RHP - Ryman Hospitality Properties Inc. Reports Second Quarter 2022 Results

NASHVILLE, Tenn., Aug. 01, 2022 (GLOBE NEWSWIRE) -- Ryman Hospitality Properties, Inc. (NYSE: RHP), a leading lodging and hospitality real estate investment trust (“REIT”) that specializes in upscale convention center resorts and leading entertainment experiences, today reported financial results for the second quarter ended June 30, 2022.

Second Quarter 2022 Highlights and Recent Developments:

• The Company generated Net Income available to common shareholders of $50.3 million or $0.91 per share, representing a return to profitability for the first time since the beginning of the COVID-19 pandemic.
• The Hospitality segment reported operating income and operating income margin of $100.6 million and 25.0% for the quarter, respectively, and delivered a quarterly record in Adjusted EBITDAre and Adjusted EBITDAre margin of $155.0 million and 38.6%, respectively, compared to $133.2 million and 37.3% for Q2 2019, respectively, despite 5.3 lower points of occupancy compared to Q2 2019.
• Driven by an all-time record transient rate of $283, Hospitality ADR exceeded $234 per night in Q2 2022, an increase of 16.0% compared to Q2 2021 and 16.3% increase compared to Q2 2019.
• Booked 601,000 gross advanced group room nights for all future years as of June 30, 2022, at an all-time record ADR of $243, an increase of nearly 14% over Q2 2021 ADR for future bookings and over 15% above Q2 2019 ADR levels for future bookings.
• Successfully collected $15.4 million in attrition and cancellation fees in the quarter, totaling $35.0 million year to date.
• Closed strategic investment in the Company’s Opry Entertainment Group (OEG) by Atairos and NBCUniversal on June 16, 2022, initially valuing the OEG business at $1.415 billion, inclusive of Block 21, which we acquired on May 31, 2022.
• Company provides an outlook for Q3 2022 and increases its Full Year 2022 outlook.
  

Colin Reed, Chairman and Chief Executive Officer of Ryman Hospitality Properties, said, “Our hotel business set multiple all-time records this quarter as the strategic actions we took in the early days of the pandemic and the capital investments we have made in our assets over the last five years continue to show meaningful results. Remarkably, we achieved these record results with recovering Hospitality occupancy levels that are approximately 5 points below our pre-COVID levels. We are particularly pleased with the improvement we have seen in group travel and are encouraged by the pace of hotel bookings production and lead volumes. These results, along with continued healthy leisure demand and the strong desire of groups to return to their pre-COVID meeting cadence, are indicators that our hotel business is in prime position for a strong back half of the year and additional upside in the years ahead.
The second quarter was also an active one for our Entertainment segment. We successfully closed two major transactions, the Block 21 acquisition and our new joint venture with Atairos and NBCUniversal, that will provide additional value creation opportunities and further position OEG for long-term, sustainable growth.”

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

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

Hospitality Segment

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

Hospitality Segment Highlights

• Hotels achieved 72.7% occupancy in Q2 2022, compared to 47.3% in Q1 2022 and 32.9% in Q2 2021, as the segment continued to sequentially improve as our recovery continues.
• April 2022 set a record for the highest monthly operating income and Adjusted EBITDA re for the Hospitality segment at $36.4 million and $54.3 million, respectively, and the second highest Adjusted EBITDA re margin month on record.
• Gaylord National delivered Adjusted EBITDA re margin excluding bond interest for the quarter comparable to Q2 2019, despite occupancy of 64.2%, which was 17.2 points lower than Q2 2019, demonstrating that the investments made in F&B reconcepting are yielding results.
• Gaylord Rockies reported its strongest quarter since its initial opening, with occupancy in the month of June setting an all-time monthly record for any hotel in Company history at 92.4%, while achieving an operating income margin in the month of 21.5% and an Adjusted EBITDA re margin in the month of 49.0%.
• Gaylord Opryland delivered operating income of $31.9 million and Adjusted EBITDA re of $40.4 million for the quarter, up 2.4% and 1.6% from Q2 2019, respectively, despite 6.2 lower points of occupancy compared to Q2 2019.
• Gaylord Texan delivered a second quarter record for both operating income of $25.7 million and Adjusted EBITDA re of $31.5 million, and Gaylord Palms delivered an all-time record quarter for both operating income of $18.2 million and Adjusted EBITDA re of $24.9 million, with both hotels benefitting from continued group and transient demand as well as successful recent expansions.

Gaylord Opryland

Gaylord Palms

Gaylord Texan

Gaylord National

Gaylord Rockies

Entertainment Segment

For the three and six months ended June 30, 2022, and 2021, the Company reported the following:

Reed continued, “While the major news this quarter for our Entertainment segment was the closing of two strategic transactions, demand for live entertainment experiences continues to be healthy and our existing businesses delivered solid results during the second quarter, with segment revenue, operating income and Adjusted EBITDA re exceeding second quarter 2019 results, despite a slower than anticipated post-pandemic recovery of the tour and travel segment in Nashville and a softening advertising market which impacted results in our Circle joint venture.”

Corporate and Other Segment

For the three and six months ended June 30, 2022, and 2021, the Company reported the following:

Corporate and Other Segment Operating Loss and Adjusted EBITDA re for the 2022 periods include increases in administrative and employment costs associated with supporting the Company’s growth as well as increased costs associated with incentive compensation accruals due to the Company’s strong financial performance.

2022 Guidance

The Company is providing a business performance outlook for the third quarter 2022 and is raising its guidance for full year 2022 based on current information as of August 1, 2022. The Company does not expect to update the guidance provided below before next quarter’s earnings release. However, the Company may update its full business outlook or any portion thereof at any time for any reason.

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

Reed concluded, “Our results this quarter are further indication that the investments and actions we have taken alongside Marriott over the last several years have competitively positioned our business to capitalize on the continued recovery of the group segment. We entered 2022 with cautious optimism that we would see sequential month-over-month improvement in our business as the nation continues to navigate COVID-19. Given our performance in the first half and the strength of our forward bookings for the remainder of the year, we are raising full year 2022 guidance to a consolidated Adjusted EBITDA re midpoint of $526 million, a $19 million increase over our previous updated guidance midpoint given in June. We continue to believe in the future of our business and look forward to the long-term trajectory of this Company.”

Transaction Updates
On May 31, 2022, the Company closed its previously announced acquisition of Block 21 from Stratus Properties for a stated purchase price of $260 million, as subsequently adjusted to $255 million pursuant to the terms of the purchase agreement, which included the assumption of approximately $136 million of existing mortgage debt.

On June 16, 2022, the Company closed the strategic investment in Opry Entertainment Group (OEG) by Atairos and NBCUniversal, which initially valued the OEG business at $1.415 billion, inclusive of Block 21. Atairos and NBCUniversal acquired a 30% equity interest in OEG for a $296 million investment. OEG also closed a $300 million term loan and a $65 million revolving credit facility which was undrawn at closing.

Balance Sheet/Liquidity Update
As of June 30, 2022, after repayment of the Company’s Term Loan A using proceeds of the new OEG financing, the Company had total debt outstanding of $2,863.0 million, net of unamortized deferred financing costs, and unrestricted cash of $179.2 million. As of June 30, 2022, there were no amounts drawn under the revolving credit lines of the Company’s credit facility or the OEG credit facility, and the lending banks had issued $10.4 million in letters of credit, which left $754.6 million of availability for borrowing under the two credit facilities.

As a reminder, at the end of the first quarter of this year, the Company effectively exited its covenant waiver period under its secured credit facility. Beginning with the second quarter, the Company is required to meet modified covenants related to its funded indebtedness to total asset value ratio, fixed charge coverage ratio, and implied debt service coverage ratio.

Earnings Call Information
Ryman Hospitality Properties will hold a conference call to discuss this release tomorrow, August 2, 2022, at 10:00 a.m. ET. Investors can listen to the conference call over the Internet at www.rymanhp.com. To listen to the live call, please go to the Investor Relations section of the website (Investor Relations/Presentations, Earnings and Webcasts) at least 15 minutes prior to the call to register and download any necessary audio software. For those who cannot listen to the live broadcast, a replay will be available shortly after the call and will be available for at least 30 days.

About Ryman Hospitality Properties, Inc.
Ryman Hospitality Properties, Inc. (NYSE: RHP) is a leading lodging and hospitality real estate investment trust that specializes in upscale convention center resorts and leading entertainment experiences. RHP’s core holdings, Gaylord Opryland Resort & Convention Center; Gaylord Palms Resort & Convention Center; Gaylord Texan Resort & Convention Center; Gaylord National Resort & Convention Center; and Gaylord Rockies Resort & Convention Center, are five of the top ten largest non-gaming convention center hotels in the United States based on total indoor meeting space. Our Hospitality segment is comprised of these convention center resorts operating under the Gaylord Hotels brand, along with two adjacent ancillary hotels, which are managed by Marriott International and represent a combined total of 10,412 rooms and more than 2.8 million square feet of total indoor and outdoor meeting space in top convention and leisure destinations across the country. RHP also owns a 70% controlling ownership interest in Opry Entertainment Group (OEG), which is composed of entities owning a growing collection of iconic and emerging country music brands, including the Grand Ole Opry, Ryman Auditorium, WSM 650 AM, Ole Red and Circle, a country lifestyle media network RHP owns in a joint venture with Gray Television, Nashville-area attractions managed by Marriott, and Block 21, a mixed-use entertainment, lodging, office and retail complex, including the W Austin Hotel and the ACL Live at Moody Theater, located in downtown Austin, Texas. RHP operates OEG as its Entertainment segment, in a taxable REIT subsidiary, and its results are consolidated in the Company’s financial results. Visit RymanHP.com for more information.

Cautionary Note Regarding Forward-Looking Statements
This press release contains statements as to RHP’s beliefs and expectations of the outcome of future events that are forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. You can identify these statements by the fact that they do not relate strictly to historical or current facts. Examples of these statements include, but are not limited to, statements regarding the future performance of our business, the impact of COVID-19 on travel, leisure and group demand, the effects of COVID-19 on our results of operations, efforts, our liquidity, recovery of group business to pre-pandemic levels, anticipated business levels and anticipated financial results for the Company during future periods, the Company’s expectations for OEG including Block 21 and the Atairos investment, and other business or operational issues. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from the statements made. These include the risks and uncertainties associated with the COVID-19 pandemic, including the effects of the COVID-19 pandemic on us and the hospitality and entertainment industries generally, the effects of the COVID-19 pandemic on the demand for travel, leisure and group business (including government-imposed restrictions), levels of consumer confidence in the safety of travel and group gathering as a result of COVID-19, the duration and severity of the COVID-19 pandemic in the United States and the pace of recovery following the COVID-19 pandemic, the duration and severity of the COVID-19 pandemic in the markets where our assets are located, governmental restrictions on our businesses, economic conditions affecting the hospitality business generally, the geographic concentration of the Company’s hotel properties, business levels at the Company’s hotels, the effects of inflation on the Company’s business and on its customers, including group business at its hotels, the Company’s ability to remain qualified as a REIT for federal income tax purposes, the Company’s ability to execute its strategic goals as a REIT, the Company’s ability to generate cash flows to support dividends, the suspension of our dividend and our dividend policy, including the frequency and amount of any dividend we may pay, the Company’s ability to borrow funds pursuant to its credit agreements, the occurrence of any event, change or other circumstance that could affect the integration of Block 21 or the strategic position of OEG after the Atairos investment. Other factors that could cause operating and financial results to differ are described in the filings made from time to time by the Company with the U.S. Securities and Exchange Commission (SEC) and include the risk factors and other risks and uncertainties described in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021, and its Quarterly Reports on Form 10-Q and subsequent filings. The Company does not undertake any obligation to release publicly any revisions to forward-looking statements made by it to reflect events or circumstances occurring after the date hereof or the occurrence of unanticipated events.

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

Calculation of RevPAR, Total RevPAR, and Occupancy
We calculate revenue per available room (“RevPAR”) for our hotels by dividing room revenue by room nights available to guests for the period. Room nights available to guests include nights the hotels are closed. We calculate total revenue per available room (“Total RevPAR”) for our hotels by dividing the sum of room revenue, food & beverage, and other ancillary services revenue by room nights available to guests for the period. Rooms out of service for renovation are included in room nights available. For the three and six months ended June 30, 2022, and 2021, the calculation of RevPAR and Total RevPAR in our tabular presentations has not been changed as a result of the COVID-19 pandemic and the resulting hotel closures and is consistent with prior periods. The closure of Gaylord National, which reopened July 1, 2021, resulted in significantly lower performance reflected in these metrics for the six months ended June 30, 2021, as compared to the current period. Occupancy figures reflect an additional 302 rooms available at Gaylord Palms beginning in June 2021. Hospitality metrics do not include the results of the W Austin, which is included in the Entertainment segment.

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

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

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

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

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

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

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

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

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

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

We believe that the presentation of these non-GAAP financial measures provides useful information to investors regarding the performance of our ongoing operations because each presents a measure of our operations without regard to specified non-cash items such as real estate depreciation and amortization, gain or loss on sale of assets and certain other items, which we believe are not indicative of the performance of our underlying hotel properties. We believe that these items are more representative of our asset base than our ongoing operations. We also use these non-GAAP financial measures as measures in determining our results after considering the impact of our capital structure.
We caution investors that non-GAAP financial measures we present may not be comparable to similar measures disclosed by other companies, because not all companies calculate these non-GAAP measures in the same manner. The non-GAAP financial measures we present, and any related per share measures, should not be considered as alternative measures of our Net Income (Loss), operating performance, cash flow or liquidity. These non-GAAP financial measures may include funds that may not be available for our discretionary use due to functional requirements to conserve funds for capital expenditures and property acquisitions and other commitments and uncertainties. Although we believe that these non-GAAP financial measures can enhance an investor’s understanding of our results of operations, these non-GAAP financial measures, when viewed individually, are not necessarily better indicators of any trend as compared to GAAP measures such as Net Income (Loss), Operating Income (Loss), or cash flow from operations.