Gaylord Entertainment Co. Reports Hospitality Segment Operating Results for November 2008
|
|
Gaylord Entertainment Co. Reports Hospitality Segment Operating Results for November 2008
|
Category: Worldwide - Industry economy
- Figures / Studies
This is a press release selected by our editorial committee and published online for free on 2009-01-08
Company Provides Preliminary December Hospitality Segment Revenue Results
Company Resolves All Claims with Perini over Construction of Gaylord National Resort
Company Announces Repurchase of $45.8 Million in Outstanding Senior Notes
Gaylord Entertainment Co. (NYSE: GET) today reported its operating results for November 2008 and preliminary revenue results for December 2008. During this two month reporting period the Company's hotels experienced a modest decline in business volumes related to its group business and holiday transient programs.
-- For the month of November 2008, same-store total hospitality revenue
declined 5.4 percent from the same month last year, to $55.0 million.
-- Same-store hospitality segment Consolidated Cash Flow(1) ("CCF") for
November 2008 also declined from the same period last year to $11.8
million, down 2.6 percent. November 2008 operating income for the
same-store hospitality segment was $4.8 million.
-- Gaylord National total revenues for November 2008 were $16.1 million
with occupancy of 56 percent. Gaylord National reported CCF of $2.6
million for the month of November 2008. Operating income for the month
was $199 thousand.
-- Preliminary results for December 2008 indicate that same-store total
hospitality revenue declined 4.8 percent from the same period last year
to $65.1 million.
-- Preliminary December total revenue results for Gaylord National were
$12.8 million.
"Based on preliminary results, our business performance in the fourth quarter was in-line with the guidance we provided in our third quarter 2008 earnings announcement in November," said Colin V. Reed, chairman and chief executive officer of Gaylord Entertainment. "During the month of December we experienced a modest decline in group business on a same-store basis relative to December 2007. This decline was partially offset by higher transient occupancy and increased attrition and cancellation fee collections. Outside-the-room spending was down modestly both in banquet and outlet spending. Additionally, ticket sales to our holiday programs were marginally below our expectations. In the first quarter of 2009, our focus will again be on our group business and we will continue to monitor our results and will provide additional details during our next quarterly earnings call."
The Company also announced that on December 23, 2008 it entered into an amended agreement (the "Final Settlement Agreement") with Perini/Tomkins Joint Venture ("PTJV") to resolve the disputes arising from the construction of the Gaylord National Resort and Convention Center project located at National Harbor, Maryland. The Final Settlement Agreement establishes the final contract amount of $845 million, which is within the amount the Company had accrued for capital expenditures in its consolidated balance sheet as of the end of the third quarter 2008. The settlement resolves all claims between the Company and PTJV which will enable them to avoid further litigation. The settlement entailed a final cash payment of approximately $40 million to PTJV prior to the end of 2008. Including the cost of the Final Settlement Agreement, the final cost of the project was approximately $1,050 million.
Reed continued, "With the Gaylord National project closed out we have satisfied our last committed capital expenditure. Going forward we will be aggressive in our effort to maximize operating results while being cautious in our capital spending to reduce leverage."
Also during the month of December 2008, the Company repurchased $45.8 million in aggregate principal amount of its outstanding senior notes ($28.5 million of 8 percent senior notes and $17.3 million of 6.75 percent senior notes) for $25.6 million. In the fourth quarter, the Company will record a pretax gain of approximately $20 million (approximately $13 million after tax) as a result of the repurchase. The Company used available cash and borrowings under its revolving credit facility to finance the purchases and intends to consider additional repurchases of its senior notes from time to time depending on market conditions.
|
|
