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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
 	 	 	
þ	 	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934	
For the quarterly period ended March 31, 2011
or
 	 	 	
o	 	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934	
Commission file number 1-13079
GAYLORD ENTERTAINMENT COMPANY
(Exact name of registrant as specified in its charter)
 	 	 	
Delaware	 	73-0664379	
 	 	 	
(State or other jurisdiction of
incorporation or organization)	 	(I.R.S. Employer
Identification No.)	
One Gaylord Drive
Nashville, Tennessee 37214
(Address of principal executive offices)
(Zip Code)
(615) 316-6000
(Registrant’s telephone number, including area code)
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. Yes  þ  No  o
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes  þ  No  o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
 	 	 	 	 	 	 	
Large accelerated filer þ	 	Accelerated filer o	 	Non-accelerated filer o
(Do not check if a smaller reporting company)	 	Smaller reporting company o	
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No þ
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 April 30, 2011	 	 	
 	Common Stock, $.01 par value	 	 	48,360,210 shares	 	

 

 
GAYLORD ENTERTAINMENT COMPANY
FORM 10-Q
For the Quarter Ended March 31, 2011
INDEX
 	 	 	 	
 	 	Page	 	
Part I — Financial Information	 	 	 	
 	 	 	 	
Item 1. Financial Statements.	 	 	 	
 	 	 	 	
Condensed Consolidated Statements of Operations — For the Three Months Ended March 31, 2011 and 2010	 	3	 	
 	 	 	 	
Condensed Consolidated Balance Sheets — March 31, 2011 and December 31, 2010	 	4	 	
 	 	 	 	
Condensed Consolidated Statements of Cash Flows — For the Three Months Ended March 31, 2011 and 2010	 	5	 	
 	 	 	 	
Notes to Condensed Consolidated Financial Statements	 	6	 	
 	 	 	 	
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.	 	23	 	
 	 	 	 	
Item 3. Quantitative and Qualitative Disclosures About Market Risk.	 	44	 	
 	 	 	 	
Item 4. Controls and Procedures.	 	45	 	
 	 	 	 	
Part II — Other Information	 	 	 	
 	 	 	 	
Item 1. Legal Proceedings.	 	46	 	
 	 	 	 	
Item 1A. Risk Factors.	 	46	 	
 	 	 	 	
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.	 	46	 	
 	 	 	 	
Item 3. Defaults Upon Senior Securities.	 	46	 	
 	 	 	 	
Item 5. Other Information.	 	46	 	
 	 	 	 	
Item 6. Exhibits.	 	46	 	
 	 	 	 	
SIGNATURES	 	47	 	
 EX-31.1	
 EX-31.2	
 EX-32.1	
 EX-101 INSTANCE DOCUMENT	
 EX-101 SCHEMA DOCUMENT	
 EX-101 CALCULATION LINKBASE DOCUMENT	
 EX-101 LABELS LINKBASE DOCUMENT	
 EX-101 PRESENTATION LINKBASE DOCUMENT	
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Part I — FINANCIAL INFORMATION
Item 1. — FINANCIAL STATEMENTS.
GAYLORD ENTERTAINMENT COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except per share data)
 	 	 	 	 	 	 	 	 	
 	 	Three Months Ended	 	
 	 	March 31,	 	
 	 	2011	 	 	2010	 	
Revenues	 	$	220,738	 	 	$	214,481	 	
 	 	 	 	 	 	 	 	 	
Operating expenses:	 	 	 	 	 	 	 	 	
Operating costs	 	 	133,878	 	 	 	130,555	 	
Selling, general and administrative	 	 	43,078	 	 	 	41,902	 	
Casualty loss	 	 	(1	)	 	 	—	 	
Depreciation and amortization	 	 	29,057	 	 	 	27,071	 	

Operating income	 	 	14,726	 	 	 	14,953	 	
 	 	 	 	 	 	 	 	 	
Interest expense, net of amounts capitalized	 	 	(20,809	)	 	 	(20,115	)	
Interest income	 	 	3,173	 	 	 	3,222	 	
Income (loss) from unconsolidated companies	 	 	173	 	 	 	(73	)	
Net gain on extinguishment of debt	 	 	—	 	 	 	1,199	 	
Other gains and (losses), net	 	 	(191	)	 	 	(13	)	

Loss before income taxes and discontinued operations	 	 	(2,928	)	 	 	(827	)	
 	 	 	 	 	 	 	 	 	
(Benefit) provision for income taxes	 	 	(967	)	 	 	975	 	

Loss from continuing operations	 	 	(1,961	)	 	 	(1,802	)	
 	 	 	 	 	 	 	 	 	
Income (loss) from discontinued operations, net of income taxes	 	 	4	 	 	 	(48	)	

Net loss	 	$	(1,957	)	 	$	(1,850	)	

Basic loss per share:	 	 	 	 	 	 	 	 	
Loss from continuing operations	 	$	(0.04	)	 	$	(0.04	)	
Income from discontinued operations, net of income taxes	 	 	—	 	 	 	—	 	
 	 	 	 	 	 	 	
Net loss	 	$	(0.04	)	 	$	(0.04	)	

Fully diluted loss per share:	 	 	 	 	 	 	 	 	
Loss from continuing operations	 	$	(0.04	)	 	$	(0.04	)	
Income from discontinued operations, net of income taxes	 	 	—	 	 	 	—	 	
 	 	 	 	 	 	 	
Net loss	 	$	(0.04	)	 	$	(0.04	)	
 	 	 	 	 	 	 	
The accompanying notes are an integral part of these condensed consolidated financial statements.
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GAYLORD ENTERTAINMENT COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands)
 	 	 	 	 	 	 	 	 	
 	 	March 31,	 	 	December 31,	 	
 	 	2011	 	 	2010	 	
ASSETS	
Current assets:	 	 	 	 	 	 	 	 	
Cash and cash equivalents — unrestricted	 	$	86,968	 	 	$	124,398	 	
Cash and cash equivalents — restricted	 	 	1,150	 	 	 	1,150	 	
Trade receivables, less allowance of $806 and $882, respectively	 	 	63,927	 	 	 	31,793	 	
Estimated fair value of derivative assets	 	 	11	 	 	 	22	 	
Deferred income taxes	 	 	6,719	 	 	 	6,495	 	
Other current assets	 	 	43,739	 	 	 	48,992	 	
 	 	 	 	 	 	 	
Total current assets	 	 	202,514	 	 	 	212,850	 	

Property and equipment, net of accumulated depreciation	 	 	2,203,681	 	 	 	2,201,445	 	
Notes receivable, net of current portion	 	 	142,457	 	 	 	142,651	 	
Long-term deferred financing costs	 	 	11,240	 	 	 	12,521	 	
Other long-term assets	 	 	50,077	 	 	 	51,065	 	
Long-term assets of discontinued operations	 	 	416	 	 	 	401	 	
 	 	 	 	 	 	 	
Total assets	 	$	2,610,385	 	 	$	2,620,933	 	

LIABILITIES AND STOCKHOLDERS’ EQUITY	
Current liabilities:	 	 	 	 	 	 	 	 	
Current portion of long-term debt and capital lease obligations	 	$	58,805	 	 	$	58,574	 	
Accounts payable and accrued liabilities	 	 	158,226	 	 	 	175,343	 	
Estimated fair value of derivative liabilities	 	 	7,235	 	 	 	12,475	 	
Current liabilities of discontinued operations	 	 	342	 	 	 	357	 	
 	 	 	 	 	 	 	
Total current liabilities	 	 	224,608	 	 	 	246,749	 	

Long-term debt and capital lease obligations, net of current portion	 	 	1,103,411	 	 	 	1,100,641	 	
Deferred income taxes	 	 	104,630	 	 	 	101,140	 	
Other long-term liabilities	 	 	140,502	 	 	 	142,200	 	
Long-term liabilities of discontinued operations	 	 	451	 	 	 	451	 	
Commitments and contingencies	 	 	 	 	 	 	 	 	
Stockholders’ equity:	 	 	 	 	 	 	 	 	
Preferred stock, $.01 par value, 100,000 shares authorized, no shares issued or outstanding	 	 	—	 	 	 	—	 	
Common stock, $.01 par value, 150,000 shares authorized, 48,357 and 48,144 shares issued and outstanding, respectively	 	 	484	 	 	 	481	 	
Additional paid-in capital	 	 	921,936	 	 	 	916,359	 	
Treasury stock of 385 shares, at cost	 	 	(4,599	)	 	 	(4,599	)	
Retained earnings	 	 	143,643	 	 	 	145,600	 	
Accumulated other comprehensive loss	 	 	(24,681	)	 	 	(28,089	)	
 	 	 	 	 	 	 	
Total stockholders’ equity	 	 	1,036,783	 	 	 	1,029,752	 	
 	 	 	 	 	 	 	
Total liabilities and stockholders’ equity	 	$	2,610,385	 	 	$	2,620,933	 	
 	 	 	 	 	 	 	
The accompanying notes are an integral part of these condensed consolidated financial statements.
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GAYLORD ENTERTAINMENT COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Three Months Ended March 31, 2011 and 2010
(Unaudited)
(In thousands)
 	 	 	 	 	 	 	 	 	
 	 	2011	 	 	2010	 	
Cash Flows from Operating Activities:	 	 	 	 	 	 	 	 	
Net loss	 	$	(1,957	)	 	$	(1,850	)	
Amounts to reconcile net loss to net cash flows (used in) provided by operating activities:	 	 	 	 	 	 	 	 	
(Income) loss from discontinued operations, net of taxes	 	 	(4	)	 	 	48	 	
(Income) loss from unconsolidated companies	 	 	(173	)	 	 	73	 	
Loss on disposals of long-lived assets	 	 	201	 	 	 	13	 	
(Benefit) provision for deferred income taxes	 	 	(1,346	)	 	 	1,458	 	
Depreciation and amortization	 	 	29,057	 	 	 	27,071	 	
Amortization of deferred financing costs	 	 	1,309	 	 	 	1,314	 	
Amortization of discount on convertible notes	 	 	3,043	 	 	 	2,802	 	
Stock-based compensation expense	 	 	2,323	 	 	 	1,668	 	
Excess tax benefit from stock-based compensation	 	 	—	 	 	 	(134	)	
Net gain on extinguishment of debt	 	 	—	 	 	 	(1,199	)	
Changes in:	 	 	 	 	 	 	 	 	
Trade receivables	 	 	(32,134	)	 	 	(9,321	)	
Interest receivable	 	 	5,089	 	 	 	4,866	 	
Accounts payable and accrued liabilities	 	 	(11,478	)	 	 	(322	)	
Other assets and liabilities	 	 	(1,882	)	 	 	1,116	 	
 	 	 	 	 	 	 	
Net cash flows (used in) provided by operating activities — continuing operations	 	 	(7,952	)	 	 	27,603	 	
Net cash flows (used in) provided by operating activities — discontinued operations	 	 	(26	)	 	 	71	 	
 	 	 	 	 	 	 	
Net cash flows (used in) provided by operating activities	 	 	(7,978	)	 	 	27,674	 	

Cash Flows from Investing Activities:	 	 	 	 	 	 	 	 	
Purchases of property and equipment	 	 	(37,497	)	 	 	(7,733	)	
Collection of notes receivable	 	 	2,465	 	 	 	4,025	 	
Other investing activities	 	 	1,570	 	 	 	245	 	
 	 	 	 	 	 	 	
Net cash flows used in investing activities — continuing operations	 	 	(33,462	)	 	 	(3,463	)	
Net cash flows used in investing activities — discontinued operations	 	 	—	 	 	 	—	 	
 	 	 	 	 	 	 	
Net cash flows used in investing activities	 	 	(33,462	)	 	 	(3,463	)	

Cash Flows from Financing Activities:	 	 	 	 	 	 	 	 	
Repurchases of senior notes	 	 	—	 	 	 	(25,082	)	
Proceeds from exercise of stock option and purchase plans	 	 	4,052	 	 	 	381	 	
Excess tax benefit from stock-based compensation	 	 	—	 	 	 	134	 	
Other financing activities, net	 	 	(42	)	 	 	(186	)	
 	 	 	 	 	 	 	
Net cash flows provided by (used in) financing activities — continuing operations	 	 	4,010	 	 	 	(24,753	)	
Net cash flows provided by financing activities — discontinued operations	 	 	—	 	 	 	—	 	
 	 	 	 	 	 	 	
Net cash flows provided by (used in) financing activities	 	 	4,010	 	 	 	(24,753	)	

Net change in cash and cash equivalents	 	 	(37,430	)	 	 	(542	)	
Cash and cash equivalents — unrestricted, beginning of period	 	 	124,398	 	 	 	180,029	 	
 	 	 	 	 	 	 	
Cash and cash equivalents — unrestricted, end of period	 	$	86,968	 	 	$	179,487	 	
 	 	 	 	 	 	 	
The accompanying notes are an integral part of these condensed consolidated financial statements.
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GAYLORD ENTERTAINMENT COMPANY AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. BASIS OF PRESENTATION:
The condensed consolidated financial statements include the accounts of Gaylord Entertainment Company and its subsidiaries (the “Company”) 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 pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the financial information presented not misleading. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K as of and for the year ended December 31, 2010 filed with the SEC. 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.
2. NEWLY ISSUED ACCOUNTING STANDARDS:
In January 2010, the Financial Accounting Standards Board issued Accounting Standards Update (“ASU”) No. 2010-06, Topic 820, “ Fair Value Measurements and Disclosures ,” to require more detailed disclosures regarding transfers in and out of Level 1 and Level 2 fair value measurements, including the amounts and reasons for the transfers. Level 3 fair value measurements should present separate information about purchases, sales, issuances and settlements. In addition, this ASU requires that a reporting entity should provide fair value measurement disclosures for each class of assets and liabilities, defined as a subset of assets or liabilities within a line item in the statement of financial position, as well as disclosures about the valuation techniques and inputs used to measure fair value in either Level 2 or Level 3. The Company adopted the remaining disclosure requirements of this ASU in the first quarter of 2011, and the adoption did not have a material impact on the Company’s consolidated financial statements.
3. NASHVILLE FLOOD:
As more fully discussed in the Company’s Annual Report on Form 10-K as of and for the year ended December 31, 2010 filed with the SEC, on May 3, 2010, Gaylord Opryland, the Grand Ole Opry, certain of the Company’s Nashville-based attractions, and certain of the Company’s corporate offices experienced significant flood damage as a result of the historic flooding of the Cumberland River (collectively, the “Nashville Flood”). Each of the affected properties reopened in 2010; however, the Company will continue to have various flood-related expenses during 2011 as it completes the remaining flood-related projects. These expenses have been segregated from normal operations and are reported as casualty loss in the accompanying condensed consolidated statements of operations.
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Casualty Loss
During the three months ended March 31, 2011, casualty loss in the accompanying condensed consolidated statement of operations was comprised of the following (in thousands):
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Three Months Ended March 31, 2011	 	
 	 	Hospitality	 	 	Opry and Attractions	 	 	Corporate and Other	 	 	Total	 	
Site remediation	 	$	(179	)	 	$	8	 	 	$	(41	)	 	$	(212	)	
Non-capitalized repairs of buildings and equipment	 	 	—	 	 	 	2	 	 	 	13	 	 	 	15	 	
Other	 	 	6	 	 	 	21	 	 	 	169	 	 	 	196	 	
 	 	 	
Net casualty loss	 	$	(173	)	 	$	31	 	 	$	141	 	 	$	(1	)	
 	 	 	
4. INCOME PER SHARE:
The weighted average number of common shares outstanding is calculated as follows (in thousands):
 	 	 	 	 	 	 	 	 	
 	 	Three Months Ended March 31,	
 	 	2011	 	2010	
Weighted average shares outstanding	 	 	48,221	 	 	 	47,011	 	
Effect of dilutive stock options	 	 	—	 	 	 	—	 	
 	 	 	 	 	 	 	 	 	
Weighted average shares outstanding — assuming dilution	 	 	48,221	 	 	 	47,011	 	
 	 	 	 	 	 	 	 	 	
For the three months ended March 31, 2011 and 2010, the effect of dilutive stock-based compensation awards was the equivalent of approximately 839,000 and 434,000 shares, respectively, of common stock outstanding. Because the Company had a loss from continuing operations in the three months ended March 31, 2011 and 2010, these incremental shares were excluded from the computation of dilutive earnings per share for those periods as the effect of their inclusion would have been anti-dilutive.
The Company had stock-based compensation awards outstanding with respect to approximately 884,000 and 3,047,000 shares of common stock as of March 31, 2011 and 2010, respectively, that could potentially dilute earnings per share in the future but were excluded from the computation of diluted earnings per share for the three months ended March 31, 2011 and 2010, respectively, as the effect of their inclusion would have been anti-dilutive.
As discussed in Note 8, and more fully in the Company’s Annual Report on Form 10-K as of and for the year ended December 31, 2010, in 2009, the Company issued 3.75% Convertible Senior Notes (the “Convertible Notes”) due 2014. It is the Company’s intention to settle the face value of the Convertible Notes in cash upon conversion/maturity. Any conversion spread associated with the conversion/maturity of the Convertible Notes may be settled in cash or shares of the Company’s common stock. The effect of potentially issuable shares under this conversion spread for the three months ended March 31, 2011 was the equivalent of approximately 3,079,000 shares of common stock outstanding. Because the Company had a loss from continuing operations in the three months ended March 31, 2011, these incremental shares were excluded from the computation of dilutive earnings per share for that period as the effect of their inclusion would have been anti-dilutive. The Convertible Notes are currently convertible through June 30, 2011; however, at this time, the Company has received no notices of note holders electing to convert their Convertible Notes.
In connection with the issuance of these notes, the Company sold common stock purchase warrants to counterparties affiliated with the initial purchasers of the Convertible Notes. The initial strike price of these
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warrants is $32.70 per share of the Company’s common stock and the warrants cover an aggregate of approximately 13.2 million shares of the Company’s common stock, subject to anti-dilution adjustments. If the average closing price of the Company’s stock during a reporting period exceeds this strike price, these warrants will be dilutive. The warrants may only be settled in shares of the Company’s common stock. The effect of potentially issuable shares under these warrants for the three months ended March 31, 2011 was the equivalent of approximately 1,052,000 shares of common stock outstanding. Because the Company had a loss from continuing operations in the three months ended March 31, 2011, these incremental shares were excluded from the computation of dilutive earnings per share for that period as the effect of their inclusion would have been anti-dilutive.
5. COMPREHENSIVE INCOME (LOSS):
Comprehensive income (loss) is as follows for the respective periods (in thousands):
 	 	 	 	 	 	 	 	 	
 	 	Three Months Ended	
 	 	March 31,	
 	 	2011	 	2010	
Net loss	 	$	(1,957	)	 	$	(1,850	)	
Unrealized gain (loss) on natural gas swaps, net of deferred taxes of $22 and $(105)	 	 	40	 	 	 	(166	)	
Unrealized gain on interest rate swaps, net of deferred taxes of $1,836 and $452	 	 	3,331	 	 	 	812	 	
Other	 	 	38	 	 	 	(12	)	
 	 	 	 	 	 	 	 	 	
Comprehensive income (loss)	 	$	1,452	 	 	$	(1,216	)	
 	 	 	 	 	 	 	 	 	
A rollforward of the amounts included in accumulated other comprehensive loss related to the fair value of financial derivative instruments that qualify for hedge accounting, net of taxes, for the three months ended March 31, 2011 is as follows (in thousands):
 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Interest Rate	 	 	Natural Gas	 	 	 	 	
 	 	Derivatives	 	 	Derivatives	 	 	Total Derivatives	 	
Balance at December 31, 2010	 	$	(7,860	)	 	$	(145	)	 	$	(8,005	)	
2011 changes in fair value, net of deferred taxes	 	 	3,331	 	 	 	40	 	 	 	3,371	 	
Reclassification to earnings	 	 	—	 	 	 	—	 	 	 	—	 	
 	 	 	
Balance at March 31, 2011	 	$	(4,529	)	 	$	(105	)	 	$	(4,634	)	
 	 	 	
6. PROPERTY AND EQUIPMENT:
Property and equipment of continuing operations at March 31, 2011 and December 31, 2010 is recorded at cost and summarized as follows (in thousands):
 	 	 	 	 	 	 	 	 	
 	 	March 31,	 	 	December 31,	 	
 	 	2011	 	 	2010	 	
Land and land improvements	 	$	215,121	 	 	$	214,989	 	
Buildings	 	 	2,247,512	 	 	 	2,241,813	 	
Furniture, fixtures and equipment	 	 	497,229	 	 	 	482,011	 	
Construction in progress	 	 	59,174	 	 	 	51,843	 	
 	 	 	 	 	 	 	
 	 	 	3,019,036	 	 	 	2,990,656	 	
Accumulated depreciation	 	 	(815,355	)	 	 	(789,211	)	
 	 	 	 	 	 	 	
Property and equipment, net	 	$	2,203,681	 	 	$	2,201,445	 	
 	 	 	 	 	 	 	
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7. NOTES RECEIVABLE:
In connection with the development of the Gaylord National Resort and Convention Center (“Gaylord National”), the Company is currently holding two issuances of bonds and receives the debt service thereon, which is payable from tax increments, hotel taxes and special hotel rental taxes generated from the development of the Gaylord National. The Company is recording the amortization of discount on these notes receivable as interest income over the life of the notes.
During the three months ended March 31, 2011 and 2010, the Company recorded interest income of $3.2 million on these bonds, which each included $3.1 million of interest that accrued on the bonds and $0.1 million related to amortization of the discount on the bonds. The Company received payments of $10.7 million and $11.8 million during the three months ended March 31, 2011 and 2010, respectively, relating to these notes receivable.
8. DEBT:
The Company’s debt and capital lease obligations related to continuing operations at March 31, 2011 and December 31, 2010 consisted of (in thousands):
 	 	 	 	 	 	 	 	 	
 	 	March 31,	 	 	December 31,	 	
 	 	2011	 	 	2010	 	
$1.0 Billion Credit Facility, interest at 3-month LIBOR plus 2.50% or bank’s base rate plus 0.50%, maturing July 25, 2012	 	$	700,000	 	 	$	700,000	 	
Convertible Senior Notes, interest at 3.75%, maturing October 1, 2014, net of unamortized discount of $50,406 and $53,449	 	 	309,594	 	 	 	306,551	 	
Senior Notes, interest at 6.75%, maturing November 15, 2014	 	 	152,180	 	 	 	152,180	 	
Capital lease obligations	 	 	442	 	 	 	484	 	
 	 	 	 	 	 	 	
Total debt	 	 	1,162,216	 	 	 	1,159,215	 	
Less amounts due within one year	 	 	(58,805	)	 	 	(58,574	)	
 	 	 	 	 	 	 	
Total long-term debt	 	$	1,103,411	 	 	$	1,100,641	 	
 	 	 	 	 	 	 	
As of March 31, 2011, the Company was in compliance with all of its covenants related to its debt.
Convertible Senior Notes
In 2009, the Company issued $360 million of the Convertible Notes. The Convertible Notes are convertible, under certain circumstances as described in the Company’s Annual Report on Form 10-K as of and for the year ended December 31, 2010 filed with the SEC, at the holder’s option, into shares of the Company’s common stock, at an initial conversion rate of 36.6972 shares of common stock per $1,000 principal amount of the Convertible Notes, which is equivalent to an initial conversion price of approximately $27.25 per share. The Company may elect, at its option, to deliver shares of its common stock, cash or a combination of cash and shares of its common stock in satisfaction of its obligations upon conversion of the Convertible Notes.
Based on the Company’s stock price during the three months ended March 31, 2011, one of the conditions permitting conversion (as defined in the indenture governing the Convertible Notes) had been satisfied, and thus the Convertible Notes are currently convertible through June 30, 2011. At this time, the Company has received no notices of note holders electing to convert their Convertible Notes. Based on the Company’s borrowing capacity under its $1.0 billion credit facility as of March 31, 2011, $251.0 million of the Convertible Notes has been classified as long-term debt in the accompanying condensed consolidated balance sheet as of March 31, 2011. Based on the Company’s March 31, 2011 closing stock price of $34.68, the “if-converted value” of the Convertible Notes exceeds the face amount by $98.2 million; however, after giving effect to the exercise of the
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call options and warrants discussed below, the incremental cash or share settlement in excess of the face amount would result in either a cash payment of $26.2 million or a 0.8 million net share issuance by the Company, or a combination of cash and stock, at the Company’s option.
Concurrently with the offering of the Convertible Notes, the Company entered into convertible note hedge transactions with respect to its common stock (the “Purchased Options”) with counterparties affiliated with the initial purchasers of the Convertible Notes, for purposes of reducing the potential dilutive effect upon conversion of the Convertible Notes. The initial strike price of the Purchased Options is $27.25 per share of the Company’s common stock (the same as the initial conversion price of the Convertible Notes) and is subject to certain customary adjustments. The Purchased Options entitle the Company to purchase, subject to anti-dilution adjustments substantially similar to the Convertible Notes, approximately 13.2 million shares of common stock. The Company may settle the Purchased Options in shares, cash or a combination of cash and shares, at the Company’s option.
Separately and concurrently with entering into the Purchased Options, the Company also entered into warrant transactions whereby it sold warrants to each of the hedge counterparties entitling them to acquire, subject to anti-dilution adjustments, up to approximately 13.2 million shares of common stock at an initial exercise price of $32.70 per share. The warrants may only be settled in shares of the Company’s common stock.
9. DERIVATIVE FINANCIAL INSTRUMENTS:
The Company is exposed to certain risks relating to its ongoing business operations. The primary risks managed by using derivative instruments are interest rate risk and commodity price risk. Interest rate swaps are entered into to manage interest rate risk associated with portions of the Company’s variable rate borrowings. Natural gas price swaps are entered into to manage the price risk associated with forecasted purchases of natural gas and electricity used by the Company’s hotels. The Company designates its interest rate swaps as cash flow hedges of variable rate borrowings and its natural gas price swaps as cash flow hedges of forecasted purchases of natural gas and electricity. All of the Company’s derivatives are held for hedging purposes. The Company does not engage in speculative transactions, nor does it hold or issue financial instruments for trading purposes. All of the counterparties to the Company’s derivative agreements are financial institutions with at least investment grade credit ratings.
Cash Flow Hedging Strategy
For derivative instruments that are designated and qualify as a cash flow hedge, the effective portion of the gain or loss on the derivative instrument is reported as a component of other comprehensive income (loss) (“OCI”) and reclassified into earnings in the same line item associated with the forecasted transaction and in the same period or periods during which the hedged transaction affects earnings (e.g., in “interest expense” when the hedged transactions are interest cash flows associated with variable rate debt). The remaining gain or loss on the derivative instrument in excess of the cumulative change in the present value of future cash flows of the hedged item, or ineffectiveness, if any, is recognized in the statement of operations during the current period.
The interest rate swap agreement currently utilized by the Company effectively modifies the Company’s exposure to interest rate risk by converting $500.0 million, or 71%, of the Company’s variable rate debt outstanding under the term loan portion of the Company’s $1.0 billion credit facility to a weighted average fixed rate of 3.94% plus the applicable margin on these borrowings, thus reducing the impact of interest rate changes on future interest expense. This agreement involves the receipt of variable rate amounts in exchange for fixed rate interest payments through July 25, 2011, without an exchange of the underlying principal amount. The critical terms of the swap agreements match the critical terms of the borrowings under the term loan portion of the $1.0 billion credit facility. Therefore, the Company has designated these interest rate swap agreements as cash flow hedges. As the terms of these derivatives match the terms of the underlying hedged items, there
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should be no gain (loss) from ineffectiveness recognized in income on derivatives unless there is a termination of the derivative or the forecasted transaction is determined to be unlikely to occur.
The Company has entered into natural gas price swap contracts to manage the price risk associated with a portion of the Company’s forecasted purchases of natural gas and electricity used by the Company’s hotels. The objective of the hedge is to reduce the variability of cash flows associated with the forecasted purchases of these commodities. At March 31, 2011, the Company had 27 variable to fixed natural gas price swap contracts that mature from April 2011 to December 2011 with an aggregate notional amount of approximately 751,565 dekatherms. The Company has designated these natural gas price swap contracts as cash flow hedges. The Company assesses the correlation of the terms of these derivatives with the terms of the underlying hedged items on a quarterly basis.
The fair value of the Company’s derivative instruments based upon quotes, with appropriate adjustments for non-performance risk of the parties to the derivative contracts, at March 31, 2011 and December 31, 2010 is as follows (in thousands):
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Asset Derivatives	 	 	Liability Derivatives	 	
 	 	March 31, 2011	 	 	December 31, 2010	 	 	March 31, 2011	 	 	December 31, 2010	 	
Derivatives designated as hedging instruments:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Interest rate swaps	 	$	—	 	 	$	—	 	 	$	7,060	 	 	$	12,227	 	
Natural gas swaps	 	 	11	 	 	 	22	 	 	 	175	 	 	 	248	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Total derivatives designated as hedging instruments	 	$	11	 	 	$	22	 	 	$	7,235	 	 	$	12,475	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
The effect of derivative instruments on the statement of operations for the respective periods is as follows (in thousands):
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Amount of Gain (Loss) Recognized in OCI	 	 	 	 	 	 	Amount Reclassified from	 	
 	 	on Derivative (Effective Portion)	 	 	 	 	 	 	Accumulated OCI into Income	 	
 	 	 	 	 	 	 	 	 	 	Location of Amount	 	 	 	 	 	 	 	
Derivatives in Cash	 	 	 	 	 	 	 	 	 	Reclassified from	 	 	 	 	 	 	 	
Flow Hedging	 	Three Months Ended	 	 	Three Months Ended	 	 	Accumulated OCI into	 	 	Three Months Ended	 	 	Three Months Ended	 	
Relationships	 	March 31, 2011	 	 	March 31, 2010	 	 	Income	 	 	March 31, 2011	 	 	March 31, 2010	 	
Interest rate swaps	 	$	5,167	 	 	$	1,264	 	 	Interest expense, net of amounts capitalized	 	$	—	 	 	$	—	 	
Natural gas swaps	 	 	62	 	 	 	(270	)	 	Other gains (losses), net	 	 	—	 	 	 	—	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total	 	$	5,229	 	 	$	994	 	 	Total	 	$	—	 	 	$	—	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
10. STOCK PLANS:
In addition to grants of stock options to its directors and employees, the Company’s 2006 Omnibus Incentive Plan (the “Plan”) permits the award of restricted stock and restricted stock units (“Restricted Stock Awards”). The fair value of Restricted Stock Awards is determined based on the market price of the Company’s stock at the date of grant. The Company generally records compensation expense equal to the fair value of each Restricted Stock Award granted over the vesting period.
During the three months ended March 31, 2011, the Company granted 149,320 Restricted Stock Awards with time-based vesting and a weighted-average grant-date fair value of $34.30 per award. Additionally, the Company granted 67,400 Restricted Stock Awards to certain members of its management team which may vest in 2014. The number of awards that will ultimately vest will be based on Company performance relative to the annual budgets approved by the Company’s board of directors. The Company will not begin recognizing compensation cost for these awards until the fourth quarter of 2012 when
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the 2013 budget is approved and the key terms and conditions of the awards will be deemed to be established and a grant date will have occurred.
At March 31, 2011 and December 31, 2010, Restricted Stock Awards of 625,460 and 471,894 shares, respectively, were outstanding.
The compensation cost that has been charged against pre-tax income for all of the Company’s stock-based compensation plans was $2.3 million and $1.7 million for the three months ended March 31, 2011 and 2010, respectively.
11. RETIREMENT AND POSTRETIREMENT BENEFITS OTHER THAN PENSION PLANS:
Net periodic pension expense reflected in the accompanying condensed consolidated statements of operations included the following components for the respective periods (in thousands):
 	 	 	 	 	 	 	 	 	
 	 	Three months ended	 	
 	 	March 31,	 	
 	 	2011	 	 	2010	 	
Interest cost	 	$	1,208	 	 	$	1,188	 	
Expected return on plan assets	 	 	(1,333	)	 	 	(1,197	)	
Amortization of net actuarial loss	 	 	619	 	 	 	519	 	
 	 	 	 	 	 	 	
Total net periodic pension expense	 	$	494	 	 	$	510	 	
 	 	 	 	 	 	 	
Net postretirement benefit expense reflected in the accompanying condensed consolidated statements of operations included the following components for the respective periods (in thousands):
 	 	 	 	 	 	 	 	 	
 	 	Three months ended	
 	 	March 31,	
 	 	2011	 	2010	
Service cost	 	$	14	 	 	$	17	 	
Interest cost	 	 	258	 	 	 	244	 	
Amortization of net gain	 	 	—	 	 	 	(3	)	
Amortization of curtailment gain	 	 	(61	)	 	 	(61	)	
 	 	 	 	 	 	 	
Total net postretirement benefit expense	 	$	211	 	 	$	197	 	
 	 	 	 	 	 	 	
12. INCOME TAXES:
The Company’s effective tax rate as applied to pre-tax loss was 33% and (118)% for the three months ended March 31, 2011 and 2010, respectively. Under the Patient Protection and Affordable Care Act, which became law on March 23, 2010, as amended by the Health Care and Education Reconciliation Act of 2010, which became law on March 30, 2010, the Company and other companies that receive a subsidy under Medicare Part D to provide retiree prescription drug coverage will no longer receive a Federal income tax deduction for the expenses incurred in connection with providing the subsidized coverage to the extent of the subsidy received. Because future anticipated retiree health care liabilities and related subsidies were already reflected in the Company’s financial statements, this change required the Company to reduce the value of the related tax benefits recognized in its financial statements during the period the law was enacted. As a result, the Company recorded a one-time, non-cash tax charge of $0.8 million during the three months ended March 31, 2010 to reflect the impact of this change. This charge, as well as changes in the Company’s valuation allowances during each period, resulted in the change to the effective tax rate noted above.
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As of March 31, 2011 and December 31, 2010, the Company had $16.0 million and $19.0 million of unrecognized tax benefits, respectively, of which $9.0 million, respectively, would affect the Company’s effective tax rate if recognized. These liabilities are recorded in other long-term liabilities in the accompanying condensed consolidated balance sheets. The Company estimates the overall decrease in unrecognized tax benefits in the next twelve months will be approximately $14.1 million, mainly due to the expiration of various statutes of limitations. As of March 31, 2011 and December 31, 2010, the Company had accrued $1.9 million of interest and $0.1 million of penalties related to uncertain tax positions.
13. COMMITMENTS AND CONTINGENCIES:
As further discussed in Note 3, on May 3, 2010, Gaylord Opryland, the Grand Ole Opry, certain of the Company’s Nashville-based attractions, and certain of the Company’s corporate offices experienced significant damage as a result of the Nashville Flood. While certain flood-related projects remain to be completed in 2011, the Company repaired the damage to these facilities and reopened them at various dates during 2010. The Company entered into several agreements with general contractors and other suppliers for the provision of certain remediation and construction services at the facilities damaged by the Nashville Flood. As of March 31, 2011, the Company had open commitments to pay $7.7 million under those agreements and expects to execute $5 — $7 million of additional commitments to complete the remaining flood-related projects. The Company also has commitments for maintenance capital expenditures and other projects.
On September 3, 2008, the Company announced it had entered into a land purchase agreement with DMB Mesa Proving Grounds LLC, an affiliate of DMB Associates, Inc. (“DMB”), to create a resort and convention hotel at the Mesa Proving Grounds in Mesa, Arizona, which is located approximately 30 miles from downtown Phoenix. The DMB development is planned to host an urban environment that features a Gaylord resort property, a retail development, a golf course, office space, residential offerings and significant other mixed-use components. The Company’s purchase agreement includes the purchase of 100 acres of real estate within the 3,200-acre Mesa Proving Grounds. The project is contingent on the finalization of entitlements and incentives, and final approval by the Company’s board of directors. The Company made an initial deposit of a portion of the land purchase price upon execution of the agreement with DMB, and additional deposit amounts are due upon the occurrence of various development milestones, including required governmental approvals of the entitlements and incentives. These deposits are refundable to the Company upon a termination of the agreement with DMB during a specified due diligence period, except in the event of a breach of the agreement by the Company. The timing of this development is uncertain, and the Company has not made any financing plans or, except as described above, made any commitments in connection with the proposed development.
The Company is considering other potential hotel sites throughout the country. The timing and extent of any of these development projects is uncertain, and the Company has not made any commitments, received any government approvals or made any financing plans in connection with these development projects.
Through joint venture arrangements with two private real estate funds managed by DB Real Estate Opportunities Group, the Company previously invested in minority ownership interests in two joint ventures which were formed to own and operate hotels in Hawaii. As part of the joint venture arrangements, the Company entered into contribution agreements with the majority owners, which owners had guaranteed certain recourse liabilities under third-party loans to the joint ventures. The guarantees of the joint venture loans guaranteed each of the subsidiaries’ obligations under its third party loans for as long as those loans remain outstanding (i) in the event of certain types of fraud, breaches of environmental representations or warranties, or breaches of certain “special purpose entity” covenants by the subsidiaries, or (ii) in the event of bankruptcy or reorganization proceedings of the subsidiaries. The Company agreed that, in the event a majority owner is required to make any payments pursuant to the terms of these guarantees of joint venture loans, it will contribute to the majority owner an amount based on its proportional commitment in the applicable joint venture. The Company estimates that the maximum potential amount for which the Company could be liable under the contribution agreements is $23.8 million, which represents its pro rata share of the $121.2 million of
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total debt that is subject to the guarantees. As of March 31, 2011, the Company had not recorded any liability in the condensed consolidated balance sheet associated with the contribution agreements.
On February 22, 2005, the Company concluded the settlement of litigation with Nashville Hockey Club Limited Partnership (“NHC”), which owned the Nashville Predators NHL hockey team. At the closing of the settlement, NHC redeemed all of the Company’s outstanding limited partnership units in the Predators, and the Naming Rights Agreement between the Company and NHC was terminated. In addition, pursuant to a Consent Agreement among the Company, the National Hockey League and owners of NHC, the Company’s guaranty described below has been limited as described below.
In connection with the Company’s execution of an Agreement of Limited Partnership with NHC on June 25, 1997, the Company, its subsidiary CCK, Inc., Craig Leipold, Helen Johnson-Leipold (Mr. Leipold’s wife) and Samuel C. Johnson (Mr. Leipold’s father-in-law) entered into a guaranty agreement executed in favor of the National Hockey League (NHL). This agreement provides for a continuing guarantee of the following obligations for as long as either of these obligations remains outstanding: (i) all obligations under the expansion agreement between NHC and the NHL; and (ii) all operating expenses of NHC. The maximum potential amount which the Company and CCK, collectively, could be liable under the guaranty agreement is $15.0 million, although the Company and CCK would have recourse against the other guarantors if required to make payments under the guarantee. In connection with the legal settlement with the Nashville Predators consummated on February 22, 2005, this guaranty has been limited so that the Company is not responsible for any debt, obligation or liability of NHC that arises from any act, omission or circumstance occurring after the date of the legal settlement. As of March 31, 2011, the Company had not recorded any liability in the condensed consolidated balance sheet associated with this guarantee.
The Company has purchased stop-loss coverage in order to limit its exposure to any significant levels of claims relating to workers’ compensation, employee medical benefits and general liability for which it is self-insured.
The Company has entered into employment agreements with certain officers, which provides for severance payments upon certain events, including certain terminations in connection with a change of control.
The Company, in the ordinary course of business, is involved in certain legal actions and claims on a variety of other matters. It is the opinion of management that such legal actions will not have a material effect on the results of operations, financial condition or liquidity of the Company.
14. FAIR VALUE MEASUREMENTS:
The Company uses a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include: Level 1, defined as observable inputs such as quoted prices in active markets; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions.
As of March 31, 2011, the Company held certain assets and liabilities that are required to be measured at fair value on a recurring basis. These included the Company’s derivative instruments related to interest rates and natural gas prices and investments held in conjunction with the Company’s non-qualified contributory deferred compensation plan.
The Company’s interest rate and natural gas derivative instruments consist of over-the-counter swap contracts, which are not traded on a public exchange. See Note 9 for further information on the Company’s derivative instruments and hedging activities. The Company determines the fair values of these swap contracts based on quotes, with appropriate adjustments for any significant impact of non-performance risk of the parties to the swap contracts. Therefore, the Company has categorized these swap contracts as Level 2. The Company has
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consistently applied these valuation techniques in all periods presented and believes it has obtained the most accurate information available for the types of derivative contracts it holds.
The investments held by the Company in connection with its deferred compensation plan consist of mutual funds traded in an active market. The Company determined the fair value of these mutual funds based on the net asset value per unit of the funds or the portfolio, which is based upon quoted market prices in an active market. Therefore, the Company has categorized these investments as Level 1. The Company has consistently applied these valuation techniques in all periods presented and believes it has obtained the most accurate information available for the types of investments it holds.
The Company’s assets and liabilities measured at fair value on a recurring basis at March 31, 2011, were as follows (in thousands):
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	Markets for	 	 	Observable	 	 	Unobservable	 	
 	 	March 31,	 	 	Identical Assets	 	 	Inputs	 	 	Inputs	 	
 	 	2011	 	 	(Level 1)	 	 	(Level 2)	 	 	(Level 3)	 	
Deferred compensation plan investments	 	$	13,422	 	 	$	13,422	 	 	$	—	 	 	$	—	 	
 	 	 	
Total assets measured at fair value	 	$	13,422	 	 	$	13,422	 	 	$	—	 	 	$	—	 	

Variable to fixed natural gas swaps, net	 	$	164	 	 	$	—	 	 	$	164	 	 	$	—	 	
Variable to fixed interest rate swaps	 	 	7,060	 	 	 	—	 	 	 	7,060	 	 	 	—	 	
 	 	 	
Total liabilities measured at fair value	 	$	7,224	 	 	$	—	 	 	$	7,224	 	 	$	—	 	
 	 	 	
The remainder of the assets and liabilities held by the Company at March 31, 2011 are not required to be measured at fair value. The carrying value of certain of these assets and liabilities do not approximate fair value, as described below.
As further discussed in Note 7, in connection with the development of Gaylord National, the Company received two notes receivable from Prince George’s County, Maryland which had an aggregate carrying value of $130.4 million as of March 31, 2011. The aggregate fair value of these notes receivable, based upon current market interest rates of notes receivable with comparable market ratings and current expectations about the timing of debt service payments under the notes, was approximately $162 million as of March 31, 2011.
As shown in Note 8, the Company has $700.0 million in borrowings outstanding under the $1.0 Billion Credit Facility that accrue interest at a rate of LIBOR plus 2.50%. Because the margin of 2.50% is fixed, the carrying value of borrowings outstanding do not approximate fair value. The fair value of the $700.0 million in borrowings outstanding under the $1.0 Billion Credit Facility, based upon the present value of cash flows discounted at current market interest rates, was approximately $678 million as of March 31, 2011.
As more fully discussed in Note 8, the Company has outstanding $360.0 million in aggregate principal amount of Convertible Notes due 2014 that accrue interest at a fixed rate of 3.75%. The carrying value of these notes on March 31, 2011 was $309.6 million, net of discount. The fair value of the Convertible Notes, based upon the present value of cash flows discounted at current market interest rates, was approximately $337 million as of March 31, 2011.
As shown in Note 8, the Company has outstanding $152.2 million in aggregate principal amount of senior notes due 2014 that accrue interest at a fixed rate of 6.75% (the “Senior Notes”). The fair value of these notes, based upon quoted market prices, was $153.3 million as of March 31, 2011.
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The carrying amount of short-term financial instruments held by the Company (cash, short-term investments, trade receivables, accounts payable and accrued liabilities) approximates fair value due to the short maturity of those instruments. The concentration of credit risk on trade receivables is minimized by the large and diverse nature of the Company’s customer base.
15. FINANCIAL REPORTING BY BUSINESS SEGMENTS:
The Company’s continuing operations are organized into three principal business segments:
 	•	 	Hospitality, which includes the Gaylord Opryland Resort and Convention Center, the Gaylord Palms Resort and Convention Center, the Gaylord Texan Resort and Convention Center, the Gaylord National Resort and Convention Center and the Radisson Hotel at Opryland, as well as the Company’s interest in a joint venture;	
 	 	 	 	
 	•	 	Opry and Attractions, which includes the Grand Ole Opry, WSM-AM, and the Company’s Nashville-based attractions; and	
 	 	 	 	
 	•	 	Corporate and Other, which includes the Company’s corporate expenses.	
The following information from continuing operations is derived directly from the segments’ internal financial reports used for corporate management purposes (amounts in thousands):
 	 	 	 	 	 	 	 	 	
 	 	Three Months Ended	 	
 	 	March 31,	 	
 	 	2011	 	 	2010	 	
Revenues:	 	 	 	 	 	 	 	 	
Hospitality	 	$	209,342	 	 	$	203,695	 	
Opry and Attractions	 	 	11,367	 	 	 	10,761	 	
Corporate and Other	 	 	29	 	 	 	25	 	
 	 	 	 	 	 	 	
Total	 	$	220,738	 	 	$	214,481	 	

Depreciation and amortization:	 	 	 	 	 	 	 	 	
Hospitality	 	$	25,275	 	 	$	23,219	 	
Opry and Attractions	 	 	1,332	 	 	 	1,362	 	
Corporate and Other	 	 	2,450	 	 	 	2,490	 	
 	 	 	 	 	 	 	
Total	 	$	29,057	 	 	$	27,071	 	

Operating income (loss):	 	 	 	 	 	 	 	 	
Hospitality	 	$	29,454	 	 	$	30,247	 	
Opry and Attractions	 	 	(643	)	 	 	(765	)	
Corporate and Other	 	 	(14,086	)	 	 	(14,529	)	
Casualty loss	 	 	1	 	 	 	—	 	
 	 	 	 	 	 	 	
Total operating income	 	 	14,726	 	 	 	14,953	 	
Interest expense, net of amounts capitalized	 	 	(20,809	)	 	 	(20,115	)	
Interest income	 	 	3,173	 	 	 	3,222	 	
Income (loss) from unconsolidated companies	 	 	173	 	 	 	(73	)	
Net gain on extinguishment of debt	 	 	—	 	 	 	1,199	 	
Other gains and (losses), net	 	 	(191	)	 	 	(13	)	
 	 	 	 	 	 	 	
Loss before income taxes and discontinued operations	 	$	(2,928	)	 	$	(827	)	
 	 	 	 	 	 	 	
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16. INFORMATION CONCERNING GUARANTOR AND NON-GUARANTOR SUBSIDIARIES:
Not all of the Company’s subsidiaries have guaranteed the Company’s Convertible Notes and the Senior Notes. The Company’s Convertible Notes and Senior Notes are guaranteed on a senior unsecured basis by generally all of the Company’s active domestic subsidiaries (the “Guarantors”). The Company’s investment in joint ventures and certain discontinued operations and inactive subsidiaries (the “Non-Guarantors”) do not guarantee the Company’s Convertible Notes and Senior Notes.
The following condensed consolidating financial information includes certain allocations of revenues and expenses based on management’s best estimates, which are not necessarily indicative of financial position, results of operations and cash flows that these entities would have achieved on a stand alone basis.
GAYLORD ENTERTAINMENT COMPANY AND SUBSIDIARIES
Condensed Consolidating Statement of Operations
For the Three Months Ended March 31, 2011
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	Non-	 	 	 	 	 	 	 	
(in thousands)	 	Issuer	 	 	Guarantors	 	 	Guarantors	 	 	Eliminations	 	 	Consolidated	 	
Revenues	 	$	1,475	 	 	$	220,759	 	 	$	—	 	 	$	(1,496	)	 	$	220,738	 	
Operating expenses:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Operating costs	 	 	—	 	 	 	133,906	 	 	 	—	 	 	 	(28	)	 	 	133,878	 	
Selling, general and administrative	 	 	4,292	 	 	 	38,786	 	 	 	—	 	 	 	—	 	 	 	43,078	 	
Casualty loss	 	 	—	 	 	 	(1	)	 	 	—	 	 	 	—	 	 	 	(1	)	
Management fees	 	 	—	 	 	 	1,468	 	 	 	—	 	 	 	(1,468	)	 	 	—	 	
Depreciation and amortization	 	 	1,027	 	 	 	28,030	 	 	 	—	 	 	 	—	 	 	 	29,057	 	
 	 	 	
Operating (loss) income	 	 	(3,844	)	 	 	18,570	 	 	 	—	 	 	 	—	 	 	 	14,726	 	
Interest expense, net of amounts capitalized	 	 	(21,074	)	 	 	(29,984	)	 	 	(99	)	 	 	30,348	 	 	 	(20,809	)	
Interest income	 	 	25,827	 	 	 	3,865	 	 	 	3,829	 	 	 	(30,348	)	 	 	3,173	 	
Income from unconsolidated companies	 	 	—	 	 	 	173	 	 	 	—	 	 	 	—	 	 	 	173	 	
Other gains and (losses), net	 	 	—	 	 	 	(191	)	 	 	—	 	 	 	—	 	 	 	(191	)	
 	 	 	
Income (loss) before income taxes	 	 	909	 	 	 	(7,567	)	 	 	3,730	 	 	 	—	 	 	 	(2,928	)	
(Provision) benefit for income taxes	 	 	(475	)	 	 	2,891	 	 	 	(1,449	)	 	 	—	 	 	 	967	 	
Equity in subsidiaries’ losses, net	 	 	(2,391	)	 	 	—	 	 	 	—	 	 	 	2,391	 	 	 	—	 	
 	 	 	
(Loss) income from continuing operations	 	 	(1,957	)	 	 	(4,676	)	 	 	2,281	 	 	 	2,391	 	 	 	(1,961	)	
Income (loss) from discontinued operations, net of taxes	 	 	—	 	 	 	22	 	 	 	(18	)	 	 	—	 	 	 	4	 	
 	 	 	
Net (loss) income	 	$	(1,957	)	 	$	(4,654	)	 	$	2,263	 	 	$	2,391	 	 	$	(1,957	)	
 	 	 	
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GAYLORD ENTERTAINMENT COMPANY AND SUBSIDIARIES
Condensed Consolidating Statement of Operations
For the Three Months Ended March 31, 2010
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	Non-	 	 	 	 	 	 	 	
(in thousands)	 	Issuer	 	 	Guarantors	 	 	Guarantors	 	 	Eliminations	 	 	Consolidated	 	
Revenues	 	$	1,592	 	 	$	214,523	 	 	$	—	 	 	$	(1,634	)	 	$	214,481	 	
Operating expenses:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Operating costs	 	 	—	 	 	 	130,565	 	 	 	—	 	 	 	(10	)	 	 	130,555	 	
Selling, general and administrative	 	 	5,334	 	 	 	36,605	 	 	 	—	 	 	 	(37	)	 	 	41,902	 	
Management fees	 	 	—	 	 	 	1,587	 	 	 	—	 	 	 	(1,587	)	 	 	—	 	
Depreciation and amortization	 	 	1,284	 	 	 	25,787	 	 	 	—	 	 	 	—	 	 	 	27,071	 	
 	 	 	
Operating (loss) income	 	 	(5,026	)	 	 	19,979	 	 	 	—	 	 	 	—	 	 	 	14,953	 	
Interest expense, net of amounts capitalized	 	 	(20,465	)	 	 	(28,939	)	 	 	—	 	 	 	29,289	 	 	 	(20,115	)	
Interest income	 	 	24,068	 	 	 	4,808	 	 	 	3,635	 	 	 	(29,289	)	 	 	3,222	 	
Loss from unconsolidated companies	 	 	—	 	 	 	(73	)	 	 	—	 	 	 	—	 	 	 	(73	)	
Net gain on extinguishment of debt	 	 	1,199	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	1,199	 	
Other gains and (losses), net	 	 	3	 	 	 	(16	)	 	 	—	 	 	 	—	 	 	 	(13	)	

(Loss) income before income taxes	 	 	(221	)	 	 	(4,241	)	 	 	3,635	 	 	 	—	 	 	 	(827	)	
(Provision) benefit for income taxes	 	 	(656	)	 	 	1,472	 	 	 	(1,791	)	 	 	—	 	 	 	(975	)	
Equity in subsidiaries’ losses, net	 	 	(973	)	 	 	—	 	 	 	—	 	 	 	973	 	 	 	—	 	
 	 	 	
(Loss) income from continuing operations	 	 	(1,850	)	 	 	(2,769	)	 	 	1,844	 	 	 	973	 	 	 	(1,802	)	
Loss from discontinued operations, net of taxes	 	 	—	 	 	 	—	 	 	 	(48	)	 	 	—	 	 	 	(48	)	
 	 	 	
Net (loss) income	 	$	(1,850	)	 	$	(2,769	)	 	$	1,796	 	 	$	973	 	 	$	(1,850	)	
 	 	 	
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GAYLORD ENTERTAINMENT COMPANY AND SUBSIDIARIES
Condensed Consolidating Balance Sheet
March 31, 2011
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	Non-	 	 	 	 	 	 	 	
(in thousands)	 	Issuer	 	 	Guarantors	 	 	Guarantors	 	 	Eliminations	 	 	Consolidated	 	
ASSETS	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Current assets:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Cash and cash equivalents — unrestricted	 	$	83,117	 	 	$	3,851	 	 	$	—	 	 	$	—	 	 	$	86,968	 	
Cash and cash equivalents — restricted	 	 	1,150	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	1,150	 	
Trade receivables, net	 	 	—	 	 	 	63,927	 	 	 	—	 	 	 	—	 	 	 	63,927	 	
Estimated fair value of derivative assets	 	 	11	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	11	 	
Deferred income taxes	 	 	50	 	 	 	5,989	 	 	 	680	 	 	 	—	 	 	 	6,719	 	
Other current assets	 	 	3,232	 	 	 	40,633	 	 	 	—	 	 	 	(126	)	 	 	43,739	 	
Intercompany receivables, net	 	 	1,803,757	 	 	 	—	 	 	 	290,628	 	 	 	(2,094,385	)	 	 	—	 	
 	 	 	
Total current assets	 	 	1,891,317	 	 	 	114,400	 	 	 	291,308	 	 	 	(2,094,511	)	 	 	202,514	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Property and equipment, net of accumulated depreciation	 	 	40,347	 	 	 	2,163,334	 	 	 	—	 	 	 	—	 	 	 	2,203,681	 	
Notes receivable, net of current portion	 	 	—	 	 	 	142,457	 	 	 	—	 	 	 	—	 	 	 	142,457	 	
Long-term deferred financing costs	 	 	11,240	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	11,240	 	
Other long-term assets	 	 	652,529	 	 	 	361,096	 	 	 	—	 	 	 	(963,548	)	 	 	50,077	 	
Long-term assets of discontinued operations	 	 	—	 	 	 	—	 	 	 	416	 	 	 	—	 	 	 	416	 	
 	 	 	
Total assets	 	$	2,595,433	 	 	$	2,781,287	 	 	$	291,724	 	 	$	(3,058,059	)	 	$	2,610,385	 	

LIABILITIES AND STOCKHOLDERS’ EQUITY	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Current liabilities:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Current portion of long-term debt and capital lease obligations	 	$	58,621	 	 	$	184	 	 	$	—	 	 	$	—	 	 	$	58,805	 	
Accounts payable and accrued liabilities	 	 	30,233	 	 	 	128,414	 	 	 	—	 	 	 	(421	)	 	 	158,226	 	
Estimated fair value of derivative liabilities	 	 	7,235	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	7,235	 	
Intercompany payables, net	 	 	—	 	 	 	2,008,755	 	 	 	85,630	 	 	 	(2,094,385	)	 	 	—	 	
Current liabilities of discontinued operations	 	 	—	 	 	 	—	 	 	 	342	 	 	 	—	 	 	 	342	 	
 	 	 	
Total current liabilities	 	 	96,089	 	 	 	2,137,353	 	 	 	85,972	 	 	 	(2,094,806	)	 	 	224,608	 	
Long-term debt and capital lease obligations, net of current portion	 	 	1,103,153	 	 	 	258	 	 	 	—	 	 	 	—	 	 	 	1,103,411	 	
Deferred income taxes	 	 	(24,014	)	 	 	128,873	 	 	 	(229	)	 	 	—	 	 	 	104,630	 	
Other long-term liabilities	 	 	58,428	 	 	 	81,779	 	 	 	—	 	 	 	295	 	 	 	140,502	 	
Long-term liabilities of discontinued operations	 	 	—	 	 	 	—	 	 	 	451	 	 	 	—	 	 	 	451	 	
Commitments and contingencies	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Stockholders’ equity:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Preferred stock	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	
Common stock	 	 	484	 	 	 	2,388	 	 	 	1	 	 	 	(2,389	)	 	 	484	 	
Additional paid-in capital	 	 	921,936	 	 	 	1,081,056	 	 	 	(40,120	)	 	 	(1,040,936	)	 	 	921,936	 	
Treasury stock	 	 	(4,599	)	 	 	—	 	 	 	—	 	 	 	—	 	 	 	(4,599	)	
Retained earnings	 	 	468,637	 	 	 	(650,420	)	 	 	245,649	 	 	 	79,777	 	 	 	143,643	 	
Other stockholders’ equity	 	 	(24,681	)	 	 	—	 	 	 	—	 	 	 	—	 	 	 	(24,681	)	
 	 	 	
Total stockholders’ equity	 	 	1,361,777	 	 	 	433,024	 	 	 	205,530	 	 	 	(963,548	)	 	 	1,036,783	 	
 	 	 	
Total liabilities and stockholders’ equity	 	$	2,595,433	 	 	$	2,781,287	 	 	$	291,724	 	 	$	(3,058,059	)	 	$	2,610,385	 	
 	 	 	
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GAYLORD ENTERTAINMENT COMPANY AND SUBSIDIARIES
Condensed Consolidating Balance Sheet
December 31, 2010
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	Non-	 	 	 	 	 	 	 	
(in thousands)	 	Issuer	 	 	Guarantors	 	 	Guarantors	 	 	Eliminations	 	 	Consolidated	 	
ASSETS:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Current assets:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Cash and cash equivalents — unrestricted	 	$	117,913	 	 	$	6,485	 	 	$	—	 	 	$	—	 	 	$	124,398	 	
Cash and cash equivalents — restricted	 	 	1,150	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	1,150	 	
Trade receivables, net	 	 	—	 	 	 	31,793	 	 	 	—	 	 	 	—	 	 	 	31,793	 	
Estimated fair value of derivative assets	 	 	22	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	22	 	
Deferred income taxes	 	 	67	 	 	 	5,748	 	 	 	680	 	 	 	—	 	 	 	6,495	 	
Other current assets	 	 	3,364	 	 	 	45,754	 	 	 	—	 	 	 	(126	)	 	 	48,992	 	
Intercompany receivables, net	 	 	1,744,290	 	 	 	—	 	 	 	287,087	 	 	 	(2,031,377	)	 	 	—	 	
 	 	 	
Total current assets	 	 	1,866,806	 	 	 	89,780	 	 	 	287,767	 	 	 	(2,031,503	)	 	 	212,850	 	
Property and equipment, net of accumulated depreciation	 	 	38,686	 	 	 	2,162,759	 	 	 	—	 	 	 	—	 	 	 	2,201,445	 	
Notes receivable, net of current portion	 	 	—	 	 	 	142,651	 	 	 	—	 	 	 	—	 	 	 	142,651	 	
Long-term deferred financing costs	 	 	12,521	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	12,521	 	
Other long-term assets	 	 	654,722	 	 	 	362,282	 	 	 	—	 	 	 	(965,939	)	 	 	51,065	 	
Long-term assets of discontinued operations	 	 	—	 	 	 	—	 	 	 	401	 	 	 	—	 	 	 	401	 	
 	 	 	
Total assets	 	$	2,572,735	 	 	$	2,757,472	 	 	$	288,168	 	 	$	(2,997,442	)	 	$	2,620,933	 	

LIABILITIES AND STOCKHOLDERS’ EQUITY:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Current liabilities:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Current portion of long-term debt and capital lease obligations	 	$	58,396	 	 	$	178	 	 	$	—	 	 	$	—	 	 	$	58,574	 	
Accounts payable and accrued liabilities	 	 	14,622	 	 	 	161,142	 	 	 	—	 	 	 	(421	)	 	 	175,343	 	
Estimated fair value of derivative liabilities	 	 	12,475	 	 	 	 	 	 	 	—	 	 	 	—	 	 	 	12,475	 	
Intercompany payables, net	 	 	—	 	 	 	1,947,054	 	 	 	84,323	 	 	 	(2,031,377	)	 	 	—	 	
Current liabilities of discontinued operations	 	 	—	 	 	 	—	 	 	 	357	 	 	 	—	 	 	 	357	 	
 	 	 	
Total current liabilities	 	 	85,493	 	 	 	2,108,374	 	 	 	84,680	 	 	 	(2,031,798	)	 	 	246,749	 	
Long-term debt and capital lease obligations, net of current portion	 	 	1,100,335	 	 	 	306	 	 	 	—	 	 	 	—	 	 	 	1,100,641	 	
Deferred income taxes	 	 	(26,398	)	 	 	127,768	 	 	 	(230	)	 	 	—	 	 	 	101,140	 	
Other long-term liabilities	 	 	58,559	 	 	 	83,346	 	 	 	—	 	 	 	295	 	 	 	142,200	 	
Long-term liabilities of discontinued operations	 	 	—	 	 	 	—	 	 	 	451	 	 	 	—	 	 	 	451	 	
Commitments and contingencies	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Stockholders’ equity:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Preferred stock	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	
Common stock	 	 	481	 	 	 	2,388	 	 	 	1	 	 	 	(2,389	)	 	 	481	 	
Additional paid-in capital	 	 	916,359	 	 	 	1,081,056	 	 	 	(40,120	)	 	 	(1,040,936	)	 	 	916,359	 	
Treasury stock	 	 	(4,599	)	 	 	—	 	 	 	—	 	 	 	—	 	 	 	(4,599	)	
Retained earnings	 	 	470,594	 	 	 	(645,766	)	 	 	243,386	 	 	 	77,386	 	 	 	145,600	 	
Accumulated other comprehensive loss	 	 	(28,089	)	 	 	—	 	 	 	—	 	 	 	—	 	 	 	(28,089	)	
 	 	 	
Total stockholders’ equity	 	 	1,354,746	 	 	 	437,678	 	 	 	203,267	 	 	 	(965,939	)	 	 	1,029,752	 	
 	 	 	
Total liabilities and stockholders’ equity	 	$	2,572,735	 	 	$	2,757,472	 	 	$	288,168	 	 	$	(2,997,442	)	 	$	2,620,933	 	
 	 	 	
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GAYLORD ENTERTAINMENT COMPANY AND SUBSIDIARIES
Condensed Consolidating Statement of Cash Flows
For the Three Months Ended March 31, 2011
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	Non-	 	 	 	 	 	 	 	
(in thousands)	 	Issuer	 	 	Guarantors	 	 	Guarantors	 	 	Eliminations	 	 	Consolidated	 	
Net cash (used in) provided by continuing operating activities	 	$	(37,264	)	 	$	29,248	 	 	$	64	 	 	$	—	 	 	$	(7,952	)	
Net cash provided by (used in) discontinued operating activities	 	 	—	 	 	 	38	 	 	 	(64	)	 	 	—	 	 	 	(26	)	
 	 	 	
Net cash (used in) provided by operating activities	 	 	(37,264	)	 	 	29,286	 	 	 	—	 	 	 	—	 	 	 	(7,978	)	

Purchases of property and equipment	 	 	(1,588	)	 	 	(35,909	)	 	 	—	 	 	 	—	 	 	 	(37,497	)	
Collection of notes receivable	 	 	—	 	 	 	2,465	 	 	 	—	 	 	 	—	 	 	 	2,465	 	
Other investing activities	 	 	4	 	 	 	1,566	 	 	 	—	 	 	 	—	 	 	 	1,570	 	
 	 	 	
Net cash used in investing activities — continuing operations	 	 	(1,584	)	 	 	(31,878	)	 	 	—	 	 	 	—	 	 	 	(33,462	)	
Net cash used investing activities — discontinued operations	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	
 	 	 	
Net cash used in investing activities	 	 	(1,584	)	 	 	(31,878	)	 	 	—	 	 	 	—	 	 	 	(33,462	)	

Proceeds from exercise of stock option and purchase plans	 	 	4,052	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	4,052	 	
Other financing activities, net	 	 	—	 	 	 	(42	)	 	 	—	 	 	 	—	 	 	 	(42	)	
 	 	 	
Net cash provided by (used in) financing activities — continuing operations	 	 	4,052	 	 	 	(42	)	 	 	—	 	 	 	—	 	 	 	4,010	 	
Net cash provided by financing activities — discontinued operations	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	
 	 	 	
Net cash provided by (used in) financing activities	 	 	4,052	 	 	 	(42	)	 	 	—	 	 	 	—	 	 	 	4,010	 	

Net change in cash and cash equivalents	 	 	(34,796	)	 	 	(2,634	)	 	 	—	 	 	 	—	 	 	 	(37,430	)	
Cash and cash equivalents at beginning of period	 	 	117,913	 	 	 	6,485	 	 	 	—	 	 	 	—	 	 	 	124,398	 	
 	 	 	
Cash and cash equivalents at end of period	 	$	83,117	 	 	$	3,851	 	 	$	—	 	 	$	—	 	 	$	86,968	 	
 	 	 	
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GAYLORD ENTERTAINMENT COMPANY AND SUBSIDIARIES
Condensed Consolidating Statement of Cash Flows
For the Three Months Ended March 31, 2010
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	Non-	 	 	 	 	 	 	 	
(in thousands)	 	Issuer	 	 	Guarantors	 	 	Guarantors	 	 	Eliminations	 	 	Consolidated	 	
Net cash provided by continuing operating activities	 	$	25,988	 	 	$	1,560	 	 	$	55	 	 	$	—	 	 	$	27,603	 	
Net cash provided by (used in) discontinued operating activities	 	 	—	 	 	 	126	 	 	 	(55	)	 	 	—	 	 	 	71	 	
 	 	 	
Net cash provided by operating activities	 	 	25,988	 	 	 	1,686	 	 	 	—	 	 	 	—	 	 	 	27,674	 	

Purchases of property and equipment	 	 	(1,109	)	 	 	(6,624	)	 	 	—	 	 	 	—	 	 	 	(7,733	)	
Collection of notes receivable	 	 	—	 	 	 	4,025	 	 	 	—	 	 	 	—	 	 	 	4,025	 	
Other investing activities	 	 	—	 	 	 	245	 	 	 	—	 	 	 	—	 	 	 	245	 	
 	 	 	
Net cash used in investing activities — continuing operations	 	 	(1,109	)	 	 	(2,354	)	 	 	—	 	 	 	—	 	 	 	(3,463	)	
Net cash used investing activities — discontinued operations	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	
 	 	 	
Net cash used in investing activities	 	 	(1,109	)	 	 	(2,354	)	 	 	—	 	 	 	—	 	 	 	(3,463	)	

Repurchases of senior notes	 	 	(25,082	)	 	 	—	 	 	 	—	 	 	 	—	 	 	 	(25,082	)	
Proceeds from exercise of stock option and purchase plans	 	 	381	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	381	 	
Excess tax benefit from stock-based compensation	 	 	134	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	134	 	
Other financing activities, net	 	 	—	 	 	 	(186	)	 	 	—	 	 	 	—	 	 	 	(186	)	
 	 	 	
Net cash used in financing activities — continuing operations	 	 	(24,567	)	 	 	(186	)	 	 	—	 	 	 	—	 	 	 	(24,753	)	
Net cash provided by financing activities — discontinued operations	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	
 	 	 	
Net cash used in financing activities	 	 	(24,567	)	 	 	(186	)	 	 	—	 	 	 	—	 	 	 	(24,753	)	

Net change in cash and cash equivalents	 	 	312	 	 	 	(854	)	 	 	—	 	 	 	—	 	 	 	(542	)	
Cash and cash equivalents at beginning of period	 	 	175,871	 	 	 	4,158	 	 	 	—	 	 	 	—	 	 	 	180,029	 	
 	 	 	
Cash and cash equivalents at end of period	 	$	176,183	 	 	$	3,304	 	 	$	—	 	 	$	—	 	 	$	179,487	 	
 	 	 	
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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis should be read in conjunction with our condensed consolidated financial statements and related notes included elsewhere in this report and our audited consolidated financial statements and related notes for the year ended December 31, 2010, appearing in our Annual Report on Form 10-K that was filed with the Securities and Exchange Commission (“SEC”) on February 25, 2011.
This quarterly report on Form 10-Q contains “forward-looking statements” intended to qualify for the safe harbor from liability established by 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. These statements contain words such as “may,” “will,” “project,” “might,” “expect,” “believe,” “anticipate,” “intend,” “could,” “would,” “estimate,” “continue” or “pursue,” or the negative or other variations thereof or comparable terminology. In particular, they include statements relating to, among other things, future actions, new projects, strategies, future performance, the outcome of contingencies such as legal proceedings and future financial results. We have based these forward-looking statements on our current expectations and projections about future events.
We caution the reader that forward-looking statements involve risks and uncertainties that cannot be predicted or quantified and, consequently, actual results may differ materially from those expressed or implied by such forward-looking statements. Such risks and uncertainties include, but are not limited to, those factors described in our Annual Report on Form 10-K for the year ended December 31, 2010 or described from time to time in our other reports filed with the SEC. These include the risks and uncertainties associated with the flood damage to Gaylord Opryland and our other Nashville-area Gaylord facilities, which include our remaining flood-related repair projects and effects of the hotel closure including the loss of customer goodwill, uncertainty of future hotel bookings and other negative factors yet to be determined; economic conditions affecting the hospitality business generally, rising labor and benefits costs, the timing of any new development projects, increased costs and other risks associated with building and developing new hotel facilities, the geographic concentration of our hotel properties, business levels at the Company’s hotels, our ability to successfully operate our hotels, our ability to refinance indebtedness as it matures and our ability to obtain financing for new developments. Any forward-looking statements are made pursuant to the Private Securities Litigation Reform Act of 1995 and, as such, speak only as of the date made. We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise.
Overall Outlook
Our concentration in the hospitality industry, and in particular the large group meetings sector of the hospitality industry, exposes us to certain risks outside of our control. Recessionary conditions in the national economy have resulted in economic pressures on the hospitality industry generally, and on our Company’s operations and expansion plans. In portions of 2008 and the first half of 2009, we experienced declines in hotel occupancy, weakness in future bookings by our core large group customers, lower spending levels by groups, increased cancellation levels, and increases in groups not fulfilling the minimum number of room nights originally contracted for, or rooms attrition. In recent quarters, we have begun to see stabilization in our industry and specifically in our business. We have seen increases in group travel, as well as growth in outside-the-room revenue, indicating that not only are our group customers beginning to travel again, they are spending more on food and beverage and entertainment when they reach our properties. Our attrition and cancellation levels have also decreased compared to 2009 and 2010 levels. As a result of the higher levels of group business, we have experienced an increase in occupancy in recent quarters. Although we continue to see pressure on rates for bookings that will travel in the shorter-term, in 2010 and thus far in 2011, we have experienced solid booking levels in future periods, as well as improvements in pricing for those bookings. In conjunction with the improvements in our business, as well as our improved outlook on the hospitality industry generally, we are revisiting our future plans for growth. While we continue to focus our marketing efforts on booking rooms in 2011, in addition to later years, there can be no assurance that we can continue to achieve further improvements
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in occupancy and revenue levels. We cannot predict when or if hospitality demand and spending will return to historical levels, but we anticipate that our future financial results and growth will be harmed if the economy does not continue to improve or becomes worse.
See Item 1A, “Risk Factors,” in our Annual Report on Form 10-K for the year ended December 31, 2010, filed with the SEC on February 25, 2011, for important information regarding forward-looking statements made in this report and risks and uncertainties we face.
Nashville Flood
As more fully discussed in our Annual Report on Form 10-K as of and for the year ended December 31, 2010 filed with the SEC, on May 3, 2010, the Gaylord Opryland Resort and Convention Center (“Gaylord Opryland”), the Grand Ole Opry, certain of our Nashville-based attractions, and certain of our corporate offices experienced significant flood damage as a result of the historic flooding of the Cumberland River (collectively, the “Nashville Flood”). Gaylord Opryland reopened November 15, 2010. While the Grand Ole Opry continued its schedule at alternative venues, including our Ryman Auditorium, the Grand Ole Opry House reopened September 28, 2010. Certain of our Nashville-based attractions were closed for a period of time, but reopened in June and July, and the majority of the affected corporate offices reopened during November 2010. Gross total remediation and rebuilding costs are at the low end of the projected $215-$225 million range, including approximately $23-$28 million in pre-flood planned enhancement projects at Gaylord Opryland. In addition, preopening costs came in under the projected $57-$62 million range. These costs included the initial eight-week carrying period for all labor at the hotel as well as the labor for security, engineering, horticulture, reservations, sales, accounting and management during the restoration, as well as the labor associated with re-launching the assets and the restocking of operating supplies prior to re-opening. In addition, in 2010 we incurred a non-cash write-off of $45.0 million associated with the impairment of certain assets as a result of sustained flood damage. While several flood-related projects remain to be completed in 2011, we anticipate that net of tax refunds of $36.5 million, insurance proceeds of $50.0 million, and the cost of projects slated for the property prior to the flood, the net cash impact of the flood in 2010 and 2011 will be approximately $150 million. We believe that we have ample liquidity for the remaining projects through the use of a combination of cash on-hand, available borrowings and cash flow generated by our other hotel assets.
In addition, we have initiated a $12.0 million enhancement to our existing Nashville flood protection system in an effort to provide 500-year flood protection for Gaylord Opryland. We have worked with engineers to design the enhancements to be aesthetically pleasing and sensitive to adjacent property owners. It is anticipated that the project will be completed in the spring of 2012.
Development Update
Our investments in 2010 consisted primarily of capital expenditures associated with the flood damage and reopening of Gaylord Opryland and the Grand Ole Opry House, as well as ongoing maintenance capital expenditures for our existing properties. Our investments in 2011 are also expected to consist primarily of ongoing maintenance capital expenditures for our existing properties, and potentially, development projects that have not yet been determined.
As described in Note 13 to our condensed consolidated financial statements for the three months ended March 31, 2011 and 2010 included herewith, we have entered into a land purchase agreement with respect to a potential hotel development in Mesa, Arizona.
We are also considering expansions at Gaylord Texan and Gaylord Palms, as well as other potential hotel sites throughout the country. In addition, we are reevaluating our prior considerations regarding a possible expansion at Gaylord Opryland. We have made no commitments to construct expansions of our current facilities or to build new facilities. We are closely monitoring the condition of the economy and the availability of attractive
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financing. We are unable to predict at this time when we might make such commitments or commence construction of these proposed expansion projects.
Our Current Operations
Our ongoing operations are organized into three principal business segments:
 	•	 	Hospitality, consisting of our Gaylord Opryland, our Gaylord Palms Resort and Convention Center (“Gaylord Palms”), our Gaylord Texan Resort and Convention Center (“Gaylord Texan”), our Gaylord National Resort and Convention Center (“Gaylord National”) and our Radisson Hotel at Opryland (“Radisson Hotel”), as well as our interest in a joint venture.	
 	 	 	 	
 	•	 	Opry and Attractions, consisting of our Grand Ole Opry assets, WSM-AM and our Nashville attractions.	
 	 	 	 	
 	•	 	Corporate and Other, consisting of our corporate expenses.	
For the three months ended March 31, 2011 and 2010, our total revenues were divided among these business segments as follows:
 	 	 	 	 	 	 	 	 	
 	 	Three months ended	 	
 	 	March 31,	 	
Segment	 	2011	 	 	2010	 	
Hospitality	 	 	94.8	%	 	 	95.0	%	
Opry and Attractions	 	 	5.2	%	 	 	5.0	%	
Corporate and Other	 	 	0.0	%	 	 	0.0	%	
We generate a significant portion of our revenues from our Hospitality segment. We believe that we are the only hospitality company whose stated primary focus is on the large group meetings and conventions sector of the lodging market. Our strategy is to continue this focus by concentrating on our “All-in-One-Place” self-contained service offerings and by emphasizing customer rotation among our convention properties, while also offering additional entertainment opportunities to guests and target customers.
In addition to our group meetings strategy, we are also focused on improving leisure demand in our hotels through special events (Country Christmas, summer-themed events, etc.), social media strategies, and unique content and entertainment partnerships. As part of this strategy, on April 27, 2011, we announced a multi-year strategic alliance with DreamWorks Animation SKG, Inc. to become the official hotel provider of DreamWorks vacation experiences. Through this strategic alliance, Gaylord will offer leisure experiences featuring DreamWorks characters for its guests at all Gaylord resort properties beginning in November 2011.
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Key Performance Indicators
The operating results of our Hospitality segment are highly dependent on the volume of customers at our hotels and the quality of the customer mix at our hotels. These factors impact the price we can charge for our hotel rooms and other amenities, such as food and beverage and meeting space. Key performance indicators related to revenue are:
 	•	 	hotel occupancy (a volume indicator);	
 	 	 	 	
 	•	 	average daily rate (“ADR”) (a price indicator);	
 	 	 	 	
 	•	 	Revenue per Available Room (“RevPAR”) (a summary measure of hotel results calculated by dividing room sales by room nights available to guests for the period);	
 	 	 	 	
 	•	 	Total Revenue per Available Room (“Total RevPAR”) (a summary measure of hotel results calculated by dividing the sum of room, food and beverage and other ancillary service revenue by room nights available to guests for the period); and	
 	 	 	 	
 	•	 	Net Definite Room Nights Booked (a volume indicator which represents the total number of definite bookings for future room nights at Gaylord hotels confirmed during the applicable period, net of cancellations).	
We recognize Hospitality segment revenue from our occupied hotel rooms as earned on the close of business each day and from concessions and food and beverage sales at the time of sale. Attrition fees, which are charged to groups when they do not fulfill the minimum number of room nights or minimum food and beverage spending requirements originally contracted for, as well as cancellation fees, are recognized as revenue in the period they are collected. Almost all of our Hospitality segment revenues are either cash-based or, for meeting and convention groups meeting our credit criteria, billed and collected on a short-term receivables basis. Our industry is capital intensive, and we rely on the ability of our hotels to generate operating cash flow to repay debt financing, fund maintenance capital expenditures and provide excess cash flow for future development.
The results of operations of our Hospitality segment are affected by the number and type of group meetings and conventions scheduled to attend our hotels in a given period. We attempt to offset any identified shortfalls in occupancy by creating special events at our hotels or offering incentives to groups in order to attract increased business during this period. A variety of factors can affect the results of any interim period, including the nature and quality of the group meetings and conventions attending our hotels during such period, which meetings and conventions have often been contracted for several years in advance, the level of attrition we experience, and the level of transient business at our hotels during such period.
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Selected Financial Information
The following table contains our unaudited selected summary financial data for the three months ended March 31, 2011 and 2010. The table also shows the percentage relationships to total revenues and, in the case of segment operating income (loss), its relationship to segment revenues (in thousands, except percentages).
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	Unaudited	 	 	 	 	 	
 	 	Three Months ended March 31,	 	 	 	 	
 	 	2011	 	 	%	 	 	2010	 	 	%	 	 	 	 	 	
Income Statement Data:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
REVENUES:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Hospitality	 	$	209,342	 	 	 	94.8	%	 	$	203,695	 	 	 	95.0	%	 	 	 	 	
Opry and Attractions	 	 	11,367	 	 	 	5.1	%	 	 	10,761	 	 	 	5.0	%	 	 	 	 	
Corporate and Other	 	 	29	 	 	 	0.0	%	 	 	25	 	 	 	0.0	%	 	 	 	 	
 	 	 	 	 	 	 	
Total revenues	 	 	220,738	 	 	 	100.0	%	 	 	214,481	 	 	 	100.0	%	 	 	 	 	
OPERATING EXPENSES:	 	 	 	 	 	 	
Operating costs	 	 	133,878	 	 	 	60.7	%	 	 	130,555	 	 	 	60.9	%	 	 	 	 	
Selling, general and administrative	 	 	43,078	 	 	 	19.5	%	 	 	41,902	 	 	 	19.5	%	 	 	 	 	
Casualty loss	 	 	(1	)	 	 	0.0	%	 	 	—	 	 	 	0.0	%	 	 	 	 	
Depreciation and amortization:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Hospitality	 	 	25,275	 	 	 	11.5	%	 	 	23,219	 	 	 	10.8	%	 	 	 	 	
Opry and Attractions	 	 	1,332	 	 	 	0.6	%	 	 	1,362	 	 	 	0.6	%	 	 	 	 	
Corporate and Other	 	 	2,450	 	 	 	1.1	%	 	 	2,490	 	 	 	1.2	%	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total depreciation and amortization	 	 	29,057	 	 	 	13.2	%	 	 	27,071	 	 	 	12.6	%	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total operating expenses	 	 	206,012	 	 	 	93.3	%	 	 	199,528	 	 	 	93.0	%	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
OPERATING INCOME (LOSS):	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Hospitality	 	 	29,454	 	 	 	14.1	%	 	 	30,247	 	 	 	14.8	%	 	 	 	 	
Opry and Attractions	 	 	(643	)	 	 	-5.7	%	 	 	(765	)	 	 	-7.1	%	 	 	 	 	
Corporate and Other	 	 	(14,086	)	 	 	(A	)	 	 	(14,529	)	 	 	(A	)	 	 	 	 	
Casualty loss	 	 	1	 	 	 	(B	)	 	 	—	 	 	 	(B	)	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total operating income	 	 	14,726	 	 	 	6.7	%	 	 	14,953	 	 	 	7.0	%	 	 	 	 	
Interest expense, net of amounts capitalized	 	 	(20,809	)	 	 	(B	)	 	 	(20,115	)	 	 	(B	)	 	 	 	 	
Interest income	 	 	3,173	 	 	 	(B	)	 	 	3,222	 	 	 	(B	)	 	 	 	 	
Income (loss) from unconsolidated companies	 	 	173	 	 	 	(B	)	 	 	(73	)	 	 	(B	)	 	 	 	 	
Net gain on extinguishment of debt	 	 	—	 	 	 	(B	)	 	 	1,199	 	 	 	(B	)	 	 	 	 	
Other gains and (losses), net	 	 	(191	)	 	 	(B	)	 	 	(13	)	 	 	(B	)	 	 	 	 	
Benefit (provision) for income taxes	 	 	967	 	 	 	(B	)	 	 	(975	)	 	 	(B	)	 	 	 	 	
Income (loss) from discontinued operations, net	 	 	4	 	 	 	(B	)	 	 	(48	)	 	 	(B	)	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net loss	 	$	(1,957	)	 	 	(B	)	 	$	(1,850	)	 	 	(B	)	 	 	 	 	

(A)     These amounts have not been shown as a percentage of segment revenue because the Corporate and Other segment generates only minimal revenue.
(B)     These amounts have not been shown as a percentage of revenue because they have no relationship to revenue.
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Summary Financial Results
Results
The following table summarizes our financial results for the three months ended March 31, 2011 and 2010 (in thousands, except percentages and per share data):
 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	Three Months	 	 	 	 	
 	 	 	 	 	 	Ended March 31,	 	 	 	 	
 	 	2011	 	 	2010	 	 	%Change	 	
Total revenues	 	$	220,738	 	 	$	214,481	 	 	 	2.9	%	
Total operating expenses	 	 	206,012	 	 	 	199,528	 	 	 	3.2	%	
Operating income	 	 	14,726	 	 	 	14,953	 	 	 	-1.5	%	
Net loss	 	 	(1,957	)	 	 	(1,850	)	 	 	-5.8	%	
Net loss per share — fully diluted	 	 	(0.04	)	 	 	(0.04	)	 	 	0.0	%	
Total Revenues
The increase in our total revenues for the three months ended March 31, 2011, as compared to the same period in 2010, is attributable to an increase in our Hospitality segment revenues of $5.6 million for the 2011 period, as discussed more fully below. Total Hospitality revenues in the 2011 period include $1.6 million in attrition and cancellation fee collections, a $1.4 million decrease from the 2010 period.
Total Operating Expenses
The increase in our total operating expenses for the three months ended March 31, 2011, as compared to the same period in 2010, is primarily due to a $6.3 million increase in our Hospitality segment operating expenses associated with higher occupancy and increased depreciation expense, as discussed more fully below.
Net Loss
Our net loss of $2.0 million for the three months ended March 31, 2011, as compared to a net loss of $1.9 million for the same period in 2010, was due primarily to the decrease in our operating income described above, partially offset by the following factors:
 	•	 	A benefit for income taxes of $1.0 million during the three months ended March 31, 2011, as compared to a provision for income taxes of $1.0 million in the same period in 2010, described more fully below.	
 	 	 	 	
 	•	 	The three months ended March 31, 2010 including a $1.2 million net gain on the extinguishment of debt relating to the repurchase of a portion of our 6.75% senior notes which did not recur in 2011, described more fully below.	
 	 	 	 	
 	•	 	A $0.7 million increase in our interest expense, net of amounts capitalized, for the three months ended March 31, 2011, as compared to the same period in 2010, described more fully below.	
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Factors and Trends Contributing to Operating Performance
The most important factors and trends contributing to our operating performance during the period described herein were:
 	•	 	Increased occupancy levels (an increase of 1.7 percentage points of occupancy for the three months ended March 31, 2011 as compared to the same period in 2010), resulting from increased levels of group business during the period, and increased outside-the-room spending during the period (an increase of 6.7% for the three months ended March 31, 2011, as compared to the same period in 2010), due primarily to increased banquet spending by group business. These factors resulted in increased RevPAR and increased Total RevPAR for the three months ended March 31, 2011, as compared to the same period in 2010.	
 	 	 	 	
 	•	 	Decreased attrition and cancellation levels for the three months ended March 31, 2011, as compared to the same period in 2010, which increased our revenue, operating income, RevPAR and Total RevPAR. Attrition for the three months ended March 31, 2011 was 6.1% of bookings, compared to 10.6% for the 2010 period. Cancellations for the three months ended March 31, 2011 decreased 38.9% as compared to the 2010 period.	
Operating Results — Detailed Segment Financial Information
Hospitality Segment
     Total Segment Results. The following presents the financial results of our Hospitality segment for the three months ended March 31, 2011 and 2010 (in thousands, except percentages and performance metrics):
 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	Three Months	 	 	 	 	
 	 	 	 	 	 	Ended March 31,	 	 	 	 	
 	 	2011	 	 	2010	 	 	% Change	 	
Hospitality revenue (1)	 	$	209,342	 	 	$	203,695	 	 	 	2.8	%	
Hospitality operating expenses:	 	 	 	 	 	 	 	 	 	 	 	 	
Operating costs	 	 	123,765	 	 	 	120,971	 	 	 	2.3	%	
Selling, general and administrative	 	 	30,848	 	 	 	29,258	 	 	 	5.4	%	
Depreciation and amortization	 	 	25,275	 	 	 	23,219	 	 	 	8.9	%	
 	 	 	 	 	 	 	 	 	 	 	
Total Hospitality operating expenses	 	 	179,888	 	 	 	173,448	 	 	 	3.7	%	
 	 	 	 	 	 	 	 	 	 	 	
Hospitality operating income (2)	 	$	29,454	 	 	$	30,247	 	 	 	-2.6	%	
 	 	 	 	 	 	 	 	 	 	 	
Hospitality performance metrics:	 	 	 	 	 	 	 	 	 	 	 	 	
Occupancy	 	 	69.6	%	 	 	67.9	%	 	 	2.5	%	
ADR	 	$	164.43	 	 	$	165.86	 	 	 	-0.9	%	
RevPAR (3)	 	$	114.45	 	 	$	112.62	 	 	 	1.6	%	
Total RevPAR (4)	 	$	292.61	 	 	$	279.59	 	 	 	4.7	%	
Net Definite Room Nights Booked	 	 	275,000	 	 	 	360,000	 	 	 	-23.6	%	
 
(1)	 	Hospitality results and performance metrics include the results of our Gaylord Hotels and our Radisson Hotel for all periods presented.	
 	 	 	
(2)	 	Hospitality operating income does not include the effect of casualty loss. See the discussion of casualty loss set forth below.	
 	 	 	
(3)	 	We calculate Hospitality RevPAR by dividing room sales by room nights available to guests for the period. Hospitality RevPAR is not comparable to similarly titled measures such as revenues.	
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(4)	 	We calculate Hospitality Total RevPAR by dividing the sum of room sales, food and beverage, and other ancillary services (which equals Hospitality segment revenue) by room nights available to guests for the period. Hospitality Total RevPAR is not comparable to similarly titled measures such as revenues.	
The increase in total Hospitality segment revenue in the three months ended March 31, 2011, as compared to the same period in 2010, is primarily due to increased occupancy rates and increased outside-the-room spending resulting from higher levels of group business during the period. Total Hospitality revenues were negatively impacted by a decline of $1.4 million in attrition and cancellation fee collections during the three months ended March 31, 2011.
The percentage of group versus transient business based on rooms sold for our hospitality segment for the periods presented was approximately as follows:
 	 	 	 	 	 	 	 	 	
 	 	Three months ended	 	
 	 	March 31,	 	
 	 	2011	 	 	2010	 	
Group	 	 	85.2	%	 	 	82.7	%	
Transient	 	 	14.8	%	 	 	17.3	%	
The increase in group business during the 2011 period is primarily the result of the macroeconomic factors discussed above, specifically, increases in group travel and decreases in groups cancelling or experiencing attrition during the 2011 period as compared to the 2010 period.
Total Hospitality segment operating expenses consist of direct operating costs, selling, general and administrative expenses, and depreciation and amortization expense. The increase in Hospitality operating expenses in the three months ended March 31, 2011, as compared to the same period in 2010, is primarily attributable to an increase in operating expenses at Gaylord Opryland, Gaylord Palms and Gaylord Texan, partially offset by a decrease in operating expenses at Gaylord National, as described below.
Total Hospitality segment operating costs, which consist of direct costs associated with the daily operations of our hotels (primarily room, food and beverage and convention costs), increased in the three months ended March 31, 2011, as compared to the same period in 2010, primarily as a result of an increase in operating costs at Gaylord Opryland and Gaylord Texan, partially offset by a decrease in operating costs at Gaylord National, as described below.
Total Hospitality segment selling, general and administrative expenses, consisting of administrative and overhead costs, increased in the three months ended March 31, 2011, as compared to the same period in 2010, primarily as a result of an increase in selling, general and administrative expenses at Gaylord Opryland, Gaylord Palms and Gaylord Texan, partially offset by a decrease in selling, general and administrative expenses at Gaylord National, as described below.
Total Hospitality segment depreciation and amortization expense increased in the three months ended March 31, 2011, as compared to the same period in 2010, primarily as a result of an increase at Gaylord Opryland due to the new fixed assets placed in service as part of the rebuilding after the Nashville Flood.
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Property-Level Results. The following presents the property-level financial results of our Hospitality segment for the three months ended March 31, 2011 and 2010.
     Gaylord Opryland Results. The results of Gaylord Opryland for the three months ended March 31, 2011 and 2010 are as follows (in thousands, except percentages and performance metrics):
 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	Three Months	 	 	 	 	
 	 	 	 	 	 	Ended March 31,	 	 	 	 	
 	 	2011	 	 	2010	 	 	%Change	 	
Total revenues	 	$	60,310	 	 	$	54,669	 	 	 	10.3	%	
Operating expense data (1):	 	 	 	 	 	 	 	 	 	 	 	 	
Operating costs	 	 	38,273	 	 	 	34,561	 	 	 	10.7	%	
Selling, general and administrative	 	 	8,256	 	 	 	7,443	 	 	 	10.9	%	
Hospitality performance metrics:	 	 	 	 	 	 	 	 	 	 	 	 	
Occupancy	 	 	68.6	%	 	 	62.7	%	 	 	9.4	%	
ADR	 	$	137.26	 	 	$	143.08	 	 	 	-4.1	%	
RevPAR	 	$	94.19	 	 	$	89.67	 	 	 	5.0	%	
Total RevPAR	 	$	232.76	 	 	$	210.99	 	 	 	10.3	%	

(1)	 	Gaylord Opryland results and performance do not include the effect of casualty loss. See the discussion of casualty loss set forth below.	
Total revenue and RevPAR increased at Gaylord Opryland in the three months ended March 31, 2011, as compared to the same period in 2010, as a result of increased occupancy, primarily corporate groups, partially offset by lower ADR, primarily due to declines in room rate for association groups. The increase in corporate groups also led to increases in outside-the-room spending at the hotel, which drove the hotel’s increased Total RevPAR during the 2011 period. This increase in Total RevPAR was partially offset by lower collection of attrition and cancellation fees.
Operating costs increased at Gaylord Opryland in the three months ended March 31, 2011, as compared to the same period in 2010, primarily due to increases in variable costs associated with higher occupancy and outside-the-room revenues, as well as increased flood insurance on the property and increased utility consumption. Selling, general and administrative expenses at Gaylord Opryland increased in the three months ended March 31, 2011, as compared to the same period in 2010, primarily due to increased sales and marketing expenses and increased employment costs.
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     Gaylord Palms Results. The results of Gaylord Palms for the three months ended March 31, 2011 and 2010 are as follows (in thousands, except percentages and performance metrics):
 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	Three Months	 	 	 	 	
 	 	 	 	 	 	Ended March 31,	 	 	 	 	
 	 	2011	 	 	2010	 	 	%Change	 	
Total revenues	 	$	45,492	 	 	$	43,317	 	 	 	5.0	%	
Operating expense data:	 	 	 	 	 	 	 	 	 	 	 	 	
Operating costs	 	 	23,732	 	 	 	23,106	 	 	 	2.7	%	
Selling, general and administrative	 	 	8,049	 	 	 	7,113	 	 	 	13.2	%	
Hospitality performance metrics:	 	 	 	 	 	 	 	 	 	 	 	 	
Occupancy	 	 	78.2	%	 	 	74.2	%	 	 	5.4	%	
ADR	 	$	166.07	 	 	$	176.84	 	 	 	-6.1	%	
RevPAR	 	$	129.93	 	 	$	131.24	 	 	 	-1.0	%	
Total RevPAR	 	$	359.51	 	 	$	342.31	 	 	 	5.0	%	
The increase in Gaylord Palms revenue and Total RevPAR in the three months ended March 31, 2011, as compared to the same period in 2010, was primarily due to increased occupancy and outside-the-room spending, largely driven by an increase in group business during the period, partially offset by a lower ADR, as rates in Orlando remain under short-term pressure, primarily due to the increase in room supply in the Orlando, Florida market that has seen slow absorption due to the challenging economic environment.
Operating costs at Gaylord Palms in the three months ended March 31, 2011 increased as compared to the same period in 2010, primarily due to higher variable costs associated with the increase in occupancy and outside-the-room revenues. Selling, general and administrative expenses increased during the three months ended March 31, 2011, as compared to the same period in 2010, primarily due to increased incentive compensation expense and increased sales and marketing expenses.
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     Gaylord Texan Results. The results of Gaylord Texan for the three months ended March 31, 2011 and 2010 are as follows (in thousands, except percentages and performance metrics):
 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	Three Months	 	 	 	 	
 	 	 	 	 	 	Ended March 31,	 	 	 	 	
 	 	2011	 	 	2010	 	 	%Change	 	
Total revenues	 	$	50,360	 	 	$	46,871	 	 	 	7.4	%	
Operating expense data:	 	 	 	 	 	 	 	 	 	 	 	 	
Operating costs	 	 	26,246	 	 	 	25,032	 	 	 	4.8	%	
Selling, general and administrative	 	 	6,240	 	 	 	5,964	 	 	 	4.6	%	
Hospitality performance metrics:	 	 	 	 	 	 	 	 	 	 	 	 	
Occupancy	 	 	72.3	%	 	 	72.8	%	 	 	-0.7	%	
ADR	 	$	190.19	 	 	$	168.68	 	 	 	12.8	%	
RevPAR	 	$	137.56	 	 	$	122.78	 	 	 	12.0	%	
Total RevPAR	 	$	370.32	 	 	$	344.67	 	 	 	7.4	%	
The increase in Gaylord Texan revenue and RevPAR in the three months ended March 31, 2011, as compared to the same period in 2010, was primarily due to higher ADR during the 2011 period, largely driven by an increase in group and association business, as well as the impact of the 2011 Super Bowl being held in metropolitan Dallas. The increase in group and association business also led to increases in banquet, catering and other outside-the-room spending at the hotel, which increased the hotel’s Total RevPAR for the period.
Operating costs at Gaylord Texan in the three months ended March 31, 2011, as compared to the same period in 2010, increased primarily due to increased variable operating costs associated with the higher revenue and outside-the-room spending at the hotel. Selling, general and administrative expenses increased slightly during the three months ended March 31, 2011, as compared to the same period in 2010, primarily due to increased benefit costs and increased credit card fees in the 2011 period.
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Gaylord National Results. The results of Gaylord National for the three months ended March 31, 2011 and 2010 are as follows (in thousands, except percentages and performance metrics):
 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Three Months	 	
 	 	Ended March 31,	 	
 	 	2011	 	 	2010	 	 	% Change	 	
 	 	 	 	 	 	 	 	 	 	 	
Total revenues	 	$	52,354	 	 	$	57,523	 	 	 	-9.0	%	
Operating expense data:	 	 	 	 	 	 	 	 	 	 	 	 	
Operating costs	 	 	34,806	 	 	 	37,486	 	 	 	-7.1	%	
Selling, general and administrative	 	 	7,936	 	 	 	8,370	 	 	 	-5.2	%	
Hospitality performance metrics:	 	 	 	 	 	 	 	 	 	 	 	 	
Occupancy	 	 	64.2	%	 	 	70.5	%	 	 	-8.9	%	
ADR	 	$	187.91	 	 	$	192.50	 	 	 	-2.4	%	
RevPAR	 	$	120.70	 	 	$	135.77	 	 	 	-11.1	%	
Total RevPAR	 	$	291.44	 	 	$	320.21	 	 	 	-9.0	%	
Gaylord National revenue and Total RevPAR decreased in the three months ended March 31, 2011, as compared to the same period in 2010, primarily as a result of lower occupancy and decreased outside-the-room spending during the 2011 period, primarily due to a decrease in associations and governmental groups. The decrease in governmental groups and their associated ADR was partially driven by the uncertainty surrounding the federal budget, as well as reductions in the federal per diem rate. Revenue and Total RevPAR were also negatively impacted by a decrease in collections of attrition and cancellation fees during the 2011 period.
Operating costs at Gaylord National decreased in the three months ended March 31, 2011, as compared to the same period in 2010, primarily due to decreased variable operating costs associated with the decrease in occupancy and outside-the-room revenues. Selling, general and administrative expenses decreased slightly during the three months ended March 31, 2011, as compared to the same period in 2010, primarily due to a decrease in advertising and promotional expense.
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Opry and Attractions Segment
     Total Segment Results. The following presents the financial results of our Opry and Attractions segment for the three months ended March 31, 2011 and 2010 (in thousands, except percentages):
 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Three Months	 	
 	 	Ended March 31,	 	
 	 	2011	 	 	2010	 	 	% Change	 	
 	 	 	 	 	 	 	 	 	 	 	
Total revenues	 	$	11,367	 	 	$	10,761	 	 	 	5.6	%	
Operating expense data:	 	 	 	 	 	 	 	 	 	 	 	 	
Operating costs	 	 	7,269	 	 	 	7,117	 	 	 	2.1	%	
Selling, general and administrative	 	 	3,409	 	 	 	3,047	 	 	 	11.9	%	
Depreciation and amortization	 	 	1,332	 	 	 	1,362	 	 	 	-2.2	%	
 	 	 	 	 	 	 	 	 	 	 	
Operating loss (1)	 	$	(643	)	 	$	(765	)	 	 	15.9	%	

 	 	 	
(1)	 	Opry and Attractions segment results do not include the effect of casualty loss. See the discussion of casualty loss set forth below.	
The increase in revenues in the Opry and Attractions segment for the three months ended March 31, 2011, as compared to the same period in 2010, is primarily due to an increase in revenue at the Grand Ole Opry due to increased attendance.
The slight increase in Opry and Attractions operating costs in the three months ended March 31, 2011, as compared to the same period in 2010, was due primarily to variable costs associated with the increase in attendance. The increase in selling, general and administrative costs in the three months ended March 31, 2011, as compared to the same period in 2010, was due primarily to increased rental expense and increased employee benefit costs.
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Corporate and Other Segment
     Total Segment Results. The following presents the financial results of our Corporate and Other segment for the three months ended March 31, 2011 and 2010 (in thousands, except percentages):
 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Three Months	 	
 	 	Ended March 31,	 	
 	 	2011	 	 	2010	 	 	% Change	 	
 	 	 	 	 	 	 	 	 	 	 	
Total revenues	 	$	29	 	 	$	25	 	 	 	16.0	%	
Operating expense data:	 	 	 	 	 	 	 	 	 	 	 	 	
Operating costs	 	 	2,844	 	 	 	2,467	 	 	 	15.3	%	
Selling, general and administrative	 	 	8,821	 	 	 	9,597	 	 	 	-8.1	%	
Depreciation and amortization	 	 	2,450	 	 	 	2,490	 	 	 	-1.6	%	
 	 	 	 	 	 	 	 	 	 	 	
Operating loss (1)	 	$	(14,086	)	 	$	(14,529	)	 	 	3.0	%	

 	 	 	
(1)	 	Corporate and Other segment results do not include the effect of casualty loss. See the discussion of casualty loss set forth below.	
Corporate and Other segment revenue consists of rental income and corporate sponsorships.
Corporate and Other operating costs, which consist primarily of costs associated with information technology, increased in the three months ended March 31, 2011, as compared to the 2010 period, due primarily to higher employment costs.
Corporate and Other selling, general and administrative expenses, which consist of senior management salaries and benefits, legal, human resources, accounting, pension and other administrative costs, decreased in the three months ended March 31, 2011, as compared to 2010 period, due primarily to lower consulting costs in the 2011 period, which were partially offset by increased equity compensation and employment costs.
Corporate and Other depreciation and amortization expense remained stable in the three months ended March 31, 2011 as compared with the 2010 period.
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Operating Results — Casualty Loss
As a result of the Nashville Flood discussed above, during the three months ended March 31, 2011, casualty loss was comprised of the following (in thousands):
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Three Months Ended March 31, 2011	 	
 	 	 	 	 	 	Opry and	 	 	Corporate	 	 	 	 	
 	 	Hospitality	 	 	Attractions	 	 	and Other	 	 	Total	 	
 	 	 	
Site remediation	 	$	(179	)	 	$	8	 	 	$	(41	)	 	$	(212	)	
Non-capitalized repairs of buildings and equipment	 	 	—	 	 	 	2	 	 	 	13	 	 	 	15	 	
Other	 	 	6	 	 	 	21	 	 	 	169	 	 	 	196	 	
 	 	 	
Net casualty loss	 	$	(173	)	 	$	31	 	 	$	141	 	 	$	(1	)	
 	 	 	
Non-Operating Results Affecting Net Loss
General
The following table summarizes the other factors which affected our net loss for the three months ended March 31, 2011 and 2010 (in thousands, except percentages):
 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Three Months	 	
 	 	Ended March 31,	 	
 	 	2011	 	 	2010	 	 	% Change	 	
 	 	 	 	 	 	 	 	 	 	 	
Interest expense, net of amounts capitalized	 	$	(20,809	)	 	$	(20,115	)	 	 	-3.5	%	
Interest income	 	 	3,173	 	 	 	3,222	 	 	 	-1.5	%	
Income (loss) from unconsolidated companies	 	 	173	 	 	 	(73	)	 	 	337.0	%	
Net gain on extinguishment of debt	 	 	—	 	 	 	1,199	 	 	 	-100.0	%	
Other gains and (losses), net	 	 	(191	)	 	 	(13	)	 	 	-1369.2	%	
Benefit (provision) for income taxes	 	 	967	 	 	 	(975	)	 	 	199.2	%	
Income (loss) from discontinued operations, net of taxes	 	 	4	 	 	 	(48	)	 	 	108.3	%	
Interest Expense, Net of Amounts Capitalized
Interest expense, net of amounts capitalized, increased $0.7 million to $20.8 million (net of capitalized interest of $0.1 million) during the three months ended March 31, 2011, as compared to the same period in 2010, due primarily to an increase in interest expense associated with our $1.0 billion credit facility. Cash interest expense increased $0.4 million to $16.6 million in the three months ended March 31, 2011 as compared to the same period in 2010, and noncash interest expense, which includes amortization of deferred financing costs and debt discounts and capitalized interest, increased $0.3 million to $4.2 million in the three months ended March 31, 2011 as compared to the same period in 2010.
Our weighted average interest rate on our borrowings, excluding the write-off of deferred financing costs during the period, was 6.9% and 6.6% for the three months ended March 31, 2011 and 2010, respectively.
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Interest Income
Interest income for the three months ended March 31, 2011 and 2010 primarily includes amounts earned on the notes that were received in connection with the development of Gaylord National.
Income (Loss) from Unconsolidated Companies
We account for our investment in RHAC Holdings, LLC (the joint venture entity which owns the Aston Waikiki Beach Hotel) under the equity method of accounting. Income (loss) from unconsolidated companies for the three months ended March 31, 2011 and 2010 consisted of equity method income from this investment.
Net Gain on Extinguishment of Debt
During the three months ended March 31, 2010, we repurchased $26.5 million in aggregate principal amount of our outstanding 6.75% senior notes for $25.1 million. After adjusting for deferred financing costs and other costs, we recorded a pretax gain of $1.2 million as a result of the repurchases.
Other Gains and (Losses)
Other gains and (losses) for the three months ended March 31, 2011 and 2010 primarily consisted of miscellaneous income and expense related to the retirements of fixed assets.
(Benefit) Provision for Income Taxes
The effective tax rate as applied to pretax income from continuing operations differed from the statutory federal rate due to the following:
 	 	 	 	 	 	 	 	 	
 	 	Three Months	 	
 	 	Ended March 31,	 	
 	 	2011	 	 	2010	 	
U.S. Federal statutory rate	 	 	35	%	 	 	35	%	
State taxes (net of federal tax benefit and change in valuation allowance)	 	 	2	 	 	 	(45	)	
Change in treatment of Medicare Part D subsidies	 	 	—	 	 	 	(92	)	
Other	 	 	(4	)	 	 	(16	)	
 	 	 	 	 	 	 	
Effective tax rate	 	 	33	%	 	 	(118	)%	
 	 	 	 	 	 	 	
Under the Patient Protection and Affordable Care Act, which became law on March 23, 2010, as amended by the Health Care and Education Reconciliation Act of 2010, which became law on March 30, 2010, the Company and other companies that receive a subsidy under Medicare Part D to provide retiree prescription drug coverage will no longer receive a Federal income tax deduction for the expenses incurred in connection with providing the subsidized coverage to the extent of the subsidy received. Because future anticipated retiree health care liabilities and related subsidies were already reflected in the Company’s financial statements, this change required the Company to reduce the value of the related tax benefits recognized in its financial statements during the period the law was enacted. As a result, the Company recorded a one-time, non-cash tax charge of $0.8 million during the three months ended March 31, 2010 to reflect the impact of this change. This charge, as well as changes in the Company’s valuation allowances during each period, resulted in the change to the effective tax rate noted above.
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Liquidity and Capital Resources
Cash Flows From Operating Activities. Cash flow from operating activities is the principal source of cash used to fund our operating expenses, interest payments on debt, and maintenance capital expenditures. During the three months ended March 31, 2011, our net cash flows used in operating activities — continuing operations were $8.0 million, reflecting primarily cash provided by our loss from continuing operations before non-cash depreciation expense, amortization expense, income tax benefit, stock-based compensation expense, income from unconsolidated companies, and losses on the disposals of certain fixed assets of approximately $32.4 million, offset by unfavorable changes in working capital of approximately $40.4 million. The unfavorable changes in working capital primarily resulted from an increase in trade receivables due to a seasonal change in the timing of payments received from corporate group customers at Gaylord Opryland, Gaylord Texan, Gaylord National and Gaylord Palms, and a decrease in accrued expenses primarily related to the payment of accrued compensation, accrued property taxes, and accrued expenses associated with our hotel holiday programs, partially offset by an increase in deferred revenues due to increased receipts of deposits on advanced bookings of hotel rooms at Gaylord National and Gaylord Opryland, an increase in interest payable, attributable to interest accrued on our convertible senior notes and our 6.75% senior notes, and the receipt of a payment on the interest receivable related to the bonds that were received in connection with the development of Gaylord National.
During the three months ended March 31, 2010, our net cash flows provided by operating activities - continuing operations were $27.6 million, reflecting primarily cash provided by our loss from continuing operations before non-cash depreciation expense, amortization expense, income tax provision, stock-based compensation expense, excess tax benefits from stock-based compensation, loss from unconsolidated companies, net gain on extinguishment of debt, and losses on the disposals of certain fixed assets of approximately $31.3 million, partially offset by unfavorable changes in working capital of approximately $3.7 million. The unfavorable changes in working capital primarily resulted from an increase in trade receivables due to a seasonal change in the timing of payments received from corporate group customers at Gaylord Opryland, Gaylord Texan and Gaylord Palms, and a decrease in accrued expenses primarily related to the payment of accrued property taxes, accrued compensation, and accrued expenses associated with our hotel holiday programs, partially offset by the receipt of a payment on the interest receivable related to the bonds that were received in connection with the development of Gaylord National, an increase in deferred revenues due to increased receipts of deposits on advanced bookings of hotel rooms at Gaylord Opryland and Gaylord Palms and an increase in interest payable, attributable to interest accrued on our convertible senior notes and our 6.75% senior notes.
Cash Flows From Investing Activities. During the three months ended March 31, 2011, our primary uses of funds for investing activities were purchases of property and equipment, which totaled $37.5 million, partially offset by the receipt of a $2.5 million principal payment on the bonds that were received in April 2008 in connection with the development of Gaylord National and $1.6 million in proceeds from the sale of certain fixed assets. Our capital expenditures during the three months ended March 31, 2011 primarily included remaining flood-related projects at Gaylord Opryland, the building of our new resort pool at Gaylord Texan and various information technology projects, as well as ongoing maintenance capital expenditures for our existing properties.
During the three months ended March 31, 2010, our primary uses of funds and investing activities were purchases of property and equipment, which totaled $7.7 million, partially offset by the receipt of a $3.8 million principal payment on the bonds that were received in April 2008 in connection with the development of Gaylord National. Our capital expenditures during the three months ended March 31, 2010 primarily included ongoing maintenance capital expenditures for our existing properties.
Cash Flows From Financing Activities. Our cash flows from financing activities reflect primarily the incurrence of debt and the repayment of long-term debt. During the three months ended March 31, 2011, our net cash flows provided by financing activities were approximately $4.0 million, primarily reflecting $4.1 million in proceeds from the exercise of stock option and purchase plans.
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During the three months ended March 31, 2010, our net cash flows used in financing activities were approximately $24.8 million, primarily reflecting the payment of $25.1 million to repurchase portions of our senior notes.
Working Capital
As of March 31, 2011 we had total current assets of $202.5 million and total current liabilities of $224.6 million, which resulted in a working capital deficit of $22.1 million. A significant portion of our current liabilities consist of deferred revenues ($51.9 million at March 31, 2011), which primarily represent deposits received on advance bookings of hotel rooms. While satisfaction of these deferred revenue liabilities will require the use of hotel resources and services, it does not require future cash payments by us. As a result, we believe our current assets, cash flows from operating activities and availability under our $1.0 billion credit facility will be sufficient to repay our current liabilities as they become due.
Liquidity
As further described above, we anticipate investing in our operations during 2011 through additional capital expenditures associated with repairing the flood damage and reopening of Gaylord Opryland, the Grand Ole Opry House and the other properties affected by the Nashville Flood and ongoing maintenance of our existing hotel properties. We plan to use our existing cash on hand and cash flow from operations to fund these expenditures. On an ongoing basis, we evaluate potential acquisition opportunities and future development opportunities for hotel properties and have considered expanding our existing hotel properties. We will continue to evaluate these possibilities in light of economic conditions and other factors. We are unable to predict at this time if or when development or acquisition opportunities may present themselves. In addition, we are unable to predict at this time when we might make commitments or commence construction related to the proposed development in Mesa, Arizona or our proposed expansions. Furthermore, we do not anticipate making significant capital expenditures on the development in Mesa, Arizona or the proposed expansions of Gaylord Palms and Gaylord Texan during 2011.
Principal Debt Agreements
$1.0 Billion Credit Facility. On July 25, 2008, we refinanced our previous $1.0 billion credit facility by entering into a Second Amended and Restated Credit Agreement (the “$1.0 Billion Credit Facility”) by and among the Company, certain subsidiaries of the Company party thereto, as guarantors, the lenders party thereto and Bank of America, N.A., as administrative agent. The $1.0 Billion Credit Facility consists of the following components: (a) a $300.0 million senior secured revolving credit facility, which includes a $50.0 million letter of credit sublimit and a $30.0 million sublimit for swingline loans, and (b) a $700.0 million senior secured term loan facility. The term loan facility was fully funded at closing. The $1.0 Billion Credit Facility also includes an accordion feature that will allow us to increase the $1.0 Billion Credit Facility by a total of up to $400.0 million in no more than three occasions, subject to securing additional commitments from existing lenders or new lending institutions. The revolving loan, letters of credit, and term loan mature on July 25, 2012. At our election, the revolving loans and the term loans will bear interest at an annual rate of LIBOR plus 2.50% or a base rate (the higher of the lead bank’s prime rate and the federal funds rate) plus 0.50%. We entered into interest rate swaps with respect to $500.0 million aggregate principal amount of borrowings under the term loan portion to convert the variable rate on those borrowings to a fixed weighted average interest rate of 3.94% plus the applicable margin on these borrowings during the term of the swap agreements. Interest on our borrowings is payable quarterly, in arrears, for base rate loans and at the end of each interest rate period for LIBOR rate-based loans. Principal is payable in full at maturity. We will be required to pay a commitment fee of 0.25% per year of the average unused portion of the $1.0 Billion Credit Facility.
The $1.0 Billion Credit Facility is (i) secured by a first mortgage and lien on the real property and related personal and intellectual property of our Gaylord Opryland hotel, Gaylord Texan hotel, Gaylord Palms hotel
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and Gaylord National hotel, and pledges of equity interests in the entities that own such properties and (ii) guaranteed by each of the four wholly-owned subsidiaries that own the four hotels. Advances are subject to a 55% borrowing base, based on the appraisal value of the hotel properties (reduced to 50% in the event a hotel property is sold).
As of March 31, 2011, $700.0 million of borrowings were outstanding under the $1.0 Billion Credit Facility, and the lending banks had issued $8.2 million of letters of credit under the facility for us, which left $291.8 million of availability under the credit facility (subject to the satisfaction of debt incurrence tests under the indentures governing our senior notes).
We will have to refinance or amend the $1.0 Billion Credit Facility before its maturity on July 25, 2012, in order to finance our ongoing capital needs. While we believe that the strength of our cash flows, the quality of our assets and the long-term prospects of our business all provide a sound basis on which we can obtain capital, there is no assurance that we will be able to refinance the $1.0 Billion Credit Facility on acceptable terms.
3.75% Convertible Senior Notes. In 2009, we issued $360 million of 3.75% Convertible Senior Notes (the “Convertible Notes”). The Convertible Notes have a maturity date of October 1, 2014, and interest is payable semiannually in cash in arrears on April 1 and October 1, and commenced April 1, 2010. The Convertible Notes are convertible, under certain circumstances as described below, at the holder’s option, into shares of our common stock, at an initial conversion rate of 36.6972 shares of common stock per $1,000 principal amount of the Convertible Notes, which is equivalent to an initial conversion price of approximately $27.25 per share. We may elect, at our option, to deliver shares of our common stock, cash or a combination of cash and shares of our common stock in satisfaction of our obligations upon conversion of the Convertible Notes. We intend to settle the face value of the Convertible Notes in cash.
The Convertible Notes are convertible under any of the following circumstances: (1) during any calendar quarter ending after September 30, 2009 (and only during such calendar quarter), if the closing price of our common stock for at least 20 trading days during the 30 consecutive trading day period ending on the last trading day of the immediately preceding calendar quarter exceeds 120% of the applicable conversion price per share of common stock on the last trading day of such preceding calendar quarter; (2) during the ten business day period after any five consecutive trading day period in which the Trading Price (as defined in the Indenture) per $1,000 principal amount of the Convertible Notes, as determined following a request by a Convertible Note holder, for each day in such five consecutive trading day period was less than 98% of the product of the last reported sale price of our common stock and the applicable conversion rate, subject to certain procedures; (3) if specified corporate transactions or events occur; or (4) at any time on or after July 1, 2014, until the second scheduled trading day immediately preceding October 1, 2014. At March 31, 2011, the first condition permitting conversion had been satisfied and, thus, the Convertible Notes were convertible as of April 1, 2011 through June 30, 2011. At this time, we have received no notices of note holders electing to convert their Convertible Notes. Based on our borrowing capacity under the $1.0 Billion Credit Facility, $251.0 million and $248.2 million of the Convertible Notes has been classified as long-term debt in the accompanying condensed consolidated balance sheets as of March 31, 2011 and December 31, 2010, respectively. Based on the Company’s March 31, 2011 closing stock price of $34.68, the “if-converted value” of the Convertible Notes exceeds the face amount by $98.2 million; however, after giving effect to the exercise of the call options and warrants associated with the Convertible Notes as described below, the incremental cash or share settlement in excess of the face amount would result in either a cash payment of $26.2 million or a 0.8 million net share issuance, or a combination of cash and stock, at our option. Based on our cash on hand and our availability under the $1.0 Billion Credit Facility as of March 31, 2011, we do not expect any liquidity issues should the Convertible Notes be converted.
The Convertible Notes are general unsecured and unsubordinated obligations and rank equal in right of payment with all of our existing and future senior unsecured indebtedness, including our 6.75% senior notes due 2014, and senior in right of payment to all of our future subordinated indebtedness, if any. The Convertible Notes will
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be effectively subordinated to any of our secured indebtedness to the extent of the value of the assets securing such indebtedness.
The Convertible Notes are guaranteed, jointly and severally, on an unsecured unsubordinated basis by generally all of our active domestic subsidiaries. Each guarantee will rank equally in right of payment with such subsidiary guarantor’s existing and future senior unsecured indebtedness and senior in right of payment to all future subordinated indebtedness, if any, of such subsidiary guarantor. The Convertible Notes will be effectively subordinated to any secured indebtedness and effectively subordinated to all indebtedness and other obligations of our subsidiaries that do not guarantee the Convertible Notes.
Upon a Fundamental Change (as defined), holders may require us to repurchase all or a portion of their Convertible Notes at a purchase price equal to 100% of the principal amount of the Convertible Notes to be repurchased, plus any accrued and unpaid interest, if any, thereon to (but excluding) the Fundamental Change Repurchase Date (as defined). The Convertible Notes are not redeemable at our option prior to maturity.
We do not intend to file a registration statement for the resale of the Convertible Notes or any common stock issuable upon conversion of the Convertible Notes. As a result, holders may only resell the Convertible Notes or common stock issued upon conversion of the Convertible Notes, if any, pursuant to an exemption from the registration requirements of the Securities Act of 1933 and other applicable securities laws.
6.75% Senior Notes. On November 30, 2004, we completed our offering of $225 million in aggregate principal amount of senior notes bearing an interest rate of 6.75% (the “Senior Notes”). The Senior Notes, which mature on November 15, 2014, bear interest semi-annually in cash in arrears on May 15 and November 15 of each year, starting on May 15, 2005. The Senior Notes are redeemable, in whole or in part, at any time on or after November 15, 2009 at a designated redemption amount, plus accrued and unpaid interest. The Senior Notes rank equally in right of payment with our other unsecured unsubordinated debt, but are effectively subordinated to all of our secured debt to the extent of the assets securing such debt. The Senior Notes are fully and unconditionally guaranteed, jointly and severally, on a senior unsecured basis by generally all of our active domestic subsidiaries. In addition, the Senior Notes indenture contains certain covenants which, among other things, limit the incurrence of additional indebtedness (including additional indebtedness under the term loan portion of our senior secured credit facility), investments, dividends, transactions with affiliates, asset sales, capital expenditures, mergers and consolidations, liens and encumbrances and other matters customarily restricted in such agreements. The Senior Notes are cross-defaulted to our other indebtedness.
During the three months ended March 31, 2010, we repurchased $26.5 million in aggregate principal amount of our outstanding Senior Notes for $25.1 million. After adjusting for deferred financing costs and other costs, we recorded a pretax gain of $1.2 million as a result of the repurchases. We used available cash to finance the purchases and intend to consider additional repurchases of our Senior Notes from time to time depending on market conditions.
Future Developments
As described in “Development Update” above, we are considering other potential hotel sites throughout the country, including Mesa, Arizona.
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Off-Balance Sheet Arrangements
As described in Note 13 to our condensed consolidated financial statements included herein, we invested in two unconsolidated entities, one of which owns a hotel located in Hawaii and the other which formerly owned a hotel located in Hawaii. Our joint venture partner in each of these unconsolidated entities guaranteed, under certain circumstances, certain loans made to wholly-owned subsidiaries of each of these entities, and we agreed to contribute to these joint venture partners our pro rata share of any payments under such guarantees required to be made by such joint venture partners. In addition, we enter into commitments under letters of credit, primarily for the purpose of securing our deductible obligations with our workers’ compensation insurers, and lending banks under our credit facility had issued $8.2 million of letters of credit as of March 31, 2011 for us. Except as set forth above, we do not have any off-balance sheet arrangements.
Commitments and Contractual Obligations
The following table summarizes our significant contractual obligations as of March 31, 2011, including long-term debt and operating and capital lease commitments (amounts in thousands):
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Total amounts	 	 	Less than	 	 	 	 	 	 	 	 	 	 	More than	 	
Contractual obligations	 	committed	 	 	1 year	 	 	1-3 years	 	 	3-5 years	 	 	5 years	 	
Long-term debt (1)	 	$	1,212,180	 	 	$	—	 	 	$	700,000	 	 	$	512,180	 	 	$	—	 	
Capital leases	 	 	442	 	 	 	184	 	 	 	258	 	 	 	—	 	 	 	—	 	
Construction commitments	 	 	36,764	 	 	 	36,764	 	 	 	—	 	 	 	—	 	 	 	—	 	
Operating leases (2)	 	 	653,733	 	 	 	6,139	 	 	 	10,578	 	 	 	8,658	 	 	 	628,358	 	
Other	 	 	21,806	 	 	 	5,436	 	 	 	11,451	 	 	 	4,919	 	 	 	—	 	
 	 	 	
Total contractual obligations	 	$	1,924,925	 	 	$	48,523	 	 	$	722,287	 	 	$	525,757	 	 	$	628,358	 	

 	 	 	
(1)	 	The long-term debt commitments due in 3-5 years of $512.2 million include $360.0 million of the Convertible Notes, which are currently convertible through June 30, 2011.	
 	 	 	
(2)	 	The total operating lease commitments of $653.7 million above includes the 75-year operating lease agreement we entered into during 1999 for 65.3 acres of land located in Osceola County, Florida where Gaylord Palms is located.	
The cash obligations in the table above do not include future cash obligations for interest associated with our outstanding long-term debt and capital lease obligations.
Due to the uncertainty with respect to the timing of future cash payments associated with our defined benefit pension plan, our non-qualified retirement plan, our non-qualified contributory deferred compensation plan and our defined benefit postretirement health care and life insurance plan, we cannot make reasonably certain estimates of the period of cash settlement. Therefore, these obligations have been excluded from the contractual obligations table above. See Note 12 and Note 13 to our Annual Report on Form 10-K for the year ended December 31, 2010 for further discussion related to these obligations.
Critical Accounting Policies and Estimates
We prepare our condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States. Certain of our accounting policies, including those related to revenue recognition, impairment of long-lived assets and goodwill, stock-based compensation, derivative financial instruments, income taxes, retirement and postretirement benefits other than pension plans, and legal contingencies, require that we apply significant judgment in defining the appropriate assumptions for calculating financial estimates. By their nature, these judgments are subject to an inherent degree of uncertainty. Our judgments are based on our historical experience, our observance of trends in the industry, information provided by our customers and
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information available from other outside sources, as appropriate. There can be no assurance that actual results will not differ from our estimates. For a discussion of our critical accounting policies and estimates, please refer to Management’s Discussion and Analysis of Financial Condition and Results of Operations and Notes to Consolidated Financial Statements presented in our Annual Report on Form 10-K for the year ended December 31, 2010. There were no newly identified critical accounting policies in the first quarter of 2011 nor were there any material changes to the critical accounting policies and estimates discussed in our Annual Report on Form 10-K for the year ended December 31, 2010.
Recently Issued Accounting Standards
For a discussion of recently issued accounting standards, see Note 2 to our condensed consolidated financial statements for the three months ended March 31, 2011 and 2010 included herewith.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Market risk is the risk of loss arising from adverse changes in market rates and prices, such as interest rates, foreign currency exchange rates and commodity prices. Our primary exposures to market risk are from changes in interest rates, natural gas prices and equity prices and changes in asset values of investments that fund our pension plan.
Risk Related to Changes in Interest Rates
Borrowings outstanding under our $1.0 Billion Credit Facility bear interest at an annual rate at our election of either LIBOR plus 2.50% or a base rate (the higher of the lead bank’s prime rate and the federal funds rate) plus 0.50%. In connection with the refinancing of our $1.0 Billion Credit Facility in July 2008, we entered into a new series of forward-starting interest rate swaps to effectively convert the variable rate on $500.0 million aggregate principal amount of borrowings under the term loan portion of our $1.0 Billion Credit Facility to a fixed rate. These interest rate swaps, which expire on various dates through July 25, 2011, effectively adjust the variable interest rate on those borrowings to a fixed weighted average interest rate of 3.94% plus the applicable margin on these borrowings during the term of the swap agreements. These interest rate swaps are deemed effective and therefore the hedges have been treated as effective cash flow hedges.
If LIBOR were to increase by 100 basis points, our annual interest cost on the remaining $200.0 million in borrowings outstanding under our $1.0 Billion Credit Facility as of March 31, 2011 would increase by approximately $2.0 million.
Certain of our outstanding cash balances are occasionally invested overnight with high credit quality financial institutions. We do not have significant exposure to changing interest rates on invested cash at March 31, 2011. As a result, the interest rate market risk implicit in these investments at March 31, 2011, if any, is low.
Risk Related to Changes in Natural Gas Prices
As of March 31, 2011, we held 27 variable to fixed natural gas price swaps with respect to the purchase of 751,565 dekatherms of natural gas in order to fix the prices at which we purchase that volume of natural gas for our hotels. These natural gas price swaps, which have remaining terms of up to nine months, effectively adjust the price on that volume of purchases of natural gas to a weighted average price of $4.80 per dekatherm. These natural gas swaps are deemed effective, and, therefore, the hedges have been treated as an effective cash flow hedge. If the forward price of natural gas futures contracts for delivery at the Henry Hub as of March 31, 2011 as quoted on the New York Mercantile Exchange was to increase or decrease by 10%, the net derivative liability associated with the fair value of our natural gas swaps outstanding as of March 31, 2011 would have decreased or increased by $0.3 million.
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Risk Related to Changes in Equity Prices
The $360 million aggregate principal amount of Convertible Notes we issued in September 2009 may be converted prior to maturity, at the holder’s option, into shares of our common stock under certain circumstances as described in our Annual Report on Form 10-K as of and for the year ended December 31, 2010 filed with the SEC. The initial conversion price is approximately $27.25 per share. Upon conversion, we may elect, at our option, to deliver shares of our common stock, cash or a combination of cash and shares of our common stock in satisfaction of our obligations upon conversion of the Convertible Notes. As such, the fair value of the Convertible Notes will generally increase as our share price increases and decrease as the share price declines. The Convertible Notes were convertible as of April 1, 2011 through June 30, 2011. At this time, we have received no notices of note holders electing to convert their Convertible Notes. Based on the Company’s March 31, 2011 closing stock price of $34.68, the “if-converted value” of the Convertible Notes exceeds the face amount by $98.2 million; however, after giving effect to the exercise of the call options and warrants associated with the Convertible Notes, the incremental cash or share settlement in excess of the face amount would result in either a cash payment of $26.2 million or a 0.8 million net share issuance by us, or a combination of cash and stock, at our option.
Concurrently with the issuance of the Convertible Notes, we entered into convertible note hedge transactions intended to reduce the potential dilution upon conversion of the Convertible Notes in the event that the market value per share of our common stock, as measured under the Convertible Notes, at the time of exercise is greater than the conversion price of the Convertible Notes. The convertible note hedge transactions involved us purchasing from four counterparties options to purchase approximately 13.2 million shares of our common stock, subject to anti-dilution adjustments, at a price per share equal to the initial conversion price of the Convertible Notes. Separately we sold warrants to the same counterparties whereby they have the option to purchase approximately 13.2 million shares of our common stock at a price of $32.70 per share. As a result of the convertible note hedge transactions and related warrants, the Convertible Notes will not have a dilutive impact on shares outstanding if the share price of our common stock is below $32.70. For every $1 increase in the share price of our common stock above $32.70, we will be required to deliver, upon the exercise of the warrants, the equivalent of $13.2 million in shares of our common stock (at the relevant share price).
Risk Related to Changes in Asset Values that Fund our Pension Plans
The expected rates of return on the assets that fund our defined benefit pension plan are based on the asset allocation of the plan and the long-term projected return on those assets, which represent a diversified mix of equity securities, fixed income securities and cash. As of March 31, 2011, the value of the investments in the pension fund was $68.2 million, and an immediate 10% decrease in the value of the investments in the fund would have reduced the value of the fund by approximately $6.8 million.
ITEM 4. CONTROLS AND PROCEDURES.
The Company maintains disclosure controls and procedures, as defined in Rule 13a-15(e) promulgated under the Securities Exchange Act of 1934 (the “Exchange Act”), that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. The Company carried out an evaluation under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this report. Based on the evaluation of these disclosure controls and procedures, the Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of the end of the period covered by this report. There have been no changes in our internal control over financial reporting that occurred during
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the period covered by this report that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
PART II — OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
The Company is a party to certain litigation, as described in Note 13 to our condensed consolidated financial statements included herein and which is incorporated herein by reference.
ITEM 1A. RISK FACTORS.
There have been no material changes to our “Risk Factors” as previously set forth in our Annual Report on Form 10-K for the year ended December 31, 2010.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.
The following table sets forth information with respect to purchases of shares of the Company’s common stock made during the three months ended March 31, 2011 by or on behalf of the Company or any “affiliated purchaser,” as defined by Rule 10b-18 of the Exchange Act:
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	Total Number of	 	 	Maximum Number of	 	
 	 	 	 	 	 	 	 	 	 	Shares Purchased as	 	 	Shares that May Yet	 	
 	 	 	 	 	 	 	 	 	 	Part of Publicly	 	 	Be Purchased Under	 	
 	 	Total Number of	 	 	Average Price Paid	 	 	Announced Plans or	 	 	the Plans or	 	
Period	 	Shares Purchased	 	 	per Share	 	 	Programs	 	 	Programs	 	
January 1 — January 31, 2011	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	
February 1 — February 28, 2011 (1)	 	 	307	 	 	$	34.91	 	 	 	—	 	 	 	—	 	
March 1 — March 31, 2011	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	
 	 	 	
Total	 	 	307	 	 	$	34.91	 	 	 	—	 	 	 	—	 	

 	 	 	
(1)	 	Represents shares withheld from vested restricted stock to satisfy the minimum withholding requirement for federal and state taxes.	
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
Inapplicable.
ITEM 5. OTHER INFORMATION.
Inapplicable.
ITEM 6. EXHIBITS.
See Index to Exhibits following the Signatures page.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
 	 	 	 	 	
 	GAYLORD ENTERTAINMENT COMPANY
 	 	
Date: May 6, 2011 	By:  	/s/ Colin V. Reed  	 	
 	 	Colin V. Reed 	 	
 	 	Chairman of the Board of Directors
and Chief Executive Officer
(Principal Executive Officer) 	 	

 	By:  	/s/ Mark Fioravanti  	 	
 	 	Mark Fioravanti 	 	
 	 	Senior Vice President and
Chief Financial Officer
(Principal Financial Officer) 	 	

 	By:  	/s/ Rod Connor  	 	
 	 	Rod Connor 	 	
 	 	Senior Vice President and
Chief Administrative Officer
(Principal Accounting Officer) 	 	
 	
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INDEX TO EXHIBITS
 	 	 	
EXHIBIT	 	 	
NUMBER	 	DESCRIPTION	
3.1	 	Restated Certificate of Incorporation of the Company, as amended (restated for SEC filing purposes only) (incorporated by reference to Exhibit 3.1 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2007).	
 	 	 	
3.2	 	Second Amended and Restated Bylaws of the Company, as amended (restated for SEC filing purposes only) (incorporated by reference to Exhibit 4.4 to the Company’s Registration Statement on Form S-3 filed on May 7, 2009).	
 	 	 	
3.3	 	Certificate of Designations of Series A Junior Participating Preferred Stock of Gaylord Entertainment Company (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K dated August 13, 2008).	
 	 	 	
31.1	 	Certification of Colin V. Reed pursuant to Section 302 of Sarbanes-Oxley Act of 2002.	
 	 	 	
31.2	 	Certification of Mark Fioravanti pursuant to Section 302 of Sarbanes-Oxley Act of 2002.	
 	 	 	
32.1	 	Certification of Colin V. Reed and Mark Fioravanti pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of Sarbanes-Oxley Act of 2002.	
 	 	 	
101	 	The following materials from Gaylord Entertainment Company’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2011, formatted in XBRL (eXtensible Business Reporting Language): (i) Condensed Consolidated Statements of Operations for the three months ended March 31, 2011 and 2010, (ii) Condensed Consolidated Balance Sheets at March 31, 2011 and December 31, 2010, (iii) Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2011 and 2010, and (iv) Notes to Condensed Consolidated Financial Statements, tagged as blocks of text.*	

*	 	Pursuant to Rule 406T of Regulation S-T, the Interactive Data Files on Exhibit 101 hereto are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for purposes of Section 18 of the Securities and Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections.	
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EXHIBIT 31.1
CERTIFICATIONS
I, Colin V. Reed, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Gaylord Entertainment Company;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
     a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
     b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
     c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
     d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
     a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
     b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: May 6, 2011

By:  	/s/ Colin V. Reed  	 	
 	Name:  	Colin V. Reed 	 	
 	Title:  	Chairman of the Board of Directors and
Chief Executive Officer 	 	

 	 	 	 	 	
EXHIBIT 31.2
CERTIFICATIONS
I, Mark Fioravanti, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Gaylord Entertainment Company;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
     a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
     b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
     c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
     d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
     a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
     b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: May 6, 2011

By:  	/s/ Mark Fioravanti  	 	 	
 	Name:  	Mark Fioravanti 	 	 	
 	Title:  	Senior Vice President and Chief Financial Officer 	 	 	

 	 	 	 	 	
EXHIBIT 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
     In connection with the Quarterly Report of Gaylord Entertainment Company (the “Company”) on Form 10-Q for the quarter ended March 31, 2011, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), each of the undersigned certifies, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:
          (1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
          (2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 	By:  	/s/ Colin V. Reed  	 	 	 	
 	 	Colin V. Reed 	 	 	 	
 	 	Chairman of the Board of Directors and
Chief Executive Officer
May 6, 2011 	 	 	

 	By:  	/s/ Mark Fioravanti  	 	 	 	
 	 	Mark Fioravanti 	 	 	 	
 	 	Senior Vice President and Chief Financial Officer
May 6, 2011 	 	 	
 	 	 	
A signed original of this written statement required by Section 906, or other document authenticating, acknowledging or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.