Table of Contents
SECURITIES AND EXCHANGE COMMISSION
FORM 11-K
ANNUAL REPORT
ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2003
Commission File No.: 1-13079
ResortQuest Savings & Retirement Plan
(Full title of plan)
Gaylord Entertainment Company
One Gaylord Drive
Nashville, TN 37214
(Name of issuer of securities held pursuant to the plan
and address of principal executive office)
Table of Contents
TABLE OF CONTENTS
Reports of Independent Registered Public Accounting Firms |
Statements of Net Assets Available for Benefits |
Statement of
Changes in Net Assets Available for Benefits |
Notes to Financial Statements |
Signature |
ResortQuest Savings
and Retirement Plan
Contents
| 3 | ||||
| 4 | ||||
Financial Statements |
||||
| 5 | ||||
| 6 | ||||
| 7 | ||||
Supplemental Schedule |
||||
| 13 |
2
Table of Contents
Report of Independent Registered Public Accounting Firm
Benefits Trust Committee for the Gaylord Entertainment Company 401(K) Savings Plan
ResortQuest Savings and Retirement Plan
We have audited the accompanying statement of net assets available for benefits of the ResortQuest Savings and Retirement Plan (the “Plan”) as of December 31, 2003, and the related statement of changes in net assets available for benefits for the year then ended. The financial statements of the Plan as of December 31, 2002, were reported upon by other auditors whose report dated June 24, 2003, included an unqualified opinion. These financial statements are the responsibility of the Plan’s management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). These standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits of the Plan as of December 31, 2003, and the changes in net assets available for benefits for the year then ended in conformity with accounting principles generally accepted in the United States of America.
Our audit was performed for the purpose of forming an opinion on the 2003 basic financial statements taken as a whole. The supplemental schedule of the Plan is presented for the purpose of additional analysis and is not a required part of the basic financial statements but is supplementary information required by the Department of Labor’s Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. This supplemental schedule is the responsibility of the Plan’s management. The supplemental schedule has been subjected to the auditing procedures applied in the audit of the 2003 basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the 2003 basic financial statements taken as a whole.
| /s/ BDO Seidman, LLP | |
| |
|
| Dallas, Texas | |
| June 23, 2004 |
3
Table of Contents
Report of Independent Registered Public Accounting Firm
To The Advisory Committee of the
ResortQuest Savings & Retirement Plan:
We have audited the accompanying statement of net assets available for benefits of the ResortQuest Savings & Retirement Plan (the “Plan”) as of December 31, 2002, and the related statement of changes in net assets available for benefits for the year then ended. These financial statements are the responsibility of the Plan’s management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the 2002 financial statements present fairly, in all material respects, the net assets available for benefits of the Plan as of December 31, 2002, and the changes in net assets available for benefits for the year then ended in conformity with accounting principles generally accepted in the United States of America.
| Memphis, Tennessee | /s/ Deloitte & Touche, LLP | |
| June 24, 2003 |
4
Table of Contents
ResortQuest Savings and Retirement Plan
Statements of Net Assets Available for Benefits
| December 31, |
2003 |
2002 |
||||||
| (in thousands) | ||||||||
Assets |
||||||||
Investments, at fair value: |
||||||||
Mutual funds |
$ | 24,793 | $ | 19,477 | ||||
Common stock |
850 | 636 | ||||||
Group annuity contract |
— | 41 | ||||||
Participant loans, at cost |
995 | 1,080 | ||||||
Total investments |
26,638 | 21,234 | ||||||
Cash |
— | 129 | ||||||
Receivables: |
||||||||
Employer contributions |
15 | 73 | ||||||
Participant contributions |
42 | 206 | ||||||
Receivable for securities sold |
41 | 41 | ||||||
Total receivables |
98 | 320 | ||||||
Total assets |
26,736 | 21,683 | ||||||
Liabilities |
||||||||
Accrued administrative expenses |
(38 | ) | (51 | ) | ||||
Net assets available for benefits |
$ | 26,698 | $ | 21,632 | ||||
See accompanying notes to financial statements. |
||||||||
5
Table of Contents
ResortQuest Savings and Retirement Plan
Statement of Changes in Net Assets Available for Benefits
| Year ended December 31, |
2003 |
|||
| (in thousands) | ||||
Additions |
||||
Investment income: |
||||
Interest income on participant loans |
$ | 77 | ||
Dividend income |
492 | |||
Net appreciation in fair value of investments |
3,604 | |||
Total investment income |
4,173 | |||
Employer matching contributions |
762 | |||
Participants’ contributions |
2,959 | |||
Total additions |
7,894 | |||
Deductions |
||||
Benefits paid to participants |
2,171 | |||
Net realized loss from mutual funds |
398 | |||
Administrative expenses |
259 | |||
Total deductions |
2,828 | |||
Net increase in net assets available for benefits |
5,066 | |||
Net assets available for benefits, beginning of year |
21,632 | |||
Net assets available for benefits, end of year |
$ | 26,698 | ||
See accompanying notes to financial statements. |
||||
6
Table of Contents
ResortQuest Savings and Retirement Plan
Notes to Financial Statements
| 1. | Plan Description |
The following description of the
ResortQuest Savings and Retirement Plan
(the “Plan”) provides only general
information. Participants should refer
to the plan agreement or Summary Plan
Description for a more complete
description of the Plan’s provisions.
General – The Plan is a defined
contribution plan covering
substantially all full-time salaried
and hourly employees of ResortQuest
International, Inc. and its
wholly-owned subsidiaries (the
“Company”) beginning on January 1 or
July 1 after the employee has completed
1,000 hours of service during their
first year of employment and who are at
least 21 years old. As further discussed in Note 7, effective November 20, 2003,
the Company was acquired by Gaylord Entertainment Company in a stock for stock transaction.
The Benefits Trust Committee for the Gaylord Entertainment Company 401(K) Savings Plan is
responsible for the administration and operation of the Plan. Union Planters Bank, N.A. serves
as the trustee of the Plan and is responsible for the custody and
management of the Plan’s assets. BISYS Retirement Services served as
the Plan’s recordkeeper from January through April of 2003.
AMVESCAP Retirement, Inc. served as the Plan’s recordkeeper from
May through December of 2003. The Plan is
subject to the provisions of the
Employee Retirement Income Security Act
of 1974 (“ERISA”).
Contributions – Each year, participants
may contribute up to 100 percent of
their pretax annual compensation, as
defined in the Plan, subject to certain
Internal Revenue Code (“IRC”) limitations. For
each plan year, the Company may
contribute to the Plan on behalf of
Plan participants an amount of matching
contributions, up to 6 percent of
employee compensation, as determined by
the Company at its discretion. For the
year ended December 31, 2002, and for
the period January 1, 2003 through
April 30, 2003, the Company contributed
50 percent of the first 6 percent of
base compensation that a participant
contributed to the Plan. Effective May
1, 2003, the Company’s Board of
Directors suspended the Company’s
matching contributions to the Plan for
an unspecified period of time for all
participants, except for participants
located in Hawaii. Participants may
also contribute amounts representing
distributions from other qualified
defined benefit or defined contribution
plans.
Participant Accounts – Individual
accounts are maintained for each Plan
participant. Each participant’s account
is credited with the participant’s
contribution, the Company’s matching
contribution, and Plan earnings, and
charged with withdrawals and an
allocation of Plan losses and
administrative expenses. Allocations
are based on participant earnings or
account balances, as defined. The
benefit to which a participant is
entitled is the benefit that can be
provided from the participant’s vested
account.
7
Table of Contents
ResortQuest Savings and Retirement Plan
Notes to Financial Statements
Investments – Participants direct the
investment of their contributions, both
employee deferrals and employer match,
into various investment options offered
by the Plan. The Plan currently offers
mutual funds, a group annuity contract,
and the employer’s common stock as
investment options for participants.
Vesting – Participants are vested
immediately in their contributions plus
actual earnings thereon. Vesting in the
Company’s contribution portion of their
accounts is based on years of
continuous service. A participant is 50
percent vested after two years of
credited service and 100 percent vested
after three years of credited service.
In the event of death, disability, or
normal retirement, participants become
100 percent vested in all account
balances. Forfeited balances of
terminated participants are used to
reduce future Company contributions.
Participant Loans – Participants may
borrow from their fund accounts up to a
maximum of $50,000 or 50 percent of
their vested account balance, whichever is
less. The loans are secured by the
balance in the participant’s account
and bear interest at rates commensurate
with local prevailing rates as
determined by the Plan administrator.
Principal and interest is paid ratably
through payroll deductions.
Payment of Benefits – On termination of
service due to death, disability, or
retirement, a participant may elect to
receive either a lump-sum amount equal
to the value of the participant’s
vested interest in his or her account,
partial payments, annual installments,
or a joint and 50 percent survival
annuity.
Forfeited Accounts – Forefeitures are used to reduce
future Company contributions. Forefeited amounts at December 31, 2003
were not material to the financial statements.
8
Table of Contents
ResortQuest Savings and Retirement Plan
Notes to Financial Statements
| 2. | Summary of Significant Accounting Policies |
Basis of Accounting – The accompanying
financial statements have been prepared
under the accrual method of accounting
in accordance with accounting
principles generally accepted in the
United States of America.
Use of Estimates – The preparation of
financial statements in conformity with
accounting principles generally
accepted in the United States of
America requires Plan management to
make estimates and assumptions that
affect the reported amounts of net
assets available for benefits and
changes therein. Actual results could
differ from those estimates.
Investment Valuation and Income
Recognition – The Plan’s investments
are stated at fair value except for its
benefit-responsive investment contract,
which is valued at contract value (Note
5). Quoted market prices are used to
value investments. Shares of mutual
funds are valued at quoted market
prices, which represent the net asset
value of shares held by the Plan at
year-end. Participant loans are valued
at the outstanding loan balances.
Purchases and sales of securities are
recorded on a trade-date basis.
Interest income is recorded on the
accrual basis. Dividends are recorded
on the ex-dividend date.
Management fees and operating expenses
charged to the Plan for investments in
the mutual funds are deducted from
income earned on a daily basis and are
not separately reflected. Consequently,
management fees and operating expenses
are reflected as a component of net
appreciation (depreciation) in fair
market value of investments for such
investments.
Reclassifications – Certain
reclassifications have been made to amounts reported in prior year to
conform to the current year’s
presentation.
9
Table of Contents
ResortQuest Savings and Retirement Plan
Notes to Financial Statements
| 3. | Investments |
The following presents investments that represent 5 percent or more of the Plan’s net assets (in thousands):
| December 31 |
2003 |
2002 |
||||||
INVESCO Stable Value Trust |
$ | 9,553 | $ | — | ||||
INVESCO Core Mul. Attr. Equity
Trust |
3,092 | — | ||||||
INVESCO 500 Index Trust |
2,569 | — | ||||||
INVESCO Core Fixed Income Trust |
2,326 | — | ||||||
Oppenheimer Global — Class A |
1,818 | — | ||||||
INVESCO Fundamental Core Bal.
Trust |
1,763 | — | ||||||
AIM Capital Development |
1,606 | — | ||||||
Federated Capital Preservation
Fund |
— | 8,802 | ||||||
MFS Research Fund A |
— | 1,632 | ||||||
Dreyfus S&P500 Index Fund |
— | 1,759 | ||||||
Berger Balanced Fund |
— | 1,430 | ||||||
Janus Worldwide Fund C |
— | 1,082 | ||||||
Total investments above 5% |
22,727 | 14,705 | ||||||
Total investments below 5% |
3,911 | 6,529 | ||||||
Total investments |
26,638 | 21,234 | ||||||
During 2003, the Plan’s investments (including gains and losses on investments bought and sold, as well as held during the year) appreciated in value as follows (in thousands):
| Year ended December 31, |
2003 |
|||
Mutual funds |
$ | 2,689 | ||
Common stock |
517 | |||
Total investments |
$ | 3,206 | ||
| 4. | Plan Termination |
Although it has not expressed any intent to do so, the Company has the right under the Plan to discontinue its contributions at any time and to terminate the Plan, subject to the provisions of ERISA. In the event of plan termination, participants’ accounts will become fully vested and nonforfeitable.
10
Table of Contents
ResortQuest Savings and Retirement Plan
Notes to Financial Statements
| 5. | Investment Contract with Insurance Company |
The Plan has entered into a
benefit-responsive investment contract
with Travelers Insurance Company
(“Travelers”). Travelers maintains the
contributions in a general account,
which is credited with earnings on the
underlying investments and charged for
participant withdrawals and
administrative expenses. The contract
is included in the financial statements
at contract value as reported to the
Plan by Travelers.
Contract value represents contributions
made under the contract, plus earnings,
less participant withdrawals and
administrative expenses. Participants
may ordinarily direct the withdrawal or
transfer of all or a portion of their
investment at contract value.
There are no reserves against contract
value for credit risk of the contract
issuer or otherwise. The crediting
interest rate is based on a formula
agreed upon with the issuer. Such
interest rates are reviewed on a
quarterly basis for resetting. The
final payment on the investment
contract was made on December 29, 2003
and is reflected as a receivable for securities sold in the accompanying financial statements at December 31,
2003. The average yield for the year
ended December 31, 2003 was 1.14
percent.
| 6. | Income Tax Status |
The Internal Revenue Service determined and informed the Trustee, in a letter dated July 23, 2003, that the Plan, as then designed, was qualified and the trust established under the Plan was tax-exempt under the appropriate sections of the IRC. Although the Plan has been amended since receiving the determination letter, the plan administrator believes that the Plan is currently designed and being operated in compliance with the applicable requirements of the IRC. Therefore, no provision for income taxes has been included in the Plan’s financial statements.
| 7. | Related Party Transactions |
Effective November 20, 2003, Gaylord Entertainment Company acquired ResortQuest International, Inc. in a stock for stock transaction in which ResortQuest International, Inc. stockholders received 0.275 shares of Gaylord Entertainment Company common stock for each outstanding share of ResortQuest
11
Table of Contents
ResortQuest Savings and Retirement Plan
Notes to Financial Statements
International, Inc. common stock. At December 31, 2003 the Plan held 106,480 units of Gaylord Entertainment Company common stock with a cost basis of $366,393. At December 31, 2002, the Plan held 163,909 units of ResortQuest International, Inc. common stock.
| 8. | Subsequent Event |
Effective January 1, 2004, Gaylord Entertainment Company’s Board of Directors reinstated the Company matching contributions to the Plan for all employees. The Company contributes 50 percent of the first 6 percent of base compensation that a participant contributed to the Plan.
12
Table of Contents
ResortQuest Savings and Retirement Plan
Schedule of Assets Held for Investment Purposes at End of Year
Plan Number: 001
| December 31, 2003 |
||||||||||||
| (c) | ||||||||||||
| (b) | Description of Investment, including | (e) | ||||||||||
| Identity of Issue, Borrower, | Maturity Date, Rate of Interest, | Current | ||||||||||
| (a) |
Lessor or Similar Party |
Collateral, Par or Maturity Value |
Value |
|||||||||
| * | Gaylord Entertainment Company Common Stock |
Common Stock | $ | 849,715 | ||||||||
INVESCO 500 Index Trust |
Mutual Fund | 2,569,232 | ||||||||||
INVESCO Core Multiple Attribute Equity Trust |
Mutual Fund | 3,092,312 | ||||||||||
INVESCO Core Fixed Income Trust |
Mutual Fund | 2,326,469 | ||||||||||
INVESCO Stable Value Trust |
Mutual Fund | 9,553,030 | ||||||||||
Janus Mid Cap Value Investor Shares |
Mutual Fund | 362,925 | ||||||||||
INVESCO Fundamental Core Balanced Trust |
Mutual Fund | 1,763,329 | ||||||||||
AIM Capital Development |
Mutual Fund | 1,605,790 | ||||||||||
American Growth Fund of America |
Mutual Fund | 441,564 | ||||||||||
AIM Small Cap Growth |
Mutual Fund | 128,761 | ||||||||||
MFS Value Class A |
Mutual Fund | 393,626 | ||||||||||
AIM Mid Cap Core Equity |
Mutual Fund | 178,318 | ||||||||||
Oppenheimer Global — Class A |
Mutual Fund | 1,818,022 | ||||||||||
Royce Low-Priced Stock |
Mutual Fund | 560,692 | ||||||||||
| Participant Loans with | ||||||||||||
| interest rates ranging from | ||||||||||||
| * | Loans to Participants |
6% to 11.5% and maturity dates ranging from January 16, 2004 to January 5, 2009 | 994,573 | |||||||||
| $ | 26,638,358 | |||||||||||
| * | A party-in-interest as defined by ERISA. |
See accompanying report of
independent registered public accounting firm.
13
Table of Contents
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Trustee of the ResortQuest Savings & Retirement Plan has duly caused this Annual Report to be signed on its behalf by the undersigned hereunto duly authorized.
RESORTQUEST SAVINGS &
RETIREMENT PLAN
By: Benefits Trust Committee for the
Gaylord
Entertainment
Company
401(K)
Savings Plan
Date: June 28, 2004
|
By: | /s/ J. Brian Byrd | ||
| Name: | J. Brian Byrd | |||
| Title: | Secretary of the Benefits Trust Committee for the | |||
| Gaylord Entertainment Company 401(K) Savings Plan | ||||