Ryman Hospitality Properties(RHP) - 2023 Q1 - Quarterly Report

Part I - Financial Information This part presents the unaudited condensed consolidated financial statements and notes for Ryman Hospitality Properties, Inc. for Q1 2023 Item 1. Financial Statements This section details the unaudited condensed consolidated financial statements and comprehensive notes for the first quarter of 2023 Condensed Consolidated Balance Sheets This section presents the company's financial position, including assets, liabilities, and equity, at specific reporting dates | Metric | March 31, 2023 (in thousands) | December 31, 2022 (in thousands) | | :-------------------------------- | :----------------------------- | :------------------------------- | | Property and equipment, net | $3,163,900 | $3,171,708 | | Cash and cash equivalents - unrestricted | $318,512 | $334,194 | | Total assets | $4,034,679 | $4,040,623 | | Debt and finance lease obligations | $2,866,898 | $2,862,592 | | Total liabilities | $3,614,649 | $3,632,865 | | Total equity | $100,277 | $95,901 | Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) This section outlines the company's financial performance, including revenues, expenses, and net income, for the reporting periods | Metric | Three Months Ended March 31, 2023 (in thousands) | Three Months Ended March 31, 2022 (in thousands) | Change (YoY) | | :----------------------------------- | :--------------------------------------------- | :--------------------------------------------- | :----------- | | Total revenues | $491,719 | $299,135 | +64.4% | | Total operating expenses | $386,069 | $291,261 | +32.6% | | Operating income | $105,650 | $7,874 | +1241.8% | | Net income (loss) | $60,994 | $(24,797) | +346.0% | | Net income (loss) available to common stockholders | $61,320 | $(24,621) | +349.1% | | Basic income (loss) per share | $1.11 | $(0.45) | +346.7% | | Diluted income (loss) per share | $1.02 | $(0.45) | +326.7% | Condensed Consolidated Statements of Cash Flows This section details the cash inflows and outflows from operating, investing, and financing activities | Metric | Three Months Ended March 31, 2023 (in thousands) | Three Months Ended March 31, 2022 (in thousands) | | :------------------------------------------ | :--------------------------------------------- | :--------------------------------------------- | | Net cash flows provided by (used in) operating activities | $31,711 | $(4,174) | | Net cash flows used in investing activities | $(48,544) | $(8,564) | | Net cash flows used in financing activities | $(13,872) | $(5,353) | | Net change in cash, cash equivalents, and restricted cash | $(30,705) | $(18,091) | | Cash, cash equivalents, and restricted cash, end of period | $413,625 | $144,909 | Condensed Consolidated Statements of Equity (Deficit) and Noncontrolling Interest This section presents changes in total equity, including net income, dividends, and other comprehensive income (loss) - Total equity increased from $95,901 thousand at December 31, 2022, to $100,277 thousand at March 31, 2023, primarily driven by net income of $61,757 thousand, partially offset by dividend payments of $42,090 thousand and other comprehensive loss[16] Notes to Condensed Consolidated Financial Statements This section provides detailed explanations and disclosures supporting the condensed consolidated financial statements 1. Basis of Presentation This note describes the company's business model, REIT status, and segment reporting structure - Ryman Hospitality Properties, Inc. operates as a REIT, specializing in group-oriented, destination hotel assets, primarily its five Gaylord Hotels properties managed by Marriott. The Company also owns a controlling 70% equity interest in the Opry Entertainment Group (OEG), which includes various entertainment and media assets, and consolidates OEG's financial results[18][19][20] - The Company's business segments are Hospitality, Entertainment, and Corporate and Other[23] 2. Block 21 Transaction This note details the acquisition of Block 21, a mixed-use complex, and its accounting treatment - On May 31, 2022, the Company acquired Block 21, a mixed-use entertainment, lodging, office, and retail complex in Austin, Texas, for $255 million, including the assumption of approximately $136 million in existing mortgage debt. The acquisition was accounted for as a business combination and its assets are reflected in the Entertainment segment[25] 3. Revenues This note provides a breakdown of revenues by source and segment, including deferred revenue changes | Revenue Source | Three Months Ended March 31, 2023 (in thousands) | Three Months Ended March 31, 2022 (in thousands) | | :----------------------------- | :--------------------------------------------- | :--------------------------------------------- | | Hotel group rooms | $120,513 | $62,478 | | Hotel transient rooms | $40,738 | $39,115 | | Hotel food and beverage - banquets | $160,499 | $72,824 | | Hotel food and beverage - outlets | $55,305 | $39,292 | | Entertainment admissions/ticketing | $22,156 | $15,549 | | Entertainment food and beverage | $24,066 | $14,361 | | Total revenues | $491,719 | $299,135 | | Hospitality Segment Location | Three Months Ended March 31, 2023 (in thousands) | Three Months Ended March 31, 2022 (in thousands) | | :--------------------------- | :--------------------------------------------- | :--------------------------------------------- | | Gaylord Opryland | $111,806 | $73,519 | | Gaylord Palms | $84,546 | $59,848 | | Gaylord Texan | $86,398 | $56,636 | | Gaylord National | $72,772 | $32,587 | | Gaylord Rockies | $64,047 | $34,787 | | Total Hospitality segment revenues | $424,439 | $261,111 | - Deferred revenues increased to $163.4 million at March 31, 2023, from $136.5 million at December 31, 2022, with approximately $70.1 million recognized in revenue during Q1 2023[31] 4. Income (Loss) Per Share This note presents basic and diluted income (loss) per share, including potential dilution from OEG put rights | Metric | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | | :------------------------------------------ | :-------------------------------- | :-------------------------------- | | Net income (loss) available to common stockholders | $61,320 | $(24,621) | | Basic income (loss) per share | $1.11 | $(0.45) | | Diluted income (loss) per share | $1.02 | $(0.45) | | Weighted average shares outstanding - basic | 55,182 | 55,086 | | Weighted average shares outstanding - diluted | 59,326 | 55,086 | - The OEG Investor holds certain put rights to require the Company to purchase its equity interest in OEG, which could be paid in cash or Company stock, and potential dilution from these rights is calculated using the if-converted method[34] 5. Accumulated Other Comprehensive Loss This note explains changes in accumulated other comprehensive loss, primarily due to interest rate derivatives - Accumulated other comprehensive loss increased from $(10,923) thousand at December 31, 2022, to $(17,215) thousand at March 31, 2023, primarily due to net other comprehensive loss of $(6,292) thousand, driven by interest rate derivatives[37] 6. Property and Equipment This note details the composition of property and equipment, net, by asset category | Asset Category | March 31, 2023 (in thousands) | December 31, 2022 (in thousands) | | :----------------------------- | :---------------------------- | :------------------------------- | | Land and land improvements | $451,422 | $443,469 | | Buildings | $3,801,386 | $3,785,968 | | Furniture, fixtures and equipment | $1,027,535 | $1,015,078 | | Construction-in-progress | $53,128 | $50,312 | | Property and equipment, net | $3,163,900 | $3,171,708 | 7. Notes Receivable This note describes governmental bonds held as notes receivable, including credit loss reserves and interest income - The Company holds two governmental bonds (Series A and Series B) related to the development of Gaylord National, with a total carrying value of $64.2 million at March 31, 2023, net of a $38.0 million credit loss reserve. The Series B bond is fully reserved due to reduced tax revenue projections[39][40] - Interest income of $1.3 million was recorded on these bonds for both Q1 2023 and Q1 2022[42] 8. Debt This note provides details on various debt obligations and the use of interest rate swaps to manage risk | Debt Obligation | March 31, 2023 (in thousands) | December 31, 2022 (in thousands) | | :------------------------------------------ | :---------------------------- | :------------------------------- | | $500M Term Loan B | $370,000 | $371,250 | | $600M Senior Notes, interest at 4.50% | $600,000 | $600,000 | | $700M Senior Notes, interest at 4.75% | $700,000 | $700,000 | | $800M Gaylord Rockies Term Loan | $800,000 | $800,000 | | $300M OEG Term Loan | $298,500 | $299,250 | | $65M OEG Revolver | $7,000 | — | | Block 21 CMBS Loan | $133,934 | $134,636 | | Total debt | $2,866,898 | $2,862,592 | - The Company uses interest rate swaps to manage interest rate risk for its variable-rate debt, with an estimated $5.9 million expected to be reclassified from accumulated other comprehensive income as a reduction to interest expense in the next twelve months[45][46] | Hedged Debt | Type | Strike Rate | Index | Maturity Date | Notional Amount (in thousands) | Estimated Fair Value March 31, 2023 (in thousands) | | :-------------------- | :---------------- | :---------- | :------------ | :------------ | :----------------------------- | :--------------------------------------------- | | Term Loan B | Interest Rate Swap | 1.2235% | 1-month LIBOR | May 11, 2023 | $87,500 | $356 | | Gaylord Rockies Term Loan | Interest Rate Swap | 3.3410% | 1-month LIBOR | August 1, 2023 | $800,000 | $4,388 | | OEG Term Loan | Interest Rate Swap | 4.5330% | 3-month SOFR | December 18, 2025 | $100,000 | $(1,904) | 9. Deferred Management Rights Proceeds This note explains the deferred proceeds from the sale of management rights, amortized over 65 years - The Company deferred $190.0 million from the sale of Gaylord Hotels brand and management rights to Marriott in 2012, which is amortized on a straight-line basis over the 65-year term of the hotel management agreements as a reduction in management fee expense[50] 10. Leases This note outlines the company's operating and finance lease obligations, terms, and associated costs - The Company leases the Gaylord Palms site (term through 2074) and various Ole Red locations (5-10 year terms with renewal options)[51][53] | Lease Cost Category | Three Months Ended March 31, 2023 (in thousands) | Three Months Ended March 31, 2022 (in thousands) | | :-------------------------- | :--------------------------------------------- | :--------------------------------------------- | | Operating lease cost | $4,657 | $3,536 | | Finance lease cost | $37 | $39 | | Net lease cost | $4,694 | $3,575 | | Lease Type | Weighted-average remaining lease term | Weighted-average discount rate | | :---------------- | :------------------------------------ | :----------------------------- | | Operating leases | 44.0 years | 7.0 % | | Finance leases | 12.4 years | 4.0 % | 11. Stock Plans This note details restricted stock unit grants and stock-based compensation expense for the period - The Company granted 0.2 million restricted stock units in Q1 2023 with a weighted-average grant date fair value of $86.59 per unit. Stock-based compensation expense was $3.7 million for Q1 2023, a slight decrease from $3.8 million in Q1 2022[58] 12. Pension Plans This note presents the components of net periodic pension expense (income) for the reporting periods | Pension Component | Three Months Ended March 31, 2023 (in thousands) | Three Months Ended March 31, 2022 (in thousands) | | :-------------------------- | :--------------------------------------------- | :--------------------------------------------- | | Interest cost | $825 | $526 | | Expected return on plan assets | $(730) | $(1,031) | | Amortization of net actuarial loss | $228 | $200 | | Total net periodic pension (income) expense | $323 | $(305) | 13. Income Taxes This note explains the company's REIT tax status and the income tax provision for its taxable REIT subsidiaries - As a REIT, the Company is generally not subject to federal corporate income taxes on distributed income but pays federal and state corporate income taxes on earnings of its taxable REIT subsidiaries (TRSs). The income tax provision for Q1 2023 was $1.6 million, compared to a benefit of $(0.1) million in Q1 2022[60][61] 14. Commitments and Contingencies This note discloses various guarantees, letters of credit, and joint venture investment commitments - The Company has limited repayment and carry guaranties for the Gaylord Rockies Loan and provided limited guarantees and a letter of credit for the Block 21 CMBS Loan[62][63] - The Company has invested $35.0 million in the Circle joint venture and plans to contribute an additional $8.2 million for working capital through December 31, 2023[64] 15. Equity This note details common stock dividends declared and the At-the-Market equity distribution agreement - The board of directors declared a Q1 2023 cash dividend of $0.75 per share of common stock, totaling approximately $41.7 million[67] - The Company has an At-the-Market (ATM) equity distribution agreement to sell up to 4.0 million shares of common stock, primarily for debt repayment, but no shares were issued under this agreement in Q1 2023[69][70][71] 16. Fair Value Measurements This note categorizes fair value measurements into a three-tier hierarchy and provides fair values for certain instruments - The Company categorizes fair value measurements into a three-tier hierarchy: Level 1 for quoted prices in active markets (e.g., deferred compensation plan investments), Level 2 for observable inputs other than quoted prices (e.g., interest rate swaps), and Level 3 for unobservable inputs[72][75][76] | Asset/Liability | March 31, 2023 (in thousands) | December 31, 2022 (in thousands) | | :-------------------------------- | :---------------------------- | :------------------------------- | | Deferred compensation plan investments | $30,335 | $29,245 | | Variable to fixed interest rate swaps (asset) | $5,811 | $11,350 | | Variable to fixed interest rate swaps (liability) | $1,904 | $1,164 | - The fair value of the $600 million 4.50% senior notes was $542.2 million at March 31, 2023 (carrying value $592.1 million), and the $700 million 4.75% senior notes was $658.9 million (carrying value $694.0 million)[78][79] 17. Financial Reporting by Business Segments This note provides detailed financial information, including revenues and operating income, for each business segment | Segment | Revenues (Q1 2023, in thousands) | Revenues (Q1 2022, in thousands) | Operating Income (Q1 2023, in thousands) | Operating Income (Q1 2022, in thousands) | Identifiable Assets (March 31, 2023, in thousands) | | :---------------- | :------------------------------- | :------------------------------- | :--------------------------------------- | :--------------------------------------- | :----------------------------------------------- | | Hospitality | $424,439 | $261,111 | $106,070 | $15,668 | $3,213,984 | | Entertainment | $67,280 | $38,024 | $10,581 | $2,741 | $518,029 | | Corporate and Other | — | — | $(10,811) | $(9,762) | $302,666 | | Total | $491,719 | $299,135 | $105,650 | $7,874 | $4,034,679 | Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the company's financial condition, operational results, strategic plans, and liquidity for Q1 2023 Overview This section provides a high-level description of the company's business model, including its REIT status and key assets - The Company operates as a REIT, focusing on group-oriented destination hotel assets, primarily its five Gaylord Hotels properties managed by Marriott, totaling 9,917 rooms. It also holds a controlling 70% equity interest in the Opry Entertainment Group (OEG), which includes various entertainment and media assets[88][89] OEG Transaction This section details the sale of a 30% equity interest in OEG and the use of proceeds for debt repayment - On June 16, 2022, the Company sold a 30% equity interest in OEG to an affiliate of Atairos for approximately $296.0 million, retaining a controlling 70% interest. Net proceeds were used to repay outstanding debt[92][94][95] Dividend Policy This section outlines the company's dividend policy, aiming for 100% of REIT taxable income distribution - The Company's board of directors approved a dividend policy in September 2022 to make minimum annual dividends of 100% of REIT taxable income, subject to future board determinations and debt agreement restrictions[96] Our Long-Term Strategic Plan This section describes the company's long-term strategy focusing on group-oriented hotel assets and brand expansion - The Company's long-term strategic plan focuses on being the premier hospitality REIT for group-oriented meeting hotel assets. Key strategies include: (1) maintaining existing hotel property design for large group meetings, (2) expanding the hotel asset portfolio through acquisitions or developments, (3) continuous investment in existing properties, (4) leveraging brand name awareness through various media and partnerships (e.g., Ole Red, Circle, Luke Combs venue), and (5) short-term capital allocation focused on dividends and asset investments[97][98][99][100][101][102][103] Our Operations This section categorizes the company's operations into Hospitality, Entertainment, and Corporate segments - The Company's operations are organized into three principal business segments: Hospitality (86% of Q1 2023 revenues), Entertainment (14% of Q1 2023 revenues), and Corporate and Other (0% of Q1 2023 revenues)[104][106] - Key performance indicators for the Hospitality segment include hotel occupancy, average daily rate (ADR), revenue per available room (RevPAR), total revenue per available room (Total RevPAR), and net definite group room nights booked[105][107] Current Economic Environment This section discusses the impact of economic conditions and inflation on business levels and financial performance - Business levels and financial performance improved in Q1 2023 compared to Q1 2022, despite general economic uncertainty and inflationary pressures. Demand is expected to continue performing well for the remainder of 2023, but is sensitive to macroeconomic factors[110][111] Selected Financial Information This section provides a summary of key financial metrics, including revenues and operating expenses by category | Metric | Q1 2023 (in thousands) | % of Total Revenues (Q1 2023) | Q1 2022 (in thousands) | % of Total Revenues (Q1 2022) | | :-------------------------------- | :--------------------- | :---------------------------- | :--------------------- | :---------------------------- | | REVENUES: | | | | | | Rooms | $161,251 | 32.8 % | $101,593 | 34.0 % | | Food and beverage | $215,804 | 43.9 % | $112,116 | 37.5 % | | Other hotel revenue | $47,384 | 9.6 % | $47,402 | 15.8 % | | Entertainment | $67,280 | 13.7 % | $38,024 | 12.7 % | | Total revenues | $491,719 | 100.0 % | $299,135 | 100.0 % | | OPERATING EXPENSES: | | | | | | Rooms | $42,059 | 8.6 % | $30,136 | 10.1 % | | Food and beverage | $115,181 | 23.4 % | $71,329 | 23.8 % | | Other hotel expenses | $103,059 | 21.0 % | $86,643 | 29.0 % | | Hotel management fees, net | $15,195 | 3.1 % | $5,064 | 1.7 % | | Entertainment | $51,434 | 10.5 % | $31,731 | 10.6 % | | Corporate | $10,594 | 2.2 % | $9,557 | 3.2 % | | Total operating expenses | $386,069 | 78.5 % | $291,261 | 97.4 % | | OPERATING INCOME (LOSS): | | | | | | Hospitality | $106,070 | 25.0 % (of segment revenue) | $15,668 | 6.0 % (of segment revenue) | | Entertainment | $10,581 | 15.7 % (of segment revenue) | $2,741 | 7.2 % (of segment revenue) | | Total operating income | $105,650 | 21.5 % | $7,874 | 2.6 % | | Net income (loss) available to common stockholders | $61,320 | (A) | $(24,621) | (A) | Summary Financial Results This section summarizes the company's overall financial performance, highlighting revenue and net income changes | Metric | Three Months Ended March 31, 2023 (in thousands) | Three Months Ended March 31, 2022 (in thousands) | % Change | | :------------------------------------------ | :--------------------------------------------- | :--------------------------------------------- | :------- | | Total revenues | $491,719 | $299,135 | 64.4 % | | Total operating expenses | $386,069 | $291,261 | 32.6 % | | Operating income | $105,650 | $7,874 | 1,241.8 % | | Net income (loss) | $60,994 | $(24,797) | 346.0 % | | Net income (loss) available to common stockholders | $61,320 | $(24,621) | 349.1 % | | Net income (loss) available to common stockholders per share - diluted | $1.02 | $(0.45) | 326.7 % | - The increase in total revenues was driven by increases in both the Hospitality segment ($163.3 million) and Entertainment segment ($29.3 million). Total operating expenses also increased due to higher activity in both segments, partially offset by a decrease in depreciation expense[117][118] - Net income improved significantly from a loss of $24.8 million in Q1 2022 to a profit of $61.0 million in Q1 2023, primarily due to increased revenues and operating income, despite a $10.6 million increase in interest expense[119] Factors and Trends Contributing to Performance This section identifies key operational factors and market trends driving the company's financial performance - Hotel occupancy increased by 25.0 points to 72.3% in Q1 2023, and ADR increased by 3.8% to $237.95, compared to Q1 2022[120] - Outside-the-room spend at hotels increased by 65.0% in Q1 2023, with strong group catering revenue[120] - Cancelled room nights decreased by 66.8%, and group attrition decreased from 32.1% in Q1 2022 to 15.5% in Q1 2023[120] - Group room nights on the books for future years at March 31, 2023, are in line with 2022 and 2019 levels, with ADR 4.5% higher than 2022 and 12.4% higher than 2019[120] - Entertainment revenue increased by 76.9% in Q1 2023, primarily due to the addition of Block 21 and increased attendance at the Grand Ole Opry[122] Operating Results – Detailed Segment Financial Information This section provides a detailed breakdown of operating results for each of the company's business segments Hospitality Segment This section analyzes the financial and operational performance of the company's Hospitality segment | Metric | Q1 2023 (in thousands) | Q1 2022 (in thousands) | % Change | | :-------------------------- | :--------------------- | :--------------------- | :------- | | Total hospitality revenue | $424,439 | $261,111 | 62.6 % | | Hospitality operating income | $106,070 | $15,668 | 577.0 % | | Occupancy | 72.3 % | 47.3 % | 25.0 pts | | ADR | $237.95 | $229.17 | 3.8 % | | RevPAR | $172.08 | $108.41 | 58.7 % | | Total RevPAR | $452.94 | $278.64 | 62.6 % | | Net Definite Group Room Nights Booked | 250,318 | 165,668 | 51.1 % | - The increase in Hospitality segment revenue was primarily driven by Gaylord National, Gaylord Opryland, Gaylord Texan, Gaylord Rockies, and Gaylord Palms. Attrition and cancellation fee revenue decreased by $9.9 million in Q1 2023[124][125] - Group business accounted for 79% of rooms sold in Q1 2023, up from 66% in Q1 2022[126] - Hospitality operating expenses increased across rooms, food and beverage, and other hotel expenses due to increased business levels. Management fees, net, increased by 200.1% due to higher base and incentive fees[126][127][128] - Hospitality segment depreciation and amortization decreased by 18.0% due to the full amortization of an intangible asset associated with advanced bookings at Gaylord Rockies[130] Entertainment Segment This section analyzes the financial and operational performance of the company's Entertainment segment | Metric | Q1 2023 (in thousands) | Q1 2022 (in thousands) | % Change | | :-------------------------- | :--------------------- | :--------------------- | :------- | | Revenues | $67,280 | $38,024 | 76.9 % | | Operating expenses | $51,434 | $31,731 | 62.1 % | | Depreciation and amortization | $5,265 | $3,552 | 48.2 % | | Operating income | $10,581 | $2,741 | 286.0 % | - Revenue, operating expenses, and depreciation/amortization in the Entertainment segment increased primarily due to the acquisition of Block 21 in May 2022 and increased attendance at the Grand Ole Opry[135][136] Corporate and Other Segment This section details the operating expenses and loss for the Corporate and Other segment | Metric | Q1 2023 (in thousands) | Q1 2022 (in thousands) | % Change | | :-------------------------- | :--------------------- | :--------------------- | :------- | | Operating expenses | $10,594 | $9,557 | 10.9 % | | Depreciation and amortization | $217 | $205 | 5.9 % | | Operating loss | $(10,811) | $(9,762) | (10.7)% | - Corporate and Other operating expenses increased due to higher employment expenses from additional hires and increased wages[138] Operating Results – Preopening Costs This section discusses preopening costs incurred for new developments, such as Ole Red Las Vegas - Preopening costs in Q1 2023 were primarily associated with Ole Red Las Vegas, expected to be completed in Q4 2023. Q1 2022 costs were mainly for Ole Red Nashville International Airport, completed in May 2022[139] Operating Results – Loss on Sale of Assets This section reports the loss recognized from the sale of a parcel of land in Nashville, Tennessee - A loss on sale of assets of $0.5 million was recorded in Q1 2022, related to the sale of a parcel of land in Nashville, Tennessee[140] Non-Operating Results Affecting Net Income (Loss) This section analyzes non-operating items impacting net income, including interest expense and income taxes Interest Expense This section details the increase in interest expense due to new debt and higher weighted average interest rates - Interest expense increased by $10.6 million to $42.5 million in Q1 2023, compared to $31.9 million in Q1 2022, primarily due to the new OEG Term Loan and Block 21 CMBS loan[141][142] - The weighted average interest rate on borrowings (including swaps) increased from 4.3% in Q1 2022 to 5.9% in Q1 2023[145] Interest Income This section describes interest income primarily derived from governmental bonds related to Gaylord National - Interest income primarily stems from bonds received in connection with the development of Gaylord National, held as notes receivable[146] Loss from Unconsolidated Joint Ventures This section reports the company's equity method share of losses from unconsolidated joint ventures, specifically Circle - Losses from unconsolidated joint ventures represent the Company's equity method share of losses associated with Circle[147] Other Gains and (Losses), net This section accounts for various miscellaneous non-operating gains and losses - Other gains and losses represent various miscellaneous items[148] (Provision) benefit for Income Taxes This section details the income tax provision or benefit related to the company's taxable REIT subsidiaries - The Company recorded an income tax provision of $(1.6) million in Q1 2023, compared to a benefit of $0.1 million in Q1 2022, related to its taxable REIT subsidiaries (TRSs)[149] Non-GAAP Financial Measures This section presents non-GAAP financial measures like EBITDAre and FFO, used for performance evaluation - The Company presents non-GAAP financial measures including EBITDAre, Adjusted EBITDAre, Adjusted EBITDAre Excluding Noncontrolling Interest in Consolidated Joint Venture, FFO, and Adjusted FFO available to common stockholders and unit holders, which are used to evaluate operating performance and debt leverage metrics[150][151][152][153][154][157][158] | Metric | Three Months Ended March 31, 2023 (in thousands) | Three Months Ended March 31, 2022 (in thousands) | | :---------------------------------------------------------- | :--------------------------------------------- | :--------------------------------------------- | | Net income (loss) | $60,994 | $(24,797) | | EBITDAre | $150,974 | $62,213 | | Adjusted EBITDAre | $157,675 | $68,994 | | Adjusted EBITDAre, excluding noncontrolling interest in consolidated joint venture | $153,379 | $68,994 | | Metric | Three Months Ended March 31, 2023 (in thousands) | Three Months Ended March 31, 2022 (in thousands) | | :---------------------------------------------------------- | :--------------------------------------------- | :--------------------------------------------- | | Net income (loss) | $60,994 | $(24,797) | | FFO available to common stockholders and unit holders | $108,526 | $31,222 | | Adjusted FFO available to common stockholders and unit holders | $113,593 | $34,814 | Liquidity and Capital Resources This section analyzes the company's cash flows, available liquidity, capital expenditure plans, and debt agreements Cash Flows Provided By (Used In) Operating Activities This section details cash generated or used by operating activities, reflecting net income and working capital changes - Net cash flows from operating activities were $31.7 million in Q1 2023, compared to a use of $4.2 million in Q1 2022. The Q1 2023 increase reflects net income before non-cash charges, partially offset by unfavorable working capital changes[162][163] Cash Flows Used In Investing Activities This section outlines cash used for investing activities, primarily property and equipment purchases and enhancements - Net cash flows used in investing activities increased to $48.5 million in Q1 2023 from $8.6 million in Q1 2022, primarily due to $36.8 million in property and equipment purchases for Block 21 enhancements, Ole Red Las Vegas construction, and Gaylord Rockies enhancements[164][165] Cash Flows Used In Financing Activities This section details cash used in financing activities, mainly for dividend payments and debt-related transactions - Net cash flows used in financing activities were $13.9 million in Q1 2023, primarily reflecting $14.0 million in cash dividend payments, compared to $5.4 million used in Q1 2022[166][168] Liquidity This section assesses the company's available cash, credit facilities, and ability to fund future commitments - At March 31, 2023, the Company had $318.5 million in unrestricted cash and $743.4 million available under its revolving credit facilities[169] - The Company anticipates $175 million to $215 million in capital expenditures for the remainder of 2023, including enhancements at Gaylord Rockies and Block 21, and construction of Ole Red Las Vegas. An additional $8.2 million will be contributed to the Circle joint venture[170] - The Company believes current cash, operating cash flow, and available credit will be adequate to fund short-term commitments, operating expenses, debt interest, lease obligations, declared dividends, and planned capital expenditures[171] Principal Debt Agreements This section describes the terms and conditions of the company's major debt obligations and credit facilities - The Credit Agreement includes a $700.0 million senior secured revolving credit facility (Revolver) and a $500.0 million senior secured term loan B (Term Loan B). The Revolver matures March 31, 2024, with two extension options, and had $685.4 million available at March 31, 2023. The Term Loan B matures May 11, 2024, with $370.0 million outstanding[173][178][179][180] - The Company has $700.0 million in 4.75% Senior Notes due October 15, 2027, and $600.0 million in 4.50% Senior Notes due February 15, 2029. Both are general unsecured obligations, effectively subordinated to secured debt[181][185][188] - The Gaylord Rockies Loan is an $800.0 million secured term loan facility, maturing July 2, 2023, with three one-year extension options, and bears interest at LIBOR plus 2.50%[190][191] - The OEG Credit Agreement includes a $300.0 million senior secured term loan (OEG Term Loan) maturing June 16, 2029, and a $65.0 million senior secured revolving credit facility (OEG Revolver) maturing June 16, 2027. $7.0 million was outstanding under the OEG Revolver at March 31, 2023[197] - The Block 21 CMBS Loan is a $136 million non-recourse term loan with a fixed interest rate of 5.58%, maturing January 5, 2026. Block 21 exited a 'Trigger Period' in Q1 2023[198][199] Estimated Interest on Principal Debt Agreements This section provides estimated future interest payment obligations on the company's principal debt agreements - Estimated interest obligations through 2027 total $474.7 million, with $100.6 million for the remainder of 2023, $106.6 million in 2024, $96.7 million in 2025, $89.2 million in 2026, and $81.6 million in 2027[204] Inflation This section discusses the impact of inflation on operating costs and how it is mitigated by revenue growth - Inflation has had a more significant impact recently, but favorable occupancy, ADR, and outside-the-room spend in Hospitality, along with strong Entertainment business levels, have mitigated increased operating costs. The Company continues to monitor inflationary pressures[205] Supplemental Guarantor Financial Information This section provides financial information for guarantor subsidiaries related to senior notes obligations - The Company's $600 Million 4.50% Senior Notes and $700 Million 4.75% Senior Notes are guaranteed by the Company and certain subsidiaries, which are 100% owned and provide full, unconditional, and joint and several guarantees. These guarantees are structurally subordinated to obligations of non-guarantor subsidiaries[206] | Metric | March 31, 2023 (in thousands) | | :------------------------------------------ | :---------------------------- | | Net receivables due from non-guarantor subsidiaries | $21,361 | | Other assets | $1,655,854 | | Total assets | $1,677,215 | | Total liabilities | $1,835,480 | | Total noncontrolling interest | $766 | | Metric | Three Months Ended March 31, 2023 (in thousands) | | :------------------------------------------ | :--------------------------------------------- | | Revenues from non-guarantor subsidiaries | $106,475 | | Operating expenses (excluding expenses to non-guarantor subsidiaries) | $30,604 | | Expenses to non-guarantor subsidiaries | $3,563 | | Operating income | $72,308 | | Interest income from non-guarantor subsidiaries | $831 | | Net income | $52,922 | | Net income available to common stockholders | $53,515 | Critical Accounting Policies and Estimates This section confirms no material changes to critical accounting policies and estimates since the last annual report - There were no newly identified critical accounting policies or material changes to existing critical accounting policies and estimates in Q1 2023 compared to the Annual Report on Form 10-K for the year ended December 31, 2022[211] Item 3. Quantitative and Qualitative Disclosures About Market Risk No material changes in quantitative and qualitative market risks have occurred since December 31, 2022 - No material changes in quantitative and qualitative market risks since December 31, 2022[212] Item 4. Controls and Procedures Disclosure controls and procedures were effective as of March 31, 2023, with no material changes in internal control - The Company's disclosure controls and procedures were effective as of March 31, 2023[213][215] - No material changes in internal control over financial reporting occurred during the period[216] Part II - Other Information This part includes disclosures on legal proceedings, risk factors, equity sales, defaults, and other miscellaneous items Item 1. Legal Proceedings Legal actions in the ordinary course of business are not expected to materially affect financial statements - Legal proceedings in the ordinary course of business are not expected to have a material effect on the financial statements[217] Item 1A. Risk Factors No material changes to risk factors have occurred since the Annual Report on Form 10-K for FY2022 - No material changes from the risk factors disclosed in the Annual Report on Form 10-K for the fiscal year ended December 31, 2022[218] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds This item is not applicable for the current reporting period - This item is inapplicable[219] Item 3. Defaults Upon Senior Securities This item is not applicable for the current reporting period - This item is inapplicable[220] Item 4. Mine Safety Disclosures This item is not applicable for the current reporting period - This item is inapplicable[221] Item 5. Other Information Executive Chairman Colin V. Reed established a Rule 10b5-1 plan to sell up to 109,089 common shares - Colin V. Reed, Executive Chairman, entered into a Rule 10b5-1 selling plan on March 1, 2023, to sell up to 109,089 shares of common stock between May 30, 2023, and December 5, 2023, at or above a specified market price[222] Item 6. Exhibits This section lists all exhibits filed with the Form 10-Q, including organizational documents and certifications - Exhibits include Amended and Restated Certificate of Incorporation, Second Amended and Restated Bylaws, Restricted Stock Unit Award Agreements, Certifications (31.1, 31.2, 32.1), and Inline XBRL financial statements[224] SIGNATURES This section contains the official signatures of the company's President, CEO, CFO, and Chief Accounting Officer - The report was signed on May 4, 2023, by Mark Fioravanti, President and Chief Executive Officer, and Jennifer Hutcheson, Executive Vice President, Chief Financial Officer and Chief Accounting Officer[231]