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Gaylord Entertainment Co. Reports Third Quarter Earnings |
NASHVILLE, Tenn. - (BUSINESS WIRE) - Nov. 6, 2006 - Gaylord Entertainment Co. (NYSE: GET) today reported its financial results for the third quarter of 2006.
For the third quarter ended September 30, 2006:
-- Consolidated revenue increased 11.5 percent to $231.9 million
from $208.0 million in the same period last year, led by solid
revenue growth in the hospitality segment.
-- Income from continuing operations was $5.7 million, or $0.14
per share, compared to a loss from continuing operations of
$9.5 million, or $0.24 per share, in the prior-year quarter.
-- Hospitality segment total revenue grew 16.0 percent to $142.3
million, compared to $122.6 million in the prior-year quarter,
driven by solid performance from Gaylord Palms and Gaylord
Opryland. Gaylord Hotels revenue per available room(1)
("RevPAR") and total revenue per available room(2) ("Total
RevPAR") increased 11.4 percent and 14.5 percent,
respectively, compared to the third quarter of 2005.
-- Consolidated adjusted EBITDA(3) was $28.8 million compared to
$21.2 million in the prior-year quarter.
-- Consolidated Cash Flow(4) ("CCF") increased 44.4 percent to
$38.4 million in the third quarter of 2006 compared to $26.6
million in the same period last year.
"As expected, our hospitality business had another good quarter," said Colin V. Reed, chairman and chief executive officer of Gaylord Entertainment. "The Gaylord Hotels brand continues to attract the highest quality customers by offering them a unique experience for their group meeting needs. This fundamental difference drives our strong occupancy rates, robust outside the room spending and growth in CCF. Our continuously strong performance is testimony to the service we provide to our customers and the loyalty they provide us in return."
"We continue to work hard to extend the brand into new and important locations and our development in Prince George's County and our plans for Chula Vista remain on track. As our meeting planner relationships continue to strengthen in both quality and quantity, we intend to continue to explore new opportunities to satisfy their unique needs in ways that provide attractive returns to our shareholders."
Segment Operating Results
Hospitality
Key components of the Company's hospitality segment performance in the third quarter of 2006 include:
-- Gaylord Hotels' Total RevPAR increased 14.5 percent to
$257.62, compared to $224.95 in the third quarter of 2005.
Gaylord Hotels RevPAR increased 11.4 percent to $110.99
compared to $99.59 in the prior-year quarter. Occupancy
increased 7.8 percentage points to 77.1 percent. Total RevPAR
was favorably impacted by higher spending on banquet revenue.
Average Daily Rate (ADR) was $143.88.
-- CCF increased 39.2 percent to $30.2 million in the third
quarter of 2006 compared to $21.7 million in the same period
last year. CCF margins for the hospitality segment increased
353 basis points to 21.2 percent from 17.7 percent in the
prior-year quarter.
-- Gaylord Hotels' same-store net definite bookings for all
future years, excluding Gaylord National, decreased 37.5
percent to 220,471 net definite room nights booked in the
third quarter of 2006. Gaylord Hotels' year-to-date same-store
net definite bookings for all future years increased 1.8
percent to 826,993 net definite room nights versus 812,518
room nights booked in the first three quarters of 2005.
-- Gaylord National booked an additional 80,585 net definite room
nights in the third quarter of 2006, bringing National's
cumulative net definite room nights to 726,544.
-- Gaylord Hotels' rotational bookings continue to be strong at
40.9 percent on a trailing 12 month basis, a 2.2 percent
decrease versus the second quarter 2006.
"Our core hospitality business remains the catalyst of our impressive performance this year, posting a CCF improvement of 39.2 percent as our properties continue to illustrate their network-wide strength," continued Reed. "The Palms had a strong quarter, growing Total RevPAR by 20 percent and proving that our brand offers customers a unique experience and a clear better option for large conventions in the competitive Orlando market. I am also pleased that our occupancy levels in our hotels business remained strong at 77 percent, which was led by our largest property Opryland. Our future bookings for the quarter were as expected and we remain on track to meet our guidance of 1.4 - 1.5 million same-store room nights booked based on our very strong bookings pace to date."
At the property level, Gaylord Opryland achieved revenues of $65.1 million in the third quarter of 2006, a 22.8 percent increase compared to the prior-year quarter. RevPAR increased 13.6 percent to $114.53 from $100.85 in the third quarter of 2005 and Total RevPAR grew 19.4 percent to $254.40 in the third quarter of 2006 compared to $213.08 in the prior-year quarter. RevPAR and Total RevPAR grew primarily on the strength of a 10.2 percentage point occupancy increase which drove outside the room spend. ADR decreased 0.5 percent to $139.48 compared to the prior year quarter.
Opryland CCF grew 70.9 percent to $15.4 million versus $9.0 million in the third quarter of 2006. CCF margin increased by 668 basis points to 23.7 percent due to greater operational leverage driven by higher occupancy levels and fewer rooms having been out of service for the rooms renovation program. Third quarter 2006 operating statistics reflect 8,941 room nights removed from available inventory due to the room renovation program versus 16,001 room nights for the same quarter in 2005. The room renovation resumed this year in July and will continue into the fourth quarter of 2006, with the renovation of an additional 256 rooms, or approximately 9,400 room nights. As part of the multi-year room renovation program, the Company expects to take approximately 48,300 room nights out of service at various times in 2007.
Gaylord Palms posted revenues of $37.5 million in the third quarter of 2006, an increase of 20.3 percent compared to $31.2 million in the prior-year quarter. Gaylord Palms generated RevPAR growth of 16.8 percent from the prior year quarter to $111.86, driven by a 11.6 percentage point increase in occupancy and a 1.9 percent decrease in ADR. Total RevPAR was $289.77, up 20.3 percent from $240.85 in the third quarter of 2005 driven primarily by the increase in occupancy and a 24.5 percent increase in Food and Beverage revenue. CCF increased 62.2 percent to $7.4 million compared to the prior-year quarter of $4.6 million. CCF margin for the hotel was 19.8 percent, up 510 basis points from the prior-year quarter driven by operational efficiencies due to the increased occupancy and a greater focus on the group customer.
Gaylord Texan revenues increased 3.1 percent to $37.5 million in the third quarter of 2006 compared to $36.4 million in the prior-year quarter. RevPAR increased by 4.5 percent to $113.35 in the third quarter of 2006, due to an ADR increase of 2.4 percent to $154.12 and a 1.4 percentage point increase in occupancy. Total RevPAR improved 3.1 percent to $269.99 in the third quarter of 2006 from $261.94 in the same period last year. CCF decreased 9.2 percent to $6.8 million from $7.5 million in the third quarter of 2005 due in part to property tax consulting fees and costs associated with the new Glass Cactus nightclub. The decline in CCF led to a CCF margin of 18.2 percent, or a 247 basis point decrease compared to the third quarter of 2005.
Development Update
Progress continues on the Gaylord National development in Prince George's County for the 2,000 room property set on the banks of the Potomac River. The National booked 80,585 room nights during the quarter, bringing the total number of advanced bookings for the property to 726,544 room nights. Negotiations continue with the Unified Port of San Diego and the City of Chula Vista to build a resort convention hotel on the San Diego Bayfront.
"Our expansion plans remain on target and we are excited to bring our high-value customers to new markets such as Prince George's County, Maryland," said Reed. "Advanced bookings for the Gaylord National surpassed 725,000 room nights, a validation that our 500-room expansion was the right decision. The hotel is expected to open in the beginning of the second quarter of 2008, with the 500-room expansion opening in the third quarter of 2008. We are also quite pleased with the progress on our continued negotiations in Chula Vista, and continue to believe that the opportunity for a West Coast rotational option will yield significant results for the entire network."
ResortQuest
ResortQuest revenues from continuing operations were $68.1 million, an increase of 4.1 percent compared to the prior-year quarter. ResortQuest operating income was $8.1 million compared to $4.9 million, an increase of 67.7 percent. ResortQuest RevPAR increased 2.4 percent to $111.07 due to a 3.8 percent increase in ADR. Occupancy declined 0.8 percentage points as a result of continued weakness in our Northwest Florida markets. ResortQuest CCF was $13.0 million compared to $9.2 million in the third quarter of 2005. In the third quarter of 2006, ResortQuest had 14,925 units under exclusive management, excluding units reflected in discontinued operations.
ResortQuest revenue, operating income, and CCF were favorably impacted by the net receipt of $4.9 million in connection with the Company's settlement of its business interruption insurance claim related to hurricanes Ivan, Dennis, and Charley. This receipt has been included in revenue in the accompanying condensed consolidated statement of operations for the three months and nine months ended September 30, 2006.
Also during the third quarter of 2006, as a result of a significant adverse change in the business climate at one of the markets of ResortQuest, we recorded an impairment charge of $0.8 million related to goodwill and certain intangible assets of this market.
"ResortQuest performance came in as expected. Our Southeast region was affected by softness in both the real estate and vacation rental markets as we continue to see some measure of customer reluctance to travel to Florida and Gulf Coast areas which have been affected by hurricanes in the past few years."
Opry and Attractions
Opry and Attractions segment revenues increased 8.8 percent to $21.5 million in the third quarter of 2006 compared to $19.7 million in the third quarter of 2005. Opry and Attractions reported operating income of $3.0 million for the period compared to operating income of $1.6 million in the third quarter of 2005. CCF increased 54.2 percent to $4.6 million in the third quarter of 2006 from $3.0 million in the prior-year quarter.
Corporate and Other
Corporate and Other operating loss totaled $13.6 million in the third quarter of 2006 compared to an operating loss of $9.0 million in the same period last year. Corporate and Other CCF loss in the third quarter of 2006 increased 28.3 percent to a loss of $9.4 million compared to a loss of $7.3 million in the prior-year quarter.
Bass Pro Shops
For the quarter ended September 30, 2006, Gaylord's equity income from its investment in Bass Pro Group, LLC was $3.6 million.
Liquidity
As of September 30, 2006, the Company had long-term debt outstanding, including current portion, of $671.7 million and unrestricted and restricted cash of $53.7 million. $497.4 million of the Company's $600.0 million credit facility remains undrawn at the end of the third quarter of 2006, which includes $12.6 million in letters of credit.
The Company continues to evaluate its financing alternatives for the announced development projects. Such plans could include incurrence of additional indebtedness, sale of non-core assets, or a combination thereof.
Outlook
The following outlook is based on current information as of November 6, 2006. The Company does not expect to update guidance until next quarter's earnings release. However, the Company may update its full business outlook or any portion thereof at any time for any reason.
"In summary, our hospitality business remains strong with solid bookings, continued CCF improvement, high occupancy, and impressive Total RevPAR growth. Our ability to fill openings in booking patterns during the third quarter, which is typically a low demand period, highlights the growing accuracy to which we are able to match demand with availability. As we move into the fourth quarter, we expect continued strong results across our network, which we believe will bring another strong quarter of advanced bookings."
"Due to the Company's strong performance during the first three quarters of the year, we are maintaining our 2006 guidance levels as previously announced."
Gaylord's 2006 outlook reflects approximately 18,600 room nights out of service due to the room renovation at the Gaylord Opryland.
2006
CURRENT
----------------------------------------------------------------------
Consolidated Revenue $924 - 961 Million
Consolidated Cash Flow
Gaylord Hotels $166 - 171 Million
ResortQuest $16 - 21 Million
Opry and Attractions $10 - 11 Million
Corporate and Other $(37 - 35 Million)
--------------------------------
Consolidated CCF $155 - 168 Million
Gaylord Hotels advance bookings 1.4 - 1.5 Million
Gaylord Hotels RevPAR 8% - 10%
Gaylord Hotels Total RevPAR 8% - 10%
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), 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 and include the risk factors described in our Annual Report on Form 10-K for the fiscal year ended December 31, 2005. 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 $12.5 million and $11.4 million for the three months ended September 30, 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 and CBS 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 and CBS 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, impairment charges, 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 gains and losses on the disposal of certain 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 investments in unconsolidated companies. 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.
GAYLORD ENTERTAINMENT COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Unaudited
(In thousands, except per share data)
Three Months Ended Nine Months Ended
Sep. 30 Sep. 30
------------------- -------------------
2006 2005 2006 2005
------------------- -------------------
Revenues (a) (b) $231,907 $207,951 $708,634 $645,893
Operating expenses:
Operating costs (b) 152,573 141,993 456,002 420,854
Selling, general and
administrative (c) 47,251 43,536 141,535 134,517
Impairment charge 832 - 832 -
Preopening costs 2,432 1,213 4,997 3,329
Depreciation and amortization 21,686 20,899 64,287 62,023
------------------- -------------------
Operating income 7,133 310 40,981 25,170
------------------- -------------------
Interest expense, net of
amounts capitalized (17,761) (18,474) (53,613) (54,449)
Interest income 853 662 2,295 1,820
Unrealized gain (loss) on
Viacom stock 13,453 10,828 820 (37,070)
Unrealized (loss) gain on
derivatives (5,601) (10,753) 13,730 29,233
Income from unconsolidated
companies 2,571 2,098 8,374 1,980
Other gains and (losses), net
(d) 1,972 1,102 8,698 6,022
------------------- -------------------
Income (loss) before
(benefit) provision for
income taxes 2,620 (14,227) 21,285 (27,294)
(Benefit) provision for income
taxes (3,127) (4,753) 9,937 (8,740)
------------------- -------------------
Income (loss) from
continuing operations 5,747 (9,474) 11,348 (18,554)
Income (loss) from
discontinued operations, net
of taxes 564 (2,143) 2,961 (2,331)
------------------- -------------------
Net income (loss) $ 6,311 $(11,617) $ 14,309 $(20,885)
=================== ===================
Basic net income (loss) per
share:
------------------------------
Income (loss) from
continuing operations $ 0.14 $ (0.24) $ 0.28 $ (0.46)
Income (loss) from
discontinued operations,
net of taxes $ 0.02 $ (0.05) $ 0.07 $ (0.06)
------------------- -------------------
Net income (loss) $ 0.16 $ (0.29) $ 0.35 $ (0.52)
=================== ===================
Fully diluted net income
(loss) per share:
------------------------------
Income (loss) from
continuing operations $ 0.14 $ (0.24) $ 0.27 $ (0.46)
Income (loss) from
discontinued operations,
net of taxes $ 0.01 $ (0.05) $ 0.07 $ (0.06)
------------------- -------------------
Net income (loss) $ 0.15 $ (0.29) $ 0.34 $ (0.52)
=================== ===================
Weighted average common shares
for the period:
------------------------------
Basic 40,655 40,234 40,521 40,126
Fully-diluted 41,636 40,234 41,563 40,126
(a) Includes a net recovery of $4,922 received in connection with the
Company's settlement of its business interruption insurance claim
related to hurricanes Ivan, Dennis, and Charley for the three and
nine months ended September 30, 2006.
(b) Includes certain ResortQuest reimbursed management contract
expenses incurred in the period of $12,475 and $11,398 for the
three months ended September 30, 2006 and 2005, respectively, and
$33,422 and $31,614 for the nine months ended September 30, 2006
and 2005, respectively.
(c) Includes non-cash lease expense of $1,627 and $1,638 for the three
months ended September 30, 2006 and 2005, respectively, and $4,917
and $4,914 for the nine months ended September 30, 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.
(d) 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 nine months ended September
30, 2006.
GAYLORD ENTERTAINMENT COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
Unaudited
(In thousands)
Sep. 30 Dec. 31,
2006 2005
----------- -----------
ASSETS
Current assets:
Cash and cash equivalents - unrestricted $ 40,919 $ 58,719
Cash and cash equivalents - restricted 12,819 19,688
Short-term investments 357,396 -
Trade receivables, net 51,261 37,154
Estimated fair value of derivative assets 236,749 -
Deferred financing costs 17,238 26,865
Deferred income taxes - 8,861
Other current assets 34,692 29,276
Current assets of discontinued operations 9 7,726
----------- -----------
Total current assets 751,083 188,289
Property and equipment, net of accumulated
depreciation 1,550,606 1,404,211
Intangible assets, net of accumulated
amortization 24,048 27,768
Goodwill 173,323 177,556
Indefinite lived intangible assets 40,315 40,315
Investments 82,710 429,295
Estimated fair value of derivative assets - 220,430
Long-term deferred financing costs 16,359 29,144
Other long-term assets 20,361 14,135
Long-term assets of discontinued operations - 1,447
----------- -----------
Total assets $2,658,805 $2,532,590
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt and
capital lease obligations $ 2,247 $ 1,825
Secured forward exchange contract 613,054 -
Accounts payable and accrued liabilities 220,779 186,540
Deferred income taxes 85,086 -
Current liabilities of discontinued
operations 584 7,802
----------- -----------
Total current liabilities 921,750 196,167
Secured forward exchange contract - 613,054
Long-term debt and capital lease obligations,
net of current portion 669,423 598,475
Deferred income taxes 89,678 177,652
Estimated fair value of derivative liabilities 2,443 1,994
Other long-term liabilities 91,399 96,488
Long-term liabilities and minority interest of
discontinued operations 279 193
Stockholders' equity 883,833 848,567
----------- -----------
Total liabilities and stockholders' equity $2,658,805 $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 Sep. 30,
---------------------------------
2006 2005
---------------- ----------------
$ Margin $ Margin
---------------- ----------------
Consolidated
-----------------------------------
Revenue (1) $231,907 100.0% $207,951 100.0%
Net income (loss) $ 6,311 2.7% $(11,617) -5.6%
Loss (income) from discontinued
operations, net of taxes (564) -0.2% 2,143 1.0%
(Benefit) provision for income
taxes (3,127) -1.3% (4,753) -2.3%
Other (gains) and losses, net (1,972) -0.9% (1,102) -0.5%
(Income) loss from unconsolidated
companies (2,571) -1.1% (2,098) -1.0%
Unrealized (gain) loss on
derivatives 5,601 2.4% 10,753 5.2%
Unrealized loss (gain) on Viacom
stock (13,453) -5.8% (10,828) -5.2%
Interest expense, net 16,908 7.3% 17,812 8.6%
---------------- ----------------
Operating income 7,133 3.1% 310 0.1%
Depreciation & amortization 21,686 9.4% 20,899 10.0%
---------------- ----------------
Adjusted EBITDA 28,819 12.4% 21,209 10.2%
Pre-opening costs 2,432 1.0% 1,213 0.6%
Impairment charge 832 0.4% - 0.0%
Other non-cash expenses 1,627 0.7% 1,638 0.8%
Non-recurring ResortQuest
integration charges (2) - 0.0% 348 0.2%
Stock Option expense 1,463 0.6% - 0.0%
Other gains and (losses), net (3) 1,972 0.9% 1,102 0.5%
Losses and (gains) on sales of
assets - 0.0% 641 0.3%
Dividends received 1,244 0.5% 427 0.2%
---------------- ----------------
CCF $ 38,389 16.6% $ 26,578 12.8%
================ ================
Hospitality segment
-----------------------------------
Revenue $142,250 100.0% $122,623 100.0%
Operating income 9,663 6.8% 2,910 2.4%
Depreciation & amortization 16,115 11.3% 15,861 12.9%
Pre-opening costs 2,432 1.7% 1,213 1.0%
Other non-cash expenses 1,578 1.1% 1,638 1.3%
Stock Option expense 431 0.3% - 0.0%
Other gains and (losses), net (38) 0.0% (139) -0.1%
Losses on sales of assets - 0.0% 202 0.2%
---------------- ----------------
CCF $ 30,181 21.2% $ 21,685 17.7%
================ ================
ResortQuest segment
-----------------------------------
Revenue (1) $ 68,149 100.0% $ 65,464 100.0%
Operating income 8,132 11.9% 4,850 7.4%
Depreciation & amortization 2,894 4.2% 2,677 4.1%
Impairment charge 832 1.2% - 0.0%
Non-recurring ResortQuest
integration charges (2) - 0.0% 348 0.5%
Other non-cash expenses 49 0.1% - 0.0%
Stock Option expense 258 0.4% - 0.0%
Other gains and (losses), net (3) 852 1.3% 937 1.4%
Dividends received - 0.0% 427 0.7%
Losses on sales of assets - 0.0% - 0.0%
---------------- ----------------
CCF $ 13,017 19.1% $ 9,239 14.1%
================ ================
Opry and Attractions segment
-----------------------------------
Revenue $ 21,461 100.0% $ 19,727 100.0%
Operating income 2,965 13.8% 1,577 8.0%
Depreciation & amortization 1,404 6.5% 1,375 7.0%
Stock Option expense 174 0.8% - 0.0%
Other gains and (losses), net 8 0.0% - 0.0%
Losses and (gains) on sales of
assets - 0.0% - 0.0%
---------------- ----------------
CCF $ 4,551 21.2% $ 2,952 15.0%
================ ================
Corporate and Other segment
-----------------------------------
Revenue $ 47 $ 137
Operating loss (13,627) (9,027)
Depreciation & amortization 1,273 986
Other non-cash expenses - -
Stock Option expense 600 -
Other gains and (losses), net 1,150 304
Dividends received 1,244 -
Losses and (gains) on sales of
assets - 439
---------------- ----------------
CCF $ (9,360) $ (7,298)
================ ================
Adjusted Earnings Before Interest,
Taxes, Depreciation and
Amortization ("Adjusted EBITDA")
and Consolidated Cash Flow ("CCF")
reconciliation: Nine Months Ended Sep. 30,
----------------------------------
2006 2005
----------------- ----------------
$ Margin $ Margin
----------------- ----------------
Consolidated
------------------------------------
Revenue (1) $708,634 100.0% $645,893 100.0%
Net income (loss) $ 14,309 2.0% $(20,885) -3.2%
Loss (income) from discontinued
operations, net of taxes (2,961) -0.4% 2,331 0.4%
(Benefit) provision for income
taxes 9,937 1.4% (8,740) -1.4%
Other (gains) and losses, net (8,698) -1.2% (6,022) -0.9%
(Income) loss from unconsolidated
companies (8,374) -1.2% (1,980) -0.3%
Unrealized (gain) loss on
derivatives (13,730) -1.9% (29,233) -4.5%
Unrealized loss (gain) on Viacom
stock (820) -0.1% 37,070 5.7%
Interest expense, net 51,318 7.2% 52,629 8.1%
----------------- ----------------
Operating income 40,981 5.8% 25,170 3.9%
Depreciation & amortization 64,287 9.1% 62,023 9.6%
----------------- ----------------
Adjusted EBITDA 105,268 14.9% 87,193 13.5%
Pre-opening costs 4,997 0.7% 3,329 0.5%
Impairment charge 832 0.1% - 0.0%
Other non-cash expenses 4,917 0.7% 4,978 0.8%
Non-recurring ResortQuest
integration charges (2) - 0.0% 1,816 0.3%
Stock Option expense 4,723 0.7% - 0.0%
Other gains and (losses), net (3) 8,698 1.2% 6,022 0.9%
Losses and (gains) on sales of
assets 558 0.1% (3,187) -0.5%
Dividends received 3,155 0.4% 427 0.1%
----------------- ----------------
CCF $133,148 18.8% $100,578 15.6%
================= ================
Hospitality segment
------------------------------------
Revenue $464,903 100.0% $412,802 100.0%
Operating income 67,721 14.6% 46,731 11.3%
Depreciation & amortization 48,281 10.4% 47,040 11.4%
Pre-opening costs 4,997 1.1% 3,329 0.8%
Other non-cash expenses 4,728 1.0% 4,914 1.2%
Stock Option expense 813 0.2% - 0.0%
Other gains and (losses), net (124) 0.0% (475) -0.1%
Losses on sales of assets 89 0.0% 202 0.0%
----------------- ----------------
CCF $126,505 27.2% $101,741 24.6%
================= ================
ResortQuest segment
------------------------------------
Revenue (1) $185,482 100.0% $181,407 100.0%
Operating income 8,648 4.7% 5,803 3.2%
Depreciation & amortization 8,379 4.5% 8,009 4.4%
Impairment charge 832 0.4% - 0.0%
Non-recurring ResortQuest
integration charges (2) - 0.0% 1,816 1.0%
Other non-cash expenses 189 0.1% - 0.0%
Stock Option expense 855 0.5% - 0.0%
Other gains and (losses), net (3) 6,118 3.3% 879 0.5%
Dividends received 243 0.1% 427 0.2%
Losses on sales of assets 216 0.1% - 0.0%
----------------- ----------------
CCF $ 25,480 13.7% $ 16,934 9.3%
================= ================
Opry and Attractions segment
------------------------------------
Revenue $ 58,045 100.0% $ 51,272 100.0%
Operating income 3,150 5.4% 1,574 3.1%
Depreciation & amortization 4,255 7.3% 3,927 7.7%
Stock Option expense 235 0.4% - 0.0%
Other gains and (losses), net (342) -0.6% 1,886 3.7%
Losses and (gains) on sales of
assets 253 0.4% (2,077) -4.1%
----------------- ----------------
CCF $ 7,551 13.0% $ 5,310 10.4%
================= ================
Corporate and Other segment
------------------------------------
Revenue $ 204 $ 412
Operating loss (38,538) (28,938)
Depreciation & amortization 3,372 3,047
Other non-cash expenses - 64
Stock Option expense 2,820 -
Other gains and (losses), net 3,046 3,732
Dividends received 2,912 -
Losses and (gains) on sales of
assets - (1,312)
----------------- ----------------
CCF $(26,388) $(23,407)
================= ================
(1) Includes a net recovery of $4,922 received in connection with the
Company's settlement of its business interruption insurance claim
related to hurricanes Ivan, Dennis, and Charley for the three and
nine months ended September 30, 2006.
(2) 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.
(3) 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 nine months ended September
30, 2006.
GAYLORD ENTERTAINMENT COMPANY AND SUBSIDIARIES
SUPPLEMENTAL FINANCIAL RESULTS
Unaudited
(in thousands, except operating metrics)
------------------- -------------------
Three Months Ended Nine Months Ended
Sep. 30, Sep. 30,
---------------------------------------
2006 2005 2006 2005
--------- --------- --------- ---------
HOSPITALITY OPERATING METRICS:
Gaylord Hospitality Segment
(1)
------------------------------
Occupancy 77.1% 69.3% 78.3% 73.7%
Average daily rate (ADR) $ 143.88 $ 143.69 $ 152.76 $ 147.65
RevPAR $ 110.99 $ 99.59 $ 119.55 $ 108.75
OtherPAR $ 146.63 $ 125.36 $ 161.34 $ 142.76
Total RevPAR $ 257.62 $ 224.95 $ 280.89 $ 251.51
Revenue $142,250 $122,623 $464,903 $412,802
CCF $ 30,181 $ 21,685 $126,505 $101,741
CCF Margin 21.2% 17.7% 27.2% 24.6%
Gaylord Opryland (1)
------------------------------
Occupancy 82.1% 71.9% 79.5% 73.8%
Average daily rate (ADR) $ 139.48 $ 140.18 $ 141.90 $ 135.36
RevPAR $ 114.53 $ 100.85 $ 112.84 $ 99.87
OtherPAR $ 139.87 $ 112.23 $ 141.95 $ 112.93
Total RevPAR $ 254.40 $ 213.08 $ 254.79 $ 212.80
Revenue $ 65,108 $ 53,028 $197,740 $162,198
CCF $ 15,440 $ 9,035 $ 50,854 $ 34,761
CCF Margin 23.7% 17.0% 25.7% 21.4%
Gaylord Palms
------------------------------
Occupancy 72.6% 61.0% 80.4% 75.8%
Average daily rate (ADR) $ 154.15 $ 157.10 $ 175.15 $ 170.45
RevPAR $ 111.86 $ 95.79 $ 140.87 $ 129.26
OtherPAR $ 177.91 $ 145.06 $ 206.61 $ 198.46
Total RevPAR $ 289.77 $ 240.85 $ 347.48 $ 327.72
Revenue $ 37,483 $ 31,155 $133,376 $125,790
CCF $ 7,414 $ 4,572 $ 40,580 $ 36,830
CCF Margin 19.8% 14.7% 30.4% 29.3%
Gaylord Texan
------------------------------
Occupancy 73.5% 72.1% 75.0% 72.4%
Average daily rate (ADR) $ 154.12 $ 150.58 $ 164.31 $ 160.02
RevPAR $ 113.35 $ 108.51 $ 123.17 $ 115.83
OtherPAR $ 156.64 $ 153.43 $ 185.44 $ 172.31
Total RevPAR $ 269.99 $ 261.94 $ 308.61 $ 288.14
Revenue $ 37,532 $ 36,413 $127,301 $118,860
CCF $ 6,842 $ 7,537 $ 33,403 $ 28,681
CCF Margin 18.2% 20.7% 26.2% 24.1%
Nashville Radisson and Other
(2)
------------------------------
Occupancy 70.7% 70.8% 72.8% 68.6%
Average daily rate (ADR) $ 88.80 $ 86.89 $ 89.87 $ 87.41
RevPAR $ 62.76 $ 61.48 $ 65.39 $ 59.97
OtherPAR $ 13.52 $ 11.24 $ 14.22 $ 12.01
Total RevPAR $ 76.28 $ 72.72 $ 79.61 $ 71.98
Revenue $ 2,127 $ 2,027 $ 6,486 $ 5,954
CCF $ 485 $ 541 $ 1,668 $ 1,469
CCF Margin 22.8% 26.7% 25.7% 24.7%
RESORTQUEST OPERATING METRICS:
ResortQuest Segment (3)
------------------------------
Occupancy 57.0% 57.8% 55.0% 56.9%
Average daily rate (ADR) $ 194.70 $ 187.63 $ 175.23 $ 163.78
RevPAR $ 111.07 $ 108.51 $ 96.35 $ 93.12
Total Units 14,925 16,900 14,925 16,900
(1) Excludes 8,941 and 16,001 room nights that were taken out of
service during the three months ended September 30, 2006 and 2005,
respectively, and 9,866 and 23,941 room nights that were taken out
of service during the nine months ended September 30, 2006 and
2005, respectively, as a result of the rooms renovation program at
Gaylord Opryland.
(2) Includes other hospitality revenue and expense.
(3) 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) $ 35,300 $ 48,300
Estimated Depreciation & amortization 89,200 89,200
------------ ------------
Estimated Adjusted EBITDA $ 124,500 $ 137,500
Estimated Pre-opening costs 5,800 5,800
Estimated Non-cash lease expense 6,700 6,700
Estimated Stock Option Expense 6,100 6,100
Estimated Gains and (losses), net 11,900 11,900
------------ ------------
Estimated CCF $ 155,000 $ 168,000
============ ============
Hospitality segment
--------------------------------------------
Estimated Operating income (loss) $ 86,600 $ 91,600
Estimated Depreciation & amortization 66,300 66,300
------------ ------------
Estimated Adjusted EBITDA $ 152,900 $ 157,900
Estimated Pre-opening costs 5,800 5,800
Estimated Non-cash lease expense 6,400 6,400
Estimated Stock Option Expense 900 900
Estimated Gains and (losses), net - -
------------ ------------
Estimated CCF $ 166,000 $ 171,000
============ ============
ResortQuest segment
--------------------------------------------
Estimated Operating income (loss) $ (4,400) $ 600
Estimated Depreciation & amortization 12,500 12,500
------------ ------------
Estimated Adjusted EBITDA $ 8,100 $ 13,100
Estimated Non-cash lease expense 300 300
Estimated Stock Option Expense 1,000 1,000
Estimated Gains and (losses), net 6,600 6,600
------------ ------------
Estimated CCF $ 16,000 $ 21,000
============ ============
Opry and Attractions segment
--------------------------------------------
Estimated Operating income (loss) $ 4,300 $ 5,300
Estimated Depreciation & amortization 5,600 5,600
------------ ------------
Estimated Adjusted EBITDA $ 9,900 $ 10,900
Estimated Stock Option Expense 100 100
Estimated Gains and (losses), net - -
------------ ------------
Estimated CCF $ 10,000 $ 11,000
============ ============
Corporate and Other segment
--------------------------------------------
Estimated Operating income (loss) $ (51,200) $ (49,200)
Estimated Depreciation & amortization 4,800 4,800
------------ ------------
Estimated Adjusted EBITDA $ (46,400) $ (44,400)
Estimated Stock Option Expense 4,100 4,100
Estimated Gains and (losses), net 5,300 5,300
------------ ------------
Estimated CCF $ (37,000) $ (35,000)
============ ============
CONTACT: Investor Relations:
Gaylord Entertainment
David Kloeppel, CFO, 615-316-6101
dkloeppel@gaylordentertainment.com
or
Key Foster, 615-316-6132
VP Treasury, Strategic Planning & Investor Relations
kfoster@gaylordentertainment.com
or
Rob Tanner, 615-316-6572
Director, Investor Relations
rtanner@gaylordentertainment.com
or
Media:
Sloane & Company
Elliot Sloane, 212-446-1860
esloane@sloanepr.com
or
Josh Hochberg, 212-446-1892
jhochberg@sloanepr.com