Welcome to Ryman Hospitality Properties Fourth Quarter 2017 Earnings Conference Call. Hosting the call today from Ryman Hospitality Properties are Mr. Colin Reed, Chairman and Chief Executive Officer; Mr. Mark Fioravanti, President and Chief Financial Officer; Mr. Patrick Chaffin, Senior Vice President of Asset Management; 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 4490557. [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. This call may contain forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995, including statements about the company's expected financial performance. Any statements we make today that are not statements of historical fact may be deemed to be forward-looking statements. Words such as believes or expects are intended to identify these statements, which may be affected by many factors, including those listed in the company's SEC filings and in today's release. The company's actual results may differ materially from the results we discuss or project today. We will not update any forward-looking statements, whether as a result of new information, future events or any other reason. We will also discuss non-GAAP financial measures today. We reconcile each non-GAAP measure to the most comparable GAAP measure in an exhibit to today's release. I'll now turn the call over to Colin.

Thanks, Scott. Good morning, everyone, and thank you for joining us. One year ago I referred to 2017 as a transition year given the number of projects later to open in 2018 but I also said 2017 could be a record year for us and indeed it was as we set new records for revenue, adjusted EBITDA the gross group bookings which of course is the lifeblood of our hotel business. Now let me start with group bookings. In the fourth quarter, we produced 968,000 gross group room nights for all future years. This is only about 9000 room nights less than the fourth quarter record we set at the end of 2015. This put our 17 production and this by the way excludes the Rockies at a tremendous 2.6 million room nights topping 2016 full year record by 1.3%. Now recall that 2016s, 252.57 million room nights production was not only a record at the time but a 10% increase over 2015. I've been saying in recent quarters that the strong demand we're seeing from group's combined with the fixed inventory of room nights we have to sell in future years will offer us more opportunities to focus on achieving good rate growth as our key patents fill up. I'm pleased to report that across these 968,000 room nights booked in Q4, we still average daily rate growth of 5.7% or just under $11. We therefore ended the year with a total of 6.9 million gross group room nights and again this excludes the Rockies on the books for all future years and this is a 7% increase over the end of 2016 and another record for our combined hotels. In addition to these bookings, the sales team for the Gaylord Rockies booked another 244,000 gross group room nights…

Thanks Colin, good morning everyone. In the fourth quarter the company generated total revenue of $345.2 million up 7.9% from the prior year quarter and for the full year 2017 total revenue increased 3.1% just over $1.18 billion. During the quarter the company generated net income available to common shareholders of $72.3 million or $1.41 per fully diluted share. The company generated $106.3 million of adjusted EBITDA and improved adjusted EBITDA margin by 120 basis points in the fourth quarter and for the full year the company's adjusted EBITDA exceeded $360.8 million, an increase of over $10.6 million and full-year adjusted EBITDA margin was flat compared to 2016. In terms of AFFO, the company produced $87 million in 2017 and 11.9% increase over the fourth quarter of 2016 or $1.69 on a fully diluted share basis. For the full year, the company generated $285.5 million in AFFO, a 1.4% increase over 2016 an equivalent to $5.56 per fully diluted share. Attrition in fourth quarter of 2017 was 13.1% slightly higher than Q4 of 2016 by approximately 42 basis point but was down sequentially as compared to the third quarter by 240 basis points. In the year for the year cancellations were lower by 500 room nights or 8.5% year-over-year and approximately 7400 room sequentially. Attrition and cancellation fee collections during the quarter totaled $4.3 million and for the year were $10.9 million. Consolidated hospitality adjusted EBITDA on the quarter grew 12.7% to $103.9 million acquainted to an adjusted EBITDA margin of 33.2% for an increase of 160 basis points in the quarter. Full year hospitality adjusted EBITDA increased 7.2% to $346.1 million representing a 30 basis point margin improvement. Our entertainment business finished strong with fourth quarter and full-year revenues increasing 7.9% and 14.1% respectively, segment adjusted EBITDA on the…

Thanks Mark. I'm going to hold off on closing remarks. Let's open up. Maria if we could the phones for questions, we've shared a lot of data here and I’m sure there is a few questions.

[Operator Instructions] Our first question comes from the line of Patrick Scholes of SunTrust.

First question is going to be on how should we think about sort of a base case RevPAR dollar amount for the Rockies. Certainly it doesn’t look like on the website that its taking reservations where would you point us in that direction or would you say the RevPAR of that property is similar to one of your other four properties maybe you could point us in that direction?

We don’t want to give too much information, just share but I would tell you that the RevPAR that were expected in the Gaylord Rockies would be in line with what we see in the Gaylord Texan as far as a comparison.

Next question concerns the Opry City Stage I'm - curious where you could envision this concept going. It seems like it’s gotten some what I can see online some pretty good reviews. So far could you envision this concept sort of being in the next house of blues as it relates to the country music?

Patrick this is Colin, let me make a couple of observations here. I don't envision - truly don’t envision Opry City Stage being like the house of blues which has in this country 60 to 80 locations actually there is a few locations under a different name but 60 to 80 locations various shapes and sizes very good concept. What we envision with Opry City Stage is that this would go into what I would call the primary market, tours markets of this country where we see you know tens of millions of tourists markets recently we put it in Times Square is because Times Square gets about 45 million tourists a year, New York City about 55 million. We would see markets I would think Orlando, Las Vegas these types of markets would be a home for Opry City Stage. So that's how we're currently thinking about it. With the product in New York City, this is obviously the first of its kind that there are - we’re in the process we had this thing opened for - I don’t know Mark six weeks something like that seven weeks. We were in the process of refining some thoughts of this product. We’re going to change the ground floor out a little bit to make it clearer to the consumer that runs up and down outside on Broadway there. What indeed goes on the second floor and third floor on the fourth floor. So we’re going to do some modifications on that and I also the marketing side of this is in the early stages of really cranking up. We had as you remember this tragedy the place when one of the workers unfortunately fell from scaffolding in the middle of the construction last year that essentially shut the construction down for a period of time and that caused some - not sure when we’re going to be opening this facility. Anyway its now opened and the marketing is being cracked and ramped and - you're right we got very good reviews on our food and entertainment and it’s - you know I think over the next two to three months you’re going to see a lot more activity by us to promote this facility domestically. And the other thing I would say to your question about Opry City Stage is that we've had some outreach from the international market on this. People who love - if you go to Europe there is a tremendous amount of people in Europe that love country music. What is going to happen here in Nashville, come early May is a pretty sure we’re going to be flying directly Dreamliner every day I think every day maybe five, six days a week to Nashville. And so it's not out of the realms of possibility that we would find an international partner and do something internationally with Opry City Stage because of the love of country music.

And one last question here, any updated thoughts on possibly divesting the entertainment segments - when your investors is interested pushing for that. And I also bring that up because some companies public companies like Live Nation that we might comp that segment again that had pretty good multiple valuation multiple run ups here. What your latest thoughts on that possibility?

Well amongst us sitting around this table we had a little discussion earlier wondering at which point in the question and answer we get that question and you’re the first one out and the first one to ask the question. So let me give you to answer. We have never talked about divesting this business what we talked about is potentially spinning this business and putting its own separate public company. This business we believe is very unique and has very good traction and the growth rates in it, is very, very strong. And we think this business has lots of ways to grow and that's how we think about it and - we're very much - we’re trying to grow this business and also in some ways. So at some point it will be mature enough to stand on its own two feet and that ultimately that is the goal.

Our next question comes from the line of Chris Woronka of Deutsche Bank.

My first question is kind of on the - you mentioned in the press release that there were some good strength in corporate group rates in the fourth quarter. And I'm wondering is that are you continuing to kind of see that general trend in 2018 and do you expect the corporate piece to be considerably stronger this year than it was last year?

This is Patrick Chaffin I’ll take that question and then Colin can add any additional comments he has. As we look into 2018, we have a higher level of corporate room nights on the books as far as our mix. And I would tell you that we are - we've been driving tremendously strong volumes of room nights in terms of production. You’re going to see us pivot a little bit more towards trying to drive rate in 2018, because we are seeing a continuance of strengthening in rate. And so we’re going to take this moment in time with the number of room nights that we already have on the books which is a record and the strength that we seen in bookings production to push rate a little bit more and take advantage of the environment that we see. So yes we have seen that its continuing and we want to make sure that we take advantage of it.

Chris let me - I want to add one thing to do this and that is that however, you cut it our industry the hotel industry and particularly the large group sector is so heavily correlated to the underlying economic strength of this country. When times are good people are out spending money, businesses are out holding meetings. And when times retrench as we saw in 2009, the world behaves very differently. So the question, the central question and this is by the way it was one of the things that I always struggle with the question of where we stand in the cycle, because what we never try and do is sort of try and figure out what's going to happen over the next one, two, three years with the economy of the country. We sit at a very interesting point, I believe. My personal view is that, Corporate America the balance sheets are very, very strong. Corporate America have just got this big windfall with particularly the sea corps with the tax reduction. You've got to have all of this repatriation of funds from overseas coming back the United States of America. And the question is, you know what happens to this economy? And my sense is that, we're going to see over the next one to two to three years, we're going to see strength in this economy. And I think that will bode well for particularly the group sector. And as Patrick Chaffin just said a second ago, our focus here is going to be driving rate. And this is what we've been sitting and talking with our operators of Marriott doing driving right here over the course of the next 12 to 24 months. And we believe given the slow supply that we see in our sector given the underlying health of the economy the next two to three years should be pretty fun for us.

And just as a follow up, you guys obviously have a lot of growth coming later this year and next year including SoundWaves in Nashville. But what I ask is you think out strategically beyond that is, there any - are you any closer to maybe adding another some kind of hotel development in Nashville? Now that now that everything else is coming closer in interview?

Well look we don't play in the sandbox of 200 to 500 room transient focused hotels, which is really the supply increase you see in this city. The supply increase you're seeing in the cities to accommodate the leisure customer that wants to come to the city. And so, I don't think you'll see us do that, unless it's parked next to Opryland, the mothership that generates you know 80 points of occupancy there or thereabouts of 70% of which is group. And I think as we get to opening up the inventory for SoundWaves, Patrick that's what May/June of this year we're going to be doing that?

SoundWaves will open in December. The inventory will open in May of this year.

So if we see huge demand here you may see us come back and want to build a you know 300 room-ish leisure focused hotel to accommodate demand as we open up this inventory. But you are not going to see us built in a downtown hotel here in Nashville. In terms of other big boxes, we look at every box that comes on the market. And here's the reality, I mean this is the bizarre thing, I read all of the reports from the analysts community and talk about our multiple as a function of what's going to happen in 2018. But you know clearly we've got some really world-class things happening in 2019. But the thing is, we can't buy hotels at the multiple we trade at. We can't buy hotels that we have at the multiples that we trade at. So but we look at every transaction that comes before us. The - either our multiple has to increase or the multiples of hotels, big hotels, world-class hotels that get sold have to decrease for us to be in the acquisition of large group hotels.

Our next question comes from the line of Shaun Kelley of Bank of America.

So Colin, I just wanted to ask at a high level, so thinking about the capital development projects, I thought that there is a portion of SoundWaves that might have the opportunity to open little closer to the summer perhaps that had already been pushed out or updated. But can you give us kind of a timeline? And then also maybe give us a little bit more color on the features? You talked about opening in December, I mean meaningful for 2019. But what came out of that indoor versus outdoor to make it attractive to guess in the middle of summer?

Yes. We got to get you to nationalist to see this construction. I was there yesterday for our board meeting at the hotel. And with all of our board members and they couldn't believe the scale of this construction. We spend a lot of time with our operator trying to figure out whether we could open the X outside part of this in sort of the July/August timeframe to capture the latter part of the summer months. And as we've spent so much time with our operators, what we've come to conclude is that, it will be fairly - it will be very difficult essentially to try and get people out of the hotel around the construction and into the pool complex. The amount of policing that we would have to do, to do that and then these folks would be at our exterior pool complex looking at a massive construction of the indoor piece of this. And so, as we've analyzed the pluses and minuses of all of this, Patrick Chaffin I think we came to the conclusion that the poll just wasn't worth the die for two or three months to open the exterior. And let's get up, get all of this fully done, integrated, work - and open it up one big point in time obviously the inside first because we can't open the exterior in the middle of the winter. But that's the way we've been thinking about it. And I got to tell you, we are very excited about this. And this is going to be quite some feature for this hotel.

The only thing I'd add to it Colin’s has already said is, we watch very closely some of the missteps that were made by some water-park operators that opened over the past couple of years in Orlando who still had ongoing construction sites for guest to be interacting with. And the guest commentary and feedback and negative reviews give us even more pause to say let's make sure that when we show this to our customers for the first time, they get a wow experience, a great sense of arrival. And to your second part of our question, just to let you know it's about 4 acres, the site itself. About 80,000 square feet is indoors and that's about three levels of water features. So an expansive outdoor area, but a very large indoor area on three levels that is unlike anything you see certainly in this region.

And make sure one last thing on this. The other thing that you know we just take advantage of we probably shouldn't is, we got one hell of a book of business in that hotel this year. And one of the things that we are very, very sensitive about is making sure that the customers that are booked into this hotel, this hotel is going to run only 80 points of occupancy and generate tremendous EBITDA for us. We make sure that those customers have world-class experience. So that was really the reason why we decided that we wouldn’t open the exterior piece of this for two or three months towards the end of the summer.

I think that makes a lot of sense. And then as we think about the CapEx for 2018 obviously, a lot of these projects starting to come to fruition. I know you said that Rockies was on time on budget. Can you just give us a reminder of sort of the overall CapEx breakdown? If you give us a sense of sort of further growth projects, where you’re at kind of by project at least some rough numbers, that will be helpful?

Well Mark can do this but, let me let me say this now that, we're fully funded on the Rockies. I mean we paid for that last year. So when you look at our leverage levels, we've got the investment, but no income. And so you know our capital flow for 2018 is not really significant. So Mark...

Well, yeah in terms of growth capital, let's on the tax and spend we’re going to be 28 million to 30 million here as we finish it in 2018. The remaining SoundWaves construction this year will be between 60 million to 62 million. The Venue downtown or read that opens in May is 8 to 9 and then we're doing an expansion enhancement to the Opry House in the Opry Plaza that's about 11 million to 12 million. So growth capital is that kind of $107 million to $113 million range. On the maintenance side, obviously you'll have your FF&E reserve of 5%. This is a little bit heavier owner funded year for us. So owner funded project we've got some infrastructure, a replacement that we're doing boiler's etcetera. So between that and the carryover maintenance you can have $80 million to $90 million race this year. So when you kind of add it all up, you're probably 190 to about 205 million for CapEx total for 2018.

And I don't have old numbers in front of me, was there anybody change to SoundWaves out of number, or is that pretty much inline where you are?

I think, that's pretty much in line with where we were. The overall budget hasn't changed. We're on budget there, maybe a few million dollars higher than what we previously provided because we had a very wet - we've had a very wet six months or so in Nashville which has slowed some of the work down. And so, it pushed a little bit of the capital spend into this year versus 17.

Our next question comes from Bill Crow of Raymond James.

Colin congratulations on advancing the ball on the growth initiatives. I want to start with the growth initiatives I think you talked about opportunities in Nashville, and on the acquisition front. But I'm just curious about going out and developing another project now that the Rockies is coming to the finish line. Where is that in your priorities, and based on any discussions you might have had. What is the environment for securing tax incentives to build another Gaylord style hotel?

There is good news and bad news here. The tax incentive piece of it is much harder today than it was simply because of the economy of the country. And – when I there's good news, bad news; the good news piece of that is that there's limited supply being built right across the country. As you know there's five 1000 room hotels and I think three of those are parked next to convention centers and are essentially have 100,000 or less square feet. So that's the benefit of this. And I think you may have seen some press in Chula Vista, the project that we initiated lord knows what was out about - years before and financial year. So probably 10, 12 years ago and the people that are behind that are the same partners in Denver. So we talk to these folks about that project if it comes to fruition, we would have an interest and that community is, we are told enthusiastic about building a world-class hotel just south of San Diego there. So right now wind community is doing pretty well growth is pretty good across the country. It's much harder to get these big tax incentives. But here's the thing, we will we will keep monitoring that. We're looking at certain markets. And here's the good news, we know how to do this. We've done it multiple times before and so I'd say just keep focused on that Bill.

The other question I had was on the gross advanced bookings, in the fourth quarter they were down just slightly for all future periods, but they were also down just a little bit last quarter. And I'm just curious, if that sends a message that maybe the windows are lengthening or maybe you're just maxed out and we're not getting any better than this or how do we interpret that?

Bill, I don't want to be critical because I think you are at the highest regard for you. But you're looking through the wrong end of the telescope. The bookings that we did last year were you know it was record bookings for us. And the quarter - the fourth quarter of just under a million gross room night was the second best quarter we ever had as a company. And this is the other thing, I would ask you to think about, if you look at the bookings that we had on the books for all of our hotels excluding Denver, at the beginning of 2017 and then you fast forward with all the bookings that we booked in 2017 you fast forward and look at the bookings that we have on the books on the first of January of 2018. The bucket of group room nights grew by 7%, 7% which is monstrous. So the issue for us is patterns and where we accommodate and that's why we made a point in this release to say, we have really focused even though we're at record levels of bookings, we're focused so much on rate. And we saw that to our benefit in the fourth quarter when we had rate up north of 5%. So I don't think you can look at it accurately fourth quarter of 2017 and fourth quarter of 2016 and say, you know we are down 9000 room nights or whatever it is and therefore things are good. They are in tremendous shape. Patrick have I missed anything?

No, I think you're absolutely right. I will tell you though that we've intentionally because of our strong book of business both in our business and well as in our competitors and our focus on multi-year rotational business, we have been successful in pushing some corporate groups to lengthen their booking window because they're trying to secure space, because they think it's not going to be available and with the multi-year rotational business that we're securing, we're naturally getting folks to sign up for a longer period than they normally would book into. So we have been successful intentionally in extending that booking window as a result.

No I wasn't trying to find some to criticize us, I really just wanted to - the booking window was changing or anything like that?

No, I'm pulling your leg a little bit. I probably shouldn't on this call. But this group market is in really good shape. Mark, something you want to add.

I was just going to say that, if you look at where we're trending, where we sit today for 2019 in the business, right it looks it looks quite good. On the books revenue perspective we’re up mid single digit versus where we were last year. So we look out respectively both 2018 and 2019 and beyond, bookings look really good, really nice growth, both in terms of occupancy, as well as rate.

One final question that occurred to me, just before you talked about the Rockies and whether it's picking up some of the rotational business and kind of taken it away from your existing hotels. It seems to me you had a lot of new business that maybe you hadn't seen in your existing hotels. Any update on kind of where that business coming from for the Rockies?

That's a great question. It has been a high area of focus for my team in making sure that what we're introducing into Rockies is not just recycling if you will of existing groups which we certainly want to do. We want to bring them and capture an additional meeting in their rotation. But we have sat with the team Bill, I said what they would say is an aggressive target acquisition business and we are watching that closely. And I would tell you that Rockies is performing right within the range of what we think is acceptable on new acquisition just about 35% to 40% brand new business that has never been to a Gaylord hotel in the past. And so bringing new folks into Rockies and then introducing them to the full brand is the objective here and I'm very pleased with how the team has been able to execute against that objective.

And we have reached the allotted time for questions. I would now turn the call back over to management for any additional or closing remarks.

Well, let me say this, if there are any other questions - if there is anyone with their light lit up, we'll take one more question.

And we do have a question from the line of [indiscernible] Traditional Capital.

You answered seven, eighths of my intended question about acquisitions. So the one-eight is since you had ruminated almost two years ago about possible interesting opportunities, are the opportunities you saw that didn't work for you price wise, were they even close?

Sort of, we look to. I would say in the last couple of years, we look to two or three close-ish but not ones that we would say that they blew our socks off. And so we we've taken a very disciplined approach. And the other part of it is, is that in this period of time of course we're expanding Texas, we've got SoundWaves going on. We've got tremendous growth coming in these world-class assets that we own. So look, we get all this expansion done. We may expand one of these hotels again here with the amount of group demand that we're seeing. And you know we'll keep our beady little eyes on opportunities that come forward. So you know that's where we are Chip and thanks for the question.

You’re welcome.

All right Maria. Thank you. I think what I would say to our investors is, thanks for being on the call this morning. We feel like we have a differentiated strategy. We've been talking about this for a long time. I think it's showing up in our underlying business strength. The thing that we haven't talked about I suppose this morning is our leisure transient business and what happened to us in the fourth quarter and we sort of look at our revenue generation as we're not victims, we're proactively driving business into our hotels and I think that's going to bode well for 2018 and 2019 years to come. So thanks everyone for being on the call this morning and you know where we are, if you have any other questions.

Thank you. Ladies and gentlemen this does conclude today's conference call. You may now disconnect. And have a wonderful day.