Ryman Hospitality Properties Reports Fourth Quarter & Full Year 2013 Results
February 28, 2014 5:37am
– Gross Advanced Group Bookings for all Future Periods Increased 20.5 Percent Over Fourth Quarter 2012 –
– Full Year 2013 Net Income at $118.4 million –
– Full Year 2013 Adjusted Funds From Operations excluding REIT conversion costs at $190.2 million –
– Gaylord Texan initiates and accelerates room renovation project in December 2013 –
– Declares First Quarter 2014 dividend of $0.55 per share an increase of 10% over prior quarter dividend –
– Issues 2014 Guidance –
NASHVILLE, Tenn.--Feb. 28, 2014-- Ryman Hospitality Properties, Inc. (NYSE:RHP), a lodging real estate investment trust ("REIT") specializing in group-oriented, destination hotel assets in urban and resort markets, today reported financial results for the fourth quarter and full year ended December 31, 2013.
Colin V. Reed, chairman, chief executive officer and president of Ryman Hospitality Properties, stated,
“Although 2013 was certainly a year in which we navigated our fair share of transitional challenges, we are generally pleased with how our business performed in the fourth quarter and our position entering 2014. While the fourth quarter came in below our expectations due to a few unanticipated events, we are encouraged by group dynamics that evolved throughout the quarter. Our bookings performance during the fourth quarter was certainly a highlight, as we booked over 772,000 gross room nights, a more than 20 percent increase year-over-year and the highest booking quarter since 2010. On a net room night basis, we booked over 637,000 room nights, a year-over-year increase of 37 percent. Our group room night bookings entering 2014 were 4.7 percent higher than they were entering 2013. In addition, our group mix for these bookings is more favorable with a 10 percent increase in corporate group room nights, which bodes well for outside-the room spending. These bookings results reflect the work we have done to improve the sales process with Marriott, and we are confident that we will continue to see these enhancements drive results in 2014.”
“Additional positive highlights during the fourth quarter include a significant decrease in in-the-year, for-the-year cancellations and attrition rates across our hotels. We saw in-the-year, for-the-year cancellations decline nearly 70 percent in the fourth quarter compared to the same period last year, and attrition rates came in at 10.7 percent for the fourth quarter 2013 compared to 12.2 percent for third quarter 2013 and 12.5 percent in fourth quarter 2012. While impacted by severe winter weather in December and accelerated rooms renovation at the Gaylord Texan, our transient segment continued to show growth with a 13.5 percent increase in room nights in the fourth quarter over the prior year quarter, while full year 2013 transient room nights increased 20.7 percent compared to full year 2012. In terms of our bottom line, we remain focused on continuing to work with Marriott to improve margin performance and realize cost synergies, and we expect to see continued improvement in the coming quarters. In aggregate, all of these factors contribute to our view that our business is well positioned for 2014 and beyond.”
Fourth Quarter and Full Year 2013 Results (as compared to Fourth Quarter and Full Year 2012)
For the Company’s definitions of RevPAR, Total RevPAR, Adjusted EBITDA, Retail Adjusted Revenue, Retail Adjusted Total RevPAR, and Adjusted FFO as well as a reconciliation of the non-GAAP financial measure Adjusted EBITDA to Net Income, a reconciliation of the non-GAAP financial measure Retail Adjusted Revenue to revenue, and a reconciliation of the non-GAAP financial measure Adjusted FFO to Net Income, see “Retail Adjusted Revenue”, “Calculation of RevPAR and Total RevPAR”, “Non-GAAP Financial Measures”, and “Supplemental Financial Results” below.
Property-level results and operating metrics for the fourth quarter of 2013 and 2012 are presented in greater detail below and under “Supplemental Financial Results.”
Reed continued, “We saw some encouraging signs at our properties in the fourth quarter, highlighted by Gaylord Palms which delivered a 7.7 percent increase in RevPAR and a 20.7 percent increase in Adjusted EBITDA, after excluding the sales and marketing expense reimbursement from Osceola County. Gaylord Opryland and Gaylord National also each performed well, despite harsh winter weather in December in Nashville and what continues to be a challenging environment in Washington D.C. amidst ongoing government uncertainty. Gaylord Opryland and Gaylord National also each delivered strong booking performances in the fourth quarter, allaying concerns over the impact of new supply entering these two markets.
“Gaylord Texan was an outlier in the fourth quarter, as a severe winter storm in December had a significant negative impact on the property’s holiday events and was responsible for an estimated $2.4 million loss of revenue. The room refurbishment underway at the property was also a headwind, with over 11,400 room nights out of service in the quarter for the renovation.”
Opry and Attractions
Revenue for the Opry and Attractions segment rose 11.3 percent to $19.3 million in the fourth quarter of 2013 from $17.3 million in the prior-year quarter. Adjusted EBITDA declined 2.0 percent to $4.2 million in the fourth quarter of 2013, from $4.3 million in the prior-year quarter. Full year 2013 was a banner year for the Opry and Attractions segment in terms of revenue and profitability aided by the increased profile of the city of Nashville among various media outlets and the popularity of the TV show Nashville. Full year 2013 revenues increased 7.8 percent to $76.1 million while Adjusted EBITDA increased 7.2 percent to $20.1 million over full year 2012.
Corporate and Other Adjusted EBITDA totaled a loss of $2.3 million in the fourth quarter of 2013 compared to a loss of $8.2 million in the same period last year, or a 71.9 percent improvement. For full year 2013, Corporate and Other Adjusted EBITDA totaled a loss of $16.8 million, or an improvement of 58.7 percent over the same period last year. During the quarter, the cash-based deferred compensation plan for our board of directors was terminated and replaced with a new compensation plan based on restricted stock unit awards. The result of this plan change was a one-time $3.4 million non-cash charge to equity based compensation, offset by a $3.4 million reversal of cash compensation cost, which positively impacted Adjusted EBITDA for the fourth quarter and full year 2013. The improvement in Corporate and Other Adjusted EBITDA in the fourth quarter and full year 2013 as compared to the prior year periods is directly related to the transition of the Company to a REIT and resulting cost savings, which have exceeded our previously discussed cost synergy estimates.
REIT Conversion Costs
The Company has segregated all conversion costs associated with its conversion to a REIT and reported these amounts separately as REIT conversion costs in the accompanying financial information. During the fourth quarter of 2013, the Company incurred $0.8 million of costs associated with this conversion compared to $44.2 million in the fourth quarter of 2012. For full year 2013, the Company incurred $22.2 million of conversion costs compared to $102.0 million for full year 2012.
The Company paid its fourth quarter cash dividend of $0.50 per share of common stock on January 15, 2014 to stockholders of record on December 27, 2013. Including the fourth quarter cash dividend payment, the Company paid out a total of $2.00 per share of common stock for full year 2013.
Today, the Company declared its first quarter cash dividend of $0.55 per share of common stock payable on April 14, 2014 to stockholders of record on March 28, 2014. It is the Company’s current plan to distribute total annual dividends of approximately $2.20 per share in cash in equal quarterly payments in April, July, October, and January, subject to the board’s future determinations as to the amount of quarterly distributions and the timing thereof.
As a result of the declaration of the dividend, effective immediately after the close of business on March 26, 2014, the conversion rate of the Company’s outstanding 3.75 percent convertible notes due 2014 will adjust from a conversion rate of 46.7774 per $1,000 principal amount of notes, which is equivalent to a conversion price of $21.38, to a conversion rate of 47.4034, which is equivalent to a conversion price of $21.10. Pursuant to customary anti-dilution adjustments, effective immediately after the close of business on March 26, 2014, the strike price of our call options related to the convertible notes will be adjusted to $21.10 per share of common stock and the exercise price of the common stock warrants we issued will be adjusted in a similar manner.
Balance Sheet/Liquidity Update
As of December 31, 2013, the Company had total debt outstanding of $1,154.4 million and unrestricted cash of $61.6 million. At December 31, 2013, $509.5 million of borrowings were drawn under the Company’s $1 billion credit facility, and the lending banks had issued $6.0 million in letters of credit, which left $484.5 million of availability for borrowing under the credit facility.
The following business performance outlook is based on current information as of February 28, 2014. The Company does not expect to update the guidance provided below before next quarter’s earnings release. However, the Company may update its full business outlook or any portion thereof at any time for any reason.
Reed continued, “We believe 2014 will be a solid year for our company particularly given our group pace entering the year as well as the continued strength of the transient segment. We entered 2014 with 4.8 percent more group room nights on the books than we had at the same point last year for 2013. This strong demand growth and favorable supply dynamics in the markets in which we operate should allow for improved pricing power and higher average daily rates, which we are reflecting in anticipated RevPAR growth of 4.0% to 6.0% versus 2013. Coupled with the strength of our group pace entering the year, we also have a more favorable mix of group business with a 10 percent increase in higher rated corporate group room nights, which should positively impact outside-of-the-room spending. As such, we believe we will generate between 5.0% and 7.0% growth in Total RevPAR over 2013. We are providing full year 2014 Adjusted EBITDA guidance for our Hospitality segment of $265.0 to $281.0 million. This includes the impact of completing the room renovation at Gaylord Texan, which we believe will result in approximately 32,276 room nights out of service for 2014. Our 2014 Adjusted EBITDA guidance for Opry and Attractions is $20.0 to $22.0 million and Corporate & Other guidance for Adjusted EBITDA in 2014 is a loss of $23.0 to $21.0 million. As a result, our guidance for 2014 Adjusted EBITDA on a consolidated basis is expected to be $262.0 to $282.0 million.
1. Hospitality segment guidance assumes 32,276 room nights out of service in 2014 due to the renovation of rooms at Gaylord Texan. The out of service rooms do not impact total available room count for calculating hotel metrics (e.g., RevPAR and Total RevPAR).
2. Estimated interest income of $12.0 million from Gaylord National bonds reported in hospitality segment guidance in 2014 and historical results in 2013.
3. Adjusted FFO guidance includes a deduction for maintenance capital expenditures of $41.0 to $43.0 million.
For our definitions of RevPAR, Total RevPAR, Adjusted EBITDA, and Adjusted FFO as well as a reconciliation of the non-GAAP financial measure Adjusted EBITDA to Net Income, and a reconciliation of the non-GAAP financial measure Adjusted FFO to Net Income, see “Calculation of RevPAR and Total RevPAR”, “Non-GAAP Financial Measures”, “Supplemental Financial Results” and “Reconciliation of Forward-Looking Statements” below.
Earnings Call information
Ryman Hospitality Properties will hold a conference call to discuss this release today at 10:00 a.m. ET. Investors can listen to the conference call over the Internet at www.rymanhp.com. To listen to the live call, please go to the Investor Relations section of the website (Investor Relations/Presentations, Earnings, and Webcasts) at least 15 minutes prior to the call to register, download and install any necessary audio software. For those who cannot listen to the live broadcast, a replay will be available shortly after the call and will run for at least 30 days.
To view all corresponding tables and supplemental data associated with this release please visit http://ir.rymanhp.com/phoenix.zhtml?c=72635&p=irol-newsArticle&ID=1904833&highlight=
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q4 2013 results
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