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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, 2000
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 12, 2001, there were 33,453,522 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 12, 2001 was approximately $541,155,000.
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, 2000, 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 3, 2001, are incorporated by reference into Part III
of this Form 10-K.
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GAYLORD ENTERTAINMENT COMPANY
2000 FORM 10-K ANNUAL REPORT
TABLE OF CONTENTS
PAGE
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PART I
Item 1 Business............................................................... 1
Item 2 Properties............................................................. 16
Item 3 Legal Proceedings...................................................... 18
Item 4 Submission of Matters to a Vote of Security Holders.................... 18
PART II
Item 5 Market for Registrant's Common Equity and Related Stockholder Matters.. 18
Item 6 Selected Financial Data................................................ 19
Item 7 Management's Discussion and Analysis of Financial Condition and
Results of Operations.................................................. 19
Item 7A Quantitative and Qualitative Disclosures About Market Risk............. 19
Item 8 Financial Statements and Supplementary Data............................ 20
Item 9 Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure................................................... 20
PART III
Item 10 Directors and Executive Officers of the Registrant..................... 20
Item 11 Executive Compensation................................................. 20
Item 12 Security Ownership of Certain Beneficial Owners and Management......... 20
Item 13 Certain Relationships and Related Transactions......................... 20
PART IV
Item 14 Exhibits, Financial Statement Schedules and Reports on Form 8-K........ 20
SIGNATURES ....................................................................... 22
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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 groups: (i) hospitality and
attractions, (ii) music, media and entertainment, and (iii) corporate and other.
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 "Music, Media and
Entertainment."
In 1983, the Company acquired Opryland USA, an interrelated group of
businesses tracing their origins to the Grand Ole Opry music radio show which
began in 1925. The Company has developed an entertainment and convention/resort
complex in Nashville, Tennessee that is anchored by the Opryland Hotel
Nashville, which is one of the nation's largest convention hotels, the Opry
House (the current home of the Grand Ole Opry), and, until the end of 1997, the
Opryland theme park. Since May 2000, the former Opryland theme park site has
been home to Opry Mills, an entertainment/retail complex 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. During 2000, CMT International was re-branded as
MusicCountry. In January 1997, the Company acquired the assets of Word
Entertainment ("Word"), one of the largest contemporary Christian music
companies in the world. See "Music, Media and Entertainment."
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"), in which a wholly-owned subsidiary of CBS merged with Old
Gaylord (the "CBS Merger"), with Old Gaylord continuing as the surviving
corporation and a wholly-owned subsidiary of CBS. Immediately before the CBS
Merger, Old Gaylord was restructured by transferring to the Company and its
subsidiaries its assets and liabilities, other than TNN, the U.S. and Canadian
operations of CMT, and certain other related assets and liabilities which
remained with Old Gaylord. 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
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"CBS Transitional Agreements"). 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.
DEVELOPMENTS DURING 2000
The year 2000 saw significant changes in the Company. At the beginning
of the year, the Company was managed using four business segments: hospitality
and attractions, creative content, interactive media, and corporate and other.
The Company was also pursuing a strategy of developing several new projects,
including two hotels, the implementation of an Internet strategy, and the
development of a new record label. It was anticipated that capital expenditures
during 2000 would be approximately $260 million, including approximately $200
million related to the Company's hotel expansion projects in Florida and Texas,
and that the Company would incur initial operating losses in connection with the
Internet strategy and the new record label. In light of the expected net losses
for the year ended December 31, 2000, in February 2000, the Company's Board of
Directors voted to discontinue the payment of cash dividends on the Company's
common stock.
During 2000, while the Company was attempting to fund its capital
requirements related to its hotel development and construction projects in
Florida and Texas, the Company's operating results were weaker than anticipated.
In addition, during the year the Company encountered a significant number of
departures from its senior management, including in July 2000, the Company's
President and Chief Executive Officer and in September 2000 a senior
entertainment industry executive who had been recruited as head of the Company's
creative content segment and to develop a new record label. As a result of these
factors, after the Company's Chairman had served briefly as interim Chief
Executive Officer, the Board of Directors appointed a new Chief Executive
Officer to serve on an interim basis, initiated a search for a permanent chief
executive officer, and engaged in an assessment of the Company's strategic
alternatives related to its operations and capital requirements. In connection
with this strategic review, during the fourth quarter, the Company took a number
of actions directed toward focusing on the Company's core assets with the goal
of improving profitability. These actions included the closure of its Internet
operations and the sale of certain other assets which it considered not to be
critical to the Company's business. In addition, in December 2000, the Company
reorganized its structure into two operating groups: hospitality and
attractions; and the music, media and entertainment group, which reflected a
combination of the creative content group with the remaining businesses of the
interactive media group. The Company also continued to pursue opportunities to
finance its two hotel construction projects, to reduce losses in certain areas,
and to improve profitability in the Company's business groups to meet
operational performance expectations. See "Recent Developments."
HOSPITALITY AND ATTRACTIONS
The Company's hospitality and attractions group consists primarily of
an interrelated group of businesses including the Opryland Hotel Nashville, the
Radisson Hotel at Opryland (which is adjacent to the Opryland Hotel Nashville),
the General Jackson (an entertainment paddle wheel showboat), the Springhouse
Golf Club 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 17 to the Company's Consolidated Financial Statements for the
amounts of revenues, operating income, and identifiable assets attributable to
hospitality and attractions.
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OPRYLAND HOTEL NASHVILLE. The Opryland Hotel Nashville, situated on
approximately 172 acres in the Opryland complex, is one of the largest hotels in
the United States in terms of number of guest rooms. The Company believes it has
the highest ratio in the industry of meeting and exhibit space per guest room.
The Opryland Hotel Nashville attracts convention business from trade
associations and corporations, which accounted for approximately 80% of the
hotel's revenues in each of 2000, 1999, and 1998. It also serves as a
destination resort for vacationers due to its in-house entertainment events and
its proximity to the Opry Mills complex, 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 the quality of
its convention facilities and availability of live musical entertainment are
factors that differentiate it from other convention hotels. In late 1999, the
Company began a three-year renovation and capital improvement program to
refurbish the physical facility, upgrade certain guest rooms and add features to
the hotel, including adding two-line telephones, signs to help direct guests,
ballroom renovations, and upgrades to lobbies and restaurants. Of the
anticipated cost of $54 million, approximately $22.4 million had been committed
as of December 31, 2000.
The following table sets forth information concerning the Opryland
Hotel Nashville for each of the five years in the period ended December 31,
2000.
YEARS ENDED DECEMBER 31,
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2000 1999 1998 1997 1996
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Average number of guest rooms 2,883 2,884 2,884 2,866 2,613
Occupancy rate 75.9% 78.0% 79.1% 85.4% 84.7%
Average daily rate ("ADR") $ 143.86 $ 137.18 $ 138.51 $ 131.82 $ 128.48
Food and beverage revenues (in thousands) $ 81,093 $ 85,686 $ 81,518 $ 85,186 $ 66,394
Total revenues (in thousands) $229,859 $234,435 $233,645 $240,969 $203,265
The Opryland Hotel Nashville has 2,883 guest rooms, four ballrooms with
approximately 124,000 square feet, 85 banquet/meeting rooms, and total dedicated
exhibition space of approximately 289,000 square feet. Total meeting, exhibit
and pre-function space in the hotel exceeds 600,000 square feet.
The interior of the hotel is divided into four areas, featuring indoor
gardens, restaurants and shops: the Delta, the Cascades, the Conservatory and
the Magnolia. The Delta area features a themed southern rivertown scene in a 4.5
acre southern-style indoor garden, under a 15-story glass dome. The attractions
of this area include a flowing waterfall that creates a winding river more than
a quarter of a mile long on which guests can take a trip on a flatboat. This
area also contains an 85-foot fountain and the Delta Island, a New
Orleans-themed island which includes retail shops, lounges, a food court with a
variety of quick-service restaurants, and seven meeting and board rooms. The
Conservatory area features 10,000 tropical plants within an approximately 1.5
acre Victorian tropical garden. The Cascades area features an approximately 1.5
acre water garden, three waterfalls ranging in height from 23 to 35 feet which
drop into a 12,500 square foot lake, and a nightly laser-enhanced, synchronized
water show. The Magnolia area features a dramatic staircase, elegant fireplaces,
and a variety of shops and restaurants.
Special productions for conventions are often staged in the hotel or on
the General Jackson showboat (described below). The Springhouse Golf Club
enables the hotel to attract conventions with a preference for proximity to a
championship golf course and makes the hotel more attractive to vacationers. The
Springhouse Golf Club hosts an annual Senior PGA Tour event, the BellSouth
Senior Classic at Opryland, which will be televised on CNBC in 2001.
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Opry Mills, a 1.2 million square foot entertainment and retail complex,
opened in May 2000 on the site adjacent to the Opryland Hotel Nashville which
previously had been occupied by the Opryland theme park. The Company believes
this new dimension of shopping and entertainment will strengthen the hotel's
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 (i) the
reputation of the hotel's services and facilities; (ii) the hotel's ability to
offer comprehensive convention services at a single facility; (iii) the quality
and variety of entertainment and activities available at the hotel and in the
Opryland complex generally; and (iv) the accessibility and central location of
Nashville within the United States. As of February 28, 2001, convention bookings
for the balance of 2001 and for 2002 were approximately 531,800 and 432,700
guest room nights, respectively, representing approximately 60% and 41%,
respectively, of available guest room nights for such periods, and the hotel had
advance convention bookings extending into the year 2020. The Opryland Hotel
Nashville typically books conventions several years in advance. Historically the
Opryland Hotel Nashville has experienced a small percentage of cancellations,
but there can be no assurance that any such bookings may not be cancelled prior
to the occupancy of the booked rooms.
The Company also markets the Opryland Hotel Nashville as a destination
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 through 2009 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 the end of the year. The Country Christmas program has
contributed to the hotel's occupancy rate during the months of November and
December, traditionally a slow period for the group/convention meeting industry.
RADISSON HOTEL AT OPRYLAND. The Company owns and operates the Radisson
Hotel at Opryland, a Radisson franchise hotel which is located across the street
from the Opryland Hotel Nashville complex. The hotel has 303 rooms and
approximately 14,000 square feet of meeting space. The Company purchased the
hotel in April 1998 for approximately $16 million. A major renovation of the
guest rooms and meeting space was completed in 1999 at a cost of approximately
$7 million. In March 2000, the Company entered into a 20-year franchise
agreement with Radisson in connection with the operation of this hotel. The
franchise agreement contains customary terms and conditions. Pursuant to the
franchise agreement, the Company will make additional capital expenditures of
approximately $2 million over two years.
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. The General Jackson is
one of many sources of entertainment that the Company makes available to
conventions held at the Opryland Hotel Nashville. It contributes to the
Company's revenues from convention participants as well as local business.
During the day it operates cruises, primarily serving tourists visiting the
Opryland complex and the Nashville area.
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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. The Company
believes that these new convention hotels will enable 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' desires to visit different areas. The Company also anticipates that
its new hotels will capture new group business that currently does not come to
the Nashville market and will seek to gain additional business at the Opryland
Hotel Nashville once these groups have experienced an Opryland Hotel in other
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 researched various markets in the United States and
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, Orlando, Florida, and Dallas-Fort Worth, Texas, were chosen for the
first two properties to be developed. The Company entered into a 75-year ground
lease with a renewal option which would extend the term until March 2098, on a
65-acre site in Osceola County, Florida. Construction of the Opryland Hotel
Florida began in June 1999. The Company expects to open Opryland Hotel Florida
in February 2002. The Company has acquired and leased, in the aggregate,
approximately 100 acres in Grapevine, Texas, near the Dallas/Fort Worth airport.
Construction consisting of development and site work for the Opryland Hotel
Texas began in June 2000. The Opryland Hotel Texas is currently projected to
open in 2003. Plans for each of the properties include 1,406 guest rooms for the
Opryland Hotel Florida and approximately 1,500 guest rooms for Opryland Hotel
Texas, with each hotel planned to have approximately 380,000 square feet of
convention space.
Total net real estate, construction, and furnishings, fixtures and
equipment costs for the two hotels are currently anticipated to be in the range
of $830-860 million. As of December 31, 2000, the Company has incurred
approximately $173.7 million of these costs for Opryland Hotel Florida and
approximately $18.1 million for Opryland Hotel Texas. The Opryland Hotel Texas
is currently in the design and development phase, and decisions pertaining to
the final design of the hotel could impact its estimated cost. In addition,
costs are being incurred and additional outlays will be required related to
marketing and financing of the two hotels. The Company is currently evaluating
various financing alternatives for these projects. See "Management's Discussion
and Analysis of Financial Condition and Results of Operations -- Liquidity and
Capital Resources."
In January 2000, the Company announced plans to form a joint venture
with The Peterson Companies to develop a 2,000-room convention hotel on the
Potomac River in Prince George's County, Maryland (in the Washington, D.C.
market). This project is subject to the availability of financing and approval
of the Board of Directors, and the Company does not anticipate that construction
would begin on it until after completion and opening of the Opryland Hotel
Texas.
MUSIC, MEDIA AND ENTERTAINMENT
Until December 2000, the music, media and entertainment group had
operated as two separate groups: creative content and interactive media. 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. The Company's interactive media
group consisted primarily of Gaylord Digital, three radio stations, MusicCountry
(formerly known as CMT International), and Z Music. See Note 17 to the Company's
Consolidated Financial Statements for the
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amounts of revenues, operating income (loss), and identifiable assets
attributable to the operations of the Company's music, media and entertainment
group.
THE GRAND OLE OPRY. The Grand Ole Opry, which celebrated its 75th
anniversary in 2000, 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 on the Company's WSM-AM radio station every
Friday and Saturday night, and TNN telecasts a 30-minute live segment every
Saturday night. The Opry broadcasts are streamed on the Internet via
www.opry.com and www.wsmonline.com. Pursuant to the CBS Transitional Agreements,
TNN (which is now called The National Network) 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 71 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-1956 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-1965
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 Pam Tillis-2000
Larry Gatlin & The Reba McEntire-1986 Randy Travis-1986
Gatlin Brothers-1976 Ronnie Milsap-1976 Travis Tritt-1992
Don Gibson-1958 Lorrie Morgan-1984 Porter Wagoner-1957
Vince Gill-1991 Jimmy C. Newman-1956 Billy Walker-1960
Billy Grammer-1959 The Osborne Brothers-1964 Charlie Walker-1967
Jack Greene-1967 Bashful Brother Oswald-1995 Steve Wariner-1996
Tom T. Hall-1971 Brad Paisley-2001 The Whites-1984
George Hamilton IV-1960 Dolly Parton*-1969 Teddy Wilburn-1953
Johnny PayCheck-1997 Trisha Yearwood-1999
Stu Phillips-1967
* Members of the Country Music Hall of Fame.
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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 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. The former
home of the Grand Ole Opry, the Ryman Auditorium was renovated and re-opened in
1994 for concerts and musical productions. Recent concert performers have
included Faith Hill, Bob Dylan, Amy Grant, The Dave Matthews Band, Ricky Skaggs,
Bruce Springsteen, Hanson and Gladys Knight. The Ryman consistently has received
local awards as a venue for hearing live music. In January 2000, City Search
editors listed the Ryman among the top five concert venues in the United States.
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 2000, the Ryman Auditorium presented a five-show musical series highlighted
by the Broadway touring production of Smokey Joe's Cafe and the return of Always
. . . Patsy Cline. During 2001, the Ryman will produce a new bio-musical based
on the life of country music legend Tammy Wynette.
The Grand Ole Opry continued its 75th anniversary celebration into 2001
by returning to the Ryman Auditorium for two months of performances in January
and February. The Ryman Auditorium is a popular sightseeing stop for tourists in
Nashville.
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 performers such
as Tim McGraw and the Dixie Chicks. The three story, 56,000 square-foot facility
includes a dance floor of approximately 1,500 square feet, a restaurant and
banquet facility which seats approximately 200, and a 15' x 22' television
screen which features country music videos and sporting events. The club has a
broadcast-ready stage and facilities to house mobile production units from which
broadcasts of live concerts may be distributed nationwide.
In May 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. The Company acquired a 100% interest in the Wildhorse Saloon
near Orlando in December 1998. In November 2000, the Company discontinued
operation of the Wildhorse Saloon near Orlando under an agreement with Walt
Disney World(R)Resort. As a result, the Company incurred a pre-tax loss of
approximately $16 million. The Company has decided not to open additional
Wildhorse Saloons.
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. The
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roster of Acuff-Rose songs includes standards such as "Oh, Pretty Woman," "Blue
Eyes Cryin' in the Rain," and "When Will I Be Loved." Acuff-Rose licenses the
use of its songs in films, plays, print, commercials, videos, cable, television
and toys. 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 recording and distribution companies in the world, with proprietary labels
and imprints featuring artists such as Amy Grant, Sixpence None the Richer,
Point Of Grace, Jaci Velasquez, Shirley Caesar, and Rachael Lampa. 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. Word also has
entered into exclusive distribution agreements for the sale of music and video
products owned by various third parties. Word's distribution activities are
effected in the Christian bookstore market through 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. In October 2000,
Pandora entered into a one-year renewable agreement with Warner Bros. for joint
production and distribution of theatrical motion picture projects with budgets
of $12 million or less. Pandora's operations were relocated from Paris, France
to California at the end of 2000. In March 2001, the Company sold its interest
in Pandora. See "Recent Developments."
OKLAHOMA REDHAWKS. Since 1993, the Company has owned an interest in OKC
Athletic Club Limited Partnership, a limited partnership that owns the Oklahoma
Redhawks, a minor league baseball club located in Oklahoma City, and in certain
concession rights for the club. In several transactions in 1999 and 2000, the
Company acquired an additional 10% interest for $875,000, increasing its
position to 75.2% of the interests in OKC Athletic Club Limited Partnership.
CORPORATE MAGIC. In March 2000, the Company acquired Corporate Magic,
Inc., a company specializing in the production of creative and entertainment
events in support of the corporate and meeting marketplace, for $9.0 million.
GAYLORD FILMS. In August 2000, the Company announced the creation of a
new business unit, Gaylord Films, for the development, production and
distribution of major motion pictures. In October, 2000, the Company entered
into a four-year agreement with Warner Bros. for the joint production and
distribution of theatrical motion pictures, with $25 million allocated to an
initial major motion picture. In March 2001, the Company sold its interest in
Gaylord Films. See "Recent Developments."
OTHER INTERESTS. The music, media and entertainment group has included
an artist management company, 50% of a professional golfer management company,
and a majority interest in a television production company focusing on specialty
golf events. In March 2001, the Company sold its interests in three of these
entities, Gaylord Production Company, Gaylord Sports Management Group, and
Gaylord Event Television. See "Recent Developments."
GAYLORD DIGITAL. In the third quarter of 1999, the Company established
Gaylord Digital to initiate an Internet strategy that would focus on the
Company's three primary customer groups: country music fans, Christian music
fans, and people involved in the meetings and conventions industry. It was
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contemplated that Gaylord Digital's revenues would be primarily generated by
e-commerce, advertising, and broadcasting.
In the second half of 1999, the Company acquired an 84% equity interest
in two online operations, Musicforce.com and Lightsource.com, for $23.4 million
in cash. During the first quarter of 2000, the Company acquired the remaining
16% of Musicforce.com and Lightsource.com for an additional $6.5 million in
cash. Musicforce.com, an online e-commerce community which concentrated on
contemporary Christian music, and Lightsource.com, the Christian content
provider for web-based broadcasters, were to serve as the foundation for Gaylord
Digital. The Company also acquired Songs.com, an e-commerce and community site
dedicated to helping independent music artists connect with their fans, in
December 1999.
In connection with its Internet initiative, the Company also made
minority investments in a number of companies, including Intertainer, Inc., a
provider of home entertainment services on demand; Edgate.com, Inc., which
operates Edgate.com, an educational portal and community focused on grades K-12;
CountryCool.com, Inc., an Internet portal and original content provider for
country music fans and industry insiders; and RockCity.com, a website presenting
short film subjects.
In early December 2000, the Company announced its intentions not to
pursue its Internet strategy and to close, sell or transfer to other Company
divisions the various components of Gaylord Digital. In connection with this
decision, the Company eliminated the positions of approximately 85 Gaylord
Digital employees and, in late December, sold Musicforce.com. In February 2001,
the Company also sold Lightsource.com, the other primary component of Gaylord
Digital. As a result of the termination of the Gaylord Digital operations and
sale of its primary components, the Company incurred pre-tax charges of
approximately $59 million, including the write-down of the value of most of the
minority investments. See Notes 4 and 5 to the Company's Consolidated Financial
Statements for a description of the impairment and restructuring charges related
to Gaylord Digital.
KTVT. In October 1999, CBS Corporation acquired the Company's
television station KTVT, in Dallas-Fort Worth, Texas. KTVT 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 KTVT, the Company
received shares of CBS Series B convertible preferred stock with a value of $485
million, $4.2 million in cash, and other consideration. The Company will also
receive $1 million worth of advertising time on the station annually through
2009. As a result of the merger of CBS Corporation and Viacom, Inc. in May 2000,
the Company ultimately received 11,003,000 shares of Viacom, Inc. non-voting
Class B Common Stock, most of which it has monetized in a seven-year forward
exchange contract. See "Other Interests."
WSM-AM AND WSM-FM. WSM-AM and WSM-FM commenced broadcasting in 1925 and
1967, respectively. The involvement of the Company's predecessors 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, the Wildhorse Saloon, the Ryman
Auditorium and in Opry Mills 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
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station of the Nashville Predators, a National Hockey League club in which the
Company owns a minority interest.
MUSICCOUNTRY (FORMERLY KNOWN AS 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.
In September 1999, the Company acquired a 15% minority interest in the
operations of two Argentine cable networks, Solo Tango and TV Argentina. In May
2000, the Company increased its ownership interest in the two networks to 50%
for approximately $5.4 million in cash. Pursuant to the terms of a program
license agreement, CMT International provided a block of CMT-branded programming
for airing on the TV Argentina cable network.
In 2000, the Company made the decision to rebrand its CMT International
networks as MusicCountry. The global branding strategy for the channel involves
a programming mix, including videos, documentaries, and shows hosted by local
VJs, with a broad range of musical styles that includes rock, rhythm & blues,
country, pop and contemporary music from regional artists that appeal to a
target audience of 25-54 year-olds. CMT Asia-Pacific Rim was rebranded as Music
Country on November 1, 2000. TV Argentina was rebranded as MusicCountry Latin
America on December 1, 2000 followed by the rebranding of CMT in Brazil to
MusicCountry on February 1, 2001.
As of December 31, 2000, CMT International and MusicCountry reached
approximately 8.1 million subscribers on a full-time basis, consisting primarily
of approximately 1.5 million subscribers in Australia and the Pacific Rim,
approximately 1.7 million subscribers in Brazil and approximately 4.9 million
subscribers in Argentina. In addition, MusicCountry has approximately 0.4
million part-time subscribers in Japan.
In March 2000, the Company became a partner with MegaCable, Mexico's
second-largest cable television operator, in the operations of Video Rola, a
24-hour video channel featuring regional Mexican music. In 2000, the Company was
responsible for the distribution, sales, and marketing of Video Rola in the
United States. In January 2001, the Company converted a note into equity to
increase its ownership in Video Rola to 40% and transferred the U.S.
representation rights for the channel back to the partnership.
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.
Z Music operated a cable network featuring contemporary Christian music videos,
music news and artist interviews. 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 which secured the note
receivable. On June 30, 2000, the Company closed the operations of Z Music.
OTHER INTERESTS
The Company's other interests consist primarily of the Company's
investments in Opry Mills, Bass Pro Shops, the Nashville Predators and Viacom
stock. See Note 17 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.
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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.
The Company closed the Opryland theme park to develop Opry Mills, an
entertainment/retail complex, in partnership with The Mills Corporation. The
Company owns a one-third interest in the partnership.
Opry Mills is an entertainment and retail complex with 1.2 million
square feet of leasable space. Opened in May 2000, Opry Mills includes more than
200 stores, restaurants and entertainment venues. Opry Mills features
entertainment in an environment which includes theme restaurants, multiplex
theaters, live entertainment, manufacturer's outlets, off-price retailers and
category-dominant retailers. The Company believes that Opry Mills will enhance
the Opryland properties, particularly the Opryland Hotel Nashville, the Grand
Ole Opry, and the General Jackson, as it provides shopping, entertainment, and
dining experiences for visitors to the Company's existing properties on a
year-round basis. The Company estimates that approximately 8.4 million people
visited Opry Mills in the 7-1/2 months it was open during 2000.
BASS PRO SHOPS. In 1993, the Company purchased a minority interest in
Bass Pro, L.P. As part of a reorganization of Bass Pro in December 1999, the
Company contributed its limited partnership interest to a newly formed Delaware
corporation, Bass Pro, Inc. for a 19% interest. Bass Pro, Inc. owns and operates
Bass Pro Shops, a retailer of premium outdoor sporting goods and fishing tackle.
Bass Pro Shops serves its customers through an extensive mail order catalog
operation, a retail center in Springfield, Missouri, and additional retail
stores at Opry Mills in Nashville and in various other U.S. locations. The
Company's properties are featured in the Bass Pro Shops catalogs.
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
third season in the fall of 2000.
In August 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 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, beginning at $2,050,000 in the
first year and with a 5% escalation each year thereafter, and to purchase a
minimum number of tickets to Predators games each year.
MONETIZATION OF VIACOM STOCK. During May 2000, the Company entered into
a seven-year secured forward exchange contract with an affiliate of Credit
Suisse First Boston with respect to approximately 10.9 million shares of the
Company's Viacom, Inc. Class B non-voting common stock ("Viacom Stock").
The seven-year secured forward exchange contract has a face amount of
$613.1 million and required contract payments based upon a stated 5% rate. The
secured forward exchange contract protects the Company against decreases in the
fair market value of the Viacom Stock while providing for participation in
increases in the fair market value. By entering into the secured forward
exchange contract, the Company realized cash proceeds of $506.3 million, net of
discounted prepaid contract payments related to the first 3.25 years of the
contract and transaction costs totaling $106.7 million. During October 2000, the
Company prepaid the remaining contract payments related to the final 3.75 years
of the contract for $83.2 million. As a result of the prepayment of the
remaining contract payments, the Company was released from the covenants in the
secured forward exchange contract which limited the Company's right to sales of
assets, to incur additional indebtedness and to grant liens. The Company
utilized $394.1 million of the net proceeds from the secured forward exchange
contract to repay all
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outstanding indebtedness under its revolving credit facility. As a result of the
secured forward exchange contract, the revolving credit facility was terminated.
During the seven-year term of the secured forward exchange contract,
the Company retains ownership of the Viacom Stock. The Company's obligation
under the secured forward exchange contract is collateralized by a security
interest in the Viacom Stock. At the end of the seven-year contract term, the
Company may, at its option, elect to pay in cash rather than by delivery of the
Viacom Stock.
RECENT DEVELOPMENTS
During the first quarter of 2001, there have been a number of
significant developments which are necessary to consider the current condition
and prospects of the Company.
SALE OF FIVE BUSINESSES TO OPUBCO. On March 9, 2001, the Company sold
its stock and equity interests in five of its businesses to The Oklahoma
Publishing Company ("OPUBCO") for a purchase price of $22 million in cash and
the assumption of approximately $20 million in debt. The businesses sold were
Gaylord Production Company, Gaylord Films, Pandora Films, Gaylord Sports
Management Group, and Gaylord Event Television. OPUBCO owns 6.3% of the
Company's common stock. Four of the Company's directors, who are the beneficial
owners of an additional 27.8% of the Company's common stock, are also directors
of OPUBCO and voting trustees of a voting trust that controls OPUBCO. The
transaction was reviewed and approved by a special committee of the independent
directors of the Company. The Company received an appraisal from a firm that
specializes in valuations related to films, entertainment and service businesses
as well as a fairness opinion from an investment bank.
FINANCING ACTIVITIES. On March 27, 2001, the Company, through special
purpose entities, entered into two new loan agreements, a $275 million senior
loan (the "Senior Loan") and a $100 million mezzanine loan (the "Mezzanine
Loan") (collectively, the "2001 Loans"). The Senior Loan is secured by a first
mortgage lien on the Opryland Hotel Nashville. The Mezzanine Loan is secured by
the equity interest in the owner of the Opryland Hotel Nashville. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations - Liquidity and Capital Resources," for a description of the 2001
Loans.
EMPLOYEES
As of December 31, 2000, the Company had approximately 3,633 full-time
("FT") and 1,116 part-time and temporary ("PT") employees. Of these,
approximately 2,745 FT and 703 PT were employed in hospitality and attractions;
approximately 711 FT and 402 PT were employed in music, media and entertainment;
and approximately 177 FT and 11 PT were employed in corporate and other. The
Company believes its relations with its employees are good.
COMPETITION
HOSPITALITY AND ATTRACTIONS. The Company's 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
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success is dependent upon certain factors beyond the Company's control including
economic conditions, the amount of available leisure time, transportation costs,
public taste, and weather conditions.
The Opryland Hotel Nashville competes with, and the Company's new
hotels will compete with, other hotels throughout the United States and abroad,
particularly the approximately 125 convention hotels located outside of Las
Vegas, Nevada that have more than 800 rooms each, as well as the Las Vegas
hotel/casinos. Many of these hotels are operated by companies with greater
financial, marketing, and human resources than the Company. The Company believes
that competition among convention hotels is based on, among other things,
factors which include: (i) the hotel's reputation, (ii) the quality of the
hotel's facility, (iii) the quality and scope of a hotel's meeting and
convention facilities and services, (iv) the desirability of a hotel's location,
(v) travel distance to a hotel for meeting attendees, (vi) a hotel facility's
accessibility to a recognized airport, (vii) the amount of entertainment and
recreational options available in and in the vicinity of the hotel, and (viii)
price. The Company's hotels also compete against civic convention centers. These
include the largest convention centers (e.g., Orlando, Chicago and Atlanta) as
well as, for the Opryland Hotel Nashville, mid-size convention centers (between
100,000 and 500,000 square feet of meeting space located in second-tier cities).
The hotel business is management and marketing intensive. The Opryland
Hotel Nashville competes with, and the Company's new hotels will compete with,
other hotels throughout the United States for high quality management and
marketing personnel. There can be no assurance that the Company's hotels will be
able to attract and retain employees with the requisite managerial and marketing
skills. The Opryland Hotel Nashville also competes with other employers for
non-managerial employees in the Middle Tennessee labor market, which has had a
low level of unemployment for several years. 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.
MUSIC, MEDIA AND ENTERTAINMENT. The Company's various creative content
businesses compete with all other entertainment businesses. 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 produce and
distribute Christian and 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.
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.
MusicCountry competes 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.
MusicCountry competes with 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
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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 MusicCountry'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 October 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 October 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 MusicCountry in any area outside of the United States and Canada,
provided that MusicCountry'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, and the
Company's new hotels will be, 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 a hotel 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 disciplinary action or revocation could have an adverse
effect upon the results of the operations of the Company's hospitality and
attractions segment.
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 not aware of any 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
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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.
MusicCountry'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.
EXECUTIVE OFFICERS OF THE REGISTRANT
The following table sets forth certain information regarding the
executive officers of the Company as of December 31, 2000. All officers serve at
the discretion of the Board of Directors.
Name Age Position
- ---- --- --------
E. K. Gaylord II .....................43 Chairman of the Board
Dennis J. Sullivan, Jr................69 President and Chief Executive Officer
Roderick F. Connor, Jr................48 Senior Vice President and Chief Administrative Officer
David B. Jones........................57 Executive Vice President; President, Hospitality and Attractions Group
Carl W. Kornmeyer.....................48 Executive Vice President; President, Music, Media and Entertainment Group
W. Brian Payne........................30 Executive Vice President
Denise Wilder Warren..................39 Senior Vice President and Chief Financial Officer
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 and, from late July until September 2000, he also served as
interim President and Chief Executive Officer. 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 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. Sullivan has served as President and Chief Executive Officer of the
Company, on an interim basis, since September 2000. Mr. Sullivan has continued
to serve after the expiration of an employment agreement with a term of six
months upon the same terms as in the agreement. From 1993 until September 2000,
Mr. Sullivan engaged in a business consulting practice as an executive counselor
with Dan Pinger Public Relations. Mr. Sullivan serves as a director of Fifth
Third Bancorp and Anthem Inc., a health insurance company. Mr. Sullivan is the
father of Mary Agnes Wilderotter, who is a director of the Company.
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. Prior to February 1995, Mr. Connor was the Corporate Controller of the
Company.
Mr. Jones, an Executive Vice President of the Company, has been the
President of the 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., where he oversaw the development and opening of
sixteen new properties.
Mr. Payne was an Executive Vice President of the Company and served as
President of the interactive media group from its inception in November 1999
until December 2000. 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. Payne resigned from the Company on
February 28, 2001.
Mr. Kornmeyer, an Executive Vice President of the Company, has been
President of the Music, Media and Entertainment Group since December 2000. Prior
to that he had been Senior Vice President of Corporate Development since
November 1999 and Acting Chief Financial Officer from December 1999 until April
2000. 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, and as Vice
President of Business Affairs of the Company's broadcasting and cable networks
operations from March 1994 until February 1996.
Ms. Warren has served as Senior Vice President and Chief Financial
Officer of the Company since April 2000. From 1996 until April 2000, Ms. Warren
was employed by Merrill Lynch & Company, a securities and investment banking
firm. At the time of her departure from Merrill Lynch, Ms. Warren was
director-senior industry analyst, providing equity research coverage of the
lodging, gaming and timeshare industries. The Company was among the businesses
covered by Ms. Warren.
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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.
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 172 acres), the site of the Opry Mills
retail complex, which is located on a portion of the approximately 200-acre site
that was formerly the Opryland theme park, 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. In connection with the 2001 Loans, a first mortgage lien
was granted on the Opryland Hotel Nashville, including the approximately 172
acre site on which it stands.
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 the partnership formed for
the development of Opry Mills.
The Company owns the Springhouse Golf Club, an 18-hole golf course
situated on approximately 240 acres, and the 6.7-acre site of the Radisson Hotel
at Opryland, both located near the Opryland complex.
The Company has executed a 75-year lease with a 24-year renewal option
on a 65-acre site in Osceola County, Florida, on which the Opryland Hotel
Florida is being constructed.
The Company has acquired, through ownership (approximately 75 acres) or
ground lease (approximately 25 acres), approximately 100 acres in Grapevine,
Texas, for the location of the Opryland Hotel Texas.
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MUSIC, MEDIA AND ENTERTAINMENT
The Company owns the Acuff-Rose Music Publishing building (and adjacent
real estate) located on "Music Row" near downtown Nashville 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 is used primarily for sales and administrative offices.
Leases for these office properties 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, England. The Company and Word also guarantee
the lease of warehouse space in Smyrna, Tennessee, for use in connection with
warehousing and distribution, and the Company owns and uses a 100,000 square
foot warehouse in Old Hickory, Tennessee.
In downtown Nashville, the Company owns the Ryman Auditorium, the
Wildhorse Saloon dance hall and production facility, and an office building. The
office building, which has approximately 38,800 square feet, was acquired by the
Company in September 1999 to serve as administrative and executive office space
for Gaylord Digital. The Company currently is considering alternatives that
might be available to it with respect to ownership of this building.
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 leased to CBS through September 30, 2002.
Master control and satellite uplink operations for MusicCountry 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. MusicCountry has offices in the Company's executive
office building and currently leases its transponders. MusicCountry also leases
office space in Sydney, Australia, and Miami, Florida.
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. No
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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.
No matter was submitted to a vote of the Company's security holders
during the fourth quarter of 2000.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
(A) MARKET INFORMATION
The Company's common stock is listed on the New York Stock Exchange
under the symbol GET. The following table sets forth the high and low sales
prices for the Company's common stock as reported by the NYSE:
1999 HIGH LOW
---- ---- ---
First Quarter $31.13 $24.25
Second Quarter 33.00 23.38
Third Quarter 31.44 28.31
Fourth Quarter 33.06 28.25
2000 HIGH LOW
---- ---- ---
First Quarter $30.44 $24.50
Second Quarter 27.38 20.25
Third Quarter 28.00 19.50
Fourth Quarter 25.50 19.31
(B) HOLDERS
The approximate number of record holders of the Company's common stock
on March 12, 2001, was 2,598.
(C) CASH DIVIDENDS
During 1999, the Company distributed a quarterly cash dividend of $0.20
per share of the Company's common stock. At its quarterly meeting in February
2000, the Company's Board of Directors voted to discontinue the payment of
dividends on its common stock. Accordingly, no dividends were
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paid during 2000.
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, 2000, 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, 2000, 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, 2000, 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 F-21 through F-48 of the Company's Annual Report to
Stockholders for the year ended December 31, 2000, 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.
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 2 - Election of Three Directors" in our Proxy
Statement for the 2001 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 2001 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."
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22
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 2001 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 2001 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 2001 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 Operations for the Years Ended
December 31, 2000, 1999 and 1998 ............................ 17
Consolidated Balance Sheets as of December 31, 2000 and 1999 ..... 18
Consolidated Statements of Cash Flows for the Years Ended
December 31, 2000, 1999 and 1998............................. 19
Consolidated Statements of Stockholders' Equity for the Years
Ended December 31, 2000, 1999 and 1998....................... 20
Notes to Consolidated Financial Statements........................ 21
20
23
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, 2000.............................................. S-2
Schedule II - Valuation and Qualifying Accounts for the Year Ended
December 31, 1999.............................................. S-3
Schedule II - Valuation and Qualifying Accounts for the Year Ended
December 31, 1998.............................................. 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 23 through 26.
14(B) REPORTS ON FORM 8-K
A Current Report on Form 8-K was filed with the Securities and Exchange
Commission on October 19, 2000 reporting Regulation FD disclosure under Item 9.
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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
March 30, 2001 Chairman of the Board
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, 2001
- --------------------------------
E. K. Gaylord II
/s/ Martin C. Dickinson Director March 30, 2001
- --------------------------------
Martin C. Dickinson
/s/ Christine Gaylord Everest Director March 30, 2001
- --------------------------------
Christine Gaylord Everest
/s/ Edward L. Gaylord Chairman Emeritus March 30, 2001
- --------------------------------
Edward L. Gaylord
/s/ Craig L. Leipold Director March 30, 2001
- --------------------------------
Craig L. Leipold
/s/ Joe M. Rodgers Director March 30, 2001
- --------------------------------
Joe M. Rodgers
/s/ Mary Agnes Wilderotter Director March 30, 2001
- --------------------------------
Mary Agnes Wilderotter
/s/ Howard Wood Director March 30, 2001
- --------------------------------
Howard Wood
/s/ Dennis J. Sullivan, Jr. President and Chief Executive Officer March 30, 2001
- --------------------------------
Dennis J. Sullivan, Jr.
/s/ Denise Wilder Warren Senior Vice President and Chief March 30, 2001
- -------------------------------- Financial Officer (Principal Financial
Denise Wilder Warren and Accounting Officer)
22
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INDEX TO EXHIBITS
Exhibit
Number Description
- ------ -----------
2.1+ 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.).
2.2+ 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.).
2.3+ 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.).
2.4+ 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.).
2.5+ 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).
2.6+ 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).
2.7+ 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).
2.8+* Securities Purchase Agreement, dated as of March 9, 2001, by and among
the Registrant, Gaylord Creative Group, Inc., PaperBoy Productions,
Inc., and Gaylord Sports, Inc.
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)).
23
26
3.3 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)).
10.1 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).
10.2 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).
10.3 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).
10.4 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).
10.5 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).
10.6 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).
10.7 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 (incorporated by reference to Exhibit
10.11 to Gaylord's Annual Report on Form 10-K for the year ended
December 31, 1999).
10.8* Guaranteed Maximum Price (GMP) Construction Agreement dated as of
November 8, 1999, by and among Opryland Hotel - Florida, L.P. Opryland
Hospitality Group, and Perini/Suitt.
10.9* First Amendment to Guaranteed Maximum Price (GMP) Construction
Agreement dated as of September 5, 2000 by and among Opryland Hotel -
Florida, L.P., Opryland Hospitality Group d/b/a OLH, G.P., and
Perini/Suitt.
10.10 Naming Rights Agreement dated as of November 24, 1999, by and between
Registrant and Nashville Hockey Club Limited Partnership (incorporated
by reference to Exhibit 10.24 to Gaylord's Annual Report on Form 10-K
for the year ended December 31, 1999).
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27
10.11 SAILS Mandatorily Exchangeable Securities Contract dated as of May 22,
2000, among the Registrant, OLH G.P., Credit Suisse First Boston
International, and Credit Suisse First Boston Corporation, as agent
(incorporated by reference to Exhibit 10.1 to the registrant's Current
Report on Form 8-K dated May 23, 2000).
10.12 SAILS Pledge Agreement dated as of May 22, 2000, among the Registrant,
Credit Suisse First Boston International, and Credit Suisse First
Boston Corporation, as agent (incorporated by reference to Exhibit 10.2
to the registrant's Current Report on Form 8-K dated May 23, 2000).
10.13* Amended and Restated Loan and Security Agreement dated as of March 27,
2001 by and between Opryland Hotel Nashville, LLC, and Merrill Lynch
Mortgage Lending, Inc.
10.14* Mezzanine Loan Agreement dated as of March 27, 2001, by and between
Merrill Lynch Mortgage Capital Inc. and OHN Holdings, LLC.
EXECUTIVE COMPENSATION PLANS AND
MANAGEMENT CONTRACTS
10.15* Gaylord Entertainment Company 1997 Omnibus Stock Option and Incentive
Plan.
10.16 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)).
10.17 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).
10.18 Amended and Restated Gaylord Entertainment Company Directors' Unfunded
Deferred Compensation Plan (incorporated by reference to Exhibit 10.17
to Gaylord's Annual Report on Form 10-K for the year ended December 31,
1999).
10.19* Gaylord Entertainment Company Retirement Benefit Restoration Plan
10.20 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).
10.21 Severance Agreement, dated February 1999 between the Registrant and
David B. Jones (incorporated by reference to Exhibit 10.22 to Gaylord's
Annual Report on Form 10-K for the year ended December 31, 1999).
10.22 Executive Employment Agreement of James "Tim" DuBois dated February 15,
2000, with the Registrant (incorporated by reference to Exhibit 10.23
to Gaylord's Annual Report on Form 10-K for the year ended December 31,
1999).
10.23* Letter agreement dated August 10, 2000 between the Registrant and Terry
E. London.
10.24* Employment Agreement dated September 14, 2000 between the Registrant
and Dennis J. Sullivan, Jr.
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28
10.25* Letter agreement dated September 15, 2000 between the Registrant and
James "Tim" DuBois.
10.26* Letter Agreement dated February 14, 2001 between the Registrant and
Carl W. Kornmeyer.
10.27* Severance Agreement dated February 15, 2001 between the Registrant and
Denise W. Warren.
13.1* Portions of the Registrant's Annual Report to Stockholders for the year
ended December 31, 2000.
21* Subsidiaries of Gaylord Entertainment Company.
23* Consent of Independent Public Accountants.
- ----------
+ 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.
26
29
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, 2000 and 1999 and for the three years ended December
31, 2000 included in this Annual Report on Form 10-K and have issued our report
thereon dated February 22, 2001. 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 22, 2001
S-1
30
GAYLORD ENTERTAINMENT COMPANY AND SUBSIDIARIES
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
FOR THE YEAR ENDED DECEMBER 31, 2000
(AMOUNTS IN THOUSANDS)
Additions charged to
Balance at ------------------------ Balance at
beginning Costs and Other end of
of period expenses accounts Deductions period
--------- --------- --------- ----- -------
1999 restructuring charges $ 499 (233) -- 266 $ --
2000 restructuring charges -- 16,426 -- 3,317 13,109
------ --------- --------- ----- -------
Total $ 499 16,193 -- 3,583 $13,109
====== ========= ========= ===== =======
S-2
31
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 charges $2,294 -- -- 2,294 $ --
1999 restructuring charges -- 3,102 -- 2,603 499
------ --------- --------- ----- -------
Total $2,294 3,102 -- 4,897 $ 499
====== ========= ========= ===== =======
S-3
32
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 charges $6,073 -- -- 3,779 $ 2,294
====== ========= ========= ===== =======
S-4