Ryman Hospitality Properties Inc (RHP) 2003 Q2 法說會逐字稿

Good morning ladies and gentlemen and welcome to the Gaylord Entertainment second-quarter 2003 earnings conference call. Hosting the call today from Gaylord Entertainment is Mr. Colin Reed, President and Chief Executive Officer, along with David Kloeppel, Chief Financial Officer. They are joined by Key Foster, Vice President of Corporate Finance and Investor Relations, and Carter Todd, of General Counsel. Gentlemen, the floor is yours.

My name is Carter Todd and I'm the General Counsel and Senior Vice President for Gaylord Entertainment Company. Thank you for joining us today on our second-quarter 2003 earnings conference call.

With me today are Colin Reed, our President and Chief Executive Officer, David Kloeppel, our Chief Financial Officer and Executive Vice President and Key Foster, our Vice President of Corporate Finance and Investor Relations. You should be aware that this conference call may contain forward-looking statements within the meaning of the private securities litigation reform act of 1995, including statements, among others, regarding Gaylord Entertainment's expected future financial performance.

For this purpose, any statements made during this call that are not statements of historical fact may be deemed to be forward looking statements. Without limiting the foregoing, words such as believes, anticipates, plans, expects, and similar expressions are intended to identify forward looking statements. You are hereby cautioned that these statements may be affected by the important factors, among others, set forth in Gaylord Entertainment's filings with the Securities and Exchange Commission in its second-quarter 2003 earnings release.

And consequently, actual operations and results may differ materially from the results discussed or projected in the forward-looking statements. Gaylord Entertainment undertakes no obligation to update publicly any forward looking statements, whether as a result of new information, future events, or otherwise.

I'd also like to remind you that in our call today we will discuss certain non-GAAP financial measures and a reconciliation of those non-GAAP financial measures to the most directly comparable GAAP financial measures has been provided as an exhibit to our earnings release and is also available on our web site under the Investor Relations section. At this time I would like to turn the call over to our Chief Executive Officer, Colin Reed.

Thanks Carter, good morning everyone, and welcome Gaylord Entertainment's second-quarter conference call. I'd like to welcome back all of you who know us, and acknowledge those investors joining us for the first time. This morning, we plan on keeping our prepared comments brief, to allow time for questions. I will begin the call with a recap of the quarter, and then go over some second-quarter segment highlights, Dave Kloeppel, our Chief Financial Officer, will then walk you through the operating and financial performance of the Company, and provide guidance for the coming quarter and full year, 2003. And finally, I will make a brief closing statement and then we will open up the call for questions.

The second-quarter was one characterized by strong operating results, that highlight the underlying fundamental strengths of our business model. The hotel segment this last two years has been somewhat challenging, but our concentration in the convention and exhibition niche, has enabled us to operate successfully, in a still-difficult travel environment. Our bookings upon entering the quarter, were extremely strong, and the normal level of attendee attrition did not occur, resulting in RevPAR at the high end of our expectations.

The major progress that we have made this last two years, to the overall service experience of our customers, continues to pay dividends. In fact, we booked approximately 248,000 room nights in the second-quarter, for large groups, for stays in future years, and approximately 37% of those groups, booked to rotate through our hotel chain. We're extremely pleased with this, because it signals to us, that our convention customers clearly see the value in dealing with our company, rather than a hotel within a city.

While the long-term sales environment is favorable, the short-term environment, particularly with corporate clients, continues to present challenges. As meeting planners, and the clients themselves, appear cautious in making buying decisions. Dave will talk more about this in our guidance section.

So now, let's share with you some of the second-quarter highlights. We had a very impressive second quarter in our hospitality segment. Behind an industry backdrop of flat-to-declining RevPAR, I'm pleased to report that both Gaylord Palms and Gaylord Opryland, benefited from higher occupancy rates, growing a combined 5.9 percentage points, for 8.9%, to 72.4% in the second quarter 2003. This notable increase, which is primarily a result of strong performance at the Palms, helped drive higher RevPAR and total revenue for available rooms for our hotels.

Gaylord Opryland produced RevPAR of $94.35, essentially flat compared to the second-quarter 2002, but increased total revenue for available rooms 2.1% to $179.51. Our focus on delivering flawless service continues to pay dividends, and we again saw customer service levels improve at Gaylord Opryland, so much so that our great staff at this landmark property earned customer satisfaction bonuses based on how our customers rated us throughout this period of time.

Also throughout the second-quarter, our meeting plan of satisfaction ratings continued to climb. This bodes well for the future, as these ratings will translate into higher customer loyalty and subsequently more repeat business. At Gaylord Palms, we had what can only be described as an incredible quarter. As both meeting planners and leisure customers became more familiar with the brand and its unique offerings.

In fact, Gaylord Palms showed notable increases in virtually every metric. Total revenue for available rooms increased a staggering 27.3% from last year's second-quarter to $323.85. The hotel also achieved RevPAR of $141.15, a tremendous 23.1% increase over last year. Looking at another barometer of how well Gaylord Palms is performing, Smith travel research reports indicate the resort achieved a 121% fair share RevPAR index, making the hotel number 1 amongst its market competitor set of properties. Year-to-date Gaylord Palm registered a fair share RevPAR index of 117%, also ranking it number 1 amongst its competitors for the first six months.

During the quarter, Gaylord Palms was also awarded an elite 4 diamond property rating by AAA for outstanding service. Also, the quality of its facilities and the overall standard of hospitality. The property has also recently received Successful Meetings Pinnacle award and just last week was named Florida monthly's best Florida resort for the second consecutive year.

If you would indulge me for a second, if I could've waved a magic wand 12 months ago and wished for a great second quarter in 2003 at the Palms, the results, the awards, the employee attitudes, and customer satisfaction metrics that we have achieved, would have surpassed those wishes of one year ago. One major highlight of the quarter on the hospitality front, was the notable performance of our food and beverage operations at both Gaylord Opryland and Gaylord Palms.

A big part of our drive to differentiate our customer experience through entertaining superior service offerings is to provide a superb dining experience. Our success in this regard is really a testament to the long-term efforts of our extremely knowledgeable and dynamic culinary staff. This high level of service in food and beverage is now being recognized by industry groups and our customers, and is starting to show up in our financials as demand for the experience builds. We continue to look forward to the expansion of our network of properties through the addition of Gaylord Opryland Texas, which opens for business in April 2004.

As most of you know, the physical asset is by and large modeled after our Gaylord Palms property, which now sits at the top of the Orlando convention market. Like its sister, Texas is receiving great acclaim in the Dallas-Fort Worth area, and visiting meeting planners have been wowed by the product. We're very confident that this property has all the actualities to become the best resort and convention center in the region, and we're delighted that we continue to attract the region's best talent who want to be part of operating this impressive facility.

Moving onto the progress of our attractions business. The results from our attractions segment were mixed, with continued improvement from the Grand Ole Opry and challenges at Corporate Magic, as spending for corporate event productions has not yet recovered. The Grand Ole Opry continues to attract country lifestyle enthusiasts from all over the world, and the best acts in the country music business.

On October the 14th, Capitol Record artist Trace Atkins was invited to become the newest member of the Grand Ole Opry and he'll be formerly inducted on August 23rd. By the way that will be on national television and we hope you'll all the watching that on CMT.

This past quarter, we America's Grand Ole Opry weekend via WestWood One Syndication distribution to 76 subscribed stations across the nation, including the markets of Los Angeles and Atlanta. As part of our new partnership with Cumulus Media, this weekly radio event is now being broadcast on Cumulus' owned country stations. All of this distribution allows us the opportunity to communicate with millions of listeners through advertising space that we now control. And this is both good for our Opry brand and any other business we choose to market through these channels.

The Grand Ole Opry is an asset and a brand that we feel has enormous potential. The Opry possesses the scale of national recognition and respect that is unparalleled in the country music world and we are working to identify specific initiatives that unlock the value of this brand for our shareholders. Now at this time, I'd like to turn the floor over to David to provide more details on the operating results.

I'll start with a brief overview of the company's consolidated operating performance, and then go into more detail for each business line, highlighting the operating drivers. Finally, I'll provide guidance for the second-quarter, for the third quarter and for the full year 2003. Consolidated revenues from continuing operations for the second-quarter 2003 were $105.5 million, up 9.9% over last year's $95.9 million. Consolidated operating loss for the second-quarter 2003 was $1.5 million, compared to an operating income of $8.7 million in the second-quarter 2002.

The company almost doubled consolidated net income to $11.4 million, or 33 cents per diluted share in the second-quarter 2003, compared to net income of $5.9 million, or 17 cents per diluted share for the second-quarter of '02.

Recognize, however, the sales of our 33.3% stake in the Opry Mills mall, which resulted in a pretax gain of $10.6 million, and an after-tax gain of $6.5 million, our included in the operating results described in the second-quarter 2002--both operating income and net income.

So, on a comparable basis, operating income was basically flat with last year. EBITDA from continuing operations was $16.9 million for the second-quarter 2003, compared with $13.6 million in 2002, an increase of 24.2%. Year-to-date, consolidated revenues from continuing operations were $219.9 million, an increase of 12.4% from the $195.6 million in the same period last year.

Consolidated operating income for the first 6 months of 2003 was $3.4 million, compared to an operating loss of $6.9 million in the first 6 months of 2002. The Company had net income in the 6 month period of 2003 of $4.9 million, or 14 cents per diluted share. This compares to a net loss of $2.3 million, or 7 cents per diluted share in the first six months of 2002.

Once again, the sale of our 33% stake in the Opry Mills Mall, which resulted in the aforementioned gains of $10.6 million pretax and $6.5 million after-tax are included in the 2002 year-to-date numbers. EBITDA for the first 6 months of 2003 was $39.9 million, compared to $23.8 million in the same period of 2002, a very impressive increase of 67.6%.

And now for each of the different business segments, the hospitality segment revenues were $90.2 million in the second-quarter of 2003, up 12.1% from last quarter. This increase was primarily a result of higher occupancy levels and strong consumer spending outside of the rooms. In the second-quarter 2003, hospitality segment REVPAR was $105.92, an increase of 8.4% from the second-quarter of 2002. And total revenue per available room was $215.94, an increase of 12.1% from the prior year.

Strong total RevPAR numbers are continuing evidence of our ability to capture additional spending dollars by our guests via our unique all in one place offering. Hospitality operating income was $8.5 million in the second quarter of 2003 compared to $5.3 million in the second quarter of 2002, an increase of 61.3%. Pre-opening expenses were $2.2 million and $0.7 million for the second-quarter 2003 and '02 respectively. Due to straight line lease these amortization on the Gaylord Palms ground lease, non non-cash lease expense included in operating income was $1.6 million in the second-quarter 2003 and second-quarter 2002.

Hospitality EBITDA was $24 million in second quarter of 2003, an increase of $6.4 million from the second-quarter 2002. In addition, EBITDA margins continued to expand in the hospitality segments with second-quarter 2003 EBITDA margins recorded at 26.6%, a 4.8 percentage point increase over the second-quarter of 2002.

Rooms’ gross margin rose from 74.2% in the second quarter of 2002 to 75.8% in the second-quarter of 2003. Food and beverage gross margins impressively as well, as results from Gaylord Palms and Gaylord Opryland National continued to drive this increase. The second quarter 2003 F&B margins rose to 36.2%, up from 31.3% posted in second-quarter 2002.

Pro forma for Gaylord Opryland National was relatively flat from the prior year's second-quarter. The property posted ADR or $138.29. Occupancy of 68.2% and revPAR of $94.35. Total revenue per billable room was $179.51 in the second-quarter 2003, up 2.1% over the prior period, and in line with a seasonally slower convention period in the second-quarter for Nashville.

In its second-year of operations the Palms continues to perform impressively well, as Colin talked about earlier. The 2003 second quarter metrics for this property were substantially higher than prior year, with the property posting an ADR of $171.26. Occupancy of a very impressive 82.4% and revPAR of $141.15. Total revenue per available room was $323.85 in second quarter of 2003, up an astonishing 27.3% from the previous year's same period.

Once again, out of the room revenues are a major contributor to the properties total revPAR and continue to exceed even our high expectations.

As Colin mentioned, the Gaylord Opryland Texas is on schedule to open in April 2004. It's still on budget and as of the quarter end, total capital expenditures on the project were $266 million, with a balance of $215.3 million to be spent through completion. These capex figures include pre-opening expenses of $13.5 million spent through the end of the second-quarter, leaving $14.9 million to be spent through the opening. The attraction segment generated revenues of $15.2 million in the second-quarter of 2003, a slight decrease of $0.2 million from the second-quarter 2002.

Operating income in the attraction segment was $0.2 million in the second-quarter of 2003, compared to operating income of $1.8 million in the same period in 2002. Attraction EBITDA declined to $1.4 million in the second-quarter of '03, from $3.1 million posted in the second-quarter of '02.

Overall, our attraction segment experienced a decrease due to weaker performance in corporate management as Colin mentioned, which is due to tighter spending for these services by our customers. In addition, adverse weather conditions during the quarter negatively impacted the results at the Springhouse Golf Club.

I would like to update you on a few events that occurred since the end of the second quarter. On July 22nd we announced that we closed the sale of our 2 FM radio stations to Cumulus Media, and initiated our joint sales agreement for a total consideration of $65 million in cash. Much of the gain on this transaction will be shielded by net operating losses as we have discussed previously. Also on July 3rd, we announced that we reached an agreement to sell our 76% stake in the Oklahoma City Red Hawks baseball team, the triple-A baseball team, once again located in Oklahoma City. It was sold to a local businessman and his organization called The Oklahoma Baseball Club, LLC.

The transaction is expected to close this fall, pending required approvals from the Pacific Coast league and major league baseball. And this sale will leave only Bass Pro shops and our stake in the National Predators as our only non core assets. As we previous have previously discussed we're seeing good results from Bass Pro shops, existing stores, and extremely high demand from communities seeking to attract new Bass Pro developments. Over time we are confident that this investment will prove to be very valuable to our shareholders.

Regarding the Predators, we exercise the second of our foot rights this week and have filed a claim in national chancery court to require the team to satisfy their obligation under that foot obligation.

Corporate and other operating loss for the quarter was $10.2 million, compared to an $8.8 million operating loss in the second-quarter of 2002. The higher operating loss in the second-quarter 2003 was primarily the result of a change in the long-term incentive compensation program from an option only based model to a combination of options and restricted stock units.

These operating losses include $1.8 million and $1.7 million of non-cash and non recurring charges for the second-quarter of 2002 and 2003 respectively. These charges account for items such as depreciation, amortization, and the non cash portion of the Gaylord Entertainment Center, naming our agreement expense. Total long-term debt outstanding at the end of the second-quarter was $470.7 million, compared to $340.6 million at the first quarter of 2003. The Company's cash balance also increased dramatically during the quarter, with a cash balance at the end of the quarter of $172.9 million, compared to $118 million at the end of the second quarter of 2002.

The Company announced that on May 22nd 2003, we closed our financing commitment of $225 million. The three year floating-rate credit facility is comprised of a $25 million senior revolving facility, a $150 million senior term loan, and a $50 million subordinated term loan. The senior loans are priced at LIBOR plus 350 basis points, and the subordinated loan is priced at LIBOR plus 800 basis points, for a weighted average pricing of LIBOR plus 450 basis points.

Proceeds from the facility were used to retire the Company $60 million term loan secured by the Gaylord Palms, and excess proceeds we deposited in a restricted cash account and will be used to complete our Texas hotels. In addition, the Company engaged in LIBOR interest rate swaps that effectively lost LIBOR at 1.48% in the first year of the loan, and 2.09% in the second year.

As previously disclosed in January '03, the Company restated its historical financial statements for 2000, 2001, and the first 9 months of 2002 to reflect certain non-cash changes, primarily for the Company's income tax accrual and the manner in which the Company accounted for its investments in the National Predators.

The company has been advised by the Securities and Exchange Commission that it is conducting a formal investigation into the financial results and transactions that were the subjects of the statement about the company. We have been cooperating fully with the SEC staff, and intend to continue to do so and although we cannot predict the ultimate outcome of the investigation, we do not believe that the investigation will have a material adverse effect on the companies financial conditions or its results of operations.

I'll now give guidance for the third quarter and full year 2003. The Company does not expect to update guidance until next quarter's earnings release, however, the Company may update its full business outlook, and any portion thereof at any time for any reason.

We continue to book a significant number of room nights and occupancy is building quite nicely for 2004 and beyond. With that in mind, we're seeing some short term impact from the ongoing challenging economic environment.

In one instance, 3 large groups scheduled for the third and fourth quarters at Gaylord Palms moved their stays to next year. We accommodated their needs, waiving current attrition clauses to lock in long-term rotation programs for multiple years. However, this activity does leave occupancy gaps in both quarters for the property.

As we've noted previously, competition for short-term bookings remains intense. The good news, however, is that the reputation of the Palms continues to soar and call volumes for customers have increased for both properties, particularly in the corporate segment and we're working with record levels of prospective customers. It's difficult to know how much of this business will convert to actual bookings for both this year and next but suffice it to say, we remain cautiously optimistic for the coming 12 months.

The Company expects revPAR to grow for the full year 2003 over 2002 unlike the rest of the industry and to be within the previously guided range of 4% to 7% growth. Notwithstanding the gaps created by the convention's move from '03 to '04, the Company expects revPAR to decline approximately 3% in the third quarter of 2003 and approximately 2% in fourth-quarter 2003 over the same period last year.

Total revenues for the third quarter of 2003 are expected to be between $95 million and $98 million, with EBITDA margins around 10%. Capital expenditures for the third quarter of 2003 are expected to be between $55 million and $70 million, and between $230 million and $240 million for 2003. And now I'd like to turn the call back over to Colin.

Our second-quarter results build upon the strong momentum that we carried from the first quarter. In combination, the first half of this year has seen the Company strengthen its balance sheet through divestitures and securing of additional financing but most importantly we're seeing our core business strategy generate tangible financial results.

Now I'd like to thank all of you for taking the time to join us this morning and Michaela will open up the line for any questions.

Our first question comes from Brett Vielokoff (ph) Performance Capital.

Three questions. One, what would be the proceeds of the sale of the Hawks? And any update on DC? And any comments on possibly freeing up some capital from our assets?

The sale of the Hawks, Dave, something like 76%. We're going to net on that I think about just over $7 million, about $7.2 million.

In regards to DC, we continue to work aggressively with the development partner. We recently conducted a lot of research, Brett, with meeting planners and one of the good things that has come back out of that research -- and we've got a ton of information that has come out of that research -- but one of the good things is that again underscores in the minds of the meeting planners the importance of the DC market.

So we're being pretty active in our negotiations up there. We basically have an understanding of the framework of the deal with the development partner. The problem is the development partner has run into a little bit of a hitch with zoning which we believe we will have resolved here in the next three months. But as the hitch with the zoning gets resolved, we'll I think have more information here in the next 3 months ago about when we expect to see that deal be formal and be moving forward with it. But we still are very excited about the opportunity of putting our product in DC.

In terms of the freeing up of the capital, it's a subject that David and I probably debate at least once a week. We like the idea of accelerating growth through churning the capital that we have invested in our big hotels. The issue though is, at what point do we do that and how do we secure the upside that we will almost certainly see as our systems that we have articulated so many times start to traction here.

We believe in, for instance, in Orlando, that we have at least 5 to 10 points of occupancy ahead of us in that hotel and what we don't want to be doing is looking at ways of churning that capital at a point where the occupancy still has a ways to grow. We've sort of thought through ways in which we could do that by any form of management contract would capture the upside. But it's something that's on our mind, we're looking at it and there's nothing to report at this moment but it's something that we're focused on.

One more question. David, would you care to quantify the loss of the 3 large groups? Can you quantify that at all? How it will hit Q3 and Q4?

Just so we're clear on the event that occurred, the three groups needed to move their -- from third and fourth quarter in the Palms to other times mostly in 2004. We had contracts with those groups and we allowed them to move in exchange for signing up longer-term deals with them and multi rotational property deals. It's a net win for us we think long-term. The total number of rooms that move in Q3 and Q4 was about 10,000 room nights, which is about 2 percentage points of occupancy for the year. So that gives you an order of magnitude of the size of the move.

Thanks.

Let me just say one thing, the point is there's good news and bad news for us on this issue. The good news is that we do have blocks of rooms now available in the third quarter and I know that sounds a quirky statement, but it allows us for the short-term large groups, particularly the pharmaceuticals, to be able to offer the product. We didn't have these large blocks available so we're working aggressively to fill these rooms.

The only problem is that we are taking a conservative view in terms of the guidance for the third and fourth-quarter, because we're not sure that we will fill these rooms, but the good news is that have them available and there's high demand building for this product, particularly the Palms product and there are prospects we have on the books. The prospects that we're dealing with, as Dave indicated, are at an all-time high. So we think that we have a shot at filling them but we're not going to stand here today and say that we will.

Thanks guys.

Will Marks (ph) of JP Securities.

Good morning, everyone. I had a couple of questions. To start with, you gave the revPAR index number for Orlando and do you look at that number for Opryland and if so, could you give us a sense of that?

Here's the problem. Through the index that we measure by in Nashville is not -- there's no competitive product in this neck of the words so what we do with Smith Travel is we compare ourselves to Atlanta, and we compare ourselves to New Orleans.

The problem is that one large convention in New Orleans, 30,000 room night convention that fills the city, disproportionately effects the way we measure our hotel here versus a completely different markets. Now the good news is that we continue to make progress on that index as we compare ourselves to the Atlanta's and to New Orleans but our hotel here in Nashville beats this market by 15 occupancy points. The market runs the middle low 50s and we run here at 68% to 70% in this hotel. That's the problem.

That's understandable. On Texas, can you give a qualitative or quantitative, for that matter, a sense of bookings on that hotel -- how things are looking going out and maybe also just touch on how much of that comes from existing clients, say at your other hotels?

I just wanted to follow-up on Colin's description of the last question as well. We do compare ourselves to the big hotels in Atlanta and New Orleans, which we think is a pretty high standard to meet given that we're in Nashville Tennessee. Despite all that we do still produce, I think, in the first-quarter we were at 95% to 96% revPAR index and in the second quarter we were at 99% so we're holding our own against pretty strong competition.

Back to your Texas question and the bookings there. The bookings are building quite nicely for Texas and the real opportunity in Texas is because of its proximity to the airport, we have a much greater opportunity there to take up a lot more transient business than we do in our other locations. So the occupancy in Texas is building, we expect it to be comparable to the first-year occupancy that Orlando produced, and I forget the second part of your question.

Cannibalization, I mean, that was the basic -- the question is are we cannibalizing? Where do the customers come from? Is it coming from our existing business?

Texas is frankly benefiting a great deal from the rotational strategy that we put in place here a year ago and we are rotating groups, instead of booking them one year at a time, we're booking them 2, 3, and 4 years at a time.

Let's be clear here, Dave. One of -- these groups that tend to go to Texas are groups that would go to another market anyway. These are not -- there's very few groups in the industry that actually stay in one location for a 5 and 10 year periods of time, in fact we just established that from all this research that we have done.

So one of the benefits that we are seeing here, Will, which is I really do believe is something that is going to bode very well for us in the future is what we like to call here supply and juice demand. That as we put supply into new markets, like into Orlando and we start picking up customers that hitherto have never been to, say Nashville, we are now inducing demand back both into Nashville and then into a place like Texas. So as we go to Texas, we will touch a lot of customers in Texas that we hitherto haven't touched in Orlando and Nashville. And when these folks see this property and sample this property just as they've done in Orlando, we will the be able to drive customers back into the Orlando product and also the national product.

But we're not cannibalizing business that would have stayed in Nashville by opening up Texas. The good news is that the whole boat is rising. If you look at the occupancy levels with our businesses, they're all rising as we're moving into these new markets and it's very exciting stuff.

Thank you both.

Will Marks, JP Securities.

Don't want to hog the floor here but one more last question. I guess it's a way to kind of wrap up all your asset sales and cash flow and that would be just where you expect your debt level approximately to be at year end?

We don't expect to incur any new debt. We currently have $470 million of debt on the books. We have $172 million of cash on the balance sheet at the end of the second quarter. We just closed the sale of the radio stations, which drops another $65 million of cash on the balance sheet. So that gives us about $230 million of cash.

That's more cash than we need to complete the construction of Texas, and that's the only real cash use that's material in this company between now and the end of the first quarter of '04.

It's a little bit difficult to pinpoint the answer to your question because the construction spending on Texas, if a $20 million bill comes in at the end of one quarter or another, it changes the cash balance dramatically. But with that as a caveat, we expect to have again about the 470 - 465 worth of debt on the books and cash north of $100 million by the end of the fourth-quarter of '03.

On the number you gave in the text for capex for third quarter of $55 million to $70 million, and $230 million to $240 million for the full year. Can you break that down? Maybe I missed that but in terms of what's maintenance and Texas and other projects.

Sure. Texas for third quarter is about $60 million. Again, there's going to be about $10 million of maintenance and expansion and that's maintenance on the hotels and expansion of the Grand Ole Opry House which is being completed in the third quarter of '03. Fourth quarter almost all the capex is going to be Texas, just a limited amount of maintenance.

For the year, if we get to the $240 million number in capex, about $230 of that is Texas and about the remaining $10 million is maintenance and other expansion capex.

Thanks a lot.

Gentlemen, I'm showing no further questions at this time.

Thank you. The comments this morning were reasonably clear. Well, we hope that's the case.

Thank you very much indeed again for everyone joining us and if there are any subsequent follow-up questions that anyone has they can either call Dave, myself or Key, and look forward to further communication. Thank you very much.

Thank you ladies and gentlemen, this does conclude this morning's teleconference. You may disconnect your lines and have a wonderful day.