Welcome to Ryman Hospitality Properties Second Quarter 2020 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, Chief Operating Officer; and Mr. Scott Bailey, President Opry Entertainment Group. This call will be available for digital replay. The number is 800-585-8367, and the conference ID number is 4586285. At this time, all participants have been placed on a listen-only mode. It is now my pleasure to turn the floor over to Mr. Mark Fioravanti. Sir, you may begin.

Thank you, Maria. Good morning, everyone. Thanks 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, further events or any other reason. We will also discuss non-GAAP financial measures today. We reconcile each non-GAAP financial measure to the most comparable GAAP measure in the exhibit to today's release. I'll now turn the call over to Colin.

Thank you, Mark, and good morning everyone. When we last spoke on our first quarter call in May, our Gaylord Hotels and the majority of our entertainment venues were closed as the nation grappled with flattening the curve during the initial outbreak of COVID-19. I'm happy that as we meet today, some three months later, four of our five Gaylord Hotels are again open and we've been able to resume some reduced capacity operations across several of our entertainment assets as well. Of course, we still have ways to go to return to pre pandemic business levels as the challenges our economy and our country faces are far from over. And frankly, no one knows how long this recovery will take. However, based on the initial success that some of the early virus epicenters around the country having battling back the pandemic, and then the rapid progress we're seeing on the therapeutic and vaccine front, in my view, despite some recent case increases in some states, the overall outlook for an eventual resolution has meaningfully improved over the past three months. And as a consequence, I'm firmly of the belief that we will be in a recovery in the foreseeable future. So rather than throw up our hands and feel sorry for ourselves over the last three months, our company has been diligently focused on two key areas to ensure we are in the best possible position to benefit from that recovery. These are minimizing our expenses and cash burn, and positioning our assets and our business, to not only participate in the recovery when it does come but more importantly, to capitalize on this opportunity. This has us asking questions like how can we grow our market share in the large group meetings business? Remember, all group business in…

Thanks, Colin. In the second quarter, the company generated total revenue of $14.7 million, as virtually all of our assets in the hospitality and entertainment segments were closed for most of the quarter with some modest reopening revenue late in the quarter. Net loss to common shareholders was a $173.5 million, or a loss of $3.16 per diluted share. A couple of one-time items that negatively impacted our second quarter net income include a $15 million write-off of our deposit for the cancelled acquisition of Block 21 and a $19 million impairment charge on the Gaylord National bonds related to reduced room revenue projection due to COVID-19. On a non-GAAP basis, the company's consolidated adjusted EBITDAre was a loss of $65.2 million for the quarter and adjusted funds from operations available to common shareholders with a loss of $90.7 million, or $1.65 per fully diluted share. Our cash interest expense for the second quarter was $28.7 million. And we amortized $1.25 million of our term loan B. So, our cash debt service was $30 million in the quarter or approximately $10 million per month, which is in line with the estimate we provided in our investor update on June 1st. To be clear, the actual semi-annual coupons on our senior notes are paid in April and October. However, when I refer to cash interest expense for any quarter or on a monthly basis, we treat the notes interest as a monthly outlay. Together as Colin mentioned, our monthly cash burn in the second quarter on a consolidated basis was therefore about $95.2 million or a $31.7 million per month on average. This excludes the discretionary capital investment that we continue to make in completing the Palms expansion, which we believe best positions the hotel for the eventual recovery. As of…

Thanks, Mark. The only closing comment I'll make before we open up to questions is that we've given you a lot of detail this morning and we've done that on purpose because we are deeply engaged as a management team in the actual reopening and running of all of our businesses. We haven't just handed over the rings to our manager, we've been through crises like this before. Not quite like this pandemic, but we've been through crisis before. And so, we wanted to share with you everything we're up to. So, Maria, let's open the lines up for questions, please.

Thank you. At this time, the floor is now open for questions. [Operator Instructions] Our first question comes from the line of Smedes Rose of Citi.

Hi, good morning. You guys provided a lot of encouraging information about the pace of bookings and rebookings. And I was just wondering if you could talk a little bit about the rates at which you're able to, that you're making these bookings, I guess, relative to where they were on the rebooking side? And then what are the kind of new bookings look like? And is there any, particular properties that you're seeing more sort of concentration in terms of demand relative to others?

Right. Smedes, good morning. This is Colin, let me defer to Patrick to get into the detail. Let me move our phone here, here you go Patrick.

Hey, Smedes. Good morning. It's Patrick. Yeah, so we actually, I'll give you July information and I'll move back to Q2. Our July production that Colin referenced a few moments ago, came in at very encouraging numbers, and we actually saw a 17% increase in average daily rate booked during the month of July for future periods. As far as were there any specific winners or losers, I mean, it really was a very well-balanced rate play across the hotels. There was no specific hotel that did better than others. And then, if you look at the second quarter, second quarter as a whole, when the worst of the pandemic was really started to unfold, ADR came in essentially slightly up, but basically flat to last year's second quarter of 2019. And again, it was pretty much well balanced across the portfolio of hotels. From a transient perspective, we've seen very encouraging rates. We've been talking about numbers between $160 up to $200 plus. So from a group perspective, we've seen recently some nice healthy increases in rates being booked and from a transient perspective, rates that are more than enough for us to feel very comfortable with having the hotels open.

Pat, you may want to, just talk a little bit about the makeshift while we're up 17% in July. 17% sounds extraordinarily high.

Yeah. And so what Colin's alluding to, the fact that part of what drove the improvement year-over-year was the fact that we booked more room nights into T plus four and beyond. And because that mix is being a little bit more heavily weighted towards periods that are much farther out, T plus four through T plus six, you're obviously going to be capturing higher rate as a result. But I would tell you that, even if you look at T plus one, what we booked in July was up about 12% from a rate perspective. So it's not overly bounced to the future periods. We're seeing nice, healthy rate growth, even in the more immediate periods T plus one and T plus two.

Yeah. And Smedes, one of the reasons, we talk about the situation being as it is unfolding situation of 2020 and COVID, and there's been one or two of your brethren who have sort of tried to connect a parallel to 2009, when the world fell off a cliff. We're not seeing the same pricing pressure in all of the dialogue we're having with our salespeople that we saw in 2009, when markets like Las Vegas, literally we're just dropping pricing dramatically. We're not seeing that, and which I think bodes well for the recovery of this sector.

Great. Thanks. And then, can I just ask you on the Circle TV that you mentioned. Do you guys have like, maybe just a broad sense of kind of the economies for that when you do start a subscription model kind of, I mean, what are sort of the ranges that you think that could maybe build to over time? In terms of revenues, I guess, how are you thinking about it?

Scott Bailey, is with us this morning, President of our Entertainment business. Scott, you want to take that?

Yes, good morning Smedes. So, the way we've modeled, it is relatively modest in terms of uptake on the S5. But what we are doing is, we will be putting our marquee assets, such as the Live Opry that Colin had referenced before. It has generated about 25 million streams on a 21-week period. So, we'll be moving that behind the subscription wall. And we anticipate over a three-year period that we'll achieve breakeven with the subscription video on demand service.

Great. Thank you for the color.

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

Hey, good morning, guys. Wanted to ask -- and thanks for all the data point very, very helpful and certainly appreciate them. As you're looking at the bookings that are starting to come in, whether it's for early next year or 2023, are you seeing any changes in terms of size of the groups or other composition of the group or the amount of food and beverages they want to guarantee or anything like that? Is there any noticeable change yet in those dynamics?

Mr. Chaffin.

Sure. Hey, Chris, this is Patrick. Good to hear from you. Yeah, let me just cite what we saw in July to give you some very relevant and real-time data. We actually saw growth in the number of bookings in the larger groups. So, when we look at non-COVID related rebookings and just looking at the new room nights that are being booked, we're seeing some healthy growth in some of the larger groups. So, we're not seeing folks pull back and say, hey, large groups are not going to be meeting in the future. Let's just stick to the small groups. I will say though, that we're focused on in 2020 trying to capture as many small groups in the near term as possible because they're more likely to travel. But as we're booking new business for the future, we're not seeing any real shift, but we are seeing healthy growth across and including in the large group segment.

Okay. Thanks, Patrick. And then, wanted to ask if you guys have done any -- there's been a lot of talk about hotels closing and maybe that's more in certain markets and might not be a ton of big group boxes that close, but should still theoretically be some kind of a benefit to you guys. How do you maybe, Colin, how do you think about that in the context of there being a benefit down the road and even if it's years out, that maybe more of a market share grab?

Well, so the way to think about this Chris is, the hotels that are sort of talking about, that we hear sort of a little bit of rhetoric about, well, maybe they won't reopen. These are not hotels that have 200, 300 or 400,000 square feet of meeting space that are focused towards the customer that we tend to go after. The customer that Patrick just referenced. And so, look, I think in some of these, forgive me saying it this way, in some of these small union concentrated big cities, urban cities in America, there will probably be less supply coming out of this because the margin of profitability in these big urban city hotels is somewhat less. I mean, they generate decent revenue levels and decent occupancy levels, but the cost structure is very, very high. And, but this is not our competition. One thing I will say though on this subject is that, I think I have a thesis today, if you were to ask this question, is that we're going to see very little new competitive supply that goes out to our business, that our type of business is capable of doing these 1000, 2000, 3000 room groups. I don't think you're going to see hotels like that built here in the next three to five years. So, look, we got to get through this tunnel. And I am very optimistic that when we get through this tunnel, the amount of business that we will have on the books because of the things that we are doing is going to be very, very healthy. And our business is I am very confident I'm not sticking my head in the sand here. I feel very confident that our business will recover here sometime in '21 and '22 and '23. We will get to a point where our businesses will be stronger coming out of this than we were going into it. That's how I feel about it.

Okay, very helpful. Thanks Colin.

Thanks Chris.

[Operator Instructions] Our next question comes from line of Shaun Kelley of Bank of America.

Hi, good morning, everyone. And thank you again for all the extra detail and some of the month-to-date trend. So, I'd like to go back to the sort of rebooking activity if we could, just it seems like if we go back from where we were obviously in maybe April and May, the overall rebooking pattern here is accelerated. I think you highlighted even from the release, you're at 40 versus I think 43 in July. Could you give us a little bit more color on maybe how that trend did fully across the quarter and second quarter then that build into that 43% number into July? And then secondarily, just what is -- what do you think is driving that activity? Is some of it a little bit of the concern around? If you look at that 100-day window, are we getting close enough on Q4 that people are now incented to possibly rebook rather than pay a cancellation fee? Or is it way more positive than that in terms of the dialogue with the customers and the planners and exactly what they want to accomplish? Just are they more optimistic about the future effectively?

You want to take that Patrick or do you want me to?

I mean not follow you or however you want to do it, so --

Go for it.

Okay. Hey, Shaun, it's Patrick, let me give you some data points to think about it. And let me know if you have any additional follow-up. So just to clarify and make sure, because I know there's been a little confusion in the past. So the 43% is measuring rebooks as a percentage of the total cancellations from when this began to where we stand today. So that again, we started our rebooking efforts in late March, retaining our sales team and having them focus on that to preserve relationships, and in some cases to help preserve the organizations, because if we collected a cancellation on some of these organizations, they simply would have gone bankrupt. So again, just to clarify, that 43% is across the entire collection of cancellations that we've seen since this all began back in March. That has been building obviously, as we got to the end of the second quarter, it continued to gain momentum. And so it's been a nice, slow build over the period. And as uncertainty, I think a lot of folks are hopeful that as we get into this fourth quarter, potentially we have a vaccine type event. And so while cancellations continue, I would say that the re-bookings are, folks are feeling more comfortable about putting something on the books for '21, '22 and beyond. You're right that as we're looking at a 100-day cancellation window, as we're getting into a period of time, when folks that should be canceling for fourth quarter, they still have uncertainty, we are seeing some of those cancellations starting to come in. The meeting planner has a two shot -- two choices right in front of them. They can either go ahead and cancel now and work with us to rebook, or they can…

Yeah, Patrick, that's a great start. So I get it that the 43 is then basically cumulative over everything that's happened post-COVID. So then, if we can -- but if I can drill in, maybe, and I don't know if you even track it this way. But just, even directionally four groups that are canceling in more recent periods or months, so more like June, July. Are you seeing again just, I guess, overall from that cohort if you will, a higher interest in rebooking? Am I -- is that the behavior that you are seeing so effectively as we might be getting closer to kind of a normalization or, again, some sort of optimistic outcome or just seeing -- or is this indicative of a change in behavior, in your view? I mean, that's a better way of asking it.

Yeah, I think we would answer the question, it's sort of anecdotal. The reality, what happened in that second quarter is groups had no clue as to whether there would be a vaccine and whether people would actually start to travel again, whether the economy was going to open up again. And what we as an organization, we insisted that our manager retain all of the sales people in our hotels and deeply engage with every single customer. And the reason why bookings -- the rebookings accelerated through that second quarter was simply it just takes time for every single discussion, negotiation, finding the available patent for that particular customer. And so, just as the weeks went by, we were just getting further into the dialogue with those customers. But the reality what we are seeing, and this is why we were very pleased to get 65,000 room nights non-COVID related booked in July is the meeting planner. The meeting planner constituency seems to be getting more comfortable that there is going to be a solution to this problem. And as we read daily of the six potential vaccines that are under various trials in this country and you hear guys like Foushee say, there should be a vaccine available in the fourth quarter. We're seeing a greater degree of confidence in the hearts and minds of the meeting planning community. So that's why we were very -- you think about it. In July, we booked essentially 50% in the middle of the summer where you really don't have a lot of meeting planning activity in the middle of the summer. We booked 50% of the new room nights. 50% of the room nights -- new room nights that were booked in the second quarter. And so, I think that as we get into the third quarter, we're going to continue to see cancellations for business that we've got on the books for third and fourth quarter. But I anticipate a slowing here of the cancellation numbers and a continued growth in the rebooking numbers.

Yeah, and this is Patrick again. The thing I would add to this is, just to give you some insight into the process. When a meeting planner calls to cancel, they do not immediately say, let's go ahead and rebook. It is the very beginning of a dialogue and a process for rebooking. And so, when you consider the massive amount of cancellations that occurred in the March, April, May and June timeframe, you start to understand that with all of these many, many, many, many meetings canceling and all of the dialogue that has to begin and with limited number of sales resources, it's going to take time for the pig to move through the python. But now, we've gotten through the process and there's enough time has occurred that we're starting to see more and more rebookings occur because that dialogue has been happening over the course of many weeks, and we're picking up pace because our sales folks are having time to finally go through that entire process with every single meeting planner. And that's why we're seeing that momentum build up as we've gone into July.

That's really helpful for me both. Thank you. And then, just the only other follow-up would be when you think about that 65,000, let's call it net new or sort of non-COVID related room nights. I mean, that's super encouraging, that there's almost sort of any level of activity out there for folks. So, can you put that in perspective relative to any sort of monthly trough type production numbers we saw back during the global financial crisis? Collin, I mean, you made the comment earlier that it's a difficult period to compare to. And obviously, I think for those of us who have lived both, we agree there's sort of no comparison, but we're all looking for something. So, can you help us think about just sort of that level of activity right now and what that can mean relative to sort of maybe trough production back in March, April month?

I don't have the month by month breakdown above '09, but we'll go back and dig that information out and get it to you. But I can tell you when we were living through it, Mark and I, it was pretty damn anemic. It was anemic. Our sales people were having a hard time getting customers to commit. And Shaun, this is very interesting what is going on here. Because, there are literally thousands of thousands of meeting planning organizations across the nation and every single one of these people, all these organizations have been some heavily disrupted. The meeting planning companies don't necessarily deal with one customer. They have multiple customers. And so, they are scurrying around trying to figure out what they do about the meeting that's coming up in September, or the meeting that was due for June. But at the same time, not only are they trying to resolve all of those issues and deal with us on the rebookings, but were seeing new business in good volumes, and that's what's encouraging here. And so, we'll get you comparables of '09, but it was pretty anemic.

Thank you everyone.

Thank you.

[Operator Instructions] At this time, I'm showing no further questions. I'll turn the floor back over to Mr. Reed for any additional or closing remarks.

Okay, Maria, thank you very much. And those of you available this morning, thank you for doing that, taking interest in our company. These are very difficult times. And we are doing our level best to navigate through this morass and at the same time, keeping all of our people in this organization motivated to be ready to take advantage for to when this COVID-19 is finally put behind us. So, thank you everyone. And if you have any other questions, you know how to get hold of Mark or Todd Seaford or me here at the company. Thank you very much.

Thank you, ladies and gentlemen. This does conclude today's conference call. You may now disconnect.