Ryman Hospitality Properties Inc (RHP) 2010 Q4 法說會逐字稿

Welcome to the Gaylord Entertainment Company's fourth quarter 2010 earnings conference call. Hosting the call today from Gaylord entertainment are Mr. Colin Reed, Chairman and Chief Executive Officer, David Kloeppel, President and Chief Operating Officer, Mr. Mark Fioravanti, Chief Financial Officer, and Mr. Carter Todd, Executive Vice President and General Counsel. This call will be available for digital replay. The number is 800-642-1687, and the conference ID number is 37487403.(Operator Instructions). It is now my pleasure to turn the floor over to Mr. Carter Todd. Sir, you may begin.

Good morning. My name is Carter Todd. I am the General Counsel for Gaylord Entertainment Company. Thank you for joining us today on our fourth quarter 2010 earnings conference call.

You should be aware that this conference call may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act, 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. You hereby cautioned that these statements may be affected by the important factors, among others, set forth in Gaylord Entertainment filings with the Security and Exchange Commission and in our fourth quarter 2010 earnings release.

Gaylord Entertainment undertakes no obligation to update publicly any forward-looking any statements, whether it is due result of new information, future events, or otherwise.I would 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 website under the Investor Relations section. At this time, I would like to turn the call over to our Chairman and Chief Executive Officer, Colin Reed.

Thank you, Carter, good morning, and welcome, everyone. Thanks for joining us today to discuss our fourth quarter 2010 results as well as our current outlook for 2011. Now I am going to begin the call with a recap of 2010 and an overview of our fourth quarter performance, and then we will focus on what we are seeing as we head into 2011. Following that, our President Dave Kloeppel will offer some color around our sales and marketing activities, and then our Chief Financial Officer Mark Fioravanti will end our prepared remarks by providing detail on our financial results for the quarter and the year and discuss our guidance in a little bit more detail. We will then open up the call for questions.

As we look back on 2010, I want to begin by saying that the past year was one in which our Company experienced several significant events which not only positively impacted our business but, in the case of the flood, transformed it. I, for one, can honestly say 2010 was a year not like any I've experienced before and all of us that Gaylord have learned a lot and are better for it. Now at the outset let me put 2010 in perspective by reminding you about the comparisons we faced.

2009 was a very difficult year for the entire industry. Our business weathered it much better than most. While the upper upscale segment of the industry experienced RevPAR declines of almost 18%. To remind you, our adjusted Gaylord hotels saw a decline of only 6.8%. While we were very pleased with our relative performance, it presented a much more difficult comparison for us in 2010. However, putting that difficult comparison aside, our business performed well in 2010.

Adjusted Gaylord hotels drove a solid year-over-year RevPAR growth of 3.9% despite the short-term pressures on rate. Adjusted Gaylord hotels total RevPAR performance was especially strong in 2010 with a year-over-year growth of 7.3%. This demonstrates the growing confidence of our customers to spend well at our hotels. Now, our total RevPAR performance was accomplished despite a $12.3 million decline in attrition and cancellation fee revenues that naturally occurred as the group business began to stabilize in 2010. If you eliminate the impact of attrition and cancellation fees on our hotels, total RevPAR growth in '10 over '09 was nearly 10%.

Now, our strengthening top line and our continued in managing the bottom-line enabled our adjusted Gaylord Hotel segment to drive over $166 million in consolidated cash flow and -- maintain a relatively flat CCF margin for the year. Again despite declining attrition and cancellation fees, and a challenging rate environment. Our margin was not achieved at the expense of service. In fact, our customer satisfaction scores remained strong across our brand and throughout the whole year.

Our success in 2010, as it relates to securing future business, is no less impressive. While I will let Dave discuss a lot more of this in detail shortly, I would like to point out that we delivered another solid quarter and -- a year of room night production for our business. Most impressive is that this was accomplished despite the fact that our sales force for most of May and June of last year were focused on moving customers to different properties, both within and outside of our chain, as a result of the flood and the resulting six month closure of Opryland.

As regards pricing, it's also important to note that we have stayed aggressive as we negotiated the price of future room rates, and as a result, the average rate of which these future bookings were contracted for is higher than the rate for the same period in 2009. Our balance sheet remains strong throughout '10 and we experienced no covenant or liquidity issues as we work to recover and rebuild our national assets. Speaking of the flood, let me share with you my immense pride in how our entire Company overcame this disaster. Each and every Gaylord Star embraced the challenge head on, and worked tirelessly to ensure we meet our aggressive timeline and quality standards for the rebuild.

As a result, people within and outside the industry are really taking notice of us and what was accomplished. The properties successfully reopened on time and under budget, and it was a truly defining moment for our brand. The grand reopening event gave literally hundreds of meeting planners a chance to experience first-hand the improvements and additions we made to the property. Their response was incredibly enthusiastic, and they were blown away by what we've been able to do in only a six month period. Now, the enthusiasm generated by the reopening wasn't just that we rebuilt the property, but that we significantly improved the asset, along with the guest experience.

Now, we do not normally breakout room night production by property, by month, but to give you a sense of the excitement around this reopening, we booked nearly 165,000 advanced group room nights to Gaylord Opryland in the month of December alone. As a result, properties entering 2011 are very well-positioned from a room night production standpoint. While I would never wish to relive an ordeal such as the one we have now put behind us, we have emerged a better Company, a stronger Company, and, frankly, a more efficient Company as a result.

In essence, this event characterized how we dealt with the entire year, and the economic challenges that have plagued our country for the past two years. We took a bad situation and turned it into an opportunity. Now let me take a moment to discuss the fourth quarter. The fourth quarter is normally an outlier for our Company. As much as it is heavily weighted toward transient business, the groups essentially stopped traveling after the early part of November. Customer behavior and mix in the fourth quarter of 2010 were no different and were in line with our own internal expectations.

I am pleased with our moderate RevPAR growth for the quarter, especially in light of our strong relative RevPAR performance in the fourth quarter of 2009. As strong total RevPAR performance reflects the tremendous level of guest traffic, the move through our holiday attractions and our other outside of the room offerings during the fourth quarter. As it relates to profitability, despite short-term rate pressures and the $2.3 million decline in attrition and cancellation fee revenue in the quarter, adjusted Gaylord hotels this year finished the quarter with a 2.6% increase over the fourth quarter of 2009. Our results during the quarter and the year give me great confidence that we are well positioned for solid future.

As we enter 2011, I'm excited about the possibilities for our Company. Our balance sheet remains strong, and will strengthen throughout 2011, and RevPAR will be strong. Total RevPAR on CCF expectations are high, as evidenced by our guidance. And we expect to generate very good free cash flow during the year. Now, one new capitalizing of note. We just received approval from our Board last week to proceed with a $12 million construction project that will, essentially, raise the protection of the flood levy surrounding Gaylord Opryland to a 500 year level. We've been talking about this over the last six months, and we now had that plan solidified. Importantly, we anticipate that this investment will also enable us to raise the flood insurance coverage on the hotel while substantially reducing the annual premium.

Now, 2011 also marks a shift in our focus. With the 2010 flood recovery now behind us, we are clearly focused on the opportunities to grow our brand. Both through acquisition opportunities and ground up developments. Now, I know that many of you are interested in the status of our conversations with municipalities and local community leaders in various regions around the country. These are groups or representatives who have recognized the enormous economic benefit that we have brought to communities where we operate and are interested in partnering with us to bring a Gaylord property to their market. We continue to see this interest level increasing, and the incentives being discussed are certainly attractive. Now, we will continue to explore and evaluate these opportunities, and will provide an update at the appropriate time.

As it relates to our 2011 outlook, we are reiterating the guidance that we provided last quarter. We are very confident in our position entering the year and the growth projections we have set for three main reasons. First, the continued signs that we see the overall environment and sector strengthening, including occupancy rate and outside of the room revenue growth, as well as the continued decline of attrition and cancellations. Second, our position as it relates to room nights on the books for 2011 compared to prior years, and the continued growth of that transient component which Dave will discuss in a second. The third is the prospect of running the business as effectively and profitably as possible without the enormous distractions of a major natural disaster and a once in a generation recession.

Although many macro economic and political unknowns are going to remain with us in '11, we are very excited about the next year and what it will bring for our Company, and the opportunities that are ahead for Gaylord. With that, I will turn the call over to David.

Thinks, Colin. Good morning, everyone. Let me begin by saying I am very pleased with the effort this quarter and in 2010. The team did a great job adjusting to what was certainly not our typical year.

From a sales perspective, our team booked over 2.2 million gross advance room nights for our brand. Which equated to the third-highest annual production on record. This was accomplished despite the challenges associated with the natural flood, without the introduction of any new assets or inventory into our system, and in a year slowed by continued economic headlines.

As Colin alluded to earlier, gross advanced group bookings production in the fourth quarter of 2010 alone were over 772,000 room nights, and reflected healthy growth over our strong production in the fourth quarter of 2009. For the full year of '10, we booked over 1.332 million net advance group room nights across our hotels for all future periods. And remember, this includes the impact of the flood cancellations at Gaylord Opryland. It also reflects a 28.2% increase over our net production in 2009. As of January 31, we have nearly 5.2 million net room nights booked for all future years.

Looking at 2011 for Gaylord hotels, including Gaylord Opryland, as of the end of the fourth quarter, we had 50.4 percentage points of net group occupancy on the books for 2011. That was 50.4 percentage points. This included the impact of roughly 54,000 room nights that will be out of service at the Palm and the Radisson for room renovations and, is approximately 2 percentage points ahead of where we stood in 2009 for net advanced group bookings for 2010. For 2012, we currently have 36.6 percentage points of net group occupancy on the books for Gaylord hotels including Gaylord Opryland. This is approximately 0.8 percentage points ahead of where we stood in 2009 for net advanced group bookings for 2011.

Our sales team continues to focus on aggressively pricing high demand periods to combat the current negative spot rate dynamics in markets like Orlando. Their efforts are securing healthy rates for future periods, but we continue to experience very short-term rate pressure. As we have said in the past, we believe that the continued recovery of occupancy will pave the way for eventual strengthening of short-term rates, and our forward bookings are an encouraging indication that this will happen as we move through 2011 and beyond.

From a marketing perspective, we continue to successfully drive increases in transient room nights. In the fourth quarter alone, our hotels outside of Nashville booked roughly 6000 more transient room nights than in the fourth quarter of last year. This was a record level with a particularly exceptional performance in December, driven by the continued success of our holiday attractions like Ice. Ice alone generated over $19 million in revenue for us in the fourth quarter. Family-friendly programs like Ice provide regional transient guests a compelling reason to return to our properties again and again. These programs are key to driving occupancy and outside of the room spending during periods of the year when group business is not as robust.

Transient volumes in the fourth quarter were also very encouraging at Gaylord Opryland. The reopening of our flagship hotel generated a tremendous amount of regional buzz, which translated into high transient occupancies. In fact, in December, Gaylord Opryland welcome the highest number of transient guest rooms on record for a single month. Our holiday attractions at Opryland also performed well despite the fact that Opry Mills, the mall next door to Gaylord Opryland, remained closed for flood repairs and thus did not generate any walk-up traffic that we have experienced in the past. Overall, we are pleased with the performance of the hotel post-reopening and are confident that it is positioned very well for a good year in 2011.

I want to conclude my remarks by reiterating Colin's comments regarding the incredible work of our leaders and stars leading up to, and following the reopening of Gaylord Opryland. They really pulled off a remarkably difficult task, and their efforts resulted in an incredibly successful reopening. Even after November 15, the property was literally overrun with people who were just there to see the work that we did to the hotel. This put tremendous pressure on the Stars to service our hotel guests amongst the numerous crowds of non-hotel guests. Of course, the team handled it extremely well.

That said, we staffed the property at elevated levels following the reopening to both deal with this influx of people, and to ensure that premium service was delivered as everything got back up to speed. While challenging for our stars, this level of customer traffic enabled the property to fully prepare for the return of multiple large groups in the first quarter, and set the stage for a successful 2011. In fact, since reopening, Gaylord Opryland has been leading the brand in guest satisfaction scores for the first time since we've been tracking guests, I might add, and it's clearly focused on maintaining this position as we move through 2011.

With that, I will turn the call over to Mark for financial highlights.

Thanks, Dave. Good morning, everyone. I'd like to spend a few minutes this morning reviewing some of the financial highlights for the quarter and the year. I'll touch on the balance sheet and then review our guidance for 2011.

As you know, our consolidated results for the quarter and the year were significantly impacted by the closure of Gaylord Opryland and the other national assets which makes consolidated year over comparisons somewhat difficult. But with that said, let's walk through how we finished the year. On a consolidated basis, Gaylord Entertainment revenue for the fourth quarter of 2010 was $213.3 million, a 13.5% decline from the fourth quarter of 2009. For the year, revenue was $770 million, down 11.8% from $872.8 million last year.

During the quarter, the Company generated a loss from continuing operations of $32.5 million, or $0.68 per diluted share, which included $5 million in pre-tax casualty lost expenses associated with the flood damage. And $23.6 million in pre-opening costs associated with the efforts to reopen a national property. For the full year 2010, losses from continuing operations was $92.2 million or $1.95 per diluted share. Company wide CCF was $27.6 million for the quarter, down 49.1%. For the year, consolidated CCF was $149 million, down 21.8%.

Turning to the hotel segment. For the fourth quarter, adjusted Gaylord hotels RevPAR increased slightly while total RevPAR increased 8.7%, driven by a nearly 5 point increase in occupancy and continued growth in outside of the room spending. For the full year 2010, RevPAR increased 3.9%, and total RevPAR increased 7.3% compared to last year.

Adjusted Gaylord hotels in the year, for the year cancellations in the quarter totaled 2603 room nights compared to 5256 room nights in the fourth quarter of 2009. Attrition rates fell 2.8 percentage points to 14.7% to 11.9% in the quarter. For the full year 2010, adjusted Gaylord Hotels in the year, for the year cancellations totaled 41,637 room nights, and nearly 50% decrease from the prior year. Likewise, attrition rates continue to see improvement in the full year 2010 as they fell 5 percentage points to 11.9%.

During the quarter, we continued to benefit from attrition and cancellation fee collections. For adjusted Gaylord hotels collections totaled $2 million compared to $4.3 million in the same period last year. Adjusted hotels, attrition and cancellation fees for the full-year totaled $8.3 million, down from $20.6 million last year. Adjusted Gaylord hotels CCF increased 2.6% in the quarter to $37.3 million. And for the full-year adjusted CCF increased 5.6% to $166.9 million. As it relates to the corporate and other segment, consolidated cash flow in the quarter decreased $1.1 million to a loss of $12.5 million. And for the full-year corporate and other CCF decreased 12.8% to a loss of $49.6 million.

Turning to our Nashville restoration efforts. Our loss from continuing operations in the quarter included an expense of $5 million in casualty loss, which included $2.2 million in non-cash impairment expense, related to the write off of flood damage to assets. For the full year 2010, casualty loss expense as a result of the flooding, totaled $92.3 million which was partially offset by $50 million in insurance proceeds which was received earlier in the year.

During the quarter, we received a $36.5 million federal tax refund associated with the flood damage. For the full-year, total repair and remediation costs finished within the projected $215 million to $225 million range, and pre-opening costs at Opryland finished under the projected $57 million to $62 million range previously provided. The Company anticipates that the net -- that net of tax refunds, insurance proceeds in the projects planned prior to the flood, the net cash impact of the flood will be less than $150 million for the Company.

Moving on to a few balance sheet items. As of December 31, 2010, we had long-term debt outstanding of approximately $1.16 billion, and unrestricted cash of $124.4 million. As of the end of the year, we had $300 million of borrowing -- under our Company's credit facility. And the lending banks had issued $8.6 million in letters of credit which left $291.4 million of availability under our credit facility.

Finally, turning to guidance. As Colin stated, we are reiterating our consolidated 2011 full-year guidance for adjusted Gaylord Hotels as a RevPAR increase of 7.5% to 9.5%, and a total RevPAR increase of 6.5% to 8.5% year over year. Additionally, we are providing full year 2011 CCF guidance for adjusted Gaylord hotels of $178 million to $185 million. This number includes the impact of room renovations at Gaylord Palms and the Radisson and will result in 54,140 room nights being out of service for 2011. Again, please note that the numbers for adjusted Gaylord hotels exclude Gaylord Opryland, but include the Radisson Hotel in Nashville.

For the full year 2011, we expect RevPAR at Gaylord Opryland to increase 13% to 15%, and total RevPAR to increase by 9% to 11% year over year. Again, as a reminder, RevPAR and total RevPAR growth guidance for Gaylord Opryland is calculated based on 2010 partial year result, due to the closure associated with the May flood. We expect Gaylord Opryland to generate consolidated cash flow of $73 million to $77 million. The operating attraction segment to generate CCF of $12 million to $14 million. And the corporate and other segment to generate a CCF loss of $46 million to $48 million for total consolidated Company CCF guidance of $215 million to $230 million for the full year. With that, I will turn the call back over to Colin for any closing remarks.

Thank you, David, thank you.I don't think I will take people's time further for additional remarks. Why don't we just get straight into the questions, Melissa, maybe you could open up the line for those. Thank you.

Thank you. (Operator Instructions) David Katz of Jefferies.

Hello. Good morning, all. Two questions. One, it does look like the net definite room nights booked accelerated pretty nicely. I guess I wondered if that was contemplated in the guidance that you had out there previously? I guess I am trying to figure out if you are just being conservative by not raising guidance, or if you had really expected 41.2% increase in that definite room nights? And then I have one other question.

All right. Should we answer that question first then, before you had the one other question?

Well, the other question was really about your growth plans. I know Mark has been quite forthcoming about opportunities with other municipalities, et cetera, but if we could perhaps take it a step further and think about any capital recycling plans you may have, or other efforts to acquire hotels in retrofit, et cetera?That would be helpful also.

All right. Thank you. Let's talk about the first. One of the things we try not to do at this Company is put out aggressive guidance, and then find that we are adjusting it back. I think if you've followed the Company over the last five, six years when David was CFO and now Mark, we have tended to put out guidance and meet or exceed it the vast majority of the times. So when we did this, when we put the guidance in place in November, it was based on a good booking pipeline that we were negotiating in the October, November time frame.

But frankly, we were I think a little happy with the volume of business that we were able to certainly contract at Opryland in the December period of time, and to see the excitement that came from the opening, particularly all the meeting planners that we had at Opryland. So that is a wishy-washy way of saying, we are comfortable with our guidance if we continue to book business at the volumes that we booked business in in the fourth quarter. We expect 2011 and '12 to be very good years for our Company.

Do you want to add to that, David?

Yes, I would just add a little color to it to say, I think the thing we are seeing that we like to see is we are continuing to see improvements in the number of people per group who are traveling, so that attrition number that we saw really spike up in the recession, that continues to come down. The fourth quarter tends to be a difficult quarter for group travel because of the types of groups who travel. If you fast-forward into January and what we are seeing, we are seeing positive trends from a group perspective in terms of the numbers of people traveling.

And then we are also seeing, we've talked about rate pressure in the short term, and how does that change? We are starting to see that spot rate for very short-term meetings begin to improve, particularly in, I would say Orlando is the market that still is lagging the other three markets in terms of that spot rate improving.

And booking volumes, we are not seeing any decline in tentatives and prospect levels in --

That is correct, yes.

-- in the early part of this year, we experienced in the latter part of last.

In terms of growth plans, David, again, I will say to you this, we are very conscious of where cap rates currently sit, and as it relates to the recycling of capital. And we continue to pursue that. Now I'm distracted. We also continue to look at one or two assets that we think could fit our portfolio. The reality though, as you well know, is there is a lot of capital chasing this stuff. There's a lot of money sitting on the sidelines pursuing hotels. We are not going to overpay for anything.

And in terms of the community discussions we are having, this is something that we are doing aggressively. I have meetings this week where I am traveling to meet with a particular series of communities. This is something that our Company has on the front burner, and when we have something to announce on this, we will obviously do so. That is where we are. I am sorry to be wishy-washy on this, but it's very hard for us to signal precise work that is going on right now.

Okay, thank you very much.

Chris Woronka of Deutsche Bank.

Hello, good morning, guys. Congratulations on a nice re-launch in November. Can you tell us, entering 2011, how your rates for 2012 look maybe relative to where you were last year for '11, or even '09 for '10?

Yes. David or Mark, do one of you two want to handle that?

Yes. From the standpoint of where we were the same time prior-year rates, rates are essentially in line. If you look at them from the perspective of where we finished '10, rates for '11 are up mid- to high-single digits. Rates for '12 compared to where we finished '10, are up mid- to high-teens, over where we finished in '10.

Okay. Great. And then just in DC, can you maybe share with us how much of that 2010 business was booked during '09 or even '10. In other words, what wasn't on the books when it opened, and maybe how does that look for 2011?

You want national only?

Yes

Okay. If you look at what traveled in the fourth quarter of '10, 37% of the group rooms that traveled in the fourth quarter of '10 were booked in '10. If you look at what was booked during the recession that traveled in '10, in the fourth quarter of '10 for the national, that's 60% of the groups that traveled in the fourth quarter of '10 were booked during '09 and '10. Comparing that to what happened last year in '09, it's about 16 points higher of groups that traveled in fourth quarter of '10 that were booked during the recession, than traveled in '09 that were booked during the recession. Does that answer your question?

Yes, does some of that burn off in '11 for national?

Generally, yes. What we generally see as we go through these recessions is the longer-term rates tend to hold pretty well, and the short-term troughs and then comes back. So now we have come through the trough from a spot-rate perspective, and those groups that are booking short-term now will be booking at better rates than they booked in last year and the year before.

Okay. And then just, Colin, maybe your thoughts on strategically -- I know you are probably working on a lot of things with municipalities, and essentially with financial partners. How important is it that everything lines up at once, versus maybe you get a growth project here and then maybe you do some kind of financial transaction later?Does it all have to line up at once, or are you willing to cobble the pieces together?

No. The answer is, of course, it doesn't all have to line up at once. We are looking at each single deal based on its own merits. Obviously, one of the reasons we have been holding off on refinancing our balance sheet is because of, quite candidly, some of the discussions we've been having. Those two things intersect. But deal one versus deal two, these things are going to be judged on their merit. The only complicating part of it is making sure that the distribution strategy that we have, the ultimate distribution strategy that we have, plays into those decisions. So, as soon as we have something to talk about on one of these assets that we are looking at, or one of the deals that we are looking at, we will have something to say.

Okay, very good. Thanks.

Thanks a lot.

Patrick Scholes of FBR Capital Markets.

Hello, good morning.I wonder if you could just give a little more color on the Orlando market, and specifically your property. Not to dwell on negative here, but it does look like the Orlando market in the fourth quarter itself wasn't that bad, but the property did underperform. Maybe in that regard, can you give us a little color on how transient verse the group results at the Orlando property?

Sure, I will take it. So, if you look at the Orlando market, Orlando was a similar story to what I just described at the national. About 75% of the group business that traveled in the fourth quarter of '10 was booked in '09 or '10. And the other side of that equation is, because we knew we had some availability in the fourth quarter of 2010, we took an aggressive approach to fill the rooms with group business, and then fill transient on top of that. We ran a slight increase in transient this year versus last year. But we ran a significant increase from a group perspective really trying to drive volume. So that was really a strategy that we undertook.

We see Orlando strengthening. The supply is beginning to be absorbed there more effectively. The new Peabody hotel has now opened. There is nothing really new that is coming, so we see that market strengthening. And we also are reinvesting in that property this year with a rooms renovation program that we expect to complete late this year, very early in 2012.

We had a pretty good fourth quarter in room night bookings, right, Mark? Do you want to reference those?

Yes, from a bookings perspective, I have them right here in front of me. From a bookings perspective, the Palms did about -- let me make sure I have my numbers right here -- did about 170,000 room nights versus 150,000 room nights at the same time last year. So we are seeing a nice increase in production, lead volume there is strong. I was with a bunch of meeting planners late last week, and everyone is talking about Orlando as being a place they want to go again.

Great, gentlemen, I appreciate the call.

And that, by the way, is one of the reasons we are accelerating the capital program for this year, because of what we are seeing behind the veil here.

Great, thanks for the information.

Kevin Milota of JPMorgan.

Hello, guys. Two questions here. First being the renovations at the Palms and the Radisson, timing-wise how are we going to see that play out through the four quarters? And then secondly on the new development front. With a fairly healthy amount of capital out there and increased appetite for owned assets, have you guys thought about moving to the asset-light strategy? Something you've talked about over years past as a way to finance any potential new developments?

Kevin, good morning. In terms of the renovation, David, the schedule that we have is back-end loaded really more for 2011.

At the Palms. At The Palms you will see, really starting in the summer time, and peaking in the late third and early fourth quarter.

And the reason for that is simply that we are going to do that outside of the convention season in that hotel.

In terms of new development and a lot of money asset-light, the answer is, yes, of course. We are conscious of the amount of money sitting on the sidelines. We are receptive to joint venturing deals, and hopefully all of this will be reflected when we have something more to say.

Kevin, you asked about the Radisson. We didn't answer that part. The Radisson will be first quarter finishing mid to late second quarter.

Okay, very good, thank you.

Bill Crow of Raymond James.

Hello, good morning, guys. (inaudible), great job there for the team. Colin, help me understand. We are coming off a strange economic period. The of 0.8% growth in 2012 bookings versus where you were, I guess a year ago for '11, is that something we should be excited about? Is that something you would anticipate would be a normal level of growth?

Well, what I think we said was that right now we have 0.8 percentage points more on the books. What we haven't talked about is our rates. The other thing that, if you recall, what we signaled to you, to the shareholder community , I think it was back in November, it may have been August. But we said we are going to get a lot more aggressive in '12, '13 and '14 in terms of pricing. We have been consciously holding back some of the blocks of rooms in peak periods in this -- when I say holding it back, pricing them very aggressively and making sure that our salespeople either meet those prices if they are going to tie up those blocks, or hold those blocks back so we can sell into them in an improving economy.

So there's a number of things going on here right now, Bill, that we are very encouraged about, frankly. But I don't think you can just look at 0.8% more on the books and say -- is that good? You have to look at the rates side of this, and you have to look at the inquiries that we have currently for '12 versus where we sat a year ago for '11, two years ago for

What do those rates look like on what's booked so far for '12? Can you comment on that?

In terms of what we have on the books for '12, if you look at them compared to where we finished '10, we are mid- to high-teens growth in rate.

Okay.

In absolute dollars, in dollars, not percent.

In percentage growth.

Terrific. And then finally, Nashville. Radisson and the decision to put money into that versus whether that might be a candidate for divestiture at some point. Any thoughts there about the longer-term place that asset might have in your portfolio?

Well, one of the things that I think you'll understand, because you spend enough time with us looking at our Company, is you understand this enormous overflow that we push out around us. When we go to a new market, one of the big concerns we have is making sure there is enough small -- the mid-scale hotels around us to overflow into.

Radisson is one of those hotels here in Nashville. It plays an important role for the people that set up and tear down conventions. The people who don't want to pay Opryland prices. But on the other hand, if there is an opportunity to recycle the capitol and still have that asset play that role, we will obviously look at that. But we expect that hotel to show good growth in profitability here over the next two to three years. But in the scale of things, when you look at our P&L, it is inconsequential.

Okay. Thank you, guys.

Thank you.

Josh Attie of Citi.

Thanks, good morning. Some large competitive projects could come online in 2014 in Nashville with the Omni, and in Washington DC with the Marriott. Have you done any work to analyze what the impact of those properties could be on your business? And is there anything you could do in the interim to mitigate the impact of that supply?

Yes, Josh, good morning. The reality is that our hotel here in Nashville is one of one. There is really nothing that competes with it in this town, frankly. And really nothing competes with it until you get into maybe one, maybe two hotels in Atlanta, and one or two hotels in New Orleans.

We compete with 800-room hotels in basically every market we do business in. But frankly, that's not -- the way we look at an 800-room hotel that is a convention hotel that sits next to a convention center, we don't see that as a competitive threat. We wouldn't compare the 800, three or four 800-room hotels that we have within 15 miles of that Dallas hotel competitive to us. I think that hotel will be more competitive to the other hotels downtown, but I don't think it will be competitive to us here in Nashville.

In terms of the Marriott Convention Center Hotel in Washington, if you are a client who wants to stay at a convention center, that hotel will provide accommodation just like the other 10 hotels around it today. But the vast majority of people that we do business with don't want to stay in a convention center, they want an all-under-one-roof experience. And so, again, we don't look at that hotel as particularly competitive. So, the key for us is knowing who our customers are, and marketing to those people and providing them with the experience that we provide, and not slinging a net at every single customer out there, which we don't do. So, we are not overly worried about that.

Now, the good news is, is that's it. In an improving economy, you've just described the competitive change, which is very unusual. If you go back to previous recessions, and you look at what tends to happen two, three, four years after those in big cities, there is not a lot of new competitive supply that we are going to have to face, period, end of story.

Okay, thank you.

Will Marks of JMP Securities.

Hello, good morning. I had a question on Las Vegas, and just how that market is.Maybe an unbiased view of Las Vegas as a competitor, and is it becoming a bigger threat to your business?

Will, good morning. The answer to the question is this, again, we have talked about this a lot. You know we do a hell of a lot of research. We did more research in January, February of last year trying to understand where the meeting planner wants to go. What we saw was a slight decline in the desire to go to Las Vegas from where meeting planners were prior to this recession in '06, '07 and '08. Approximately 50% of these large groups want to go through Las Vegas. The other groups never want to go through Las Vegas, period, end of story. That's just the way the industry functions.

Yes, we've seen some craziness around pricing in Las Vegas. We've seen the Las Vegas casino operators as their levels of profitability have gone through the floor. We've seen a lot of crazy pricing occur there. But we haven't reacted to that crazy pricing. Hopefully, we expect some sanity to prevail in the convention side of the Las Vegas marketing here over the next one to two to three years or so. Hopefully, the niche demand and gaming demand into Las Vegas improves here as the economy naturally starts to improve.

So it's something that we put our fingers on the pulse on all the time. We look at Las Vegas as a potential market for us, and we watch what the competitors are doing in that market. But David, I don't think we have a huge issue in front of us in terms of selling to groups who are being offered crazy rates in Las Vegas. We don't see that influencing the amount of business we are contracting.

Agreed. I think we are pretty happy with where Las Vegas is and where it is going. If you look at the last two decades, a decade and a half, there has always been something new under construction, something new that Las Vegas had to talk about. There's nothing new in Las Vegas that's being planned right now. So the draw that meeting planners may have to say -- hey, let's go see the new fill-in-the-blank in Las Vegas, there really isn't such a thing right now because all the supply has been completed. Nobody has any major plans on the drawing board. As you think about the next two or three years for our business, we think and we are hearing from meeting planners, that Las Vegas is becoming less important as a draw then it was in the last three, four, or five years.

Okay, that's great. Thanks, Dave, thanks Colin.

Andrew Didora of Bank of America Merrill Lynch.

Hello, good morning, Colin, Dave and Mark. I just wanted to quickly touch upon Opryland for a second. I know it was open a relatively short time in the fourth quarter, but just curious to see if you guys have experienced any unexpected costs at the property? And more importantly, if there were any costs, do you expect any of those to trickle into 2011 at all?

Andrew, that's a real good question, and something that has obviously really caught the three of ours attention, our CFO Mark, and Dave and my attention to make sure that -- look, when you open these hotels -- because essentially that's what we did here, it's like a grand opening. When you do this, you want to make sure you do it in a flawless way, that every single meeting planner, every investor, every analyst, every banker that comes, sees this place in a flawless way. And that's what we did in November and December.

The crowds that we got, the local, the amount of people that got in cars to come to Opryland and drive through this place, was extraordinary. We paid several hundred thousand dollars in just costs to the local police to man the crossroads here so we could get traffic into this hotel. The amount of people we saw in this place was just extraordinary. So there is no question that -- in that fourth quarter in those reported numbers, there was a bunch of expenses in there for a lot of overtime for our people and security and just way finding in this hotel because of the crowds.

What our management was very confident of, was that this would be a short-lived phenomenon. We just looked at our results for the month of January for this hotel, and guess what, our margins are in real good shape. We've done very well in Opryland for the month of January. And I am convinced that Opryland will show very, very good performance through 2011 with no inherent cost issues coming out of this reopening.

And Dave, if you have anything you want to add to that?

No, I think that covers it succinctly.

Okay, that is great color, Colin, thank you.

Harry Curtis of Nomura.

Hello, Colin.

How are you doing?

I'm well, thank you. Quick question, actually two of them. You have some Board members with sharp pencils there. I'm just wondering, generally speaking, what they look to as a minimum return requirement for any new developments?

Well, you know we have a pretty sophisticated Board, and people, certainly several of them have been in and around the hospitality industry. Our return criteria starts with -- it has to be a minimum of 12 [unlevered] after-tax rate of return. That's what it has to be a minimum of. Frankly, we won't do a deal unless the numbers are above that handsomely. Quite frankly, Harry, the reason for this is that over the last two or three years, this industry has learned some very interesting lessons. Our Board members do have sharp pencils, as does this management team. And that's where we look to.

That's great, and the second question. If my numbers are reasonably accurate, they will generate somewhere around $100 million of free cash this year. You mentioned that you are holding off refinancing your balance sheet. What do you do with the cash this year?

Well, what we are going to do is, any free cash flow we generate, we are going to continue to delever until we have a deal that we can then cycle that money into. We believe over this next 12 months as we redo our facility mark, that our absolute rate of borrowing, the cost of borrowing will be attractive, and if we can generate the returns that I just, one of your questions, we should create a lot of value here. So that's how we think about it.

That's great, thanks.

Fred Lowrance of Avondale Partners.

Thanks, good morning, guys. Switching gears a little bit. Just wondering what you're seeing, if anything, in the form of rising food prices, and what you are doing about that?If it's something where you can use your leverage with vendors? Or if it is something where you are looking to have to pass that on to the end consumer? And what power you think you might have on that side to pass those higher prices along?

Yes, Fred, good morning, Colin. That is a very interesting question. In fact, last week at our Board meeting, we had a very lengthy presentation made by the head of procurement to our audit committee, talking about the strides we have taken to systemize through our business central procurement. One of the parts of this was comparing the increase in commodity prices over the course of the last 12 months, to the actual increases that we have seen in our procurement, the prices we've seen by, essentially, procuring and negotiating central pricing.

And the delta between the increase in commodity prices, and in fact, what we have been able to procure for over this last 12 months has been very, very impressive. So it's something that we absolutely sit on. One of the things that we don't intend to see. And let me sort of answer the question this way, Fred. At the end of the day, we don't intend to see margin erosion because of commodity increases, period.

All right, good. Helpful, thanks.

Thank you.

All right. Well, look. Thank you, everyone, for being on the call this morning. I was just going to make one last statement. Internally, one of the things that we have now said to ourselves is, no more references to the flood. That happened last year, it's behind us. We wish we hadn't have gone through it, but as a business, we did. We've learned from it, and we are a better company because of that. We are now very much focused on '11 and '12, and that's going to be the source of the communication with all of you. So, let's hope 2011 is an exciting year for all of us. Thank you very much indeed for being with us this morning.

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