening Costs 1,300 1,400
Estimated Non-Cash Lease Expense 5,800 5,900
Estimated Stock Option Expense 950 1,000
Estimated Gains/(Losses), Net   0     0  
Estimated CCF $ 274,000   $ 286,000  
 

Opry and Attractions segment

Estimated Operating Income/(Loss) $ 9,500 $ 11,000
Estimated Depreciation & Amortization   5,400     5,700  
Estimated Adjusted EBITDA $ 14,900 $ 16,700
Estimated Pre-Opening Costs 0 0
Estimated Stock Option Expense 100 250
Estimated Gains/(Losses), Net   0     50  
Estimated CCF $ 15,000   $ 17,000  
 

Corporate and Other segment

Estimated Operating Income/(Loss) ($64,500 ) ($62,250 )
Estimated Depreciation & Amortization   8,500     8,700  
Estimated Adjusted EBITDA ($56,000 ) ($53,550 )
Estimated Stock Option Expense 2,000 2,550
Estimated Gains/(Losses), Net   0     0  
Estimated CCF   ($54,000 )   ($51,000 )




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