GAYLORD ENTERTAINMENT COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Unaudited
(In thousands, except per share data)
Three Months Ended
Mar. 31
---------------------
2006 2005
---------------------
Revenues (a)
$ 242,155 $ 214,013
Operating expenses:
Operating costs (a)
152,227 136,106
Selling, general and administrative (b)
45,866 45,140
Preopening costs
1,062 943
Depreciation and amortization
21,302 20,937
---------------------
Operating income
21,698 10,887
---------------------
Interest expense, net of amounts capitalized
(17,830) (18,091)
Interest income
707 579
Unrealized loss on Viacom stock
(13,235) (17,163)
Unrealized gain on derivatives
15,392 5,637
Income from unconsolidated companies
2,756 1,472
Other gains and (losses), net (c)
6,090 2,450
---------------------
Income (loss) before provision
(benefit)
from income taxes
15,578 (14,229)
Provision (benefit) for income taxes
4,208 (5,183)
---------------------
Income (loss) from continuing
operations 11,370
(9,046)
Income from discontinued operations, net of taxes
1,789 189
---------------------
Net income (loss)
$ 13,159 $ (8,857)
=====================
Basic net income (loss) per share:
----------------------------------
Income (loss) from continuing
operations $ 0.28 $
(0.23)
Income from discontinued operations,
net of taxes
$ 0.05 $ 0.01
---------------------
Net income (loss)
$ 0.33 $ (0.22)
=====================
Fully diluted net income (loss) per share:
------------------------------------------
Income (loss) from continuing
operations
$ 0.27 $ (0.23)
Income from discontinued operations,
net of taxes
$ 0.05 $ 0.01
---------------------
Net income (loss)
$ 0.32 $ (0.22)
=====================
Weighted average common shares for the period:
----------------------------------------------
Basic
40,311 39,983
Fully-diluted
41,395 39,983
(a) Includes certain ResortQuest reimbursed management
contract
expenses incurred in the period of
$10,561 and $9,926 for the
three months ended March 31, 2006
and 2005, respectively.
(b) Includes non-cash lease expense of $1,664 and $1,638
for the three
months ended March 31, 2006 and 2005,
respectively, related to the
effect of recognizing the Gaylord
Palms ground lease expense and
other property lease expense on a
straight-line basis. Also
includes non-cash expense of $0 and
$64 for the three months ended
March 31, 2006 and 2005, respectively,
related to the effect of
recognizing the Naming Rights Agreement
for the Gaylord
Entertainment Center on a straight-line
basis.
(c) Includes a non-recurring $5.4 million gain related
to the
collection of a note receivable, held
by ResortQuest, previously
considered to be uncollectible for
the three months ended March
31, 2006.
GAYLORD ENTERTAINMENT COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
Unaudited
(In thousands)
Mar. 31, Dec. 31,
2006 2005
------------ ------------
ASSETS
Current assets:
Cash and cash equivalents - unrestricted
$ 36,975 $ 59,797
Cash and cash equivalents - restricted
30,414 23,651
Short-term investments
- -
Trade receivables, net
61,115 37,168
Deferred financing costs
26,865 26,865
Deferred income taxes
8,562 8,861
Other current assets
35,070 29,298
Current assets of discontinued operations
1,239 2,649
------------ ------------
Total current assets
200,240 188,289
Property and equipment, net of accumulated
depreciation
1,438,827 1,404,419
Intangible assets, net of accumulated
amortization
26,520 27,828
Goodwill
174,442 178,088
Indefinite lived intangible assets
40,315 40,315
Investments
419,117 429,295
Estimated fair value of derivative assets
236,464 220,430
Long-term deferred financing costs
21,751 29,144
Other long-term assets
16,586 14,136
Long-term assets of discontinued operations
436 646
------------ ------------
Total assets
$ 2,574,698 $ 2,532,590
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt and
capital lease obligations
$ 1,819 $ 1,825
Accounts payable and accrued liabilities
203,455 190,692
Current liabilities of discontinued
operations
1,551 3,650
------------ ------------
Total current liabilities
206,825 196,167
Secured forward exchange contract
613,054 613,054
Long-term debt and capital lease
obligations, net of current portion
605,358 598,475
Deferred income taxes
179,749 177,652
Estimated fair value of derivative
liabilities
4,500 1,994
Other long-term liabilities
91,975 96,564
Long-term liabilities and minority interest
of discontinued operations
108 117
Stockholders' equity
873,129 848,567
------------ ------------
Total liabilities and stockholders' equity $ 2,574,698
$ 2,532,590
============ ============
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 Mar. 31,
---------------------------------
2006
2005
---------------- ----------------
$ Margin $
Margin
---------------- ----------------
Consolidated
------------
Revenue
$242,155 100.0% $214,013 100.0%
Net income (loss)
$ 13,159 5.4% $ (8,857) -4.1%
Loss (income) from discontinued
operations, net of taxes
(1,789) -0.7% (189) -0.1%
(Benefit) provision for income
taxes
4,208 1.7% (5,183) -2.4%
Other (gains) and losses, net
(6,090) -2.5% (2,450) -1.1%
(Income) loss from unconsolidated
companies
(2,756) -1.1% (1,472) -0.7%
Unrealized (gain) loss on
derivatives
(15,392) -6.4% (5,637) -2.6%
Unrealized loss (gain) on Viacom
stock
13,235 5.5% 17,163 8.0%
Interest expense, net
17,123 7.1% 17,512 8.2%
---------------- ----------------
Operating (loss) income
21,698 9.0% 10,887 5.1%
Depreciation & amortization
21,302 8.8% 20,937 9.8%
---------------- ----------------
Adjusted EBITDA
43,000 17.8% 31,824 14.9%
Pre-opening costs
1,062 0.4% 943
0.4%
Non-cash lease expense
1,664 0.7% 1,638
0.8%
Non-cash naming rights for Gaylord
Arena
- 0.0% 64
0.0%
Non-recurring ResortQuest
integration charges (1)
- 0.0% 1,078 0.5%
Stock Option expense
1,646 0.7%
- 0.0%
Other gains and (losses), net (2)
6,090 2.5% 2,450
1.1%
Gain on sale of songs.com
- 0.0% (926) -0.4%
Gain on sale of assets
- 0.0% (825) -0.4%
Loss on disposal of fixed assets
253 0.1% -
0.0%
Dividends received from RHAC, LLC
172 0.1% -
0.0%
---------------- ----------------
CCF
$ 53,887 22.3% $ 36,246 16.9%
================ ================
Hospitality segment
-------------------
Revenue
$165,464 100.0% $142,501 100.0%
Operating income
33,389 20.2% 21,009 14.7%
Depreciation & amortization
16,140 9.8% 15,844 11.1%
Pre-opening costs
1,062 0.6% 943
0.7%
Non-cash lease expense
1,575 1.0% 1,638
1.1%
Stock Option expense
169 0.1% -
0.0%
Other gains and (losses), net
2 0.0% 12
0.0%
---------------- ----------------
CCF
$ 52,337 31.6% $ 39,446 27.7%
================ ================
ResortQuest segment
-------------------
Revenue
$ 59,848 100.0% $ 58,508 100.0%
Operating income
2,107 3.5% 1,800
3.1%
Depreciation & amortization
2,734 4.6% 2,693
4.6%
Non-recurring ResortQuest
integration charges (1)
- 0.0% 1,078 1.8%
Non-cash lease expense
89 0.1% -
0.0%
Stock Option expense
343 0.6% -
0.0%
Other gains and (losses), net(2)
5,430 9.1%
2 0.0%
Dividends received from RHAC, LLC
172 0.3% -
0.0%
---------------- ----------------
CCF
$ 10,875 18.2% $ 5,573 9.5%
================ ================
Opry and Attractions segment
----------------------------
Revenue
$ 16,765 100.0% $ 12,857 100.0%
Operating loss
(1,371) -8.2% (2,156) -16.8%
Depreciation & amortization
1,414 8.4% 1,398 10.9%
Stock Option expense
24 0.1% -
0.0%
Other gains and (losses), net
(266) -1.6% (105) -0.8%
Loss on disposal of fixed assets
253 1.5% -
0.0%
---------------- ----------------
CCF
$ 54 0.3% $ (863)
-6.7%
================ ================
Corporate and Other segment
---------------------------
Revenue
$ 78
$ 147
Operating loss
(12,427) (9,766)
Depreciation & amortization
1,014
1,002
Non-cash naming rights for Gaylord
Arena
-
64
Stock Option expense
1,110
-
Other gains and (losses), net
924 2,541
Gain on sale of songs.com
-
(926)
Gain on sale of assets
-
(825)
---------------- ----------------
CCF
$ (9,379) $ (7,910)
================ ================
(1) Under the terms of Gaylord's bond indentures and credit
facility,
non recurring costs and expenses related
to the merger of
ResortQuest and Gaylord Entertainment
in Nov. 2003 are excluded
from the calculation of Consolidated
Cash Flow ("CCF").
Non-recurring ResortQuest integration
charges include severance
payments, rebranding expenses, technology
integration charges and
other related non-recurring expenses
related to the merger, not to
exceed a total of $10 million.
(2) Includes a non-recurring $5.4 million gain related
to the
collection of a note receivable, held
by ResortQuest, previously
considered to be uncollectible for
the three months ended
March 31, 2006.
GAYLORD ENTERTAINMENT COMPANY AND SUBSIDIARIES
SUPPLEMENTAL FINANCIAL RESULTS
Unaudited
(in thousands, except operating metrics)
Three Months Ended Mar. 31,
---------------------------
2006 2005
------------ ------------
HOSPITALITY OPERATING METRICS:
Gaylord Hospitality Segment
---------------------------
Occupancy
79.9% 74.1%
Average daily rate (ADR)
$ 160.28 $ 147.93
RevPAR
$ 128.08 $ 109.64
OtherPAR
$ 173.88 $ 149.89
Total RevPAR
$ 301.96 $ 259.53
Revenue
$ 165,464 $ 142,501
CCF
$ 52,337 $ 39,446
CCF Margin
31.6% 27.7%
Gaylord Opryland
----------------
Occupancy
77.6% 70.1%
Average daily rate (ADR)
$ 142.78 $ 124.09
RevPAR
$ 110.73 $
86.96
OtherPAR
$ 143.98 $ 105.34
Total RevPAR
$ 254.71 $ 192.30
Revenue
$ 65,757 $ 49,861
CCF
$ 17,275 $
9,785
CCF Margin
26.3% 19.6%
Gaylord Palms
-------------
Occupancy
85.1% 90.3%
Average daily rate (ADR)
$ 193.09 $ 177.26
RevPAR
$ 164.23 $ 160.10
OtherPAR
$ 237.35 $ 238.16
Total RevPAR
$ 401.58 $ 398.26
Revenue
$ 50,816 $ 50,396
CCF
$ 18,762 $ 18,896
CCF Margin
36.9% 37.5%
Gaylord Texan
-------------
Occupancy
81.5% 69.4%
Average daily rate (ADR)
$ 172.19 $ 168.96
RevPAR
$ 140.27 $ 117.24
OtherPAR
$ 204.50 $ 180.30
Total RevPAR
$ 344.77 $ 297.54
Revenue
$ 46,886 $ 40,462
CCF
$ 15,811 $ 10,419
CCF Margin
33.7% 25.8%
Nashville Radisson and Other (1)
--------------------------------
Occupancy
70.5% 60.8%
Average daily rate (ADR)
$ 90.28 $
87.48
RevPAR
$ 63.68 $
53.20
OtherPAR
$ 13.46 $
12.16
Total RevPAR
$ 77.14 $
65.36
Revenue
$ 2,005 $
1,782
CCF
$ 489 $
346
CCF Margin
24.4% 19.4%
RESORTQUEST OPERATING METRICS:
ResortQuest Segment (2)
-----------------------
Occupancy
57.8% 61.2%
ADR
$ 155.13 $ 142.70
RevPAR
$ 89.74 $
87.30
Total Units
15,795 17,664
(1) Includes other hospitality revenue and expense
(2) Excludes units in discontinued markets and units out
of service,
including units damaged by hurricanes.
GAYLORD ENTERTAINMENT COMPANY AND SUBSIDIARIES
RECONCILIATION OF FORWARD-LOOKING STATEMENTS
Unaudited
(in thousands, except operating metrics)
Adjusted Earnings Before Interest,
Taxes, Depreciation and Amortization
("Adjusted EBITDA") and Consolidated
Cash Flow ("CCF") reconciliation:
Guidance Range
(Full Year 2006)
Low High
------------ ------------
Consolidated
------------
Estimated Operating income (loss)
$ 33,960 $ 46,960
Estimated Depreciation & amortization
89,200 89,200
------------ ------------
Estimated Adjusted EBITDA
$ 123,160 $ 136,160
Estimated Pre-opening costs
5,700 5,700
Estimated Non-cash lease expense
6,400 6,400
Estimated Stock Option Expense
6,900 6,900
Estimated Gains and (losses), net
9,840 9,840
------------ ------------
Estimated CCF
$ 152,000 $ 165,000
============ ============
Hospitality segment
-------------------
Estimated Operating income (loss)
$ 83,400 $ 88,400
Estimated Depreciation & amortization
66,300 66,300
------------ ------------
Estimated Adjusted EBITDA
$ 149,700 $ 154,700
Estimated Pre-opening costs
5,700 5,700
Estimated Non-cash lease expense
6,400 6,400
Estimated Stock Option Expense
1,200 1,200
Estimated Gains and (losses), net
-
-
------------ ------------
Estimated CCF
$ 163,000 $ 168,000
============ ============
ResortQuest segment
-------------------
Estimated Operating income (loss)
$ (4,200) $
800
Estimated Depreciation & amortization
12,500 12,500
------------ ------------
Estimated Adjusted EBITDA
$ 8,300 $ 13,300
Estimated Stock Option Expense
1,500 1,500
Estimated Gains and (losses), net
6,200 6,200
------------ ------------
Estimated CCF
$ 16,000 $ 21,000
============ ============
Opry and Attractions segment
----------------------------
Estimated Operating income (loss)
$ 4,160 $
5,160
Estimated Depreciation & amortization
5,600 5,600
------------ ------------
Estimated Adjusted EBITDA
$ 9,760 $ 10,760
Estimated Stock Option Expense
100 100
Estimated Gains and (losses), net
140 140
----------- -----------
Estimated CCF
$ 10,000 $ 11,000
============ ============
Corporate and Other segment
---------------------------
Estimated Operating income (loss)
$ (49,400) $ (47,400)
Estimated Depreciation & amortization
4,800 4,800
------------ ------------
Estimated Adjusted EBITDA
$ (44,600) $ (42,600)
Estimated Stock Option Expense
4,100 4,100
Estimated Gains and (losses), net
3,500 3,500
------------ ------------
Estimated CCF
$ (37,000) $ (35,000)
============ ============
Web Cast and Replay
Gaylord Entertainment will hold a conference call to discuss
this release today at 10 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 made
available shortly after the call and will run for at least 30 days.
About Gaylord Entertainment
Gaylord Entertainment (NYSE: GET - News), a leading hospitality
and entertainment company based in Nashville, Tenn., owns and operates
three industry-leading brands - Gaylord Hotels (www.gaylordhotels.com),
its network of upscale, meetings-focused resorts, ResortQuest (www.resortquest.com),
the nation's largest vacation rental property management company, and the
Grand Ole Opry (www.opry.com), the weekly showcase of country music's finest
performers for 80 consecutive years. The Company's entertainment brands
and properties include the Radisson Hotel Opryland, Ryman Auditorium, General
Jackson Showboat, Gaylord Springs, Wildhorse Saloon, and WSM-AM. For more
information about the Company, visit www.gaylordentertainment.com.
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. These forward-looking statements are subject to risks and uncertainties
that could cause actual results to differ materially from the statements
made. These include the risks and uncertainties associated with economic
conditions affecting the hospitality business generally, the timing of
the opening of new facilities, increased costs associated with building
and developing new hotel facilities, business levels at the Company's hotels,
risks associated with ResortQuest's business, the Company's ability to
successfully integrate and achieve operating efficiencies at ResortQuest,
and the ability to obtain financing for new developments. The Company's
ability to achieve forecasted results for its ResortQuest business depends
upon levels of occupancy at ResortQuest units under management, returning
damaged units to service on a timely basis and the successful roll-out
of new ResortQuest technology initiatives. 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 Securities and Exchange
Commission. 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.
(1) The Company calculates revenue per available room
("RevPAR") for
its hospitality segment by dividing
room sales by room nights
available to guests for the period.
The Company calculates revenue
per available room ("RevPAR") for
its ResortQuest segment by
dividing gross lodging revenues by
room nights available to guests
for the period. The Company's ResortQuest
segment revenue
represents a portion of the gross
lodging revenues based on the
services provided by ResortQuest.
ResortQuest segment revenue and
operating expenses include certain
reimbursed management contract
expenses incurred in the period of
$10.6 million and $9.9 million
for the three months ended March 31,
2006 and 2005, respectively.
(2) The Company calculates total revenue per available
room ("Total
RevPAR") 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
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 the effect
of the changes in fair value
of the Viacom stock we own and changes
in the fair value of the
derivative associated with our secured
forward exchange contract
and gains on the sale of assets. In
accordance with generally
accepted accounting principles, the
changes in fair value of the
Viacom stock and derivatives are not
included in determining our
operating income (loss). 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.
(4) As discussed in footnote 3 above, Adjusted EBITDA
is used herein
as essentially operating income 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 8% and 6.75% senior notes)
also excludes the impact of
pre-opening costs, the non-cash portion
of the naming rights and
Florida ground lease expense, non-recurring
ResortQuest
integration charges which when added
to other expenses related to
the merger do not exceed $10 million,
stock option expense, the
non-cash gain on the sale of the songs.com
domain name, the
non-cash gain or loss on the disposal
of other fixed assets, and
adds (subtracts) other gains (losses)
(including the $5.4 million
gain on the collection of a note receivable
held by ResortQuest)
and dividends received from our minority
investment in RHAC,
L.L.C., which owns the Aston Waikiki
Beach Hotel. 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 or segment operating income
is included as part of the
Supplemental Financial Results contained
in this press release. |