Ryman Hospitality Properties(RHP) - 2019 Q1 - Quarterly Report

Company Overview - Ryman Hospitality Properties operates as a REIT, focusing on group-oriented destination hotel assets, with a total of 8,114 rooms across four upscale resorts managed by Marriott under the Gaylord Hotels brand[83]. - The company aims to expand its hotel asset portfolio through acquisitions, particularly targeting group-oriented large hotels in urban and resort markets[93]. Financial Performance - The company reported total revenues for the three months ended March 31, 2019, with the Hospitality segment contributing 91% and the Entertainment segment contributing 9%[97]. - Total revenues for the three months ended March 31, 2019, increased by 28.6% to $370.775 million compared to $288.370 million in the same period of 2018[104]. - Operating income for the three months ended March 31, 2019, was $53.964 million, a 17.5% increase from $45.944 million in 2018[104]. - Net income decreased by 17.1% to $22.670 million compared to $27.339 million in the same period of 2018, largely due to a $15.4 million increase in interest expense[107]. - Cash flow from operating activities for the three months ended March 31, 2019, was $54,600,000, reflecting an increase from $43,900,000 in the same period in 2018[154]. Revenue Breakdown - Hospitality segment revenues increased by 27.3% to $337.510 million, driven by significant contributions from Gaylord Rockies and other properties[110]. - The company experienced a 43.0% increase in revenue for its Entertainment segment, attributed to the operations of Ole Red and increased attendance at the Grand Ole Opry[110]. - Total revenue for Gaylord Opryland increased by 7.5% to $88.958 million in Q1 2019 compared to $82.745 million in Q1 2018[118]. - Rooms revenue at Gaylord Texan surged by 24.3% to $25.205 million in Q1 2019, up from $20.280 million in Q1 2018[128]. - Gaylord National's total revenue rose by 8.0% to $65.630 million in Q1 2019, compared to $60.756 million in Q1 2018[132]. Expenses and Costs - Total operating expenses rose by 30.7% to $316.811 million, primarily due to increases in Hospitality and Entertainment segment expenses of $43.1 million and $6.3 million, respectively[106]. - Total depreciation and amortization expenses increased by 14.3% to $53.009 million, reflecting higher costs associated with the new properties[104]. - The increase in total operating expenses for Gaylord Opryland was 6.8%, totaling $67.157 million in Q1 2019, compared to $62.871 million in Q1 2018[118]. Dividends and Shareholder Returns - Ryman Hospitality Properties plans to pay a quarterly cash dividend of $0.90 per share, amounting to approximately $46.3 million for Q1 2019, with future dividends subject to board approval[90]. Capital Expenditures and Investments - The company has invested $90 million in the SoundWaves waterpark at Gaylord Opryland, which includes 111,000 square feet of indoor attractions and is expected to enhance guest experience[88]. - An expansion project at Gaylord Palms is underway, with a budget of $158 million to add 303 guest rooms and 90,000 square feet of meeting space, expected to be completed by summer 2021[89]. - Capital expenditures for the three months ended March 31, 2019, totaled $48,900,000, primarily for construction costs at Gaylord Rockies and renovations at Gaylord Opryland[156]. Debt and Interest - Interest expense increased by $15,358,000 to $32,087,000 in Q1 2019, primarily due to the Gaylord Rockies construction and mezzanine loans[146]. - The weighted average interest rate on borrowings, excluding capitalized interest, was 5.2% for the three months ended March 31, 2019, compared to 4.6% in the same period in 2018[148]. - The company must maintain a consolidated funded indebtedness to total asset value ratio of not more than 0.65 to 1.0[172]. Operational Metrics - Key performance indicators for the hospitality segment include hotel occupancy, average daily rate (ADR), and revenue per available room (RevPAR), which are critical for assessing operational performance[100]. - The occupancy rate for the Hospitality segment was 72.3%, a decrease of 2.0% from 73.8% in the previous year[110]. - The average daily rate (ADR) at Gaylord National increased by 10.2%, while outside-the-room spending at Gaylord Texan rose by 23.0%[108]. Management and Brand Strategy - Ryman Hospitality Properties leverages the Grand Ole Opry brand for revenue growth, exploring opportunities in media and retail products to enhance brand awareness and cash flow[94]. - The company emphasizes the importance of customer volume and quality in its hospitality segment, relying on Marriott's management to optimize occupancy and revenue generation[99].