Ryman Hospitality Properties, Inc. — FY 2021 Form 10-K Summary
Business context and reporting period
Ryman Hospitality Properties, Inc. is a self-advised REIT focused on group-oriented destination hotels and entertainment assets. The filing covers the fiscal year ended December 31, 2021, with comparisons to 2020 and 2019. The company operates through Hospitality, Entertainment, and Corporate and Other segments. Hospitality represented approximately 84% of 2021 revenue and includes five Gaylord Hotels resorts, the Inn at Opryland, and the AC Hotel, all managed by Marriott.
All hotel and entertainment assets were open without capacity restrictions by the filing date, although operating levels remained below pre-pandemic conditions in several areas. The company completed the Gaylord Palms expansion, renovated Gaylord National guestrooms, and acquired the remaining 35% interest in Gaylord Rockies and adjacent land.
Key financial metrics
| Metric | 2021 | 2020 | Change |
|---|---|---|---|
| Total revenue | $939.4 million | $524.5 million | +79.1% |
| Operating income (loss) | $(58.7) million | $(303.8) million | Improved $245.2 million |
| Net income (loss) | $(194.8) million | $(460.8) million | Improved $266.0 million |
| Net loss available to common stockholders | $(177.0) million | $(417.4) million | Improved $240.4 million |
| Diluted loss per share | $(3.21) | $(7.59) | Improved |
| Operating margin | (6.2%) | (57.9%) | Improved |
| Net margin | (20.7%) | (87.9%) | Improved |
| Adjusted EBITDAre, excluding noncontrolling interest | $178.4 million | $(44.3) million | Improved $222.6 million |
| FFO available to common shareholders and unit holders | $30.9 million | $(236.6) million | Improved $267.5 million |
| Adjusted FFO available to common shareholders and unit holders | $52.0 million | $(149.6) million | Improved $201.6 million |
| Net cash provided by operating activities | $111.3 million | $(161.5) million | Improved $272.8 million |
Hospitality revenue increased to $786.6 million from $466.0 million, while Entertainment revenue increased to $152.8 million from $58.4 million. Hospitality operating loss narrowed to $38.0 million from $204.9 million; Entertainment returned to operating income of $20.4 million from a $34.2 million loss.
- Hospitality occupancy was 39.5%, up 16.3 percentage points; ADR was $221.33, up 10.7%; RevPAR was $87.53, up 88.6%; and Total RevPAR was $209.34, up 66.2%.
- Group business remained below historical levels, but group room nights on the books for the following five years were approximately 95% of the comparable 2019 level, with booked group ADR approximately 5% higher than the comparable 2019 level.
- Hospitality revenue included $48.5 million of attrition and cancellation fee collections, $15.6 million more than in 2020.
- Cash interest expense was $119.7 million, and total interest expense was $125.3 million, compared with $115.8 million in 2020.
- Total assets were $3.58 billion and total liabilities were $3.60 billion at December 31, 2021, resulting in total equity of $(22.4) million.
Material changes versus prior comparable period
- Revenue and operating performance recovered materially as properties reopened and capacity restrictions eased, but results remained below 2019 levels. 2021 revenue was approximately 41.5% below 2019 revenue, and the company remained unprofitable.
- Gaylord National reopened on July 1, 2021. Entertainment venues returned to full capacity in May 2021.
- The company purchased the remaining 35% of Gaylord Rockies for $188.0 million and acquired adjacent undeveloped land for $22.0 million. Gaylord Rockies became wholly owned.
- Capital expenditures declined to $77.4 million from $165.5 million, reflecting deferred non-essential projects, while the Gaylord Palms expansion and Gaylord National renovation were completed.
- Operating cash flow turned positive at $111.3 million, compared with cash used of $161.5 million in 2020.
- The company issued $600.0 million of 4.50% senior notes due 2029, used proceeds in part to redeem $400.0 million of 5.0% senior notes due 2023 and repay the revolver balance then outstanding, and recognized a $2.9 million loss on extinguishment of debt.
- Total debt increased to $2.94 billion from $2.66 billion, principally reflecting borrowings used for the Gaylord Rockies acquisition and other liquidity needs.
- The regular quarterly dividend remained suspended. No cash distributions were made in 2021, and management did not anticipate declaring regular quarterly dividends during 2022 as of the filing.
Liquidity, debt, outlook, and risks
At December 31, 2021, the company had $140.7 million of unrestricted cash and $509.8 million of available revolving-credit capacity. It reported no debt covenant defaults under the amended terms. The credit agreement required minimum unrestricted liquidity of $100 million and waived specified financial covenants through March 31, 2022. Management expected to comply with the financial covenants after the waiver period, but this depended on continued operating recovery and other mitigating actions.
Debt maturities include approximately $805.0 million in 2023, including the $800.0 million Gaylord Rockies term loan, and approximately $556.3 million in 2024. Management stated that it believed debt could be refinanced before maturity. The company estimated $401.2 million of interest obligations over the next five years, including $114.4 million in 2022.
For 2022, management anticipated capital expenditures of approximately $150 million to $180 million, including Ole Red Las Vegas, Gaylord National food-and-beverage improvements, Block 21 enhancements, and maintenance capital. It also planned to spend approximately $125 million, after assuming existing mortgage debt, to complete the proposed Block 21 acquisition and contribute up to $12.0 million more to Circle.
- The proposed Block 21 acquisition in Austin was valued at $260 million, including assumption of approximately $135 million of existing mortgage debt, and was expected to close in the first quarter of 2022 subject to customary conditions and consents.
- COVID-19 remained the principal operating uncertainty, particularly for group meetings, travel, occupancy, cancellations, labor availability, and live entertainment demand.
- Substantial leverage, secured debt, debt covenant restrictions, refinancing requirements, and variable-rate exposure remain material financial risks. Approximately $1.7 billion of variable-rate debt was indexed to LIBOR at year-end.
- Marriott manages substantially all Hospitality operations, concentrating operating and counterparty risk in one manager and limiting the company’s direct control over hotel operations.
- The Gaylord National bond receivable had a $71.2 million carrying value, net of a $38.0 million credit-loss reserve; valuation depends on long-term hotel and property-tax projections through 2037 and was identified as a critical audit matter.
- Other risks include labor shortages and wage inflation, competition, geographic concentration, cyber incidents, environmental and weather events, REIT qualification and distribution requirements, and the ability to integrate Block 21 if acquired.
Most important facts for investors to verify
- Whether the post-pandemic recovery in occupancy, group bookings, RevPAR, and hotel-level profitability continued after December 31, 2021.
- Compliance with financial covenants after the March 31, 2022 temporary waiver expiration and the company’s minimum liquidity requirement.
- Refinancing or repayment plans for the $800 million Gaylord Rockies loan due in 2023 and other 2023–2025 maturities.
- Whether Block 21 closed on the expected terms, including assumed debt, funding sources, management-consent requirements, and integration performance.
- The timing and amount of any future dividend, given the continued suspension and debt-agreement restrictions.
- The sensitivity of cash flow and valuation to interest-rate increases, LIBOR transition, group-demand recovery, and labor costs.
- The recoverability of the Gaylord National bonds and the assumptions supporting the $38.0 million credit-loss reserve.