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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-K
(MARK ONE)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM TO
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COMMISSION FILE NO. 1-13079
GAYLORD ENTERTAINMENT COMPANY
(Exact Name of Registrant as Specified in Its Charter)
DELAWARE 73-0664379
(State or Other Jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or Organization)
ONE GAYLORD DRIVE, NASHVILLE, TENNESSEE 37214
(Address of Principal Executive Offices) (Zip Code)
(Registrant's Telephone Number, Including Area Code) (615) 316-6000
Securities registered pursuant to Section 12(b) of the Act:
COMMON STOCK--$.01 PAR VALUE NEW YORK STOCK EXCHANGE
(Title of Class) (Name of exchange on which registered)
Securities registered pursuant to Section 12(g) of the Act:
NONE
(Title of Class)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. [X] Yes [ ] No
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [ ]
As of March 13, 2000, there were 33,317,109 shares of Common Stock
outstanding. The aggregate market value of the shares of Common Stock held by
non-affiliates of the registrant based on the closing price of the Common Stock
on the New York Stock Exchange on March 13, 2000 was approximately $478,612,000.
Shares of Common Stock held by non-affiliates exclude only those shares
beneficially owned by officers and directors.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the registrant's Annual Report to Stockholders for the year ended
December 31, 1999, are incorporated by reference into Part II of this Form 10-K.
Portions of the registrant's Proxy Statement for the Annual Meeting of
Stockholders to be held May 10, 2000, are incorporated by reference into Part
III of this Form 10-K.
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GAYLORD ENTERTAINMENT COMPANY
1999 FORM 10-K ANNUAL REPORT
TABLE OF CONTENTS
PAGE
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PART I
Item 1 Business.................................................................... 1
Item 2 Properties.................................................................. 14
Item 3 Legal Proceedings........................................................... 16
Item 4 Submission of Matters to a Vote of Security Holders......................... 16
PART II
Item 5 Market for Registrant's Common Equity and Related Stockholder Matters....... 16
Item 6 Selected Financial Data..................................................... 17
Item 7 Management's Discussion and Analysis of Financial Condition and
Results of Operations....................................................... 17
Item 7A Quantitative and Qualitative Disclosures About Market Risk.................. 17
Item 8 Financial Statements and Supplementary Data................................. 17
Item 9 Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure........................................................ 17
PART III
Item 10 Directors and Executive Officers of the Registrant.......................... 18
Item 11 Executive Compensation...................................................... 18
Item 12 Security Ownership of Certain Beneficial Owners and Management.............. 18
Item 13 Certain Relationships and Related Transactions.............................. 18
PART IV
Item 14 Exhibits, Financial Statement Schedules and Reports on Form 8-K............. 18
SIGNATURES ........................................................................... 20
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PART I
ITEM 1. BUSINESS
INTRODUCTION AND HISTORY
Gaylord Entertainment Company (the "Company") is a diversified
entertainment company operating principally in three segments: (i) hospitality
and attractions; (ii) creative content; and (iii) interactive media.
The Company traces its origins to a newspaper publishing business
founded in 1903 in the Oklahoma Territory by a group including the Gaylord and
Dickinson families. In 1928, the Company entered the radio broadcasting business
and, in 1949, expanded its broadcasting interests to include television
stations. The Company currently owns three radio stations. See "Interactive
Media."
In 1983, the Company acquired Opryland USA, an interrelated group of
businesses tracing their origins to the Grand Ole Opry music radio show created
in 1925, which has become the cornerstone of the Company's businesses. The
Company has developed an entertainment and convention/resort complex in
Nashville, Tennessee, that is anchored by the Opry House (the current home of
the Grand Ole Opry), the Opryland Hotel Nashville, which is one of the nation's
largest convention/resort hotels, and, until the end of 1997, the Opryland theme
park. Beginning in 2000, the former Opryland theme park site will be home to
Opry Mills, a $200 million entertainment/retail complex to be built in
partnership with The Mills Corporation. See "Other Interests."
Also in 1983, Opryland USA entered the cable networks business by
launching The Nashville Network ("TNN"), a cable network with a national
audience featuring country lifestyles, entertainment, and sports. In 1991, the
Company acquired a 67% interest in Country Music Television ("CMT"), a cable
network with a 24-hour country music video format. The Company subsequently
expanded CMT outside the U.S., and the first of the CMT International cable
networks was launched in Europe in 1992. CMT International, which programs
primarily country music videos, was later expanded into Asia and the Pacific
Rim, as well as Latin America. In 1994, the Company entered into an agreement to
manage the operations of Z Music, a cable network currently featuring
contemporary Christian music videos. During 1998, the Company obtained a
controlling interest in Z Music. In January 1997, the Company acquired the
assets of Word Entertainment ("Word"), one of the largest contemporary Christian
music companies in the world. See "Creative Content."
Prior to September 30, 1997, the Company was a wholly owned subsidiary
of a corporation which was then known as Gaylord Entertainment Company ("Old
Gaylord"). On October 1, 1997, Old Gaylord consummated a transaction with
Westinghouse Electric Corporation, which thereafter changed its name to CBS
Corporation ("CBS") and G Acquisition Corp., a wholly owned subsidiary of CBS,
pursuant to which G Acquisition was merged with and into Old Gaylord (the "CBS
Merger"), with Old Gaylord continuing as the surviving corporation and a wholly
owned subsidiary of CBS. Prior to the CBS Merger, Old Gaylord was restructured
by transferring its assets and liabilities, other than TNN, the U.S. and
Canadian operations of CMT, and certain other related assets and liabilities to
the Company and its subsidiaries. Following the restructuring, on September 30,
1997, Old Gaylord distributed pro rata to its stockholders all of the
outstanding capital stock of the Company (the "Distribution"). In connection
with these transactions, the Company and Old Gaylord entered into various
agreements relating to the future relationship between the Company and Old
Gaylord (as a subsidiary of CBS) after the CBS Merger (the "CBS Transitional
Agreements"), the net cost of which, if any, is expected to be immaterial to the
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Company. Immediately following the CBS Merger, the Company changed its name to
Gaylord Entertainment Company.
Unless the context otherwise requires, references in this Annual Report
on Form 10-K to the "Company" for periods prior to the Distribution are to Old
Gaylord.
HOSPITALITY AND ATTRACTIONS
The Company's hospitality and attractions group consists primarily of
an interrelated group of businesses including the Opryland Hotel Nashville, the
Inn at Opryland, the General Jackson (an entertainment showboat), and other
related businesses. Hotels currently under development in Osceola County,
Florida, (in the Orlando market) and Grapevine, Texas, (in the Dallas-Ft. Worth
market) are also a part of the hospitality and attractions group. See Note 15 to
the Company's Consolidated Financial Statements for the amounts of revenues,
operating income, and identifiable assets attributable to hospitality and
attractions.
OPRYLAND HOTEL NASHVILLE. The Opryland Hotel Nashville, situated on
approximately 120 acres in the Opryland complex, is one of the largest hotels in
the United States in terms of number of guest rooms and it has one of the
highest ratios of meeting and exhibit space per room. The Opryland Hotel
Nashville attracts convention business, which accounted for approximately 80% of
the hotel's revenues in each of 1999, 1998, and 1997 from major trade
associations and corporations. It also serves as a destination resort for
vacationers seeking accommodations in close proximity to the Grand Ole Opry and
the Springhouse Golf Club, the Company's 18-hole championship golf course, as
well as to other attractions in the Nashville area. The Company believes that
the ambiance created at the Opryland Hotel Nashville and the combination of a
state of the art convention facility, live musical entertainment, and
old-fashioned Southern hospitality and charm are factors that differentiate it
from other convention/resort hotels. In 2000 the company intends to begin a
three-year renovation and capital improvement program to provide significant
upgrades and additional features to the hotel by the end of 2002, at an
anticipated cost of $50 million.
The following table sets forth information concerning the Opryland
Hotel Nashville for each of the five years in the period ended December 31,
1999.
YEARS ENDED DECEMBER 31,
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1999 1998 1997 1996 1995
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Average number of guest rooms 2,884 2,884 2,866 2,613 1,907
Occupancy rate 78.0% 79.1% 85.4% 84.7% 87.5%
Average daily rate ("ADR")* $ 137.18 $ 138.51 $ 131.82 $ 128.48 $ 129.71
Food and beverage revenues (in thousands) $ 75,843 $ 72,659 $ 76,408 $ 59,904 $ 50,418
Total revenues (in thousands) $223,389 $223,781 $231,354 $196,226 $153,062
* The Company has made a slight change in its method of calculating average
daily room rates in order to be more consistent with industry standards.
To serve conventions, the Opryland Hotel Nashville has 2,884 guest
rooms, four ballrooms with approximately 123,900 square feet, 85 banquet/meeting
rooms, and total dedicated exhibition space of approximately 289,000 square
feet. Total meeting and exhibit space in the hotel exceeds 600,000 square feet.
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The interior of the hotel is divided into three areas, each featuring
indoor gardens, restaurants and shops. The Delta area features a New Orleans
street scene amidst a 4.5 acre southern-style indoor garden, all under a
15-story glass dome. Among the attractions of this area are a flowing waterfall
that creates a winding river more than a quarter of a mile long on which guests
can take a trip on one of the hotel's flatboats. The region also contains an
85-foot fountain and the Delta Island, which includes seven meeting and board
rooms, retail shops, lounges and a food court with a variety of quick-service
restaurants. The other two areas of the hotel, the Conservatory area, containing
an approximately 1.5 acre Victorian tropical garden, and the Cascades area,
containing an approximately 1.5 acre water garden, also feature interior
landscapes together with eating and shopping options.
Special productions for conventions are often staged in the hotel or on
the General Jackson showboat (described below). The Springhouse Golf Club
attracts conventions requiring the availability of golf and makes the hotel more
attractive to vacationers. The Springhouse Golf Club also hosts an annual Senior
PGA Tour event, the BellSouth Senior Classic at Opryland, which is televised on
ABC.
Opry Mills, a 1.2 million square foot retail entertainment center, will
open in May 2000 on a site adjacent to the Opryland Hotel Nashville. Upon
opening, the Company believes this new dimension of shopping and entertainment
will strengthen its position as an entertainment destination. See "Other
Interests."
The Opryland Hotel Nashville directs its convention marketing efforts
primarily to major trade, industry, and professional associations and
corporations. The Company believes that the primary factors in successfully
marketing the Opryland Hotel Nashville to meeting planners have been the
reputation of the hotel's services and facilities; the hotel's ability to offer
comprehensive convention services at a single facility; the quality and variety
of entertainment and activities available at the hotel and in the Opryland
complex generally; and the accessibility and central location of Nashville
within the United States. The Opryland Hotel Nashville typically enters into
contracts for conventions several years in advance. To date, Opryland Hotel
Nashville has experienced a minimal number of cancellations. Conventions under
contract that cancel are required to pay certain penalties and face the possible
loss of future convention space at the hotel. As of February 29, 2000, definite
convention bookings for the balance of 2000 and for 2001 were approximately
536,200 and 435,400 guest room nights, respectively, representing approximately
61% and 41%, respectively, of available guest room nights for such periods, and
the hotel had advance convention bookings extending into the year 2018.
The Company also markets the Opryland Hotel Nashville as a destination
resort through national and local advertising and a variety of promotional
activities. As part of its marketing activities, the Company advertises
promotional "packages" on TNN, CMT and through other media. Pursuant to the CBS
Transitional Agreements, the Company continues to have access to promotional
spots on TNN and CMT, consistent with past practices, allowing the Company to
promote the Opryland Hotel Nashville and other properties on these cable
networks until September 2002. In addition, as part of the divestiture of KTVT
(described below), the Company will receive $1 million worth of advertising time
on KTVT annually over the next 10 years to promote its businesses. Such
promotions include "Springtime Getaway," the International Country Music Fan
Fair Celebration in June of each year, and "A Country Christmas," which begins
each year in November and runs through Christmas Day. The Country Christmas
program has contributed to the hotel's high occupancy rate during the months of
November and December, traditionally a slow period for the hotel industry.
THE INN AT OPRYLAND. During 1998, the Company purchased a 307-room
hotel facility with approximately 6,500 square feet of meeting space and a
175-seat restaurant adjacent to the Opryland complex for approximately $16
million and renamed the facility the Inn at Opryland. The Company's
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planned renovations of the hotel, including a major renovation of the guest
rooms completed in 1999, will cost approximately $7.5 million.
THE GENERAL JACKSON. The Company operates the General Jackson, a
300-foot, four-deck paddle wheel showboat, on the Cumberland River, which flows
past the Opryland complex. Its Victorian Theatre can seat 620 people for
banquets and 1,000 people for theater-style presentations. The showboat stages
Broadway-style shows and other theatrical productions. It is one of many sources
of entertainment that the Company makes available to conventions held at the
Opryland Hotel Nashville and contributes to the Company's revenues from
convention participants as well as local business. During the day it operates
cruises, serving primarily tourists visiting the Opryland complex and the
Nashville area.
OPRYLAND HOTEL DEVELOPMENT. In February 1998, the Company announced
plans to develop new convention hotels to expand the Opryland Hotel concept to
other areas of the country. The Company's business strategy is to develop
properties in selected locations across the U.S. to serve meetings and
conventions in the same manner as the Opryland Hotel Nashville. These new
convention hotels will allow the Company to capture additional convention
business from groups that currently utilize the Opryland Hotel Nashville but
must rotate their meetings to other locations due to their attendees' desire to
experience different markets.
Plans for the properties to be developed include the following
components which the Company believes are the foundation of its success with the
Opryland Hotel Nashville: (i) state-of-the-art meeting facilities, including a
high ratio of square footage of meeting and exhibit space per guest room; (ii)
expansive atriums themed to capture geographical and cultural aspects of the
region in which the property is located; and (iii) entertainment components and
venues creating a guest experience not typically found in convention hotels.
The Company has researched various markets in the United States and has
determined that markets in the southern half of the country are most desirable
to convention planners due to more favorable year-round weather conditions. Two
markets, Osceola County, Florida, near Orlando, and Grapevine, Texas, near the
Dallas-Fort Worth airport, have been chosen for the first two properties to be
developed. The Company has executed a 75-year lease with a 24-year renewal
option on a 65-acre site in Osceola County, and has acquired or anticipates
acquiring, through ownership or ground lease, approximately 100 acres of
property for the Grapevine location. Construction of Opryland Hotel Florida
began in June 1999 and conceptual and schematic design work is in progress for
Opryland Hotel Texas. Plans for each of the properties include 1,400 guest rooms
for Opryland Hotel Florida and 1,500 guest rooms for Opryland Hotel Texas, with
each hotel having approximately 400,000 square feet of convention space.
The Company expects to open Opryland Hotel Florida in 2002 and to
initiate construction of Opryland Hotel Texas in the summer of 2000, with an
anticipated opening in 2003. Total development costs for the two hotels will be
approximately $800 million. The Company is currently evaluating various
financing alternatives for these projects.
CREATIVE CONTENT
During 1999, the Company's creative content group consisted primarily
of the Grand Ole Opry, the Ryman Auditorium, the Wildhorse Saloon, Acuff-Rose
Music Publishing, Word Entertainment, and other related businesses. See Note 15
to the Company's Consolidated Financial Statements for the amounts of revenues,
operating income, and identifiable assets attributable to the Company's creative
content operations.
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THE GRAND OLE OPRY. Celebrating its 75th anniversary in 2000, the Grand
Ole Opry is the most widely known platform for country music in the world. The
Opry features a live country music show with performances every Friday and
Saturday night, as well as frequent summer matinees. The Opry House, home of the
Grand Ole Opry, is located in the Opryland complex. The Grand Ole Opry moved to
the Opry House in 1974 from its original home in the Ryman Auditorium in
downtown Nashville.
The show is broadcast live by the Company's WSM-AM radio every Friday
and Saturday night, and TNN telecasts a 30-minute live segment every Saturday
night. Pursuant to the CBS Transitional Agreements, TNN will continue to
televise this live segment of the Grand Ole Opry until at least September 2002.
The show has been broadcast since 1925 on WSM-AM, making it the longest running
live radio program in the world.
The Grand Ole Opry currently has 70 performing members who are stars or
other notables in the country music field. There are no financial inducements
attached to membership in the Grand Ole Opry other than the prestige associated
with membership. In addition to performances by members, the Grand Ole Opry
presents performances by many other country music artists. Members include
traditional favorites, such as Loretta Lynn and George Jones, as well as
contemporary artists, like Garth Brooks, Vince Gill, and Trisha Yearwood. The
following is a list of the current members of the Grand Ole Opry (including year
of membership).
MEMBERS OF THE GRAND OLE OPRY
Bill Anderson-1961 Emmylou Harris-1992 Ray Pillow-1966
Ernie Ashworth-1964 Jan Howard-1971 Charley Pride-1993
Clint Black-1991 Alan Jackson-1991 Jeanne Pruett-1973
Garth Brooks-1990 Stonewall Jackson-1969 Del Reeves-1966
Jim Ed Brown-1963 Jim & Jesse-1964 Riders In The Sky-1982
Bill Carlisle-1953 George Jones*-1969 Johnny Russell-1985
Roy Clark-1987 Hal Ketchum-1994 Jeannie Seely-1967
John Conlee-1981 Alison Krauss-1993 Ricky Van Shelton-1988
Wilma Lee Cooper-1957 Hank Locklin-1960 Jean Shepard-1955
Skeeter Davis-1959 Charlie Louvin-1955 Ricky Skaggs-1982
Diamond Rio-1998 Patty Loveless-1988 Connie Smith-1971
Little Jimmy Dickens*-1948 Loretta Lynn*-1962 Mike Snider-1990
Joe Diffie-1993 Barbara Mandrell-1972 Ralph Stanley-2000
Roy Drusky-1958 Martina McBride-1995 Marty Stuart-1992
Holly Dunn-1989 Mel McDaniel-1986 Randy Travis-1986
The 4 Guys-1967 Reba McEntire-1986 Travis Tritt-1992
Larry Gatlin & The Ronnie Milsap-1976 Porter Wagoner-1957
Gatlin Brothers-1976 Lorrie Morgan-1984 Billy Walker-1960
Don Gibson-1958 Jimmy C. Newman-1956 Charlie Walker-1967
Vince Gill-1991 The Osborne Brothers-1964 Steve Wariner-1996
Billy Grammer-1959 Bashful Brother Oswald-1995 The Whites-1984
Jack Greene-1967 Dolly Parton*-1969 Teddy Wilburn-1953
Tom T. Hall-1980 Johnny PayCheck-1997 Trisha Yearwood-1999
George Hamilton IV-1960 Stu Phillips-1967
* Members of the Country Music Hall of Fame.
The Opry House contains a 45,000 square foot auditorium with 4,400
seats, a television production center that includes a 300-seat studio and
lighting, audio, and video control rooms, and set design and scenery shops. The
Opry House is used by the Company for the production of television and other
programming and by third parties such as national television networks and the
Public Broadcasting
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System. The Opry House is also rented for concerts, theatrical productions, and
special events and is used by the Opryland Hotel Nashville for convention
entertainment and events. Pursuant to the CBS Transitional Agreements, TNN and
CMT will have access to and use of the Opry House and certain other properties
owned by the Company until at least September 2002.
RYMAN AUDITORIUM. The Ryman Auditorium, built in 1892, is listed on the
National Register of Historic Places and seats approximately 2,100. In 1994, the
Company re-opened the renovated Ryman Auditorium, the former home of the Grand
Ole Opry, for concerts and musical productions.
Since its reopening, the Ryman Auditorium has featured musicals
produced by the Company such as Always . . . Patsy Cline, Lost Highway--The
Music & Legend of Hank Williams, and Bye Bye Love--The Everly Brothers Musical.
In 1999, the Ryman's expanded musical series featured three productions--Pump
Boys & Dinettes, Smoke on the Mountain, and A Musical Christmas Carol. In 2000,
the Ryman Auditorium plans to present a five-show musical series highlighted by
the Broadway touring production of Smokey Joe's Cafe and the return of Always .
. . Patsy Cline. Recent concert performers at the Ryman Auditorium include Faith
Hill, James Brown, Bob Dylan, Amy Grant, Lyle Lovett, The Dave Matthews Band,
Ricky Skaggs, and Bruce Springsteen.
THE WILDHORSE SALOON. Since 1994, the Company has owned and operated
the Wildhorse Saloon, a country music performance venue on historic Second
Avenue in downtown Nashville. The Wildhorse Saloon has featured such performers
as Tim McGraw and the Dixie Chicks. The three story, 56,000 square-foot facility
includes a 3,000 square-foot dance floor, a 190-seat restaurant and banquet
facility, and a 15' x 22' television screen featuring, among other things,
country music videos and sporting events. The club also has a broadcast-ready
stage and facilities to house mobile production units from which broadcasts of
live concerts may be distributed nationwide.
In April 1998, a second Wildhorse Saloon was opened at the Walt Disney
World(R) Resort near Orlando, Florida, to expand the Wildhorse Saloon concept
beyond Nashville to a major, high-profile tourist area. The Company acquired a
100% interest in the Orlando Wildhorse Saloon in December 1998. The Orlando
Wildhorse Saloon entertainment venue and restaurant comprises approximately
27,000 square feet.
ACUFF-ROSE MUSIC PUBLISHING. Acuff-Rose Music Publishing is primarily
engaged in the music publishing business and owns one of the world's largest, as
well as Nashville's oldest, catalog of copyrighted country music songs. The
Acuff-Rose catalog also includes popular music, with songs by legendary writers
such as Hank Williams, Pee Wee King, Roy Orbison, and Don and Phil Everly. The
Acuff-Rose catalog contains at least 70 songs that have been publicly performed
over a million times. Standards such as "Oh, Pretty Woman," "Blue Eyes Cryin' in
the Rain," and "When Will I Be Loved" are included in the roster of Acuff-Rose
songs. Acuff-Rose licenses the use of its songs in films, plays, print,
commercials, videos, cable, and television. In addition to its U.S.-based
business, through various subsidiaries and sub-publishers, Acuff-Rose collects
royalties on licenses granted in a number of foreign countries.
WORD ENTERTAINMENT. Word is one of the largest contemporary Christian
music companies in the world, with four proprietary record labels featuring
artists such as Amy Grant, Sixpence None the Richer, Point Of Grace, Jaci
Velasquez, Shirley Caesar, and Winans Phase2. Word produces and distributes a
wide variety of contemporary Christian and inspirational music, including adult
contemporary, pop, rock, gospel, praise and worship, rap, alternative, and other
emerging genres, with an emphasis on positive and inspirational themes. Other
significant Word operations include the creation of print music, congregational
hymnals, and children's videos. Word's music publishing division includes a
catalog of over 40,000 songs. In addition, Word has entered into exclusive
distribution agreements for the sale of
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music and video products owned by various third parties. Word's products are
distributed in the Christian bookstore market by its own dedicated sales force
and in mainstream retail stores through Word's distribution arrangement with
Epic Records.
PANDORA. In July 1998, the Company acquired Pandora Investment S.A., a
European-based film rights acquisition and distribution company. Pandora is a
worldwide distributor of feature films and syndicated television programming and
conducts most of its business outside of the United States.
OKLAHOMA REDHAWKS. In 1999, the Company acquired an additional 2.9%
interest in OKC Athletic Club Limited Partnership, a limited partnership that
owns the Oklahoma Redhawks, a minor league baseball club, and in certain
concession rights for the club. The additional interest was acquired in exchange
for cash consideration of $250,000. As of December 31, 1999, the Company owned a
68% interest in OKC Athletic Club Limited Partnership. The Company has executed
additional purchase agreements which are being reviewed by Major League
Baseball. If approved by Major League Baseball, these agreements will result in
the Company obtaining an additional 7.1% interest for cash consideration of
approximately $625,000.
OTHER INTERESTS. The creative content group also includes an artist
management company, a professional athlete management company, and a television
production company focusing on specialty golf events.
INTERACTIVE MEDIA
The Company's interactive media group consists primarily of Gaylord
Digital, three radio stations, CMT International, and Z Music. See Note 15 to
the Company's Consolidated Financial Statements for the amounts of revenues,
operating income, and identifiable assets attributable to the Company's
interactive media operations.
GAYLORD DIGITAL. Gaylord Digital, formerly GETdigitalmedia, was
established in 1999 to initiate an Internet strategy that focuses on the
Company's three primary customer groups: country music fans, Christian music
fans, and people involved in the meetings and conventions industry. Gaylord
Digital's revenues are primarily generated by e-commerce, advertising, and
broadcasting.
On July 28, 1999, the Company acquired a majority interest in GBRJ
Music, LLC, which owns Musicforce.com, an online e-commerce community that
concentrates on contemporary Christian music, and all of the assets related to
Lightsource.com, the Christian content provider for the spiritual channel of
broadcast.com (now part of the Yahoo! (R) network). The Company entered into
option agreements regarding the additional interests of GBRJ Music as a part of
the transaction, and as of December 31, 1999, the Company owned approximately
84% of GBRJ Music. Musicforce.com and Lightsource.com serve as the foundation of
Gaylord Digital. In addition to these investments, the Company acquired
Soundmarket.net, a country music search engine created from a fan's perspective,
and related assets in August 1999. The Company also acquired Songs.com, an
e-commerce and community site dedicated to helping independent music artists
connect with their fans on the Internet, and related assets in December 1999.
The Company also has minority investments in Intertainer, Inc., a
leading provider of home entertainment services on demand; Copernicus
Interactive, Inc., which operates Edgate.com, an educational portal and
community focused on grades K-12; and CountryCool.com, Inc., a comprehensive
Internet portal and original content provider for country music fans and
industry insiders.
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KTVT. In October 1999, CBS Corporation acquired television station
KTVT, in Dallas-Fort Worth, Texas, from the Company. KTVT, located in the
nation's 7th-largest television market, was purchased by the Company in 1963 and
operated as an independent station until becoming a CBS affiliate in July 1995.
In consideration for the sale of its interest in KTVT, the Company
received shares of CBS Series B convertible preferred stock that are convertible
into 10,141,691 shares of CBS common stock, approximately $4.2 million in cash,
and other consideration. The Company will also receive $1 million worth of
advertising time on the station annually over the next 10 years.
WSM-AM AND WSM-FM. WSM-AM and WSM-FM commenced broadcasting in 1925 and
1967, respectively. The Company's involvement with country music dates back to
the creation of the Grand Ole Opry, which has been broadcast live on WSM-AM
since 1925.
WSM-AM and WSM-FM are each broadcast from the Opryland complex and have
country music formats. WSM-AM went on the air in 1925 and is one of the nation's
25 "clear channel" stations, meaning that no other station in a 750-mile radius
uses the same frequency for nighttime broadcasts. As a result, the station's
signal, transmitted by a 50,000 watt transmitter, can be heard at night in much
of the United States and parts of Canada. The Company also has radio broadcast
studios in the Opryland Hotel Nashville and at the Wildhorse Saloon in
Nashville.
WWTN-FM. In 1995, the Company acquired the assets of radio station
WWTN-FM, which operates out of Nashville, Tennessee. WWTN-FM has a
news/talk/sports format and is the flagship station of the Nashville Predators,
a National Hockey League club of which the Company owns a minority interest.
CMT INTERNATIONAL. In October 1992, the Company launched CMT
International in Europe. CMT International expanded its reach to include
portions of Asia and the Pacific Rim, including Australia and New Zealand, with
the launch of a second cable network in 1994. In 1995, CMT International
launched its third cable network in Latin America. In February 1998, the Company
announced its plans to expand the operations of CMT International in Asia and
the Pacific Rim and Latin America and to cease operations in Europe. The Company
ceased its CMT Europe satellite feed on March 31, 1998. The Company currently
plans to pursue reentry into the European market. The programming for CMT
International currently consists primarily of country music videos.
In September 1999, the Company acquired a 15% minority interest in the
operations of two Argentine cable networks, Solo Tango and TV Argentina.
Pursuant to the terms of a program license agreement, CMT International provides
a block of CMT-branded programming for airing on the TV Argentina cable network.
On December 31, 1999, CMT International reached approximately 6.4
million subscribers on a full- and part-time basis, including approximately 1.1
million subscribers in Australia and approximately 1.3 million subscribers in
Brazil.
Z MUSIC. In 1994, the Company agreed to manage Z Music, Inc. in
exchange for an option to purchase 95% of Z Music's outstanding capital stock.
The Company funded Z Music's operations with advances under a note receivable.
During the fourth quarter of 1998, the Company foreclosed on and acquired the
assets of Z Music securing the note receivable.
The Z Music cable network features contemporary Christian music videos
and is currently available in approximately 7.5 million U.S. homes on either a
full- or part-time basis, including 2.7
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million cable homes and 4.8 million broadcast homes. The network's video
programming covers a spectrum of musical styles, ranging from inspirational,
country and rock videos to spiritual music videos with more overt Christian
messages. The Z Music network also programs music news and artists' interviews,
featuring artists with strong convictions and a passion for their message. The
network's programming includes positive, uplifting music by artists that are not
necessarily categorized as Christian.
OTHER INTERESTS
The Company's other interests consist primarily of the Company's
investments in Opry Mills, Bass Pro Shops, and the Nashville Predators. See Note
15 to the Company's Consolidated Financial Statements for the amounts of
revenues, operating income, and identifiable assets attributable to the
Company's Corporate and Other operations.
OPRY MILLS. From 1972 until the end of 1997, the Company operated the
Opryland theme park, a musical show park located within the Opryland complex
that emphasized live productions of country, rock `n' roll, gospel, bluegrass,
and Broadway show tunes. In November 1997, the Company announced plans to close
the Opryland theme park and to develop Opry Mills, a $200 million
entertainment/retail complex, in partnership with The Mills Corporation. The
Company owns a one-third interest in the partnership.
The new Opry Mills retail complex, with 1.2 million square feet of
leasable space, is expected to enhance the Opryland properties, particularly the
Opryland Hotel Nashville, the Grand Ole Opry, and the General Jackson. Unlike
the Opryland theme park, which operated full-time only in the summer and
part-time during the Christmas season and on weekends in the spring and autumn,
Opry Mills will provide shopping, entertainment, and dining experiences for
visitors to the Company's existing properties on a year-round basis. The Company
currently expects that Opry Mills will open in May 2000.
BASS PRO SHOPS. In 1993, the Company purchased a minority interest in
Bass Pro, L.P., a partnership that owns and operates Bass Pro Shops, a leading
retailer of premium outdoor sporting goods and fishing tackle. Bass Pro Shops
serves its customers through an extensive mail order catalog operation, a
185,000-square-foot retail center in Springfield, Missouri, and additional
retail stores in Atlanta, Georgia; Gurnee, Illinois (near Chicago); Ft.
Lauderdale, Florida; Islamorada, Florida; Concord, North Carolina; Katy, Texas
(near Houston); and Grapevine, Texas, near the location of the planned Opryland
Hotel Texas. Bass Pro Shops has announced plans to build three additional
stores, including one to be located in the new Opry Mills complex. The Company's
properties are featured in the millions of Bass Pro Shops catalogs published
annually.
In December 1999, Bass Pro, L.P., was reorganized to spin off certain
non-essential business assets. As part of the reorganization, the partnership
relinquished its equity interest in various subsidiaries, including those that
owned Tracker Marine, a manufacturer of fiberglass and aluminum fishing boats,
and Big Cedar Lodge, a resort development located in southern Missouri. The
Company and the other limited partners in Bass Pro, L.P., contributed their
limited partnership interest to a newly formed Delaware corporation, Bass Pro,
Inc., which is the successor-in-interest to Bass Pro, L.P.'s assets,
liabilities, and obligations. The Company has a minority interest in Bass Pro,
Inc.
NASHVILLE PREDATORS. The Company owns a 19.9% interest in the Nashville
Hockey Club Limited Partnership, a limited partnership that owns the Nashville
Predators, an expansion franchise of the National Hockey League which began its
second season in the fall of 1999.
In November 1999, the Company entered into a Naming Rights Agreement
with the limited partnership whereby the Company purchased the right to name the
Nashville Arena as the "Gaylord
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Entertainment Center" and to place certain advertising within the arena. Under
the agreement, which has a 20-year term, the Company is required to make annual
payments of $2,050,000, subject to a 5% annual increase, and to purchase a
minimum number of event tickets each year.
COMPETITION
HOSPITALITY AND ATTRACTIONS. The Company's Opryland hospitality and
attractions businesses compete with all other forms of entertainment, lodging,
and recreational activities. In addition to the competitive factors outlined
below for each of the Company's businesses within the hospitality and
attractions group, its success is dependent upon certain factors beyond the
Company's control including economic conditions, amount of available leisure
time, transportation costs, public taste, and weather conditions.
The Opryland Hotel Nashville competes with other hotels throughout the
United States and abroad, including many hotels operated by companies with
greater financial, marketing, and human resources than the Company. Principal
factors affecting competition within the convention/resort hotel industry
include the hotel's reputation, quality of facilities, location and convenience
of access, price, and entertainment. The hotel business is management and
marketing intensive. The Opryland Hotel Nashville competes with other hotels
throughout the United States for high quality management and marketing
personnel. Although Opryland Hotel Nashville has historically enjoyed a
relatively low rate of turnover among its managerial and marketing personnel,
there can be no assurance that it will continue to be able to attract and retain
employees with the requisite managerial and marketing skills. The hotel also
competes with other employers for non-managerial employees in the Middle
Tennessee labor market, which recently has had a low level of unemployment. The
low unemployment rate makes it difficult to attract qualified non-managerial
employees and has been a substantial factor in the high turnover rate among
those employees.
CREATIVE CONTENT. The Company's various creative content businesses
compete with all other entertainment outlets. Success in the entertainment
industry is dependent on taste and fashion, which may fluctuate from time to
time. Word competes with numerous other companies that publish and distribute
Christian inspirational music. In addition, Word and Acuff-Rose compete with
other record and music publishing companies, both Christian and secular, to sign
artists and songwriters. The Company's ability to sign and re-sign popular
recording artists and successful songwriters depends on a number of factors,
including distribution and marketing capabilities, management teams, and the
royalty and advance arrangements offered.
INTERACTIVE MEDIA. The market for Internet products and services is
rapidly evolving and highly competitive. There are no substantial barriers to
entry in these markets, and the Company expects that competition in the industry
will continue to intensify. As Gaylord Digital expands the scope of its Internet
services, it will compete directly with a greater number of Internet sites and
other media companies across a wide range of different online services.
Gaylord Digital competes with other online vendors, many of whom
possess significant brand awareness, sales volume and customer bases. In
addition, Gaylord Digital competes with traditional retailers who currently may
or may not sell products or services through the Internet, in addition to other
Internet attractions and entertainment products. The Company believes that the
principal competitive factors in this market are brand recognition, selection,
personalized services, convenience, price, accessibility, customer service,
quality of search tools, quality of editorial and other site content, security,
and reliability and speed of fulfillment. Many of Gaylord Digital's existing
competitors, in addition to potential competitors that may enter the industry,
have significantly greater financial, technical, marketing and distribution
resources than Gaylord Digital. In addition, providers of Internet tools and
services may
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be acquired by, receive investments from, or enter into other commercial
relationships with larger, well-established and well-financed companies. These
developments could have an adverse effect on Gaylord Digital's ability to
compete.
WSM-AM, WSM-FM, and WWTN-FM compete for advertising revenues with other
radio stations in the Nashville market on the basis of formats, ratings, market
share, and the demographic makeup of their audiences. Advertising rates of the
radio stations are based principally on the size, market share, and demographic
profile of their listening audiences. The Company's radio stations primarily
compete for both audience share and advertising revenues. They also compete with
the Internet, newspapers, billboards, cable networks, local cable channels, and
magazines for advertising revenues. Management competence and experience,
station frequency signal coverage, network affiliation, effectiveness of
programming format, sales effort, and level of customer service are all
important factors in determining competitive position.
CMT International and Z Music compete for viewer acceptance with all
forms of video entertainment, including other basic cable services, premium
cable services, commercial television networks, independent television stations,
and products distributed for the home video markets, in addition to the motion
picture industry and other communications, media, and entertainment services.
CMT International and Z Music compete with other nationally and internationally
distributed cable networks and local broadcast television stations for available
channel space on cable television systems, with other cable networks for
subscriber fees from cable systems operators, and with all forms of
advertiser-supported media for advertising revenues. The Company also competes
to obtain creative talents, properties, and market share, which are essential to
the success of its cable networks business.
The principal competitive factors in obtaining viewer acceptance, on
which cable subscriber fees and advertiser support ultimately depend, are the
appeal of the networks' programming focus and the quality of their programming.
Viewers' tastes in music and television, which impact the acceptance of the
Company's programming, may also change from time to time. Music videos
constitute substantially all of CMT International's and Z Music's programming.
These videos are currently provided to the Company for promotional purposes by
record companies and may also be distributed to other programming services as
well as to other media.
Until September 2001, pursuant to the CBS Transitional Agreements, the
Company is prohibited from owning or operating a cable network featuring country
music videos or a significant amount of musical, sports, variety, or other
entertainment features or series, the theme of which is perceived by the viewing
public as "country entertainment." The Company is also generally prohibited,
until September 2001, from providing, or making available for viewing, "country
entertainment" programming on a cable network or an over-the-air broadcast
television station. Notwithstanding the foregoing, the Company can own and
operate CMT International in any area outside of the United States and Canada,
provided that CMT International's programming, other than country music videos,
will not primarily consist of programming featuring or related to "country
entertainment."
REGULATION AND LEGISLATION
HOSPITALITY AND ATTRACTIONS. The Opryland Hotel Nashville is subject to
certain federal, state, and local governmental regulations including, without
limitation, health, safety, and environmental regulations applicable to hotel
and restaurant operations. The Company believes that it is in substantial
compliance with such regulations. In addition, the sale of alcoholic beverages
by the Opryland Hotel Nashville requires a license and is subject to regulation
by the applicable state and local authorities. The agencies involved have the
power to limit, condition, suspend, or revoke any such license, and any
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disciplinary action or revocation could have an adverse effect upon the results
of the operations of the Company's hospitality and attractions segment.
INTERACTIVE MEDIA. Radio broadcasting is subject to regulation under
the Communications Act of 1934, as amended (the "Communications Act"). Under the
Communications Act, the FCC, among other things, assigns frequency bands for
broadcasting; determines the frequencies, location, and signal strength of
stations; issues, renews, revokes, and modifies station licenses; regulates
equipment used by stations; and adopts and implements regulations and policies
that directly or indirectly affect the ownership, operation, and other practices
of broadcasting stations.
Licenses issued for radio stations have terms of eight years. Radio
broadcast licenses are renewable upon application to the FCC and in the past
usually have been renewed except in rare cases. Competing applications will not
be accepted at the time of license renewal, and will not be entertained at all
unless the FCC first concludes that renewal of the license would not serve the
public interest. A station will be entitled to renewal in the absence of serious
violations of the Communications Act or the FCC regulations or other violations
which constitute a pattern of abuse. The Company is aware of no reason why its
radio station licenses should not be renewed.
FCC regulations also limit concentrations of media ownership on both
the local and national levels. FCC regulations prohibit the common ownership or
control of most communications media serving the same market areas (i.e., (i)
television and radio ownership; (ii) television and daily newspapers; (iii)
radio and daily newspapers; and (iv) television and cable television). The FCC's
liberal waiver policy for joint television and radio ownership now covers the
top 50 markets. The number of radio stations a single entity may own in the same
market area depends on the number of stations operating in the local radio
market, and the FCC is conducting a rulemaking proceeding to consider whether
owning more than one television station in the same market area may be
permitted. The FCC has also issued a notice of inquiry for the purpose of
reevaluating the restriction on radio/newspaper cross ownership. There are no
limits on the total number of radio stations commonly owned on a national basis.
The Communications Act also places certain limitations on alien
ownership or control of entities holding broadcast licenses. The Company's
Restated Certificate of Incorporation contains a provision permitting the
Company to redeem common stock from certain holders if the Board of Directors
deems such redemption necessary to prevent the loss or secure the reinstatement
of any of its licenses or franchises. Communications companies may have officers
and directors who are not U.S. citizens.
The foregoing is only a brief summary of certain provisions of the
Communications Act and FCC regulations. The Communications Act and FCC
regulations may be amended from time to time, and the Company cannot predict
whether any such legislation will be enacted or whether new or amended FCC
regulations will be adopted, or the effect on the Company of any such changes.
CMT International's programming and uplink services are handled in the
United States. Although the operations of the Company's cable networks are not
directly subject to regulation, any future legislation or regulatory actions
that increase rate regulation or effect structural changes on the Company's
cable networks could require cable networks to lower charges for their
programming. Increased rate regulation could, among other things, affect the
ability or willingness of cable system operators to establish or retain Z Music
as a basic tier cable service.
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RECENT DEVELOPMENTS
In January 2000, the Company announced plans to form a joint venture
with The Peterson Companies to develop a 2000-room convention hotel on the
Potomac River in Maryland (Washington, D.C. market).
In March 2000, the Company finalized a transaction to become a partner
with MegaCable, Mexico's second-largest cable television operator. The initial
focus of the partnership will be the operations of Video Rola, a 24-hour video
channel, now available in Mexico, that features regional Mexican music. The
Company will be responsible for the distribution, sales, and marketing of Video
Rola in the United States.
EMPLOYEES
As of December 31, 1999, the Company had approximately 4,330 full-time
and 1,490 part-time and temporary employees. The Company believes its relations
with its employees are good.
EXECUTIVE OFFICERS OF THE REGISTRANT
The following table sets forth certain information regarding executive
officers of the Company. All officers serve at the discretion of the Board of
Directors.
Name Age Position
- ---- --- --------
E. K. Gaylord II.......... 42 Chairman of the Board
Terry E. London........... 50 Director, President, and Chief Executive Officer
J. Tim DuBois............. 51 President, Creative Content Group
David B. Jones............ 56 President, Opryland Hospitality Group
W. Brian Payne............ 29 President, Interactive Media Group
Jerry O. Bradley.......... 60 President, Acuff-Rose Music Publishing, Inc.
Roderick F. Connor, Jr.... 47 Senior Vice President and Chief Administrative Officer
Jack L. Gaines............ 58 President, Opryland Hotel and Attractions
Carl W. Kornmeyer......... 47 Senior Vice President of Corporate Development and Acting
Chief Financial Officer
Dan E. Harrell............ 51 President, Idea Entertainment, Inc.
The following is additional information with respect to the above-named
executive officers and directors.
Mr. E. K. Gaylord II has served as Chairman of the Board of the Company
since May 1999. He served as Vice Chairman of the Board from May 1996 until May
1999, and he has been a director of the Company since 1977. Mr. Gaylord has been
the president of OPUBCO since June 1994 and is a director of OPUBCO. He served
as executive vice president and assistant secretary of OPUBCO from June 1993
until June 1994. He also owns and operates the Lazy E Ranch in Guthrie,
Oklahoma, and is a director of the National Cowboy Hall of Fame & Western
Heritage Center. Mr. Gaylord is the son of Mr. Edward L. Gaylord and the brother
of Mrs. Christine Gaylord Everest, both of whom are directors of the Company.
Mr. London has been the President and Chief Executive Officer and a
director of the Company since May 1997. Mr. London was also the acting Chief
Financial Officer of the Company from March
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1997 until February 1998. Prior to May 1997, Mr. London had served, since March
1997, as Executive Vice President and Chief Operating Officer and, from
September 1993 until March 1997, as Senior Vice President and Chief Financial
and Administrative Officer of the Company. He has been employed by the Company
in various capacities since 1978. Mr. London is a certified public accountant.
Mr. DuBois has served as President of the creative content group since
February 2000. From 1989 until February 2000, he was president of Arista
Nashville, a record company.
Mr. Jones has been the President of the newly formed Opryland
Hospitality Group since May 1999. He served as President of the Opryland Lodging
Group from May 1998 until May 1999. From 1993 until May 1998, Mr. Jones served
as president and chief operating officer of John Q. Hammons Hotels, Inc.
Mr. Payne has served as President of the interactive media group since
November 1999. From June 1999 until November 1999, he was Vice President of the
Company's Internet operations. Mr. Payne was a financial analyst for the Company
from October 1996 until June 1999. Mr. Payne served as an intern at the Company
from May 1995 until October 1996.
Mr. Bradley has served as President of Acuff-Rose Music Publishing
since September 1993.
Mr. Connor has served as the Senior Vice President and Chief
Administrative Officer of the Company since December 1997. From February 1995 to
December 1997, Mr. Connor was the Vice President and Corporate Controller of the
Company. For more than three years prior to February 1995, Mr. Connor was the
Corporate Controller of the Company.
Mr. Gaines has served as President of the Opryland Hotel and
Attractions since February 1998. From 1994 until February 1998, Mr. Gaines
operated JLG Consulting, a hotel consulting business.
Mr. Kornmeyer has been Senior Vice President of Corporate Development
since November 1999 and Acting Chief Financial Officer since December 1999. He
served as President of the Company's broadcasting, cable networks and Internet
operations from October 1997 until November 1999. He served as Senior Vice
President of Broadcast and Business Affairs of the Company's broadcasting and
cable networks operations from March 1996 until October 1997. He served as Vice
President of Business Affairs of the Company's broadcasting and cable networks
operations from March 1994 until February 1996.
Mr. Harrell served as President of the Company's Christian music, film,
and artist and sports management businesses from March 1997 until February 2000.
For over 17 years prior to March 1997, Mr. Harrell was co-owner of Blanton
Harrell Entertainment. Mr. Harrell's employment with the Company terminated as
of February 28, 2000.
ITEM 2. PROPERTIES
The Company owns its executive offices and headquarters located at One
Gaylord Drive, Nashville, Tennessee, which consists of a four-story office
building comprising approximately 80,000 square feet. The Company believes that
its present facilities for each of its business segments as described below are
generally well maintained. The Company believes that it will require additional
office facilities to accommodate its anticipated growth over the next several
years.
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HOSPITALITY AND ATTRACTIONS
The Company owns the land and improvements that comprise the Opryland
complex in Nashville, Tennessee. The Opryland complex includes the site of the
Opryland Hotel Nashville (approximately 120 acres), the site of the Opry Mills
mall which is being constructed on a portion of the site that was formerly the
Opryland theme park (approximately 200 acres), the General Jackson showboat's
docking facility, the production and administration facilities that are
currently being leased to CBS for TNN and CMT, the Opry House, and WSM Radio's
offices and studios.
The Company has entered into 99-year lease agreements with The Mills
Corporation for approximately 124 acres of the Opryland complex in exchange for,
among other consideration, a one-third interest in a partnership formed for the
development of Opry Mills.
The Company also owns the Springhouse Golf Club, an 18-hole golf course
situated on approximately 240 acres, a 26-acre KOA campground, and the 6.7-acre
site of the Inn at Opryland, all of which are located near the Opryland complex.
The Company has acquired, through ownership or ground lease,
approximately 100 acres of property in Grapevine, Texas, for the location of
Opryland Hotel Texas. In addition, the Company has executed a 75-year lease with
a 24-year renewal option on a 65-acre site in Osceola County, Florida, for the
location of Opryland Hotel Florida.
CREATIVE CONTENT
The Company owns the Acuff-Rose Music Publishing building (and adjacent
real estate) located on Nashville's "Music Row" and an office building of
approximately 40,000 square feet, also located on Music Row, for use by Word
Entertainment as executive and administrative office space. Word leases
approximately 36,000 additional square feet on various floors of a Nashville
office building, which space is primarily used for sales and administrative
offices. Leases for the office property described above expire on various dates
ranging from August 2001 to November 2003. Word also leases sales offices and
warehouse space in Delta, Canada and Milton Keynes, United Kingdom.
Additionally, the Company and Word guarantee the lease of warehouse space in
Smyrna, Tennessee, for use in connection with warehousing and distribution.
In addition, the Company owns the Ryman Auditorium and a Wildhorse
Saloon dance hall and production facility in downtown Nashville. The Company
also owns and uses a 100,000 square foot warehouse in Old Hickory, Tennessee.
The Company leases its Wildhorse Saloon site in Orlando.
INTERACTIVE MEDIA
The Company owns the offices and three television studios of TNN and
CMT, all of which are located within the Opryland complex and contain
approximately 87,000 square feet of space. Pursuant to the CBS Transitional
Agreements, these facilities are being leased to CBS. Master control and
satellite uplink operations for CMT International and Z Music are also located
in the facilities being leased to CBS. The services for the satellite uplink
operations are being provided by CBS to the Company pursuant to the CBS
Transitional Agreements. CMT International has offices in the executive office
building and currently leases its transponders. Additionally, CMT International
leases office space in Sydney, Australia, and Miami, Florida.
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The Company acquired a building of approximately 38,800 square feet
located in downtown Nashville, Tennessee, in September 1999. Upon completion of
renovations, the building will serve as administrative and executive office
space for Gaylord Digital. Currently, Gaylord Digital leases approximately
12,000 square feet of office space in two buildings located in downtown
Nashville. Leases for this office property expire on various dates ranging from
March 2000 to December 2000.
ITEM 3. LEGAL PROCEEDINGS
The Company maintains various insurance policies, including general
liability and property damage insurance, as well as product liability, workers'
compensation, business interruption, and other policies, which it believes
provide adequate coverage for the risks associated with its range of operations.
Various subsidiaries of the Company are involved in lawsuits incidental to the
ordinary course of their businesses, such as personal injury actions by guests
and employees and complaints alleging employee discrimination. The Company
believes that it is adequately insured against these claims by its existing
insurance policies and that the outcome of any pending claims or proceedings
will not have a material adverse effect upon its financial position or results
of operations.
The Company may have potential liability under the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980, as amended
("CERCLA" or "Superfund"), for response costs at two Superfund sites. The
liability relates to properties formerly owned by Old Gaylord. In 1991, Old
Gaylord and OPUBCO, a former subsidiary of Old Gaylord, entered into a
distribution agreement (the "OPUBCO Distribution Agreement"), pursuant to which
OPUBCO assumed such liabilities and agreed to indemnify Old Gaylord for any
losses, damages, or other liabilities incurred by Old Gaylord in connection with
such matters. Under the OPUBCO Distribution Agreement, OPUBCO is required to
maintain adequate reserves to cover potential Superfund liabilities. In
connection with the Restructuring, Old Gaylord assigned its rights under the
OPUBCO Distribution Agreement to the Company, and Old Gaylord has a right of
subrogation to the Company's right to indemnification from OPUBCO. To date, no
litigation has been commenced against the Company, Old Gaylord or OPUBCO with
respect to these two Superfund sites.
Although statutorily liable private parties cannot contractually
transfer liability so as to render themselves no longer liable, CERCLA permits
private parties to indemnify one another against CERCLA liability pursuant to a
contract, and to enforce such a contract in an appropriate court. The Company
believes that OPUBCO's indemnification will fully cover the Company's Superfund
liabilities, if any, and that, based on the Company's current estimates of these
liabilities, OPUBCO has sufficient financial resources to fulfill its
indemnification obligations under the OPUBCO Distribution Agreement.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
Inapplicable.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
(A) MARKET INFORMATION
The information required by this item is incorporated by reference to
the information under the caption "Corporate Data" in the Company's Annual
Report to Stockholders for the year ended December 31, 1999, and is included in
Exhibit 13.1 to this Form 10-K.
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(B) HOLDERS
The information required by this item is incorporated by reference to
the information under the caption "Corporate Data" in the Company's Annual
Report to Stockholders for the year ended December 31, 1999, and is included in
Exhibit 13.1 to this Form 10-K.
(C) CASH DIVIDENDS
The information required by this item is incorporated by reference to
the information under the captions "Corporate Data" in the Company's Annual
Report to Stockholders for the year ended December 31, 1999, and is included in
Exhibit 13.1 to this Form 10-K.
ITEM 6. SELECTED FINANCIAL DATA.
The information required by this item is incorporated by reference to
the information under the caption "Selected Financial Data" in the Company's
Annual Report to Stockholders for the year ended December 31, 1999, and is
included in Exhibit 13.1 to this Form 10-K.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
The information required by this item is incorporated by reference to
the information under the caption "Management's Discussion and Analysis of
Financial Condition and Results of Operations" in the Company's Annual Report to
Stockholders for the year ended December 31, 1999, and is included in Exhibit
13.1 to this Form 10-K.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
The information required by this item is incorporated by reference to
the information under the caption "Market Risk" within the section entitled
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" in the Company's Annual Report to Stockholders for the year ended
December 31, 1999, and is included in Exhibit 13.1 to this Form 10-K.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
The information required by this item is incorporated by reference to
the information on pages 25 through 44 of the Company's Annual Report to
Stockholders for the year ended December 31, 1999, and is included in Exhibit
13.1 to this Form 10-K.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
Inapplicable.
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PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Information about our Directors is incorporated by reference to the
discussion under the heading "Item 1 - Election of Class III Directors" in our
Proxy Statement for the 2000 Annual Meeting of Stockholders, to be filed with
the Securities and Exchange Commission pursuant to Rule 14a-6.
Information required by Item 405 of Regulation S-K is incorporated by
reference to the discussion under the heading "Section 16(a) Beneficial
Ownership Reporting Compliance" in our Proxy Statement for the 2000 Annual
Meeting of Stockholders, to be filed with the Securities and Exchange Commission
pursuant to Rule 14a-6.
Certain other information concerning executive officers of the Company
is included in Part I of this Form 10-K under the caption "Executive Officers of
the Registrant."
ITEM 11. EXECUTIVE COMPENSATION
The information required by this item is incorporated by reference to
the discussion under the heading "Executive Compensation" in our Proxy Statement
for the 2000 Annual Meeting of Stockholders, to be filed with the Securities and
Exchange Commission pursuant to Rule 14a-6.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The information required by this item is incorporated by reference to
the discussion under the heading "Beneficial Ownership" in our Proxy Statement
for the 2000 Annual Meeting of Stockholders, to be filed with the Securities and
Exchange Commission pursuant to Rule 14a-6.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information required by this item is incorporated by reference to
the discussion under the heading "Certain Relationships and Related
Transactions" in our Proxy Statement for the 2000 Annual Meeting of
Stockholders, to be filed with the Securities and Exchange Commission pursuant
to Rule 14a-6.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
14(A)(1) FINANCIAL STATEMENTS
The following financial statements are filed as part of this report,
with reference to the applicable pages of Exhibit 13.1 to this Form 10-K:
Exhibit 13.1
Page
------------
Consolidated Statements of Income for the Years Ended December
31, 1999, 1998 and 1997 ............................................... 15
18
21
Consolidated Balance Sheets as of December 31, 1999 and 1998................. 16
Consolidated Statements of Cash Flows for the Years Ended
December 31, 1999, 1998, and 1997...................................... 17
Consolidated Statements of Stockholders' Equity for the Years
Ended December 31, 1999, 1998, and 1997................................ 18
Notes to Consolidated Financial Statements .................................. 19
14(A)(2) FINANCIAL STATEMENT SCHEDULES
The following financial statement schedules are filed as a part of this
report, with reference to the applicable pages of this Form 10-K:
Schedule II - Valuation and Qualifying Accounts for the Year Ended
December 31, 1999...................................................... S-2
Schedule II - Valuation and Qualifying Accounts for the Year Ended
December 31, 1998...................................................... S-3
Schedule II - Valuation and Qualifying Accounts for the Year Ended
December 31, 1997...................................................... S-4
All other financial statement schedules for which provision is made in
the applicable accounting regulations of the Securities and Exchange Commission
are not required under the related instructions or are inapplicable and,
therefore, have been omitted.
14(A)(3) EXHIBITS
See Index to Exhibits, pages 21 through 25.
14(B) REPORTS ON FORM 8-K
A Current Report on Form 8-K, dated October 27, 1999, reporting the
completion of the sale of the Company's interest in the entities that own
television station KTVT to CBS Corporation was filed with the Securities and
Exchange Commission.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
GAYLORD ENTERTAINMENT COMPANY
By: /s/ E. K. Gaylord II
---------------------------------------
E. K. Gaylord II
Chairman of the Board
March 30, 2000
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed by the following persons on behalf of the Registrant
in the capacities and on the dates indicated.
Signature Title Date
--------- ----- ----
/s/ E. K. Gaylord II Chairman of the Board March 30, 2000
- -------------------------------------------
E. K. Gaylord II
/s/ Terry E. London Director, President and Chief March 30, 2000
- ------------------------------------------- Executive Officer (Principal
Terry E. London Executive Officer)
/s/ Martin C. Dickinson Director March 30, 2000
- -------------------------------------------
Martin C. Dickinson
/s/ Christine Gaylord Everest Director March 30, 2000
- -------------------------------------------
Christine Gaylord Everest
Chairman Emeritus March ___, 2000
- -------------------------------------------
Edward L. Gaylord
/s/ Craig L. Leipold Director March 30, 2000
- -------------------------------------------
Craig L. Leipold
Director March ___, 2000
- -------------------------------------------
Joe M. Rodgers
/s/ Mary Agnes Wilderotter Director March 30, 2000
- -------------------------------------------
Mary Agnes Wilderotter
/s/ Howard L. Wood Director March 30, 2000
- -------------------------------------------
Howard L. Wood
/s/ Carl W. Kornmeyer Senior Vice President of March 30, 2000
- ------------------------------------------- of Corporate Development
Carl W. Kornmeyer (Principal Accounting and
Financial Officer)
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INDEX TO EXHIBITS
Exhibit
Number Description
2.1+ Asset Purchase Agreement by and among Cencom Cable Television,
Inc., Lenoir TV Cable, Inc., CCT Holdings Corporation and CCA
Holdings Corporation dated as of March 30, 1995 (incorporated
by reference to Exhibit 2 to Old Gaylord's Quarterly Report on
Form 10-Q for the quarter ended March 31, 1995).
2.2+ Amendment 1 to the Asset Purchase Agreement by and among
Cencom Cable Television, Inc., Lenoir TV Cable, Inc., CCT
Holdings Corporation and CCA Holdings Corporation dated as of
May 24, 1995 (incorporated by reference to Exhibit 2.2 to Old
Gaylord's Current Report on Form 8-K filed with the Securities
and Exchange Commission on October 13, 1995).
2.3 Amendment 2 to the Asset Purchase Agreement by and among
Cencom Cable Television, Inc., Lenoir TV Cable, Inc., CCT
Holdings Corporation and CCA Holdings Corporation dated as of
September 29, 1995 (incorporated by reference to Exhibit 2.3
to Old Gaylord's Current Report on Form 8-K filed with the
Securities and Exchange Commission on October 13, 1995).
2.4 Asset Purchase Agreement, dated as of November 21, 1996 by and
among Thomas Nelson, Inc., Word, Incorporated and Word Direct
Partners, L.P. as Sellers and Old Gaylord as Buyer
(incorporated by reference to Exhibit 2.1 to the Current
Report on Form 8-K, dated January 6, 1997, of Thomas Nelson,
Inc.).
2.5+ Amendment No. 1 to the Asset Purchase Agreement dated as of
January 6, 1997, by and among Thomas Nelson, Inc., Word
Incorporated and Word Direct Partners, L.P. as Sellers and Old
Gaylord as Buyer (incorporated by reference to Exhibit 2.2 to
the Current Report on Form 8-K, dated January 6, 1997, of
Thomas Nelson, Inc.).
2.6+ Asset Purchase Agreement, dated as of January 6, 1997, by and
between Nelson Word Limited and Word Entertainment Limited
(incorporated by reference to Exhibit 2.3 to the Current
Report on Form 8-K, dated January 6, 1997, of Thomas Nelson,
Inc.).
2.7+ Subsidiary Asset Purchase Agreement executed on January 6,
1997 and dated as of November 21, 1996 between Word
Communications, Ltd. and Word Entertainment (Canada), Inc.
(incorporated by reference to Exhibit 2.4 to the Current
Report on Form 8-K, dated January 6, 1997, of Thomas Nelson,
Inc.).
2.8+ Asset Purchase Agreement by and between Cox Broadcasting, Inc.
and Gaylord Broadcasting Company, L.P. dated January 20, 1997
(incorporated by reference to Exhibit 2.10 to Old Gaylord's
Annual Report on Form 10-K, as amended by Form 10-K/A, for the
year ended December 31, 1996).
2.9+ Agreement and Plan of Merger dated February 9, 1997 by and
among Westinghouse Electric Corporation ("Westinghouse"), G
Acquisition Corp. and Old Gaylord (incorporated by reference
to Exhibit 2.1 to Old Gaylord's Current Report on Form 8-K
dated February 9, 1997).
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2.10+ Agreement and Plan of Merger, dated as of April 9, 1999, by
and among the Registrant, Gaylord Television Company, Gaylord
Communications, Inc., CBS Corporation, CBS Dallas Ventures,
Inc. and CBS Dallas Media, Inc. (incorporated by reference to
Exhibit 2 to the Registrant's Current Report on Form 8-K dated
April 19, 1999).
2.11+ First Amendment to the Agreement and Plan of Merger, dated as
of October 8, 1999, by and among the Registrant, Gaylord
Television Company, Gaylord Communications, Inc., CBS
Corporation, CBS Dallas Ventures, Inc. and CBS Dallas Media,
Inc. (incorporated by reference to Exhibit 2.3 to the
Registration Statement on Form S-3 of CBS Corporation, as
filed with the Securities and Exchange Commission on October
12, 1999).
3.1 Restated Certificate of Incorporation of the Registrant
(incorporated by reference to Exhibit 3 to the Registrant's
Current Report on Form 8-K dated October 7, 1997).
3.2 Restated Bylaws of the Registrant (incorporated by reference
to Exhibit 3.2 to the Company's Registration Statement on Form
10, as amended (File No. 1-13079)).
4.1 Specimen of Common Stock certificate (incorporated by
reference to Exhibit 4.1 to the Company's Registration
Statement on Form 10, as amended (File No. 1-13079)).
4.2 Credit Agreement dated as of August 19, 1997 among Old
Gaylord, the banks named therein and NationsBank of Texas,
N.A., ("NationsBank") as Administrative Lender (including form
of Swing Line Note, form of Revolving Credit Note, and form of
Assumption Agreement) (incorporated by reference to Exhibit
4.2 to the Company's Registration Statement on Form 10, as
amended (File No. 1-13079)).
4.3 First Amendment to Credit Agreement, dated as of September 30,
1997, among Old Gaylord, the Registrant, the banks named
therein, and NationsBank (incorporated by reference to Exhibit
4.3 to Gaylord's Annual Report on Form 10-K for the year ended
December 31, 1997).
4.4 Second Amendment to Credit Agreement, dated as of March 24,
1998 but effective as of October 1, 1997, among the
Registrant, the banks named therein, and NationsBank
(incorporated by reference to Exhibit 4.4 to Gaylord's Annual
Report on Form 10-K for the year ended December 31, 1997).
4.5 Third Amendment to Credit Agreement, dated as of March 22,
1999 but effective as of December 31, 1998, among the
Registrant, the banks named therein, and NationsBank, N.A.
(successor by merger to NationsBank) (incorporated by
reference to Exhibit 4.5 to Gaylord's Annual Report on Form
10-K for the year ended December 31, 1998).
4.6 Fourth Amendment to Credit Agreement, dated as of October 8,
1999, among the Registrant, the banks named therein, and
NationsBank, N.A. (successor by merger to NationsBank) as
Administrative Lender (incorporated by reference to Exhibit 4
to Gaylord's Quarterly Report on Form 10-Q for the quarter
ended September 30, 1999).
4.7* First Amendment to Fourth Amendment to Credit Agreement, dated
as of March 17, 2000, but effective as of October 8, 1999,
among the Registrant, the banks named therein, and Bank of
America, N.A. (formerly known as NationsBank, N.A.) as
Administrative Lender.
22
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4.8* Fifth Amendment to Credit Agreement, dated as of February 2,
2000, among the Registrant, the banks named therein, and Bank
of America, N.A. (formerly known as NationsBank, N.A.), as
Administrative Lender.
9.1 Voting Trust Agreement ("Voting Trust Agreement") dated as of
October 3, 1990 between certain stockholders of The Oklahoma
Publishing Company and Edward L. Gaylord, Edith Gaylord
Harper, Christine Gaylord Everest, and E. K. Gaylord II as
Voting Trustees (incorporated by reference to Exhibit 9.1 to
Old Gaylord's Registration Statement on Form S-1 (Registration
No. 33-42329)).
9.2 Amendment No. 1 to Voting Trust Agreement dated as of October
7, 1991 between certain stockholders of The Oklahoma
Publishing Company and Edward L. Gaylord, Edith Gaylord
Harper, Christine Gaylord Everest, and E. K. Gaylord II as
Voting Trustees (incorporated by reference to Exhibit 9.2 to
Old Gaylord's Registration Statement on Form S-1 (Registration
No. 33-42329)).
10.1 Senior Subordinated Note issued on September 29, 1995 by CCT
Holdings Corporation in the original principal amount of
$165,687,890 (incorporated by reference to Exhibit 10.1 to Old
Gaylord's Current Report on Form 8-K filed with the Securities
and Exchange Commission on October 13, 1995).
10.2 Senior Subordinated Loan Agreement, dated as of September 29,
1995, between CCT Holdings and Cencom Cable Television, Inc.
(incorporated by reference to Exhibit 10.2 to Old Gaylord's
Current Report on Form 8-K filed with the Securities and
Exchange Commission on October 13, 1995).
10.3 Contingent Payment Agreement, dated as of September 29, 1995,
between Charter Communications Entertainment, L.P., CCT
Holdings Corporation and Cencom Cable Television, Inc.
(incorporated by reference to Exhibit 10.3 to Old Gaylord's
Current Report on Form 8-K filed with the Securities and
Exchange Commission on October 13, 1995).
10.4 Letter Agreement dated September 14, 1994 between CBS, Inc.
and the Registrant (d/b/a KTVT, Fort Worth Dallas) as modified
by the Affiliation Agreement dated December 2, 1994 between
the parties as amended by the letter agreement between the
parties dated December 29, 1994 (incorporated by reference to
Exhibit 10.20 of Old Gaylord's Annual Report on Form 10-K for
the year ended December 31, 1994).
10.5 Tax Disaffiliation Agreement by and among Old Gaylord, the
Registrant and Westinghouse, dated September 30, 1997
(incorporated by reference to Exhibit 10.3 to the Registrant's
Current Report on Form 8-K, dated October 7, 1997).
10.6 Agreement and Plan of Distribution, dated September 30, 1997,
between Old Gaylord and the Registrant (incorporated by
reference to Exhibit 10.1 to the Registrant's Current Report
on Form 8-K dated October 7, 1997).
10.7 Opry Mills Limited Partnership Agreement, executed as of March
31, 1998, by and among Opry Mills, L.L.C., The Mills Limited
Partnership, and Opryland Attractions, Inc. (incorporated by
reference to Exhibit 10.1 to the Registrant's Quarterly Report
on Form 10-Q for the quarter ended March 31, 1998).
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26
10.8 Tax Matters Agreement, dated as of April 9, 1999, by and among
the Registrant, Gaylord Television Company, Gaylord
Communications, Inc. and CBS Corporation (incorporated by
reference to Exhibit 10.1 to the Registrant's Current Report
on Form 8-K dated April 19, 1999).
10.9 Amended and Restated Tax Matters Agreement, dated as of
October 8, 1999, by and among the Registrant, Gaylord
Television Company, Gaylord Communications, Inc. and CBS
Corporation (incorporated by reference to Exhibit 2.4 to the
Registration Statement on Form S-3 of CBS Corporation, as
filed with the Securities and Exchange Commission on October
12, 1999).
10.10 First Amendment to Post-Closing Covenants Agreement and
Non-Competition Agreements, dated as of April 9, 1999, by and
among the Registrant, CBS Corporation, Edward L. Gaylord and
E. K. Gaylord II (incorporated by reference to Exhibit 10.2 to
the Registrant's Current Report on Form 8-K dated April 19,
1999).
10.11* Opryland Hotel - Florida Ground Lease, dated as of March 3,
1999, by and between Xentury City Development Company, L.C.,
and Opryland Hotel - Florida Limited Partnership.
EXECUTIVE COMPENSATION PLANS AND MANAGEMENT CONTRACTS
10.12 1997 Stock Option and Incentive Plan Amended and Restated as
of May 13, 1999 (incorporated by reference to Exhibit 10 to
the Registrant's Quarterly Report on Form 10-Q for the quarter
ended June 30, 1999).
10.13 The Opryland USA Inc. Supplemental Deferred Compensation Plan
(incorporated by reference to Exhibit 10.11 to Old Gaylord's
Registration Statement on Form S-1 (Registration No.
33-42329)).
10.14 The Opryland USA Inc. Supplemental Executive Retirement Plan
(incorporated by reference to Exhibit 10.22 to Old Gaylord's
Annual Report on Form 10-K for the year ended December 31,
1992).
10.15 Gaylord Entertainment Company Excess Benefit Plan
(incorporated by reference to Exhibit 10.30 to Old Gaylord's
Annual Report on Form 10-K for the year ended December 31,
1994).
10.16 Gaylord Entertainment Company Supplemental Executive
Retirement Plan (incorporated by reference to Exhibit 10.31 to
Old Gaylord's Annual Report on Form 10-K for the year ended
December 31, 1994).
10.17* Amended and Restated Gaylord Entertainment Company Directors'
Unfunded Deferred Compensation Plan.
10.18 Form of Severance Agreement between the Registrant and certain
of its executive officers (incorporated by reference to
Exhibit 10.23 to Old Gaylord's Annual Report on Form 10-K for
the year ended December 31, 1996).
24
27
10.19 Form of Indemnity Agreement between the Registrant and its
directors (incorporated by reference to Exhibit 10.24 to Old
Gaylord's Annual Report on Form 10-K for the year ended
December 31, 1996).
10.20 Executive Employment Agreement of Dan E. Harrell, dated March
24, 1997, with Word Entertainment Group, Inc., a subsidiary of
the Registrant (incorporated by reference to Exhibit 10.17 to
Gaylord's Annual Report on Form 10-K for the year ended
December 31, 1997).
10.21 Letter Agreement, dated March 26, 1998, regarding employment
of Jerry O. Bradley by the Registrant (incorporated by
reference to Exhibit 10.18 to Gaylord's Annual Report on Form
10-K for the year ended December 31, 1997).
10.22* Severance Agreement, dated February 1999 between the
Registrant and David B. Jones.
10.23* Executive Employment Agreement of James "Tim" DuBois dated
February 15, 2000, with the Registrant.
10.24* Naming Rights Agreement dated as of November 24, 1999, by and
between Registrant and Nashville Hockey Club Limited
Partnership.
13.1* Portions of the Registrant's Annual Report to Stockholders for
the year ended December 31, 1999.
21* Subsidiaries of Gaylord Entertainment Company.
23* Consent of Independent Public Accountants.
27* Financial Data Schedule for year ended December 31, 1999 (for
SEC use only).
+ As directed by Item 601(b)(2) of Regulation S-K, certain schedules and
exhibits to this exhibit are omitted from this filing. The Registrant
agrees to furnish supplementally a copy of any omitted schedule or
exhibit to the Commission upon request.
* Filed herewith.
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To Gaylord Entertainment Company:
We have audited, in accordance with auditing standards generally accepted in the
United States, the consolidated financial statements of Gaylord Entertainment
Company as of December 31, 1999 and 1998 and for the three years ended December
31, 1999 included in this Annual Report on Form 10-K and have issued our report
thereon dated February 9, 2000. Our audit was made for the purpose of forming an
opinion on the basic financial statements taken as a whole. The financial
statement schedules listed in response to Item 14(a)(2) of this Annual Report on
Form 10-K are the responsibility of the Company's management and are presented
for purposes of complying with the Securities and Exchange Commission's rules
and regulations under the Securities and Exchange Act of 1934 and are not
otherwise a required part of the basic financial statements. The financial
statement schedules have been subjected to the auditing procedures applied in
the audit of the basic financial statements and, in our opinion, fairly state,
in all material respects, the financial data required to be set forth therein in
relation to the basic financial statements taken as a whole.
ARTHUR ANDERSEN LLP
Nashville, Tennessee
February 9, 2000
S-1
29
GAYLORD ENTERTAINMENT COMPANY AND SUBSIDIARIES
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
FOR THE YEAR ENDED DECEMBER 31, 1999
(AMOUNTS IN THOUSANDS)
Additions charged to
Balance at --------------------- Balance at
beginning Costs and Other end of
of period expenses Accounts Deductions period
--------- -------- -------- ---------- ------
1997 restructuring charge $2,294 -- -- 2,294 $ --
1999 restructuring charge -- 3,102 -- 2,603 499
------ ----- ----- ----- ----
Total $2,294 3,102 -- 4,897 $499
====== ===== ===== ===== ====
S-2
30
GAYLORD ENTERTAINMENT COMPANY AND SUBSIDIARIES
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
FOR THE YEAR ENDED DECEMBER 31, 1998
(AMOUNTS IN THOUSANDS)
Additions charged to
Balance at --------------------- Balance at
beginning Costs and Other end of
of period expenses Accounts Deductions period
--------- -------- -------- ---------- ------
1997 restructuring charge $6,073 -- -- 3,779 $2,294
====== ===== ===== ===== ======
S-3
31
GAYLORD ENTERTAINMENT COMPANY AND SUBSIDIARIES
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
FOR THE YEAR ENDED DECEMBER 31, 1997
(AMOUNTS IN THOUSANDS)
Additions charged to
Balance at --------------------- Balance at
beginning Costs and Other end of
of period expenses Accounts Deductions period
--------- -------- -------- ---------- ------
1997 Restructuring charge $ -- 13,654 -- 7,581 $6,073
====== ====== ===== ===== ======
S-4