UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Commission file number
(Exact Name of Registrant as Specified in its Charter)
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(State or Other Jurisdiction of | (I.R.S. Employer | |
Incorporation or Organization) | Identification No.) |
(Address of Principal Executive Offices)
(Zip Code)
(
(Registrant’s Telephone Number, Including Area Code)
Securities registered pursuant to Section 12(b) of the Act:
Name of Each Exchange on | ||||
Title of Each Class | Trading Symbol(s) | Which Registered | ||
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
Class |
| Outstanding as of July 29, 2022 |
Common Stock, par value $.01 | |
RYMAN HOSPITALITY PROPERTIES, INC.
FORM 10-Q
For the Quarter Ended June 30, 2022
INDEX
2
Part I – FINANCIAL INFORMATION
Item 1. – FINANCIAL STATEMENTS.
RYMAN HOSPITALITY PROPERTIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands)
| June 30, |
| December 31, | |||
2022 | 2021 | |||||
ASSETS: |
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Property and equipment, net | $ | | $ | | ||
Cash and cash equivalents - unrestricted |
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Cash and cash equivalents - restricted |
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Notes receivable, net |
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Trade receivables, net |
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Prepaid expenses and other assets |
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Intangible assets, net | | | ||||
Total assets | $ | | $ | | ||
LIABILITIES AND EQUITY (DEFICIT): |
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Debt and finance lease obligations | $ | | $ | | ||
Accounts payable and accrued liabilities |
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Dividends payable |
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Deferred management rights proceeds |
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Operating lease liabilities |
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Deferred income tax liabilities, net | | | ||||
Other liabilities |
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Total liabilities | | | ||||
Commitments and contingencies |
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Noncontrolling interest in consolidated joint venture | | — | ||||
Equity (deficit): | ||||||
Preferred stock, $ |
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Common stock, $ |
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Additional paid-in capital |
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Treasury stock of |
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Distributions in excess of retained earnings |
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Accumulated other comprehensive loss |
| ( |
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Total stockholders' equity (deficit) |
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Noncontrolling interest in Operating Partnership | | ( | ||||
Total equity (deficit) | | ( | ||||
Total liabilities and equity (deficit) | $ | | $ | | ||
The accompanying notes are an integral part of these condensed consolidated financial statements.
3
RYMAN HOSPITALITY PROPERTIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
AND COMPREHENSIVE INCOME (LOSS)
(Unaudited)
(In thousands, except per share data)
Three Months Ended | Six Months Ended | ||||||||||||
June 30, | June 30, | ||||||||||||
| 2022 |
| 2021 |
| 2022 |
| 2021 |
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Revenues: |
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Rooms | $ | | $ | | $ | | $ | | |||||
Food and beverage |
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Other hotel revenue |
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Entertainment |
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Total revenues |
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Operating expenses: |
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Rooms |
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Food and beverage |
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Other hotel expenses |
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Management fees, net |
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Total hotel operating expenses |
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Entertainment |
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Corporate |
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Preopening costs |
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(Gain) loss on sale of assets | — | — | | ( | |||||||||
Depreciation and amortization | | | | | |||||||||
Total operating expenses |
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Operating income (loss) |
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Interest expense |
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Interest income |
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Loss on extinguishment of debt | ( | — | ( | ( | |||||||||
Loss from unconsolidated joint ventures |
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Other gains and (losses), net |
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Income (loss) before income taxes |
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Provision for income taxes |
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| ( |
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Net income (loss) | | ( | | ( | |||||||||
Net (income) loss attributable to noncontrolling interest in consolidated joint venture | ( | | ( | | |||||||||
Net (income) loss attributable to noncontrolling interest in Operating Partnership | ( | | ( | | |||||||||
Net income (loss) available to common stockholders | $ | | $ | ( | $ | | $ | ( | |||||
Basic income (loss) per share available to common stockholders | $ | | $ | ( | $ | | $ | ( | |||||
Diluted income (loss) per share available to common stockholders | $ | | $ | ( | $ | | $ | ( | |||||
Comprehensive income (loss), net of taxes | $ | | $ | ( | $ | | $ | ( | |||||
Comprehensive (income) loss, net of taxes, attributable to noncontrolling interest in consolidated joint venture | ( | | ( | | |||||||||
Comprehensive (income) loss, net of taxes, attributable to noncontrolling interest in Operating Partnership | ( | | ( | | |||||||||
Comprehensive income (loss), net of taxes, available to common stockholders | $ | | $ | ( | $ | | $ | ( | |||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
4
RYMAN HOSPITALITY PROPERTIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands)
Six Months Ended | |||||||
June 30, | |||||||
| 2022 |
| 2021 |
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Cash Flows from Operating Activities: |
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Net income (loss) | $ | | $ | ( | |||
Amounts to reconcile net income (loss) to net cash flows provided by (used in) operating activities: |
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Provision for deferred income taxes |
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Depreciation and amortization |
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Amortization of deferred financing costs |
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Loss from unconsolidated joint ventures | | | |||||
Stock-based compensation expense |
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Changes in: |
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Trade receivables |
| ( | ( | ||||
Accounts payable and accrued liabilities |
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Other assets and liabilities |
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Net cash flows provided by (used in) operating activities |
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Cash Flows from Investing Activities: |
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Purchases of property and equipment |
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Purchase of land adjacent to Gaylord Rockies | — | ( | |||||
Collection of notes receivable | | — | |||||
Purchase of Block 21, net of cash acquired | ( | — | |||||
Purchase of additional interest in Gaylord Rockies joint venture | — | ( | |||||
Investment in other joint ventures |
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Other investing activities, net |
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Net cash flows used in investing activities |
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Cash Flows from Financing Activities: |
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Net borrowings (repayments) under revolving credit facility |
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Repayments under term loan A | ( | — | |||||
Repayments under term loan B |
| ( | ( | ||||
Borrowings under OEG term loan B | | — | |||||
Repayments under Block 21 CMBS loan | ( | — | |||||
Issuance of senior notes | — | | |||||
Redemption of senior notes | — | ( | |||||
Deferred financing costs paid |
| ( | ( | ||||
Redemption of noncontrolling interest in Operating Partnership | — | ( | |||||
Sale of noncontrolling interest in OEG | | — | |||||
Payment of dividends |
| ( | ( | ||||
Payment of tax withholdings for share-based compensation |
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Other financing activities, net |
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Net cash flows provided by financing activities |
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Net change in cash, cash equivalents, and restricted cash |
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Cash, cash equivalents, and restricted cash, beginning of period |
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Cash, cash equivalents, and restricted cash, end of period | $ | | $ | | |||
Reconciliation of cash, cash equivalents, and restricted cash to balance sheet: | |||||||
Cash and cash equivalents - unrestricted | $ | | $ | | |||
Cash and cash equivalents - restricted | |
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Cash, cash equivalents, and restricted cash, end of period | $ | | $ | | |||
The accompanying notes are an integral part of these condensed consolidated financial statements.
5
RYMAN HOSPITALITY PROPERTIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY (DEFICIT)
AND NONCONTROLLING INTEREST
(Unaudited)
(In thousands)
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| Distributions |
| Accumulated |
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| Noncontrolling |
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| Noncontrolling | |||||||||||||||
| Additional | in Excess of | Other | Total | Interest in | Total | Interest in | ||||||||||||||||||||
| Common | Paid-in | Treasury | Retained | Comprehensive | Stockholders' | Operating | Equity | Consolidated | ||||||||||||||||||
Stock | Capital | Stock | Earnings | Loss | Equity (Deficit) | Partnership | (Deficit) | Joint Venture | |||||||||||||||||||
BALANCE, December 31, 2021 | $ | | $ | | $ | ( | $ | ( | $ | ( | $ | ( | $ | ( | $ | ( | $ | — | |||||||||
Net loss |
| — |
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| ( |
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| ( |
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Other comprehensive income, net of income taxes |
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Restricted stock units and stock options surrendered |
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Equity-based compensation expense |
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BALANCE, March 31, 2022 | $ | | $ | | $ | ( | $ | ( | $ | ( | $ | ( | $ | ( | $ | ( | $ | — | |||||||||
Net income |
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Other comprehensive loss, net of income taxes |
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| ( |
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Sale of noncontrolling interest in OEG | — | ( | — | — | — | ( | — | ( | | ||||||||||||||||||
Restricted stock units and stock options surrendered |
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| ( |
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| ( |
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Equity-based compensation expense |
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BALANCE, June 30, 2022 | $ | | $ | | $ | ( | $ | ( | $ | ( | $ | | $ | | $ | | $ | | |||||||||
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| Distributions |
| Accumulated |
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| Noncontrolling |
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| Noncontrolling | |||||||||||||||
| Additional | in Excess of | Other | Total | Interest in | Interest in | |||||||||||||||||||||
| Common | Paid-in | Treasury | Retained | Comprehensive | Stockholders' | Operating | Total | Consolidated | ||||||||||||||||||
Stock | Capital | Stock | Earnings | Loss | Equity | Partnership | Equity | Joint Venture | |||||||||||||||||||
BALANCE, December 31, 2020 | $ | | $ | | $ | ( | $ | ( | $ | ( | $ | | $ | | $ | | $ | | |||||||||
Net loss |
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| ( |
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| ( |
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Other comprehensive income, net of income taxes |
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Redemption of noncontrolling interest in Operating Partnership | — | — | — | ( | — | ( | ( | ( | — | ||||||||||||||||||
Contribution to consolidated joint venture | — | — | — | — | — | — | — | — | | ||||||||||||||||||
Restricted stock units and stock options surrendered |
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Equity-based compensation expense |
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BALANCE, March 31, 2021 | $ | | $ | | $ | ( | $ | ( | $ | ( | $ | | $ | | $ | | $ | | |||||||||
Net loss |
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| ( |
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| ( |
| ( |
| ( |
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Other comprehensive income, net of income taxes |
| — |
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Purchase of remaining interest in consolidated joint venture | — | ( | — | — | — | ( | — | ( | ( | ||||||||||||||||||
Restricted stock units and stock options surrendered |
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| ( |
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| ( |
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| ( |
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Equity-based compensation expense |
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BALANCE, June 30, 2021 | $ | | $ | | $ | ( | $ | ( | $ | ( | $ | ( | $ | | $ | ( | $ | — | |||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
6
RYMAN HOSPITALITY PROPERTIES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. BASIS OF PRESENTATION:
On January 1, 2013, Ryman Hospitality Properties, Inc. (“Ryman”) and its subsidiaries (collectively with Ryman, the “Company”) began operating as a real estate investment trust (“REIT”) for federal income tax purposes, specializing in group-oriented, destination hotel assets in urban and resort markets. The Company’s owned assets include a network of upscale, meetings-focused resorts that are managed by Marriott International, Inc. (“Marriott”) under the Gaylord Hotels brand. These resorts, which the Company refers to as the Gaylord Hotels properties, consist of the Gaylord Opryland Resort & Convention Center in Nashville, Tennessee (“Gaylord Opryland”), the Gaylord Palms Resort & Convention Center near Orlando, Florida (“Gaylord Palms”), the Gaylord Texan Resort & Convention Center near Dallas, Texas (“Gaylord Texan”), the Gaylord National Resort & Convention Center near Washington D.C. (“Gaylord National”), and the Gaylord Rockies Resort & Convention Center near Denver, Colorado (“Gaylord Rockies”), which prior to May 2021 was owned by a joint venture (the “Gaylord Rockies joint venture”) in which the Company owned a
In April 2021, the Company entered into an agreement with RIDA Development Corporation to acquire the remaining
As further discussed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, for periods prior to its ownership of
The Company also owns a business holding a number of media and entertainment assets, known as the Opry Entertainment Group, reported as the Company’s Entertainment segment. These assets include the Grand Ole Opry, the legendary weekly showcase of country music’s finest performers; the Ryman Auditorium, the storied live music venue and former home of the Grand Ole Opry; WSM-AM, the Opry’s radio home; Ole Red, a brand of Blake Shelton-themed bar, music venue and event spaces;
The condensed consolidated financial statements include the accounts of Ryman and its subsidiaries and have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted from this report pursuant to such rules and regulations. These condensed consolidated financial statements should be read in conjunction
7
with the audited consolidated financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021. In the opinion of management, all adjustments necessary for a fair statement of the results of operations for the interim periods have been included. All adjustments are of a normal, recurring nature. The results of operations for such interim periods are not necessarily indicative of the results for the full year because of seasonal and short-term variations.
The Company principally operates, through its subsidiaries and its property managers, as applicable, in the following business segments: Hospitality, Entertainment, and Corporate and Other.
Impact of COVID-19 Pandemic
The novel coronavirus disease (COVID-19) pandemic has been and continues to be a complex and evolving situation, causing unprecedented levels of disruption to the Company’s business. Although the Company’s assets are currently open and operating without capacity restrictions and business levels continue to recover, there remains significant uncertainty surrounding the full extent of the impact of the COVID-19 pandemic on the Company’s future results of operations and financial position.
All of the Company’s assets are open and have been operating throughout 2022. The majority of the Company’s businesses were open and operating throughout 2021. However, Gaylord National remained closed during the first half of 2021 and reopened July 1, 2021. The Grand Ole Opry and Ryman Auditorium reopened for limited-capacity publicly attended performances in September 2020, and reopened for full-capacity publicly attended performances in May 2021. In addition, subsequent to the December 2020 downtown Nashville bombing, the Wildhorse Saloon reopened in April 2021.
Throughout 2020 and 2021 and continuing to date, the Company has paid all required debt service payments on its indebtedness, lease payments, taxes and other payables. Beginning in July 2020 and continuing to date, Gaylord Rockies was in a cash sweep position pursuant to and as defined in the Gaylord Rockies $
At June 30, 2022, the Company had $
Newly Issued Accounting Standards
In March 2020, the FASB issued ASU No. 2020-04, “Reference Rate Reform – Facilitation of the Effects of Reference Rate Reform on Financial Reporting,” which provides temporary optional expedients and exceptions to the existing guidance on contract modifications and hedge accounting to ease the financial reporting burdens of the expected market transition from the London Interbank Offered Rate (“LIBOR”) and other interbank offered rates to alternative reference rates, such as the Secured Overnight Financing Rate (“SOFR”). The guidance in ASU 2020-04 is optional, effective immediately, and may be elected over time as reference rate reform activities occur generally through December 31, 2022. During 2020, the Company elected to apply the hedge accounting expedients related to probability and the assessments of effectiveness for future LIBOR-indexed cash flows to assume that the index upon which future hedged transactions will be based matches the index on the corresponding derivatives. Application of these expedients preserves the presentation of derivatives consistent with past presentation. The Company continues to evaluate the impact of this guidance and may apply other elections as applicable as additional market changes occur.
2. OEG TRANSACTION:
On June 16, 2022, the Company and certain of its subsidiaries, including OEG Attractions Holdings, LLC (“OEG”), which directly or indirectly owns the assets that comprise the Company’s Entertainment segment, consummated the transactions pursuant to an investment agreement (the “Investment Agreement”) with Atairos Group, Inc. (“Atairos”) and A-OEG Holdings, LLC, an affiliate of Atairos (the “OEG Investor”), pursuant to which OEG issued and sold to the OEG Investor, and the OEG Investor acquired,
8
“OEG Transaction”). The purchase price payable to the Company for the OEG Transaction may be increased by $
The Company retains a controlling
Pursuant to the Second Amended and Restated Limited Liability Company Agreement for OEG entered into at the closing of the OEG Transaction (the “OEG LLC Agreement”), OEG will be governed by a Board of Managers (the “Board”), subject to member consent to certain actions. The Board will initially consist of
The OEG Investor will have the option to acquire additional common units of OEG from the Company (the “Purchase Option”) in each of the fourth quarters of 2023, 2024 and 2025 in an amount equal to the lesser of $