Ryman Hospitality Properties, Inc. (RHP) Q4 2012 Earnings Report, Transcript and Summary

Welcome to the Ryman Hospitality Properties, Inc. Fourth Quarter 2012 Earnings Conference Call. Hosting the call today from Ryman Hospitality Properties are Mr. Colin Reed, Chairman and Chief Executive Officer; Mr. Mark Fioravanti, Executive Vice President and Chief Financial Officer; and Mr. Scott Lynn, Senior Vice President and General Counsel. This call will be available for digital replay. The number is (800) 585-8367 and the conference ID number is 87704685. [Operator Instructions] It is now my pleasure to turn the floor over to Mr. Scott Lynn. Sir, you may begin.

Good morning. Thank you for joining us today for the company's fourth quarter 2012 earnings call. This call may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements about the company's expected future financial performance. Any statements we make during this call that are not statements of historical fact may be deemed to be forward-looking statements. Words such as believes, plans, expects and similar words are intended to identify forward-looking statements. These forward-looking statements may be affected by many factors, including those listed in the company's filings with the Securities and Exchange Commission and in today's earnings release. As a result, the company's actual results may differ materially from the results we discuss or project in the forward-looking statements. We do not undertake any obligation to publicly update any forward-looking statements, whether as a result of new information, future events or any other reasons. In the call today, we will also discuss non-GAAP financial measures. A reconciliation of each non-GAAP measure to the most comparable GAAP measure is included as an exhibit to today's earnings release and is also available on the company's website. I will now turn the call over to the company's Chief Executive Officer, President and Chairman, Colin Reed.

Thank you, Scott. Good morning, everyone, and thank you for joining us today. I will start with the highlights of the year and the fourth quarter, and then I will provide you all with an update on the Marriott transition, and then Mark will provide additional color on our financial performance and then we'll take a few questions. As many of you know, we will be hosting our Investor and Analyst Day this Friday at the Gaylord National property, where we will go into a lot more detail about how we see our business evolving over the course of 2013. So as a result, our prepared remarks today will be briefer than normal, and we will keep question time short for the same reason. Clearly, 2012 was a year of enormous change for our company. As you know, at the end of May, we announced that, following an extensive due diligence process, we will be converting the company to a real estate investment trust and transferring the management of our hotel properties to Marriott International. Since that time, we've been focused on ensuring we meet all the legal and regulatory requirements to become a REIT, effective January 1, rightsizing our corporate structure and systems, working with the Marriott team to complete the transition at the property level, as well as securing your approval as owners. While exhaustive, we are pleased with how this entire process has unfolded. Now, there's still a tremendous amount of work left to be completed, but we're satisfied with where we are at and what has been accomplished. It is a true testament to the effort of the Marriott team, the associates at our hotel and our own Ryman team that such a broad and challenging undertaking has been managed as well as it has. We knew, however, that there would be a significant degree of disruption to our business as we move through the transition, which did have an impact on our performance in the back half of the year. The magnitude of the transformation was enormous and touched all parts of our business. We've essentially blown all of our corporate support services platforms up, including technology, accounting, human resources and the like, and rebuilt a new leaner version, and at all of our hotels, new systems have been installed or some of them are about to be installed. Now over the years, we have talked about organizational culture as a driver of competitive advantage. And as you can appreciate, our strategic shift caused a ton of distress for the psyche of our workforce. But the goal line is in sight, and we have arrived at this point intact and ready for an exciting future, notwithstanding the fact that we have disrupted a lot of folks' lives along the way. In spite of these multiple distractions, overall our business performed as we expected in the fourth quarter, from both a top and bottom line perspective. From a profitability standpoint, when you adjust for the roughly $31 million REIT conversion costs and $5 million of base management fees this quarter, our CCF was ahead of our fourth quarter of last year. This was also against a backdrop of what was a very strong CCF performance in the fourth quarter of 2011, and a record CCF year overall. RevPAR was also flat compared to last year, although we saw a minor decrease in total RevPAR as a result of the decline in outside-of-the-room spend, which was partially driven by a less favorable group room night mix, as we adjusted to fill some of the Hurricane Sandy cancellations. Adjusting for the impact of REIT conversion costs and base management fees, our fourth quarter results brought us within the upper end of our 2012 guidance range for CCF and very close to our RevPAR and total RevPAR guidance. Now we've explained to you in the past, one area where the level of distraction associated with the transition has been felt most acutely is in the psyche of our sales team, who have been understandably focused on the future of their own jobs as the Gaylord organization is being integrated with Marriott. Now with that said, given the circumstances, we felt our room night production in the fourth quarter was extremely solid. Though, for clear reasons, marginally down on the same period last year. However, for the full year of 2012, we booked 1.94 million gross room nights, which was an increase over our impressive 2011 volumes. Now, I know many of you are eager to hear an update on what we are seeing in terms of hotel level and corporate synergies, and what we're expecting regarding revenue enhancements as a clearer picture begins to emerge post-transition. We'll be providing you additional detail concerning these items on Friday at our Investor and Analyst Day in Washington. But what we can tell you is that the transition continues to be smooth and pretty much in line with the way we expected it to be. Now given our strong balance sheet and the profit dynamic of our company, in December, we announced our dividend policy, where we plan to pay, at a minimum, a quarterly cash dividend to shareholders an amount equal to at least 50% of adjusted funds from operations, known as AFFO, or 100% of REIT taxable income, whichever is the greater. In addition, we also communicated that our board authorized a share repurchase program for up to $100 million of the company's common stock. Now we announced these efforts to provide clarity on how we view capital deployment and ensure shareholders that our focus is to maximize shareholder value. Now, we're going to provide more specifics around dividend expectations and how we're thinking about '13 guidance when we are together on Friday. This is the second time in a decade that we have reinvented this company. We spent the last 10 years creating a brand with a tremendous amount of value. And we were able to monetize the brand through the REIT conversion process. Our management agreements with Marriott allow us to eliminate a lot of cost in our business, as well as providing new revenue-enhancing channels. We have emerged as an enterprise with the ability to generate strong free cash flow, a lean cost structure, an enviable balance sheet and a shareholder-focused capital deployment strategy. Whilst this past year has been difficult in many ways, I'm very confident in the direction we are heading and excited about the growth prospects ahead. Now, one investor asked me the question earlier this morning about why no guidance in this call, and I just -- there's no mystery here. I just want to explain to you all very quickly the process. On Thursday, in Washington, we'll be holding our regularly scheduled board meeting. We do this, this time of the year and we've done it this way for the last 10 years. And we'll be having our board approve our first annual plan as a REIT that has been recently submitted to us by Marriott. This will, of course, set the parameters for our guidance that we'll be sharing with you on Friday, that I've already said earlier. We'll also be discussing with you our dividend policy for the first quarter and we will -- I'm confident that we'll be expressing to you a specific dollar sum, as well as direction for the year, which we will also discuss in great detail. So I look forward to meeting with many of you on Thursday evening and Friday in Washington. And we can then talk about the whole story and how excited we are about the future. And with that, let me hand over to Mark to give you a little bit of color on the financials. Mark?

Thank you, Colin. Good morning, everyone. I'll spend a few minutes this morning reviewing the financial highlights for the quarter and the year and then just touch on the balance sheet. Before we discuss the quarterly performance. I do call your attention to the fact that at the beginning of the fourth quarter of 2012, retail operations at Opryland, the Gaylord Texan and the Gaylord National were outsourced to a third party retailer. And as a result, the company received lease payments rather than full retail revenue and associated expense, thus lowering revenues on a consolidated basis in -- for each affected property. For comparability, we've adjusted the prior year period to reflect the elimination of retail revenues that were outsourced in 2012. The Gaylord Palms was already operating under an outsourced retail model, so there are no adjustments made to the Palm's retail revenues. On a consolidated basis, Ryman Hospitality Properties' revenues for the fourth quarter of 2012 was $266.3 million, slightly ahead of the adjusted prior year quarter. For the full year 2012, consolidated revenue was $986.6 million, an increase of 4% over the adjusted prior year period. During the fourth quarter, the company generated a loss from continuing operations of $14.9 million or $0.32 per fully diluted share. This loss includes the impact of $44.2 million in pre-tax expenses related to the company's conversion to a real estate investment trust and the impact of a of $20 million pre-tax gain on the sale of the Gaylord Hotels brand rights to Marriott. For the full year 2012, loss from continuing operations, including $102 million of pre-tax REIT conversion costs, was $26.6 million or $0.56 per fully diluted share. Company consolidated cash flow, excluding cash-based REIT conversion costs and base management fees, was $63 million for the quarter, an increase of 5.7% versus the prior year quarter CCF of $59.6 million. Full year consolidated CCF, excluding cash-based conversion costs and base management fees, was $243 million, an increase of 11.9% compared to last year. Turning to the Hotel segment, Gaylord Hotels' RevPAR declined slightly to $123.40 in the fourth quarter of 2012 compared to the prior year quarter. After adjusting the prior year quarter for the elimination of retail revenue, total RevPAR for the fourth quarter of 2012 declined 2%. For the full year 2012, RevPAR increased 2.5% to $123.81, while total RevPAR increased 2.3% to $310.21. Gaylord Hotels in-the-year, for-the-year cancellations in the quarter totaled 17,416 room nights, compared to 9,738 room nights in the fourth quarter of 2011. As Colin mentioned, this increase was attributable to the cancelations associated with Hurricane Sandy. Attrition rates in the quarter increased 3.6 percentage points to 12.5% versus prior year quarter. For the full year 2012, Gaylord Hotels in-the-year, for-the-year cancellations totaled 63,142 room nights, including 8,397 room nights associated with Hurricane Sandy, representing a 6% decline from prior year. Likewise, attrition rates improved in 2012 as they fell 40 basis points to 8.3%. During the quarter, Gaylord Hotels collected $1.9 million in attrition and cancellation fees, compared to $3.3 million for the same period last year. Attrition and cancellation fees for the full year totaled $6.4 million, down from $9.2 million last year. Hospitality segment CCF, excluding property-level conversion costs and base management fees, increased slightly in the quarter to $67.8 million and CCF margin was flat. For the full year, Hospitality segment CCF increased 8.8% to $270.2 million, excluding base management fees and property-level conversion costs. The Opry and Attractions segment CCF increased 16.2% to $4.3 million after excluding REIT conversion costs. And adjusted for conversion costs, the Opry and Attractions segment generated $18.5 million of consolidated cash flow in 2012, representing its best performance on record. In the fourth quarter, the company began to realize some of the cost benefits of a smaller corporate organization, as the Corporate and Other segment CCF, excluding conversion costs, improved $2.4 million or 20%, to a loss of $9.1 million compared to the prior year quarter. For the full year, excluding conversion costs, Corporate and Other segment CCF loss increased slightly to $44.9 million compared to prior year. During the fourth quarter of 2012, the company incurred $44.2 million of costs associated with REIT conversion activities, including noncash impairment charges of $12 million, professional fees of $2.7 million, employment and severance costs of $14.3 million and various other costs totaling $15.2 million. For the full year 2012, the company incurred approximately $102 million in costs related to the REIT conversion. Excluding the noncash impairment cost and stock option expense related to conversion, the company incurred $31.2 million and $67.9 million in REIT conversion costs during the fourth quarter and full year, respectively. During the quarter, in connection with its plans to qualify as a REIT for federal income tax purposes, the company paid a special dividend in the amount of $6.84 per share of common stock or an aggregate amount of $3 -- or $309.8 million. Based on shareholder election, the dividend was paid in cash and shares or shares of common stock. The company paid an aggregate of approximately $62 million and issued approximately 6.7 million shares. Moving on to the balance sheet. As of December 31, we had long-term debt outstanding of approximately $1,032,000,000 and unrestricted cash of $97.2 million. Additionally, $380 million of borrowings remain undrawn under our credit facility and the lending banks issued $8 million in letters of credit, leaving $372 million of availability under our credit facility. On January 17, 2013, the company redeemed its remaining 6.75% senior notes at par, at a cost of approximately $152.2 million, using operational cash flow and its revolving credit line. This action will result in an interest expense savings of approximately $6.8 million annually. And with that, I'll turn the call back over to Colin for any closing remarks.

Yes, Mark, let me just go off script for a second. I was asked the other day by one of the analysts, how does this exercise that we've been through here -- this process that we've been through, compare to the flood, the challenge we had when Nashville was flooded back 2, 2.5 years ago, and [Audio Gap] I would say through the flood was a breeze. What we've been up to with Marriott, I don't think it's been done before, in certainly, in the last 10 years in this industry, converting 4 massive cities from one organization to another. Just to give you an example, Opryland has 17 discrete food and beverage outlets, 9,000 employees, but we're almost done. The heavy lifting part of this is behind us and all that remains to be done now are some -- the completion of some of the large technology systems. But the reality is this, in 2013, as I've said earlier, will be a record year for us. The cost synergies that we have laid out, I'm confident that they will be accomplished, and I'm confident that we're going to generate very substantial free cash flow. We've got an awesome balance sheet. And as some of you know or maybe all of you know, we've recently just got a 3 grade up -- 3-notch upgrade from Standard & Poor's. And our dividend that we'll be discussing on Friday, the reality is that it will be one of the best in this segment, if not the best. And for the foreseeable future, the remainder of our free cash flow is going to be used to repurchase stock because the belief of this management team and our board is that this company is trading below its true value. So that's it. We look forward to being with you all on Friday, those of you who're going to be there and those who're going to be on the phone. And with that, Jackie, we'll take a couple of questions and hear what the folks have to say.

[Operator Instructions] Your first question comes from the line of Eli Hackel with Goldman Sachs.

2 questions, both related to the transition, a little bit. Is it possible -- and I know there was a lot of disruption given the changeover, but maybe talk about how bookings went through the quarter as you got a little bit further away from the transition, and if this, once the sales force was in place, if bookings improved? And then second, and in -- just in the last quarter, sort of maybe what you saw, at least your initial views, on the transient guests running through the Marriott system, obviously it's a limited time line, but any thoughts around the transient guests coming to some of the Gaylord properties now would be very helpful.

Yes, Colin. I'll let Mark and Patrick jump in on some of this. But let me just sort of give you my view of this. So October, we had decent production. November, I would say decent production. And we had a very good December production. We generated, I would say, what, 450,000-ish room nights, Mark, for December. You've got the detail in front of you, right?

I've got it, and we have it quarterly here.

No. But I know we booked 6 gross, 600. The other thing that I would tell you that we were going to talk about on Friday, but I'll -- given the fact that everybody is here and this is not selective disclosure, we booked twice as many room nights in January as we did last January. And we booked 125,000 group room nights in January, which is normally a very low production month, particularly when we come off a very strong December. And the other thing that's encouraging is we looked week by week at our Ts and Ps, our tentatives and prospects. And the tentatives is where we issue contracts to customers or should say, now Marriott issues contracts to customers, and our tentative reservoir looks very healthy as well. So out of those 120,000-ish room nights we generated in January, I think 50,000 of those, Patrick, were for 2013. So we saw very healthy in-the-year, for-the-year production in January. So that's the first part, I don't know whether Mark or Patrick, you want to add to that?

I think -- the only thing I would add to that is that from a transition perspective, we're in the process right now of moving our sales platform over to CITY, and that will occur in February and March. And so once we get past March, so the sales forces will be fully integrated.

Yes, we -- just on the Palms, and that went pretty well, I think.

Yes.

Yes. On transient, Patrick, maybe because you've got your finger on this pulse, but the bottom line is our transient bookings are pacing ahead of where we -- where they were last year. And remember, we only completed the Marriott front desk integration at Opryland, what, in the last 2 to 3 weeks, Patrick.

That's correct.

Yes. So talk a little bit about the transient, what we're seeing on transient.

Yes. Thank you, Colin. This is Patrick. Just to expand on Colin's point, we are seeing some positive signs on the transient side. We're seeing Marriott rewards customers starting to book into the hotel. And from a transient perspective, we are seeing some good signs, especially at Gaylord National and some of the others, as the transient customer is coming to us through new and different channels than what they've historically come through to Gaylord. So really some positive signs early on. And we continue to look through the future and see if those continue, but we're confident that they will.

Your next question comes from the line of Jeff Donnelly with Wells Fargo.

Colin, I'm curious maybe just to build on Eli's earlier question. Does the strong production you referenced in January, lead you to feel that the bumps in the road with the transition in sales force to Marriott are behind you at this point?

I feel -- look, the truth of the matter is, this is going to take probably 6 months of loving and kissing and nurturing for us to have it behind us. And -- but what we are seeing is we're seeing decent production in an economically-challenged time. I mean, look, we all know government business in this country is not where it was a year ago for all the reasons that we don't need to discuss. But it's reasonably healthy, what we're seeing right now. And we are mildly encouraged by the booking volumes that we saw in December and January.

Jeff, this is Patrick. The only thing I'd add to what Colin said is, as Mark mentioned, we do have the CITY, which is the sale system migration that will be occurring in the next couple of months. And so our -- the effort for the past few months has been to make sure that we have a plan that creates redundancy and overlap so that we can offset and mitigate, as much as possible, any disruption that, that system conversion and that process conversion will create. And so yes, we do see some disruption, but we're doing everything within our power to try and mitigate it as much as possible.

What we don't know though, at this moment, as all of these folks from our company from old Gaylord go through this training for this new system that will take the place of Daylight, what we don't know is how much of that training will take folks away from the actual sales process. And we're optimistic that isn't going to materially affect our production here over the next 1 to 2 months, but we've got to get this -- Marriott wants to get this and we want it to be done, this CITY transformation, quickly and -- but the signs are reasonably encouraging at this moment.

And just actually 2 follow-ups, maybe more of a housekeeping nature. The first, I guess, maybe for Mark is, can you tell us what the full year impact would have been if the retail was outsourced for 2012?

Yes. Well you mean in revenue or profitability? Sure, you mean profit right?

I guess either or, retail or EBITDA. I'm just curious what the run rate might be for that.

Well, the -- when we -- when Marriott brought to us this whole travel traders outsourcing hypothesis and sat down with the 3 of us, the hypothesis was that it was going to generate an extra $1 million-plus a year and most of that was elimination of cost. And so it was economically a good thing.

Yes, I mean, if you annualize adjustments, it's about $12 million.

Of revenue.

Of revenue.

Yes.

Right. It is -- right, the profitability is , if you will, lost because of the shift. But, as you mentioned, the thinking that this was done to grow that profit over time, not to -- not for REIT reasons, not for REIT compliance reasons?

No, no. This was --

No, no. This was purely a profitability. No, no we don't do anything for -- I mean, we do -- we obviously want to make sure that we maintain our REIT status, but the actions that have been taken in these hotels are to generate incremental profitability.

Yes, Jeff, we had already moved the Palms to an outsourced model, and we were in the process of the brand, looking at this across all the hotels. So it was strictly an operational decision to enhance the profitability of the property.

And just a last question maybe for you, Mark, is more of a definitional question concerning the dividend. I think you had said it would be a minimum of 50% of AFFO and it's a term you guys have defined. Can you tell us how you're defining that? Is that sort of traditional near-REIT [ph] FFO less CapEx and noncash items, or is there something different to it?

It is a traditional definition and excluding maintenance CapEx, one of the -- I think one of the things that is unique to us is the inclusion of the interest expense from the Gaylord National bonds or the interest income, excuse me.

So you're going to be there Friday, right?

I'm sorry?

You're going to be there on Friday?

I'm hoping, but I'm not sure.

All right. All right. Hopefully, we'll see you.

You're next question comes from the line of Kevin Milota with JPMorgan.

Just want to add a question on the corporate level of cost savings that the REIT transition process was going to provide you guys. So the number that you had previously provided, how much of that work was completed before the end of the year? And how much is left to kind of be rolled through at the beginning of '13?

Mark, I would say, 75% of the corporate was done by the year-end. We've still got a few folks that are going to be here as we unwind our old legacy systems. But I would say the corporate costs will be fully harvested by the middle of this year.

But that's -- I think it's a fair estimate. There will be, Kevin, some conversion costs at the corporate level as we roll through the systems transformation at the REIT level. That's one of the last pieces of this process. We'll be moving our financial systems off of Oracle onto a new system, Epcor [ph]. But to Colin's point, we entered the year with the majority of our corporate cost savings in place.

Okay. But that's just [ph] 75% of what you were looking for previously?

Yes.

Yes. And I think we indicated on the last call, we're hopeful that we -- the corporate costs are going to come in a little higher than -- the corporate cost savings will come in a little higher than we initially indicated back in, I think, May of last year.

Your next question comes from the line of Andrew Didora with Bank of America.

Just obviously, you come out of the REIT conversion with a relatively low leverage balance sheet. Just how do you view your leverage longer-term? Do you think you have the ability to add some leverage to the cap structure? And I guess a follow-up to that question is, do you have any plans over the near or medium-term to place more long-term secured debt on your properties versus keeping the revolver balanced?

Yes. Yes, Andrew, good morning. Two questions that we spent a lot of time thinking about. What we have said, starting I suppose 9 -- 7, 8 months ago, Mark, when we went to visit the rating agencies when they sort of said to us, "How do you think about leverage?" We sort of think, given the world that we've lived through here for 4 years, we do not like the idea of high leverage. We think that we live in very volatile times, and as most of the REIT industry knows, you -- if you hit a recession and you're at peak leverage, it's not -- bad things happen. And we like the idea of having a strong balance sheet so we can take advantage of the peaks and troughs that we see in this industry. So directionally, what we've -- and we've heard by the way, from the REIT shareholder base, that having a prudent leverage is a good thing and we tend to agree with that. So internally, we've been talking about we do not want to hit more than a 4.5x debt-to-EBITDA. And obviously, with the pro forma for '13 that we'll talk a little bit about on Friday, that gives us a ton of capacity. And so that's how we're thinking about it. Now, in terms of terming out, this is something that we will obviously be discussing with our board, long-term rates, particularly unsecured high-yield rates for a company that has just gone through a 3-notch upgrade, very, very attractive. I've never, frankly, seen long-term rates looking like they are right now. So we will probably be doing something here over the next month, 2 months, to take advantage of this and to probably as well, look at refinancing our bank deal, redoing our bank deal to give us a ton of flexibility to be able to do what we think is in the long-term best interests of the shareholders. So that's how we're thinking about it.

Your next...

Jackie, I'm thinking we maybe take a couple of questions and then we'll see everybody on Friday. We've got a lot of work to do to get ready for Friday.

Your next question comes from the line of Bill Marks with JPM securities.

Couple of questions. One is can you give a sense of what RevPAR and total RevPAR growth would have been x Sandy, kind of where you were headed, first of all?

Mark, you want to deal with that?

Yes, we would've probably been around about 3.5%. It would have been within the guidance range that we had provided prior.

Okay, for both RevPAR and total RevPAR?

So, Will, this is Patrick. Total RevPAR would have probably been just a little bit -- maybe a little bit tiny lower 3.2%, 3.3%, something like that.

Mix shift, right?

Yes.

Okay. And then one other question. On your -- on share repurchase, I believe that was part of the December 17 announcement. Have you had windows where you could have bought and why would you have bought or why didn't you buy, and I'm assuming that...

The simple answer is no. We haven't been able to trade because of -- our lawyers have been telling us, until we get this guidance out and dividend policy out, it's -- I'm sorry, Scott. So we should be cleared either on Monday, Tuesday of next week, 3 trading days, right? Monday, Tuesday of next week. So that's when we will be able to get into the market.

Okay. And actually just one final question. Are there any -- I think you mentioned maybe a shifting of costs? But are there real changes since your last announcement on cost savings plans?

No, not really. Mark, I don't think so. Patrick? I mean I think it's all coming in a little bit of timing on the speed at which we're putting the new systems in place at corporate. But it's immaterial to the overall savings that we projected back in May of last year. We'll do one other question and then we'll see folks on Thursday evening and Friday.

Your final question comes from the line of Joshua Attie with Citi.

You mentioned earlier on the call that you think the stock trades below fair value. And you've also talked about a desire to diversify the asset base through acquisitions. You have some balance sheet capacity today but you obviously can't do everything. I guess based on what you see in the market in terms of asset pricing, based on where you see the stock trading, what do you think your best use of capital is today?

Yes. Josh, Colin. And, Mark, you may want to jump in on this one as well. But here's -- I think about this very simply and that is that the assets that do trade -- decent assets that do trade, I wouldn't talk about 150-room comforts or whatever, I'm talking about decent 4-star, full-service, with some level of convention space asset that trade -- trade at a pretty full multiple of 12x to 14x. And here we are right now with, in our opinion, the best-looking gal at the dance, best balance sheet, highest EBITDA per room, we'll have one of the very best dividend policies. We have assets that, frankly, are quite different from anything you see in this industry. That's why all of the big hotel companies desperately wanted to get their hands on these 4 assets that control 4 of the top 10 convention resorts in this country. And so the question -- your question, which we ask ourselves almost daily is, would we prefer to take our capital and invest it in hotels that don't have quite the same features that our hotels have? Or should we take our capital and continue to buy in or buy in our own equity? And my preference, and I think Mark's preference and I think our board's preference, is just that. And until our multiple trades at or above the median for this industry, it makes no sense to me to go get all excited about going and buying some hotel in Timbuktu that doesn't have the same cash-flowing qualities and physical features that these assets that we own have today. So that's how we're thinking about this.

So then it sounds like investors should expect over next couple of months, if the stock is where it is, that it's reasonable to expect that you use some of your share repurchase authorization in the next few months?

Absolutely, that's why we signaled it to you. That's why -- we heard from the investment community when -- Mark and I and Patrick, we spent a lot of time talking to investors over the last 4 or 5 months. And we heard time and time and time again, "Guys, your assets are fabulous. The cash flowing qualities of these assets are fabulous. Why would you want to go spend $100 million, $200 million on a 500-room hotel in wherever that don't have -- that doesn't have the same great features that your assets have?" And so that's why we did what we did in December of last year. We didn't do it just to goose the stock price. We are serious that this company trades, we believe, well below what it should trade at. And we will continue to deploy our free cash flow into the equity of this company until we are satisfied that this company is being valued where it should be. Thank you. Well, look, thank you, everyone, for being on the call this morning, and we look forward to spending some really good quality time with you all. And we intend to go into details around corporate overhead and show you what our cost structures look like. We will talk guidance, we'll talk dividend and we'll talk why we believe we are the best-looking gal at the dance. And so we look forward to seeing you all and sharing a lot of time with you. Thank you.

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