UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): February 13, 2007 (February 13, 2007)

GAYLORD ENTERTAINMENT COMPANY

 

(Exact name of registrant as specified in its charter)

Delaware		1-13079		73-0664379
(State or other jurisdiction of incorporation)		(Commission File Number)		(I.R.S. Employer
				Identification No.)

One Gaylord Drive
Nashville, Tennessee		37214
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (615) 316-6000

(Former name or former address, if changed since last report)

     Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

	99.1			Press Release dated February 13, 2007.

SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

EXHIBIT 99.1

GAYLORD ENTERTAINMENT CO. REPORTS FOURTH QUARTER RESULTS

Gaylord Hotels Reports Strong RevPAR & Total RevPAR Growth

Gaylord National bookings near 900,000 room nights

NASHVILLE, Tenn. (February 13, 2007) — Gaylord Entertainment Co. (NYSE: GET) today reported its financial results for the fourth quarter of 2006.

For the fourth quarter and full year ended December 31, 2006:

	•		Consolidated revenue increased 8.4 percent to $239.3 million in the fourth quarter of 2006 from $220.6 million in the same period last year, led by strong revenue growth in the hospitality segment. For the full year 2006, consolidated revenue increased 9.4 percent to $947.9 million.
	•		Loss from continuing operations was $94.2 million, or a loss of $2.31 per share, compared to a loss from continuing operations of $13.2 million, or a loss of $0.33 per share in the prior-year quarter. The increase in the loss from continuing operations in the fourth quarter of 2006 is primarily due to impairment charges totaling $109.9 million incurred in the fourth quarter 2006, as a result of the Company’s assessment of the carrying value of ResortQuest goodwill and other long-lived assets for impairment.
	•		Hospitality segment revenue grew 10.0 percent to $180.5 million in the fourth quarter of 2006 compared to $164.1 million in the prior-year quarter. Hospitality revenue for the full year 2006 grew 11.9 percent to $645.4 million. Gaylord Hotels revenue per available room1 (“RevPAR”) and total revenue per available room2 (“Total RevPAR”) increased 7.6 percent and 10.7 percent, respectively, compared to the fourth quarter of 2005. For the full year 2006, Gaylord Hotels achieved RevPAR and Total RevPAR growth of 9.3 percent and 11.4 percent, respectively, compared to the prior year.
	•		Adjusted EBITDA3 was a negative $87.9 million in the fourth quarter of 2006 compared to $16.6 million in the prior-year quarter. The decrease in adjusted EBITDA is primarily due to the recognition of impairment charges in the fourth quarter of 2006.
	•		Consolidated Cash Flow4 (“CCF”) increased 17.9 percent to $28.4 million in the fourth quarter of 2006 compared to $24.1 million in the same period last year. CCF for the full year 2006 increased by 29.6 percent from 2005 to $161.6 million.

“2006 was yet another very successful year for Gaylord Entertainment, especially in our core hotel business where we achieved strong occupancy levels and a 20 percent increase in Consolidated Cash Flow,” said Colin V. Reed, chairman and chief executive officer of Gaylord Entertainment. “Our ability to continue performing year after year at these operating levels and delivering consistent growth underscores the underlying strength and awareness of our brand and of the service proposition we provide. In 2006, we continued to strengthen our relationships with meeting planners as we focus on loyal, high-value customers that book multi-year stays and rotate throughout our network.”

“We head into 2007 with a great amount of momentum,” continued Reed. “As we look to the future prospects of our business, we are quite pleased with the success we have had on a number of fronts. We continue to see a tremendous amount of demand for our hotels and service offerings, and have even had to turn away a significant amount of business. We have significantly strengthened our relationships with customers and meeting planners, who have become quite loyal to the Gaylord brand. Further, the progress we have made in Washington, D.C. and California has generated a positive response from meeting planners who eagerly await the completion of these projects. With all of these critical elements in place, the future of our business looks very attractive.”

Segment Operating Results

Hospitality

Key components of the Company’s hospitality segment performance in the fourth quarter and full year 2006 include:

	•		Gaylord Hotels’ RevPAR grew 7.6 percent compared to the prior-year quarter to reach $125.07. Gaylord Hotels' Total RevPAR grew 10.7 percent to $327.24 compared to $295.54 in the fourth quarter of 2005. For the full year 2006, Gaylord Hotels' RevPAR and Total RevPAR increased 9.3 percent and 11.4 percent, respectively, compared to 2005.
	•		Gaylord Hotels’ CCF increased 9.2 percent to $44.4 million in the fourth quarter of 2006 compared to $40.7 million in the same period last year. CCF margins for the hospitality segment decreased 17 basis points to 24.6 percent, driven by a lower CCF margin at Gaylord Opryland compared to the prior-year quarter. CCF for the full year 2006 increased 20.0 percent to $170.9 million, resulting in a CCF margin of 26.5 percent, an increase of 180 basis points compared to the prior year.
	•		Gaylord Hotels’ same-store net definite bookings for all future years, excluding Gaylord National, decreased 17.4 percent to 492,761 room nights booked in the fourth quarter of 2006. For the full year, Gaylord Hotels’ same-store net definite bookings decreased 6.9 percent to 1.3 million room nights. Fourth quarter and full year 2006 bookings reflect Opryland’s decision to

terminate 101,000 room nights related to below-market programs which is expected to create additional upside for the hotel in replacing those programs with higher-value business.

•

Gaylord National booked an additional 167,420 room nights in the fourth quarter of 2006, bringing National’s cumulative net definite room nights booked to 893,964.

“Our strategy to deliver the highest levels of customer service and our ability to provide customers with an all-under-one-roof offering is certainly paying off, as our hospitality business achieved another quarter and year of solid growth. We are pleased that meeting planners, convention customers and transient guests have all become strong supporters of our hotels, and have helped drive occupancy to 78 percent across the network in 2006,” continued Reed. “We are, however, disappointed by Opryland’s financial performance in the fourth quarter, which came in below our expectations with respect to managing labor costs. As we continue to invest in Opryland, we maintain a high expectation for the hotel’s operating performance and profitability going forward.”

At the property level, Gaylord Opryland generated revenue of $83.5 million in the fourth quarter of 2006, a 9.4 percent increase compared to the prior-year quarter. Full year 2006 revenue of $281.2 million represented a 17.9 percent increase over the full year 2005. Higher revenue in the fourth quarter was largely a result of higher occupancy levels, which rose to 85.2 percent, a 5.0 percentage point increase versus the prior-year quarter. RevPAR grew 11.0 percent to $133.89 compared to $120.60 in the same period last year, driven in part by a 4.5 percent increase in ADR (Average Daily Rate). A strong increase in outside-the-room revenue drove Total RevPAR to increase 11.3 percent to $326.82 in the fourth quarter of 2006. For the full year 2006, RevPAR and Total RevPAR increased 12.3 percent and 16.8 percent, respectively, compared to 2005. CCF decreased slightly in the fourth quarter of 2006 to $20.0 million, resulting in a CCF margin of 23.9 percent, a 249 basis point decrease versus the prior-year quarter. Full year 2006 CCF increased 29.0 percent to $70.8 million compared to $54.9 million in the prior year, resulting in a 216 basis point increase in the hotel’s CCF margin. Opryland’s financial performance in the fourth quarter of 2006 was negatively affected by higher labor expenses compared to the prior-year quarter. Fourth quarter 2006 operating statistics reflect 9,610 room nights out of available inventory due to the Opryland room renovation. Fourth quarter 2005 operating statistics reflect 5,240 room nights out of available inventory due to the hotel’s room renovations. In total, operating statistics for the full year 2006 reflect 20,048 room nights out of available inventory compared to 29,551 room nights out of available inventory in 2005.

Gaylord Palms posted revenue of $43.3 million in the fourth quarter of 2006, an increase of 8.8 percent compared to $39.8 million in the prior-year quarter. For the full year 2006, the hotel’s revenue increased 6.7 percent to $176.6 million. Gaylord Palms experienced a 2.1 percentage point decrease in occupancy in the fourth quarter of 2006 which was entirely offset by a 4.7 percent increase in ADR compared to the

prior-year quarter. This drove the hotel’s RevPAR to increase marginally to $119.22 compared to $117.57 in the same period last year. For the full year 2006, RevPAR increased 7.2 percent to $135.42 and Total RevPAR increased 6.7 percent to $344.19. CCF increased to $9.3 million compared to $8.5 million in the prior-year quarter, resulting in a CCF margin of 21.5 percent, flat to the prior-year quarter. The hotel’s profitability in the fourth quarter of 2006 was negatively affected by increased investment in the hotel’s holiday attractions.

Gaylord Texan revenue increased 11.2 percent to $51.3 million in the fourth quarter of 2006, compared to $46.2 million in the prior-year quarter. For the full year 2006, the hotel’s revenue increased 8.3 percent to $178.6 million compared to $165.0 million in 2005. RevPAR in the fourth quarter increased 6.1 percent to $124.48, driven by a 2.9 percentage point increase in occupancy and a 2.0 percent increase in ADR compared to the same period last year. For the full year 2006, RevPAR and Total RevPAR increased 6.3 percent and 8.3 percent, respectively. CCF increased 26.9 percent to $13.9 million in the fourth quarter of 2006, resulting in a 27.1 percent CCF margin. The 334 basis point increase in the hotel’s CCF margin compared to the prior-year quarter was driven by strong profitability in all operating departments and lower utility expenses compared to the same period last year. Full year 2006 CCF increased 19.3 percent to $47.3 million, resulting in a 246 basis point increase in the hotel’s CCF margin.

Development Update

Significant progress continues to be made on the 2,000-room Gaylord National in Prince George’s County. The Company adjusted the project’s construction schedule and now intends to open the entire 2,000-room resort at the end of the first quarter of 2008. To date, approximately 95.0 percent of the general contractor’s scope of work, including construction materials, has been bought and is under contract. The Company also revised its estimate for the cost of the National to approximately $870.0 million (excluding capitalized interest and pre-opening expenses) to reflect the higher costs of construction in the market due in large part to a competitive labor market. The Company spent an additional $88.4 million in construction costs on the project in the fourth quarter of 2006, bringing capital expenditures to date to $262.0 million.

The National’s bookings continue to increase with an additional 167,420 room nights booked in the fourth quarter, bringing the cumulative number of net definite room nights for the property to 893,964. The Company is continuing its planning efforts with the Unified Port of San Diego and the City of Chula Vista to build a world-class convention hotel on the San Diego bayfront.

“Our expansion plans remain on track and we are excited to extend the Gaylord brand to additional locations in Prince George’s County, Maryland, and to Chula Vista on the San Diego bayfront,” said Reed. “The property that we are building in Prince George’s County will be the best convention hotel on

the East Coast. Our planned 500-room expansion of the hotel was well received by meeting planners this year, and advanced bookings for the hotel continue to underscore the market’s confidence in the Gaylord brand and our ability to attract high-quality customers to new markets.”

ResortQuest

ResortQuest revenue from continuing operations was $40.2 million in the fourth quarter of 2006, a decrease of 1.1 percent compared to the prior-year quarter. For the full year 2006, the segment’s revenue increased 1.6 percent to $225.7 million compared to the prior year. ResortQuest CCF loss was $8.1 million in the fourth quarter of 2006, a 2.7 percent increase over the prior-year quarter’s CCF loss of $7.9 million. For the full year 2006, ResortQuest CCF increased 91.8 percent to $17.4 million compared to the prior year, primarily due to $4.9 million received in connection with the Company’s settlement of certain business interruption insurance claims and a $5.4 million gain on the collection of a note receivable previously considered to be uncollectible. In the fourth quarter of 2006, ResortQuest RevPAR increased 6.1 percent to $56.98 compared to $53.68 in the prior-year quarter, driven entirely by a 13.7 percent increase in ADR across the network. The Hawaii and ski markets performed well in the fourth quarter of 2006; however, the Florida and Gulf Coast markets continue to suffer from both the reticence of travelers to vacation in areas affected by the 2004 and 2005 hurricane seasons and from the cyclical downturn in the real estate market. In the fourth quarter of 2006, ResortQuest had 14,530 units under exclusive management, excluding units reflected in discontinued operations.

“ResortQuest performance for the fourth quarter was in-line with our expectations,” said Reed. “We continue to explore opportunities to maximize the value of this business for our shareholders. As part of our evaluation of the ResortQuest business, we recorded impairment charges in the fourth quarter.”

In accordance with SFAS No. 142 and SFAS No. 144, the Company recorded $109.9 million in impairment charges to write down the carrying value of the trade name, goodwill, and certain other assets related to its ResortQuest business to the fair value of these assets.

Opry and Attractions

Opry and Attractions segment revenue increased 17.1 percent to $18.5 million in the fourth quarter of 2006. Full year 2006 revenue increased 14.1 percent to $76.6 million. The segment’s CCF increased 92.4 percent to $3.3 million in the fourth quarter of 2006 from $1.7 million in the prior-year quarter. CCF for the full year 2006 increased 54.6 percent to $10.9 million compared to $7.0 million in 2005.

“The Opry’s performance this quarter again highlights the strength of this iconic brand,” said Reed. “Our strategy to continue expanding the Opry’s reach and to pursue additional merchandising opportunities will increase the Opry’s appeal to new audiences and position the brand for continued growth.”