Ryman Hospitality Properties Inc (RHP) 2011 Q4 法說會逐字稿

Welcome to the Gaylord Entertainment Company's fourth-quarter and fiscal year-end 2011 earnings conference call. Hosting the call today from Gaylord Entertainment are Mr. Colin Reed, Chairman and Chief Executive Officer; Mr. David Kloeppel, President and Chief Operating Officer; Mark Fioravanti, Executive Vice President and Chief Financial Officer; and Mr. Carter Todd, Executive Vice President and General Counsel.

This call will be available for digital replay. The number is 800-585-8367 and the replay ID number is 41188469. At this time, all participants have been placed on listen only mode and the floor will be open for your questions following the presentation.

It is now my pleasure to turn the floor over to Mr. Carter Todd. Sir, you may begin.

Thank you and good morning. My name is Carter Todd and I'm the General Counsel for Gaylord Entertainment Company. Thank you for joining us today on our fourth quarter 2011 earnings call.

You should be aware that this conference call, 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 and in our fourth quarter 2011 earnings release. And consequently, actual operations and results may differ materially from the results discussed or projected in the forward-looking statements. Gaylord Entertainment takes undertakes no obligation to update publicly any forward-looking statements whether as the 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 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.

Thanks, Carter. Good morning everyone and thank you for joining us today.

I will begin with a review of the year and the highlights of our fourth-quarter performance, and then focus on how we're thinking about our business for the rest of 2012. Then David Kloeppel will offer some color around our sales and marketing activities, and then Mark Fioravanti will conclude our prepared remarks by providing detail on our financial results for the year and the quarter. And then we will open up the call for questions.

2011 was an interesting but productive year for our Company. On the one hand, we saw consistently strong performances at two of our properties -- namely Gaylord Opryland and Gaylord Texan -- and both finished the year by achieving their best annual CCF performance on record. Conversely, market challenges in Washington, DC negatively impacted our results at Gaylord National. However, despite the economic challenges, our Company generated the highest CCF our Company has ever produced.

Over the course of 2011, we told you that based on the level of business we had on the books and the rate we had secured this business at, we were optimistic about the fourth-quarter and expected to end the year on a positive note. This was indeed the case, as we saw an increase of 10.4% for adjusted Gaylord Hotels RevPAR compared to the fourth quarter of last year, driven by an 8.7% increase in ADR. We also had a very impressive profitability performance, as CCF margin increased over 320 basis points on an adjusted Gaylord Hotels basis.

Alongside another set of strong performances from Gaylord Opryland and Gaylord Texan, the most notable driver of our results this quarter was the improved performance at Gaylord National. The property posted growth over the fourth quarter of last year across nearly every metric, including an eight-percentage-point increase in CCF margin. This was a result of our continued focus on managing cost as well as the impact of several premium association groups that traveled to the property in the fourth quarter.

Given the political stalemate in Washington, we don't expect the DC market to miraculously recover overnight. But we are encouraged by the hotel's direction heading into 2012.

We were also pleased with our fourth-quarter results at the Gaylord Palms in Orlando, where despite having nearly 18,000 room nights out of service in the fourth-quarter for renovation, we saw encouraging growth in ADR and revenue on a per occupied room basis. Overall, we're pretty excited about the prospects for Gaylord Palms as we move into 2012. We've completed the full renovation of nearly 80% of the rooms and guest corridors at the property, and last week our new sports bar opened its doors in time for its first major event, i.e. Sunday's Super Bowl.

The sports bar concept has been extremely popular and profitable at our other properties, and we believe the look and feel of this new venue at the Palms will be a homerun with meeting planners as well as group and leisure guests. Also, a new adult pool and events lawn are both open for business as well, as we will have a new fabulous children's pool complex open by early April.

We will renovate the remaining 300 rooms starting in April in order to minimize disruption to the high volume of group activity that travels through the property in the first quarter. These new offerings coupled with a solid volume of group business already on the books, gives us confidence that '12 will be a good year for the Palms.

Now regarding group sales, in the fourth quarter we booked just over 734,000 group room nights across the brand. Now, while that was down very slightly from the same period last year, it is important to note that the fourth quarter of '10 included a difficult comparison due to an abnormally high number of group room nights that were booked at the Gaylord Opryland following its re-opening.

Now, I'll let Dave give you some more color on the bookings in a moment. But let me say that while our bookings performance was good in the fourth quarter, it likely could have been even better if not for the pricing strategy that we're taking with bookings that we have articulated to you multiple times.

I would like to turn for a moment to the leisure side of our business where we've made some significant strides in 2011. First and foremost, I want to reiterate that we're not focusing any less on the group element of our business. This is our foundation and we continue to hear from the meeting planner community that the unique experience of our properties provide -- that the unique experience our properties provide makes them a destination of choice for the group leisure -- for the group traveler.

Just to remind you of a statistical fact that we have shared with you before, if you take the average square feet required by the average sized group and overlay that with the actual meeting space each of our hotels possesses, the maximum theoretical group occupancy we can generate in any given month is approximately 70 points. Our goal is to consistently be operating closer to the 80% mark and we know that to do that, we need to attract the high-quality leisure customer.

To this end, in 2011 we undertook a number of new initiatives across our properties to enhance their attractiveness to the leisure customer. For example, the Paradise Springs resort pool at Gaylord Texan successfully boosted the property's leisure room nights in its first full year of operation. And as I mentioned a moment ago, we have completed the first half of a similar attraction at the Gaylord Palms, with the remainder to be completed by April of this year.

As many of you know, we also introduced our DreamWorks Experience offering in 2011. This is a program that is unlike anything you'd typically see at our competitors and we started to see the benefits in the fourth quarter. The DreamWorks offerings generated approximately $7 million in incremental revenue across the November and December holiday season, driven by a year over year room rate lift of over $18.

This supports our conviction that this offering can be a differentiator in the minds of our leisure guests who are willing to pay a premium for this unique family-friendly experience. As this program gains momentum in 2012, we believe it will allow us to fill a greater portion of the holiday and summer periods that are traditionally slower and lower rated times for the group traveler.

We also announced this quarter that we have entered into a 50-50 joint venture with the Dollywood Company to develop a family entertainment snow and water park on land we own adjacent to the Gaylord Opryland here in Nashville. Because of the large economic impact this park will have on the broad Nashville community, we have asked the city and state for assistance from part of the incremental taxes we will be generating. Our half of the $50 million investment will be in the form of both land and less than $10 million in cash, which will be contributed mostly in 2013.

Dollywood is one of the premier theme park operators in the country, and of course Dolly herself is true entertainment royalty and revered across the world. So we are understandably excited about this partnership. We believe the development will make Gaylord Opryland and the city of Nashville as a whole exponentially more attractive from a tourism standpoint, which will translate into increased leisure customers for our businesses here in Nashville. We will keep you updated on the timing of this, but we currently are expecting an opening sometime in early 2014.

In the fourth quarter of last year, we also continue to make progress with our Aurora, Colorado project and have completed the City of Aurora portion of the incentive package. At this stage, we are now waiting on the remaining part of the incentive package, which is dependent on approval by the State of Colorado under their Regional Tourism Act. We anticipate hearing from the state sometime in April as to whether or not we've been successful.

We've also been approached by several parties throughout this process who have expressed interest in taking an equity position in the project. As our discussions evolve, we will keep you updated.

Okay, now let me switch gears altogether. And rather than wait for the question in the Q&A section, let me discuss our recent SEC filings, as I'm sure many of you have been following these developments.

As you will recall, in December of 2011, GAMCO Asset Management submitted a shareholder proposal requesting that we allow shareholders to vote whether or not to extend our shareholder rights plan that is currently in place and set to expire on August 12, 2012. Now GAMCO is a large, longtime and very respected shareholder of our Company and our board has agreed to put forth this resolution for a vote and has further agreed to be bound by the results of the vote.

Also, on January 13 we entered into an agreement with TRT Holdings, our largest shareholder and owner of approximately 22% of our Company, that stipulates that the shareholder vote will indeed be held on this issue. Now as part of that agreement, TRT has agreed to vote in support of our slate of directors, which includes the two TRT-appointed directors that currently serve on our Board. TRT has also agreed to refrain from initiating or proposing any shareholder proposals at the 2012 Annual Meeting.

And finally, as part of that agreement we have agreed to include TRT in any process that may result as we continue to pursue looking at ways to enhance shareholder value. We believe that these agreements are appropriate and gives all of our shareholders the opportunity to voice their opinion on these matters. Now, let me conclude by discussing our outlook as we enter 2012.

The facts are that, notwithstanding the economy and its impact on the group sector, our Company has never been stronger. We're coming off a record year in cash earnings per share with strengthening margin performance. We have a new, exciting leisure strategy to support our hospitality assets that are pretty spectacular and that are being supplemented with great attractions like new resort pools in two of the four hotels.

We have a pretty strong balance sheet that translates to very good coverage ratios, and we expect strong free cash flow to be generated this year. We have no debt maturities in sight; bank loans of an all-in cost of LIBOR plus 225 with plenty of undrawn capacity. And most importantly, our relationships with our customers and our STARS are stronger today than at any time in our history.

So, overall, we are very excited about this coming year. And if our elected officials in the nation's capitol are able to collaborate and fixed the ills that we witness daily, our business and industry will be a very exciting place indeed. Now based on all of this, we are reiterating our 2012 guidance we announced last quarter, which Mark will review in more detail.

And with that, let me hand over the call to David.

Thanks, Colin. Good morning everyone. I'm going to start by providing some detail on our sales performance in terms of advanced group bookings.

In the fourth quarter, Gaylord Hotels booked over 586,000 net room nights. While this was a decline compared to the fourth quarter of 2010, the fourth quarter of '10 was driven by pent-up demand that booked into Gaylord Opryland once it reopened.

Advanced group bookings at all four properties continue to improve compared to the challenging periods of '08 and '09. In fact, advanced group bookings for Gaylord Opryland in the fourth quarter 2011 represented a sizable increase over the fourth quarter of both '08 and '09.

Looking just at Gaylord Palms, Texan and National, fourth-quarter 2000 (sic) net advance group bookings were flat to the fourth quarter of 2010 and increased 30% relative to the bookings in the fourth quarters of both '08 and '09. So we remain confident that while the economic environment remains volatile, the pace of our defense bookings continues to move in the right direction.

Our fourth-quarter room night production this year also reflects our continued commitment to our strategy of aggressively pricing future periods that have historically seen the highest level of group demand, which Colin discussed. But to remind you, this strategy primarily affects the bookings in the longer-term demand periods. We are in the prime booking window for corporate groups and we are booking their shorter-term business at a rapid clip.

As evidence, the advance group room night that we booked in the fourth quarter of 2011 for groups that will arrive in the next 24 months, in other words in 2012 and 2013, increased by 13% when compared to that same 24 month booking window in the fourth quarter of 2010. In keeping with this pricing strategy I mentioned a moment ago, room rates for advance group bookings for periods beyond 24 months increased nearly 10% when compared to the fourth quarter of 2010.

For the full year of 2011, we booked over 1.4 million net advance group room nights across our hotels for all future periods. This represents a 9% increase over our net production in 2010. As of January 31, we have nearly 5 million net room nights on the books for all future years.

We entered 2012 in a solid position as it relates to advance group room nights on the books, and we have excellent group patterns available for in the year for the year business. Our lead volumes continued to improve, and as I already mentioned, we're seeing a lot of short-term corporate group business. As we move into this year, our continued focus on delivering unique and memorable service experiences to our guests, coupled with the investments we've made for both of our group and leisure guests, should translate into real revenue and CCF growth for us in 2012.

We continued to improve our ability to service both group and leisure guests once they arrive at our hotels. In fact, we finished 2011 with the highest level of guest satisfaction and meeting planner satisfaction that the brand has ever achieved. And this is a tremendous testimony to the commitment our STARS make each and every day to meet and exceed the expectations of our guests.

And with that, I want pass the call over to Mark.

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 will touch on our balance sheet and then review our guidance for 2012.

Remember that the results for both the fourth quarter and the full year of 2012 -- excuse me for the full year of 2010 were impacted by the temporary closure of Gaylord Opryland and other Nashville-based assets due to the flood damage suffered.

On a consolidated basis, Gaylord Entertainment revenue for the fourth quarter of 2011 was $269.4 million, an increase of 26.3% from the fourth quarter of 2010. For the year, revenue was $952.1 million, an increase of 23.7% from $770 million last year.

During the quarter, the Company generated income from continuing operations of $5.1 million or $0.10 per diluted share. This includes the impact of a nonrecurring, non-cash, pretax charge of $4.7 million or approximately $0.06 per diluted share after tax, to dispose of fixed assets related to the development of the new resort pools and the room renovation at Gaylord Palms. For the full year 2011, income from continuing operations was $10.1 million or $0.20 per diluted share. The full-year EPS includes an $8.2 million nonrecurring charge associated with the Palms assets.

Company consolidated cash flow was $59.6 million for the quarter, an increase of 116.3%. For the year, consolidated CCF was $217.2 million or an increase of 45.7% compared to 2010.

Turning to the Hotel segment for the fourth quarter, adjusted Gaylord Hotels RevPAR increased 10.4%, driven by an 8.7% increase in ADR, while total RevPAR increased 7%. For the full year 2011 RevPAR increased 3% while total RevPAR remained flat compared to prior year.

Adjusted Gaylord Hotels in the year, for the year cancellations in the quarter totaled 5743 room nights compared to 2603 room nights in the fourth quarter of 2010. Attrition rates fell 2.7 percentage points from 11.9% to 9.2% in the quarter. For the full year 2011 adjusted Gaylord Hotels in the year, for the year cancellations totaled 36,758 room nights, an 11.7% decrease from prior year. Likewise attrition rates improved in 2011 as they fell 1.2 percentage points to 10.7%.

During the quarter, adjusted Gaylord Hotels collected $2.8 million in attrition cancellation fees compared to $2 million for the same period last year. Adjusted Hotels attrition and cancellation fees for the full year totaled $7.6 million, down from $8.3 million last year.

Driven by strong margin improvement at Gaylord National and Gaylord Texan, adjusted Gaylord Hotels CCF increased 17.5% in the quarter to $43.8 million. For the full year, adjusted Gaylord Hotel CCF decreased 3.8% to $160.5 million.

In the fourth quarter of 2011 Gaylord Opryland generated $86 million -- generated revenue of $86 million and CCF of $23.4 million. This resulted in a CCF margin of 27.2% in the quarter. For the full year, the property generated revenue of $291.8 million and consolidated cash flow of $87.4 million, resulting in a CCF margin of 30%.

RevPAR for the full year increased 18.4%. Total RevPAR for the full year increased 18.5% compared to 2010.

The Opry and Attraction segment revenue increased 22% in the quarter to $17.3 million and CCF increased to $3.7 million. For the full year 2011, revenue increased (inaudible) $65.4 million as compared to $46.9 million for the prior year. For the full year of 2011 the segment's CCF increased to $14.5 million from $6.1 million in the prior year.

As it relates to the corporate and other segment, consolidated cash flow in the quarter totaled a loss of $11.4 million compared to a loss of $12.5 million in the prior year quarter. For the full year, corporate and other CCF improved $4.9 million to a loss of $44.7 million compared to a loss of $49.6 million in 2010.

Operating loss in CCF for 2010 included an approximate $2.8 million one-time non-cash charge to recognize compensation expense related to amendments to certain executives' restricted stock unit agreements.

Moving on to the balance sheet, as of December 31, we had long-term debt outstanding of approximately $1.070 billion and unrestricted cash of $44.4 million. Additionally, $325 million of borrowings remained undrawn under our credit facility, and the lending banks issued $8 million in letters of credit, leaving $317 million of availability under our credit facility.

And finally turning to guidance, as Colin stated, we are reiterating our consolidated 2012 full-year guidance for Gaylord Hotels as a RevPAR increase of 3% to 6% and a total RevPAR increase of 2% to 5% year over year. We expect Gaylord Hotels to generate consolidated cash flow of $265 million to $275 million, which includes 9529 room nights out of service due to the renovation of rooms at Gaylord Palms and a revised room count at Gaylord Opryland of 2882 rooms.

We expect the Opry and attraction segment to generate consolidated cash flow of $14 million to $16 million, and the corporate and other segment to generate the consolidated cash flow loss of $51 million to $48 million. On a consolidated basis, total Company CCF guidance calls for $228 million to $243 million in 2012. Additionally, we anticipate approximately $90 million to $100 million in capital expenditures during 2012.

As a result of refinancing of our credit facility in the summer of 2011, we anticipate full-year 2012 net interest expense of approximately $45 million to $50 million and free cash flow of approximately $95 million to $110 million. And with that, I will turn the call back over to Colin for any closing remarks.

Mark, thank you; David, thank you. Jackie, why don't we just open up the call for questions please?

(Operator instructions) Kevin Milota, JPMorgan

Hey, good morning guys. I'm hoping you can give some commentary or some firm numbers in terms of where you guys are standing at this point going through 2012 for the different properties, and if you can't go into detail on the properties, then maybe talk to the Palms, the National and then Companywide where occupancy stands?

When you say numbers, be more specific. What are you talking about?

Talking about -- typically you will provide where the amount of occupancy that you have on the books as you entered the year versus 2011 at this point.

Okay. Do you want to take that Mark?

Kevin, typically we don't provide it by property. We're entering the year with about 50 points of occupancy on the books in terms of entering '12.

Okay, and then last quarter you provided some detail on the Palms and the National effectively stating that you were ahead of schedule and ahead of pace at those properties. Any update on that front? (multiple speakers) I think it was 53 points and 50 points.

We entered the year, that trend has held up. Both the National and Palms have a little bit more than average number of points of occupancy on the books compared to the Texan and Opryland.

Okay, very good. Thanks guys.

Andrew Didora, BofA Merrill Lynch.

Good morning everyone. Just two questions. First, maybe if you could expand a little bit more commentary around DC, maybe tell big picture comments on the market. I know it is very, very early on in the year. But it just seems like RevPAR in DC is down about 80% thus far through January. Just kind of give us a little bit of sense on where National stands and your comfort around the property improving in 2012.

Do you want to take it or do you want me to take it? (multiple speakers)

You can take it. What I was going to say, though, is that generally speaking we feel pretty good about the outlook for 2012. As Mark sort of alluded to, we have a pretty good book of business.

We have made some operational changes at the hotel that is going to -- we'll continue to see margin improvement there, which we saw in the fourth quarter and we expect to see that through the course of this year. Dave, do you want to pick up and add some more color?

I would echo everything Colin said. We made a number of changes that really started at the end of the third quarter, middle to end of the third quarter operationally to improve margins there. We saw the benefit of those in the fourth quarter. We expect to see those going forward.

And the, as we kind of look at January, we feel comfortable about how January played out relative to expectations at that particular property. So you combine the good book of business on the books, the operational changes that we made, the sales team there is doing a great job selling the property, and really across the brand the sales team is doing a great job selling that property. So we feel good about it.

And whilst we don't dissect the business that we book month by month and quarter by quarter, I would say to you I think we're pretty comfortable with the volumes of business that we booked in the fourth quarter, and what we're seeing from a tentative and prospect perspective for National.

Yes, absolutely. The team is doing a really good job selling the National. They had a strong fourth-quarter and really finishing up on a strong year from a sales perspective.

Great. And I guess that will lead into my second question just regarding the margin side. Can you maybe provide a little more color in terms of some of the operational improvements at National? The margin growth was really strong in the fourth quarter, obviously. I'm just curious on how sustainable you think those operational improvements on margins can be.

So there's two big things that happened at the National in fourth quarter. One is we had a good book of business on -- and really the seasonality you are seeing this year at the National is really more customary to what we will expect going forward. The first couple of years' operations were unusual in terms of seasonality because of the way we sold it going into the opening.

That being said, we had a strong book of business. You saw a nice rate increase. That was in part because of the group business and in part because of the impact of the new transient offerings that we had there with the DreamWorks offering. So that was kind of one thing -- we had better business and we drove the margin.

Two, we made some pretty significant changes on the food and beverage side. And that was part of what I was referencing to you earlier that we did kind of mid to late third quarter. We made a number of changes around how those outlets are configured, and in fact we are closing one of those at what outlets and converting it to meeting space for 2012, which should be a net positive for that property.

As you know, we compete with about 50 food and beverage outlets across the street and in the neighborhood of National Harbor. So we decided we were over spec'd from a food and beverage perspective. We're closing one of those restaurants, converting it to meeting space to take advantage of the very strong local demand we have for meetings in that marketplace.

And that allows us to compress covers into the other outlets and creates great profit from an F&B perspective. So that was a big change that was a positive for us.

And then the team there, about midyear we brought in a new head of our Rooms division And she did a fantastic job really tightening down our processes there, and we're seeing the real benefits of that starting to play in. And those are probably the two biggest areas where we're seeing impacts.

That's great detail. Appreciate it. Thanks guys.

Bill Crow, Raymond James.

Good morning guys, two or three questions here. Colin or whoever wants to take this, are you seeing any impact yet from the pre-marketing of the new convention hotels slated for Nashville and DC? Is that impacting rates as you think out in 2014 and 2015?

The simple answer to the question is no. We work very collaboratively, particularly here in Nashville with the CVB and the new convention operation here downtown. We cite basically the same folks that are coming into look at the new convention center, and our volume of business continues to clip at the same level that we have historically seen, which I think is evidenced in the fact we booked almost 750,000 room nights for those four hotels.

So the simple answer to the question is no. Dave, have you got any other perspectives on that?

I think that's right on. Just remember, there was a new convention hotel that opened in Dallas this year. We have really seen no impact there, as you can see from the Texan's results.

Right, right. And speaking of Texan, my second question is just if you could give us some idea of the impact we should expect in the first quarter from the Super Bowl last year. No Super Bowl, this year -- so that we're not surprised when you report first-quarter results.

That's a good question.

The incremental room revenue I think was about $1.5 million from the Super Bowl, plus (multiple speakers) outside the room spend. (multiple speakers) corporate groups.

It's a $2 million or $3 million item for us.

And Colin, or Mark maybe, what do you see as the biggest risk to 2012 guidance? You've got half your occupancy, or 50% of your occupancy on books. What is the risk? Is it the outside of the room spend? Is it increased cancellations and attritions? Is it DC?

Look, it's -- I think we feel pretty good about the revenue side of the business. We've got some decent reach on the group side that we've got to fill, but our patterns for this year look really good compared to previous years. And we've got a new leisure strategy that is going to come this summer that we didn't have last summer.

But given what we've seen in the fourth quarter of last year when we started DreamWorks, we feel pretty good about that.

I think from for our Company's perspective, I think the risk to '12 is really things that are outside of our control. It's really more of this geopolitical BS that we endure on an hourly and daily basis. And if all of a sudden we see massive changes in federal spending that continue to dampen the Washington market, maybe that will have an impact on our business, but it will have an impact on everyone's business in that market.

But I just don't think that is going to happen here. We feel pretty good about our guidance. And we've got a reasonably wide range of 3% to 6%, but we feel pretty good about it. And we've got so many good things that are happening to our Company coming into this year that, as David articulated, we feel that our margin platform in Washington is in much better shape. Our leisure strategy is in great shape and a very good book of business.

We're seeing a lot of short-term corporate business that we hope to plug in. We feel very good about these -- this outlook for this year. And candidly, January has come in where we expected it and with zero surprises to us.

That's it for me, thank you.

Carlo Santarelli, Deutsche Bank.

Hey guys, thank you. Obviously fourth-quarter you guys showed some pretty good flow through. And I was just wondering if you believe that to be sustainable. And how should we be thinking about it for '12 and even '13? Thanks.

I think from a margin perspective, as we continue to see revenue lift we should continue to see good flow through. I think our guidance anticipates approximately a 100-basis-point improvement in overall margins. So we feel very good about how our operating teams managed margins through '11, and we continue to feel good about our ability to bring that revenue to the bottom line as we go through '12 and into '13.

Just to check back, I think you guys said $90 million to $100 million in CapEx. About how much of that will be Aurora?

It would be about $8 million to $10 million.

$8 million to $10 million. Thank you very much.

Patrick Scholes, FBR Capital Markets.

Hi good morning. Just a couple of questions here. Can you just remind us again? You talked in your press release about the pricing strategies for group bookings in the year 2015 and beyond. Is that again that you are just holding out for anticipation of higher pricing down the road rather than locking it in right now?

We've locked in higher prices. I mean, we are booking business in those periods. But we have changed our revenue model for those periods of time and we're holding firm to it.

Okay.

It is really -- it's a focus on the higher demand patterns is where we've moved pricing. Obviously that is the area where we think there will be the greatest lift. And frankly, should we find that we move through the period that we're not able to book at those higher prices, those are also the easiest patterns to sell in close or an in the year, for the year. And that helps mitigate any risk that we would have in terms of having open patterns.

Thank you for the color on that. And then just two questions here.

There's been some scuttlebutt in the press of late about potential slot machines in Prince George's County. As I recall, from a couple of years ago I don't think you were interested in gaming at your properties. Would you ever consider (inaudible) gaming if Prince George's County allowed it?

Scuttlebutt. (laughter) Let me say it this way. We are not going to have anything to say on this subject until the political leadership and the county has determined -- in the county and the state has determined what they feel is in the best interest of the county and the state.

Once they have -- we don't want to dabble in this process. We want these folks to do it and not feel any pressure from us one way, shape or form. Once it's done, whatever they decide to do, then we will consider what is best for the Company.

So it doesn't sound like you are outright opposed to it, but you will assess it as it progresses. Is that fair?

That's right, that's fair.

And then just lastly sort of a modeling question here. How should we think about the timing of rooms out of service for renovations this year?

They should be out -- completely finished by the second quarter, right? (multiple speakers) Yeah, we've got 300 more to do. They probably have better rooms and we'll be done. We're starting what April, early April?

Yes, it should all be done in April.

It will all be in the second quarter, yes.

Okay, great. Thank you. I appreciate it.

Will Marks, JMP Securities.

Thank you. Good morning Colin, Dave and Mark. The 50 points of occupancy that you mentioned that is on the books in one of the questions, can you give approximate rate versus last year? You probably said something in your prepared remarks, but --

In terms of what it's on the books at, if you look at it compared to where we finished '11 in terms of ADR, it is -- on average it's a mid-single-digit increase over where we finished. There's obviously some variation by property, where those properties that had less RevPAR growth last year have a bit more growth coming into this year.

And when would you say those 50 points were booked on average, in what years?

We don't have it handy. I can get it for you.

That's okay. Just -- another question on the margins, you talked a lot in the past and we understand that food and beverage is certainly much lower than room margin. Can you just give approximate figures?

Sure. Rooms typically in the mid-70%'s of margin, banquets typically in the 50%-ish range, F&B outlets in the 30% range.

Overall food and beverage in the early 40%'s.

Right. If you couldn't hear Colin, he said overall food and beverage in the low 40%'s.

And just my last question on -- talked a little bit about the competition potentially not impacting you in DC and Nashville or no impact to date. Can you maybe just briefly discuss your competitive advantage versus those projects?

Well, in Nashville our comparative advantage here is really more competitive advantage over not just Nashville but Atlanta and New Orleans. I mean there's no other hotel in the South and outside of Vegas that can offer multiple atriums all under one roof, consolidated experience.

The hotel that is being built downtown by our largest shareholder, Mr. Rowling, will be an 800-room facility. It will be approximately less than one-third the size of Opryland. And so the hotel we have here is just very, very different, and as evidenced by the tremendous result last year where we achieved almost $90 million of consolidated cash flow.

And so, to me, this hotel has a distinct competitive advantage over any hotel that we compete with in the South. And we think it's the same for these other facilities of ours. They are very unique. They're very different. They have extremely high levels of customer satisfaction and we're booking a lot of business.

And what we tend to see is when convention hotels get built around us, as has happened in downtown Dallas, the facilities there are very different. They -- yes, they have a lot of rooms. And yes, they sat next to a nice convention center, but for the all under one roof meeting planner, the hotels that we have are very, very exciting.

The key is that they're rooms to support the public convention Center. There's not a lot of incremental meeting space that is controlled by the hotel and is within the hotel. If you look at some of the primary research that we have done with groups and meeting planners, what you find is that it is a -- while there is obviously some overlap, it's a very different segment of customer that uses the public convention center than uses the facilities that we operate.

Our customers are typically a more premium customer looking for the inclusive experience that Colin mentioned, typically aren't as rate sensitive, looking for higher-quality food and beverage and typically have a lower space to room ratio. So it's a different segment of the business.

Okay, great. Thanks very much.

[Fred Varnes], Avondale Partners.

Hey, good morning guys. Thanks for taking my call. Just curious on a couple things related to DreamWorks. One, how that partnership performed in January when you're clearly not in sort of a peak leisure time, and maybe how your experience over the first three months of having this thing live up and running changed your outlook on sort of the financial contribution of the partnership, when you look out over the whole of 2012?

Okay. Do you want to handle the first part, Dave?

Sure. Good morning Fred. DreamWorks is an offering that is available at our hotels on -- primarily when families are out of school. So we'll have kind of a full-bore offering during the summer season. We'll have our full offering during the holiday season.

And then as we are in non-peak, as we call them, seasons, it will be an offering that is focused around kind of a special event weekend. So there was none of that in January. We did not have the DreamWorks offering during the month of January.

We have weekends at three of our properties during the month of February. We just launched those weekends last week in terms of marketing them, and the demand is picking up nicely for those weekends. So that's kind of how we are thinking about the DreamWorks programming.

As we mentioned on the call, we were pleased with the demand that it generated. We were pleased with the type of customer brought to us. It was a little bit more premium customer than what we've seen in the past, on average, than other holiday packages we sold or other non-holiday -- sorry, non-package holiday guests that we had seen. So I think we are optimistic about what it can do for us.

Fred, Colin, morning. I would also say that you know when you try marketing programs or you try new programs to generate business, often you go through it and you sort of think, that wasn't quite what we expected. This is actually quite different.

This relationship that we have built with DreamWorks and what we had put in -- impregnated into these hotels, this whole DreamWorks experience, it brought an extraordinary amount of life and happiness to these hotels through this period, through this holiday period. And we're quite excited about the potential for that for the summer months and also for the next holiday season towards November, December next year.

We're going to make some changes to the program. We learned a lot from this program. But by and large, when you put 50,000 people through a ShrekFeast in these four hotels, just breakfast is just where they meet and greet characters, and you see all these happy little kids, their faces, the customer satisfaction scores that we got from the DreamWorks verbatims coming back from the customers were very strong. And so we've learned a lot, but we're very excited about the future.

And sort of along those lines, Colin, my follow-up was going to be any sort of modifications that you are making to the sales and marketing process, whether it be -- maybe you are planning to take your leisure rates higher, maybe you can unbundle some of these offerings and try to capture more of the customers spend? Any sort of key modifications that you're going to make to that marketing effort?

Well, the answer is watch this space, because your two hypotheses, the answer will be yes and yes. We're going to unbundle some of this stuff and we are going to modify the marketing programs, because what we do, as you know, we obviously -- we track the effectiveness of each of the programs we put in. So we will be making audibles on these marketing programs, but we believe this is all going to be good for the overall direction of this particular relationship with DreamWorks.

All right, thank you.

And we're going to be sitting down with the folks -- I spoke to Mr. Katzenberg just after the Christmas period, and we talked a lot about how'd it gone and what we were doing. And we're going to have some more brainstorming with the folks at DreamWorks.

They're very, very supportive of what we are doing and they're very helpful on the creative side. So we're going to be doing that here, David, I think in the next two to three weeks. So, anyway, Fred, that is the answer to the question.

I think we will take one more question if we have one more question, Jackie. Otherwise, we will shut the call down and folks know how to get a hold of us here.

Chris Jones, Telsey Advisory Group

Good morning. Thank you for taking my question. Real quickly, just when you look at your guidance, as you mentioned, you said it's a fairly wide range. Could you possibly put some parameters as to what to you're signaling to the high-end and low-end of the range? You indicated 100 bips of margin improvement was in there. Maybe you could just talk a little bit around that. I appreciate it. Thank you.

I think at this stage our guidance is our guidance, and as we get through the first quarter we will give you a little bit more color on it. But right now I think it serves no purpose to try and dissect what we have said on this guidance.

Fair enough. Thank you.

Sorry about that. All right, Jackie, thank you. And shareholders, thank you, and analysts, thank you for taking interest in our Company this morning. Decent year; looking forward to a great 2012 and look forward to interacting with all of you over the next few months. Thank you very much.

Thank you. This concludes today's conference call. You may now disconnect.