Release Details

NASHVILLE, Tenn., May 02, 2022 (GLOBE NEWSWIRE) -- Ryman Hospitality Properties, Inc. (NYSE: RHP), a lodging real estate investment trust (“REIT”) specializing in group-oriented, destination hotel assets in urban and resort markets, today reported financial results for the three months ended March 31, 2022.

First Quarter 2022 Highlights and Recent Developments:

• Impacted by group cancellations early in the quarter due to the Omicron variant, the Company generated Q1 2022 Net Loss available to common shareholders of $(24.6) million and consolidated Adjusted EBITDAre of $69.0 million.
• Driven by strong leisure ADR and occupancy and the rapid recovery in group travel from the Omicron variant, Hospitality occupancy reached 63.3% in March, compared to the month of January when occupancy was 32.8%.
• Business levels rebounded quickly in the quarter, with Hospitality Operating Income/(Loss) and Hospitality Adjusted EBITDAre reaching $33.9 million and $52.5 million in March, respectively, compared to $(17.1) million and $0.9 million in January, respectively.
• Strong ADR performance across all five Gaylord Hotels, with ADR reaching over $229 per night in Q1 2022, an increase of 21.0% compared to Q1 2021 and 14.0% compared to Q1 2019 ADR.
• The Company recorded $19.6 million in cancellation and attrition fees in Q1 2022.
• Gross Advanced Group Room Bookings in Q1 2022, exceeded Q1 2019 levels, with an increase in ADR of 7.5% on new bookings for all future years as compared to Q1 2021, and 12.7% above Q1 2019, ADR levels.
• Subsequent to quarter end, the Company announced a strategic investment in the Company’s Opry Entertainment Group (OEG) by Atairos and NBCUniversal, which initially values the OEG business at $1.415 billion, inclusive of the pending acquisition of Block 21, and is expected to close in Q2 2022.
• Company provides outlook for Q2 2022 consolidated Net Income of $28.5 to $32.0 million; FY 2022 consolidated Net Income of $60.0 to $75.0 million; Q2 2022 consolidated Adjusted EBITDAre of $135 to $145 million and FY 2022 consolidated Adjusted EBITDAre of $476 to $502 million.

Colin Reed, Chairman and Chief Executive Officer of Ryman Hospitality Properties, said, “Our businesses delivered better than expected performance during the first quarter, and we are starting the second quarter with positive momentum heading into the rest of the year. The initial headwinds we faced from the Omicron variant early in the year were overcome by a rapid month-over-month improvement in group travel, continued strength in leisure demand, and a Q1 2022 ADR that surpassed our Q1 2019 ADR by 14.0 percent. Notably, we ended the quarter with significant acceleration across our business, delivering Hospitality Adjusted EBITDAre for March that exceeded comparable results for the pre-pandemic period of March 2019. This was achieved despite overall occupancy rates that were nearly sixteen points lower than the same period in 2019. The strong end to the quarter and confidence for the remainder of 2022, barring a new variant or other exogenous events, is allowing us to provide both Q2 and full year 2022 outlook for Net Income and consolidated Adjusted EBITDAre.

In addition to strong financial performance at the end of the first quarter, we announced in early April a major step forward in our plans to expand the reach of our entertainment business, through a strategic partnership with Atairos and NBCUniversal. We believe this alliance will help accelerate the growth in this one-of-a-kind business while allowing us to deleverage and continue to strategically invest in our hospitality business. We look forward to closing this transaction in Q2 2022 and to what this partnership will bring in the months and years ahead.”

First Quarter 2022 Results (as compared to First Quarter 2021):

Note: For the Company’s definitions of Adjusted EBITDAre, Adjusted EBITDAre margin, Adjusted EBITDAre, excluding noncontrolling interest in consolidated joint venture, Adjusted EBITDAre, excluding noncontrolling interest in consolidated joint venture margin, FFO available to common shareholders and unit holders, and Adjusted FFO available to common shareholders and unit holders, as well as a reconciliation of the non-GAAP financial measure Adjusted EBITDAre to Net Income/(Loss) and a reconciliation of the non-GAAP financial measure Adjusted FFO available to common shareholders and unit holders to Net Income/(Loss), see “Non-GAAP Financial Measures,” “EBITDAre, Adjusted EBITDAre and Adjusted EBITDAre, Excluding Noncontrolling Interest in Consolidated Joint Venture Definition,” “Adjusted EBITDAre, Excluding Noncontrolling Interest in Consolidated Joint Venture Margin Definition” “FFO, Adjusted FFO, and Adjusted FFO available to common shareholders and unit holders Definition” and “Supplemental Financial Results” below.

Note: For the Company’s definitions of Revenue Per Available Room (RevPAR) and Total Revenue Per Available Room (Total RevPAR), see “Calculation of RevPAR, Total RevPAR, and Occupancy” below. Property-level results and operating metrics for first quarter 2022 are presented in greater detail below and under “Supplemental Financial Results—Hospitality Segment Adjusted EBITDAre Reconciliations and Operating Metrics,” which includes a reconciliation of the non-GAAP financial measures Hospitality Adjusted EBITDAre to Hospitality Operating Income/(Loss), and property-level Adjusted EBITDAre to property-level Operating Income/(Loss) for each of the hotel properties.

Hospitality Segment Highlights

• Hotel occupancy was 47.3% in Q1 2022, however, occupancy increased substantially month-by-month, rising from 32.8% in January to 63.3% in March as the Omicron variant subsided.
• Gaylord Palms delivered the best Operating Income and Adjusted EBITDAre month on record for the hotel for the month of March, with occupancy levels near 80%, including the recently completed 302 room expansion.
• Group sales production for the quarter totaled 422,000 gross room nights, with a 12.7% improvement in ADR for all future years over Q1 2019 group production.
  
  

Entertainment Segment

For the three months ended March 31, 2022, and 2021, the Company reported the following:

Reed continued, “Despite some turbulence early in the quarter related to the Omicron variant, our entertainment business results exceeded our internal expectations as live entertainment and leisure travel continues to appeal to consumers across the country. Our previously announced growth projects remain on pace, and our Block 21 acquisition is expected to close prior to June 1, 2022. We are pleased with the recovery we have seen in this business and look forward to increased leisure demand for the remainder of the year.”

Corporate and Other Segment

For the three months ended March 31, 2022, and 2021, the Company reported the following: 

The increase in Corporate and Other Segment Operating Loss and decrease in Adjusted EBITDAre for the 2022 period resulted from an increase in administrative and employment costs associated with the hiring of additional employees and increased wages to support the Company’s continued recovery and future growth.

Reed concluded, “After two years of uncertainty, we are at last beginning to see familiar patterns emerge on both sides of our business. We have always taken pride in the unique visibility that the contractual nature of our core business provides, and we remain optimistic about our current trajectory and tremendously enthusiastic about our long-term prospects.”

2022 Guidance

The following business performance outlook for second quarter 2022 and full year 2022 is based on current information as of May 2, 2022. The Company does not expect to update the guidance provided below before next quarter’s earnings release. However, the Company may update its full business outlook or any portion thereof at any time for any reason. The guidance below contemplates the consummation of the planned Block 21 transaction and the Company’s pro-rata share of the Circle JV.

Note: For reconciliations of Consolidated Adjusted EBITDAre guidance to Net Income and segment-level Adjusted EBITDAre to segment-level Operating Income, see “Reconciliation of Forward-Looking Statements” below.

Development Update
On March 28, 2022, the Company announced that the anticipated closing date for the previously announced sale of Block 21 by Stratus Properties, Inc. to the Company was extended, as the parties complete the process of obtaining the remaining required approvals of the assumption of the property’s existing mortgage loan by the purchaser. The acquisition is now expected to close prior to June 1, 2022, subject to the timely satisfaction or waiver of various closing conditions, including the final consent of the loan servicers to the assumption of the existing loan by the purchaser, the consent of the hotel operator, an affiliate of Marriott, to the assumption of the hotel operating agreement by the purchaser, the absence of a material adverse effect, and other customary closing conditions.

On April 4, 2022, the Company announced that Atairos, along with Atairos’ long-term strategic partner NBCUniversal, will acquire a 30% minority ownership stake in RHP’s Opry Entertainment Group. Atairos’ investment values OEG at $1.415 billion, inclusive of OEG’s previously announced acquisition of Block 21. Atairos has agreed to make an additional $30 million investment in OEG, contingent on certain performance targets being achieved, which would bring OEG’s valuation to $1.515 billion. The initial $1.415 billion valuation includes a recapitalization of OEG with a new $300 million Term Loan B, a new revolving credit facility, and the assumption of a $137 million CMBS facility for Block 21 upon consummation of that transaction. Atairos’ and NBCUniversal’s initial 30% equity investment in OEG is approximately $293 million, of which NBCUniversal will indirectly invest up to approximately $15 million. The transaction, which is subject to customary conditions, is expected to close in Q2 2022. The Company expects to use the net proceeds of the $293 million investment and the OEG financing to pay transaction expenses, fully repay its $300 million Term Loan A and repay substantially all the borrowings outstanding under its revolving credit facility, thereby reducing leverage, and creating balance sheet flexibility to allow the Company to pursue continued reinvestment in its businesses.

Balance Sheet/Liquidity Update
As of March 31, 2022, the Company had total debt outstanding of $2,937.7 million, net of unamortized deferred financing costs, and unrestricted cash of $128.4 million. As of March 31, 2022, $190.0 million was drawn under the revolving credit line of the Company’s credit facility, and the lending banks had issued $0.1 million in letters of credit, which left $509.9 million of availability for borrowing under the credit facility.

At the end of the first quarter, the Company effectively exited its covenant waiver period under its secured credit facility. Beginning with the second quarter, the Company now will once again be required to meet modified covenants related to its funded indebtedness to total asset value ratio, fixed charge coverage ratio, and implied debt service coverage ratio.

Earnings Call Information
Ryman Hospitality Properties will hold a conference call to discuss this release tomorrow, May 3, 2022, at 9:00 a.m. ET. Investors can listen to the conference call over the Internet at www.rymanhp.com. To listen to the live call, please go to the Investor Relations section of the website (Investor Relations/Presentations, Earnings and Webcasts) at least 15 minutes prior to the call to register and download any necessary audio software. For those who cannot listen to the live broadcast, a replay will be available shortly after the call and will be available for at least 30 days.

About Ryman Hospitality Properties, Inc.
Ryman Hospitality Properties, Inc. (NYSE: RHP) is a leading lodging and hospitality real estate investment trust that specializes in upscale convention center resorts and country music entertainment experiences. The Company’s core holdings, Gaylord Opryland Resort & Convention Center, Gaylord Palms Resort & Convention Center, Gaylord Texan Resort & Convention Center, Gaylord National Resort & Convention Center, and Gaylord Rockies Resort & Convention Center are five of the top 10 largest non-gaming convention center hotels in the United States based on total indoor meeting space. These convention center resorts operate under the Gaylord Hotels brand and are managed by Marriott International. The Company also owns two adjacent ancillary hotels and a small number of attractions managed by Marriott International for a combined total of 10,412 rooms and more than 2.8 million square feet of total indoor and outdoor meeting space in top convention and leisure destinations across the country. The Company’s Entertainment segment includes a growing collection of iconic and emerging country music brands operated by the Company, including the Grand Ole Opry; Ryman Auditorium; WSM 650 AM; Ole Red and a 50% interest in Circle, a country lifestyle media network the Company owns in a joint venture with Gray Television; as well as other Nashville-area attractions managed by Marriott. The Company operates its Entertainment segment as part of a taxable REIT subsidiary. Visit RymanHP.com for more information.

Cautionary Note Regarding Forward-Looking Statements
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. You can identify these statements by the fact that they do not relate strictly to historical or current facts. Examples of these statements include, but are not limited to, statements regarding the future performance of our business, the impact of COVID-19 on travel, leisure and group demand, the effects of COVID-19 on our results of operations, rebooking efforts, our liquidity, recovery of group business to pre-pandemic levels, anticipated business levels and anticipated financial results for the Company during future periods, the pending acquisition of Block 21, the Company’s expectations for Block 21 upon the closing of the transaction, the pending Atairos investment in OEG, the Company’s expectations for OEG upon the closing of the proposed investment in OEG, and other business or operational issues. 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 the COVID-19 pandemic, including the effects of the COVID-19 pandemic on us and the hospitality and entertainment industries generally, the effects of the COVID-19 pandemic on the demand for travel, leisure and group business (including government-imposed restrictions), levels of consumer confidence in the safety of travel and group gathering as a result of COVID-19, the duration and severity of the COVID-19 pandemic in the United States and the pace of recovery following the COVID-19 pandemic, the duration and severity of the COVID-19 pandemic in the markets where our assets are located, governmental restrictions on our businesses, economic conditions affecting the hospitality business generally, the geographic concentration of the Company’s hotel properties, business levels at the Company’s hotels, the effects of inflation on the Company’s business and on its customers, including group business at its hotels, the Company’s ability to remain qualified as a REIT for federal income tax purposes, the Company’s ability to execute its strategic goals as a REIT, the Company’s ability to generate cash flows to support dividends, the suspension of our dividend and our dividend policy, including the frequency and amount of any dividend we may pay, the Company’s ability to borrow funds pursuant to its credit agreement, the occurrence of any event, change or other circumstance that could delay the closing of the Block 21 acquisition or the Atairos investment in OEG, or result in the termination of the agreement for the Block 21 acquisition or for the proposed investment in OEG, adverse effects on the Company’s common stock because of the failure to complete the Block 21 acquisition or the proposed investment in OEG, and the Company’s ability to otherwise obtain cash to fund the Block 21 acquisition. 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 U.S. Securities and Exchange Commission (SEC) and include the risk factors and other risks and uncertainties described in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021, and its Quarterly Reports on Form 10-Q and subsequent filings. 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.

Additional Information
This release should be read in conjunction with the consolidated financial statements and notes thereto included in our most recent annual report on Form 10-K. Copies of our reports are available on our website at no expense at www.rymanhp.com and through the SEC’s Electronic Data Gathering Analysis and Retrieval System (“EDGAR”) at www.sec.gov.

Calculation of RevPAR, Total RevPAR, and Occupancy
We calculate revenue per available room (“RevPAR”) for our hotels by dividing room revenue by room nights available to guests for the period. Room nights available to guests include nights the hotels are closed. We calculate total revenue per available room (“Total RevPAR”) for our hotels by dividing the sum of room revenue, food & beverage, and other ancillary services revenue by room nights available to guests for the period. Rooms out of service for renovation are included in room nights available. For the three months ended March 31, 2022, and 2021, the calculation of RevPAR and Total RevPAR in our tabular presentations has not been changed as a result of the COVID-19 pandemic and the resulting hotel closures and is consistent with prior periods. The closure of Gaylord National, which reopened July 1, 2021, resulted in significantly lower performance reflected in these metrics for the three months ended March 31, 2021, as compared to the current period. Occupancy figures reflect an additional 302 rooms available at Gaylord Palms beginning in June 2021.

Calculation of GAAP Margin Figures
We calculate Net Income/(Loss) available to common shareholders margin by dividing GAAP consolidated Net Income available to common shareholders by GAAP consolidated Total Revenue. We calculate consolidated, segment or property-level Operating Income Margin by dividing consolidated, segment or property-level GAAP Operating Income/(Loss) by consolidated, segment or property-level GAAP Revenue.

Non-GAAP Financial Measures
We present the following non-GAAP financial measures we believe are useful to investors as key measures of our operating performance:

EBITDAre, Adjusted EBITDAre and Adjusted EBITDAre, Excluding Noncontrolling Interest in Consolidated Joint Venture Definition
We calculate EBITDAre, which is defined by the National Association of Real Estate Investment Trusts (“NAREIT”) in its September 2017 white paper as Net Income (calculated in accordance with GAAP) plus interest expense, income tax expense, depreciation and amortization, gains or losses on the disposition of depreciated property (including gains or losses on change in control), impairment write-downs of depreciated property and of investments in unconsolidated affiliates caused by a decrease in the value of depreciated property or the affiliate, and adjustments to reflect the entity’s share of EBITDAre of unconsolidated affiliates.
Adjusted EBITDAre is then calculated as EBITDAre, plus to the extent the following adjustments occurred during the periods presented:

• preopening costs;
• non-cash lease expense;
• equity-based compensation expense;
• impairment charges that do not meet the NAREIT definition above;
• credit losses on held-to-maturity securities;
• any transaction costs of acquisitions;
• interest income on bonds;
• loss on extinguishment of debt;
• pension settlement charges;
• pro rata Adjusted EBITDAre from unconsolidated joint venture; and
• any other adjustments we have identified herein.
  

We then exclude noncontrolling interests in consolidated joint venture to calculate Adjusted EBITDAre, Excluding Noncontrolling Interest in Consolidated Joint Venture.

We use EBITDAre, Adjusted EBITDAre and Adjusted EBITDAre, Excluding Noncontrolling Interest in Consolidated Joint Venture and segment or property-level EBITDAre and Adjusted EBITDAre to evaluate our operating performance. We believe that the presentation of these non-GAAP metrics provides useful information to investors regarding our operating performance and debt leverage metrics, and that the presentation of these non-GAAP metrics, when combined with the primary GAAP presentation of Net Income or Operating Income, as applicable, is beneficial to an investor’s complete understanding of our operating performance. We make additional adjustments to EBITDAre when evaluating our performance because we believe that presenting Adjusted EBITDAre and Adjusted EBITDAre, Excluding Noncontrolling Interest in Consolidated Joint Venture provides useful information to investors regarding our operating performance and debt leverage metrics.

Adjusted EBITDAre, Excluding Noncontrolling Interest in Consolidated Joint Venture Margin Definition
We calculate consolidated Adjusted EBITDAre, Excluding Noncontrolling Interest in Consolidated Joint Venture Margin by dividing consolidated Adjusted EBITDAre, Excluding Noncontrolling Interest in Consolidated Joint Venture by GAAP consolidated Total Revenue. We calculate consolidated, segment or property-level Adjusted EBITDAre Margin by dividing consolidated, segment-, or property-level Adjusted EBITDAre by consolidated, segment-, or property-level GAAP Revenue. We believe Adjusted EBITDAre, Excluding Noncontrolling Interest in Consolidated Joint Venture Margin is useful to investors in evaluating our operating performance because this non-GAAP financial measure helps investors evaluate and compare the results of our operations from period to period by presenting a ratio showing the quantitative relationship between Adjusted EBITDAre, Excluding Noncontrolling Interest in Consolidated Joint Venture and GAAP consolidated Total Revenue or segment or property-level GAAP Revenue, as applicable.

FFO, Adjusted FFO, and Adjusted FFO available to common shareholders and unit holders Definition
We calculate FFO, which definition is clarified by NAREIT in its December 2018 white paper as Net Income (calculated in accordance with GAAP) excluding depreciation and amortization (excluding amortization of deferred financing costs and debt discounts), gains and losses from the sale of certain real estate assets, gains and losses from a change in control, impairment write-downs of certain real estate assets and investments in entities when the impairment is directly attributable to decreases in the value of depreciated real estate held by the entity, income (loss) from consolidated joint venture attributable to noncontrolling interest, and pro rata adjustments for unconsolidated joint venture.

To calculate Adjusted FFO available to common shareholders and unit holders, we then exclude, to the extent the following adjustments occurred during the periods presented:

• right-of-use asset amortization;
• impairment charges that do not meet the NAREIT definition above;
• write-offs of deferred financing costs;
• amortization of debt discounts or premiums and amortization of deferred financing costs;
• (gains) losses on extinguishment of debt
• non-cash lease expense;
• credit loss on held-to-maturity securities;
• pension settlement charges;
• additional pro rata adjustments from unconsolidated joint venture;
• (gains) losses on other assets;
• transaction costs on acquisitions;
• deferred income tax expense (benefit); and
• any other adjustments we have identified herein.
  

To calculate Adjusted FFO available to common shareholders and unit holders (excluding maintenance capex), we then exclude FF&E reserve for managed properties and maintenance capital expenditures for non-managed properties. FFO available to common shareholders and unit holders and Adjusted FFO available to common shareholders and unit holders and Adjusted FFO available to common shareholders and unit holders (excluding maintenance capex) exclude the ownership portion of Gaylord Rockies joint venture not controlled or owned by the Company in prior periods.

We believe that the presentation of these non-GAAP financial measures provides useful information to investors regarding the performance of our ongoing operations because each presents a measure of our operations without regard to specified non-cash items such as real estate depreciation and amortization, gain or loss on sale of assets and certain other items, which we believe are not indicative of the performance of our underlying hotel properties. We believe that these items are more representative of our asset base than our ongoing operations. We also use these non-GAAP financial measures as measures in determining our results after considering the impact of our capital structure.

We caution investors that non-GAAP financial measures we present may not be comparable to similar measures disclosed by other companies, because not all companies calculate these non-GAAP measures in the same manner. The non-GAAP financial measures we present, and any related per share measures, should not be considered as alternative measures of our Net Income (Loss), operating performance, cash flow or liquidity. These non-GAAP financial measures may include funds that may not be available for our discretionary use due to functional requirements to conserve funds for capital expenditures and property acquisitions and other commitments and uncertainties. Although we believe that these non-GAAP financial measures can enhance an investor’s understanding of our results of operations, these non-GAAP financial measures, when viewed individually, are not necessarily better indicators of any trend as compared to GAAP measures such as Net Income (Loss), Operating Income (Loss), or cash flow from operations.

Source: Ryman Hospitality Properties, Inc.