FORM 10-Q

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

(Mark One)

þ		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2008

o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

GAYLORD ENTERTAINMENT COMPANY

(Exact name of registrant as specified in its charter)

Delaware		73-0664379
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification No.)

One Gaylord Drive
Nashville, Tennessee 37214
(Address of principal executive offices)
(Zip Code)

(615) 316-6000

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. Yes þ No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer þ          Accelerated filer o                    Non-accelerated filer o                    Smaller reporting company o

                    (Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No þ

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Class		Outstanding as of May 1, 2008
Common Stock, $.01 par value		40,846,444 shares

 

 

GAYLORD ENTERTAINMENT COMPANY

FORM 10-Q

For the Quarter Ended March 31, 2008
INDEX

		Page
Part I — Financial Information
Item 1. Financial Statements.
Condensed Consolidated Statements of Operations - For the Three Months Ended March 31, 2008 and 2007			3
Condensed Consolidated Balance Sheets - March 31, 2008 and December 31, 2007			4
Condensed Consolidated Statements of Cash Flows - For the Three Months Ended March 31, 2008 and 2007			5
Notes to Condensed Consolidated Financial Statements			6
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			32
Item 3. Quantitative and Qualitative Disclosures About Market Risk			58
Item 4. Controls and Procedures			59
Part II — Other Information
Item 1. Legal Proceedings			60
Item 1A. Risk Factors			60
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			60
Item 3. Defaults Upon Senior Securities			60
Item 4. Submission of Matters to a Vote of Security Holders			60
Item 5. Other Information			60
Item 6. Exhibits			60
SIGNATURES			61
Ex-31.1 Section 302 Certification of the CEO
Ex-31.2 Section 302 Certification of the CFO
Ex-32.1 Section 906 Certification of the CEO & CFO

Part I — FINANCIAL INFORMATION

GAYLORD ENTERTAINMENT COMPANY AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

		2008				2007
Revenues		$	195,235			$	182,358
Operating expenses:
Operating costs			113,489				108,553
Selling, general and administrative			39,541				40,800
Preopening costs			15,575				2,945
Impairment and other charges			12,031				—
Depreciation			20,193				18,549
Amortization			1,018				911
Operating (loss) income			(6,612	)			10,600
Interest expense, net of amounts capitalized			(3,579	)			(18,777	)
Interest income			324				517
Unrealized loss on Viacom stock and CBS stock			—				(2,789	)
Unrealized gain on derivatives			—				9,569
Income (loss) from unconsolidated companies			236				(1,918	)
Other gains and (losses), net			59				5,863
(Loss) income before (benefit) provision for income taxes			(9,572	)			3,065
(Benefit) provision for income taxes			(2,724	)			2,408
(Loss) income from continuing operations			(6,848	)			657
(Loss) income from discontinued operations, net of income taxes			(458	)			2,807
Net (loss) income		$	(7,306	)		$	3,464
Basic (loss) income per share:
(Loss) income from continuing operations		$	(0.17	)		$	0.02
(Loss) income from discontinued operations, net of income taxes			(0.01	)			0.06
Net (loss) income		$	(0.18	)		$	0.08
Fully diluted (loss) income per share:
(Loss) income from continuing operations		$	(0.17	)		$	0.02
(Loss) income from discontinued operations, net of income taxes			(0.01	)			0.06
Net (loss) income		$	(0.18	)		$	0.08

The accompanying notes are an integral part of these condensed consolidated financial statements.

GAYLORD ENTERTAINMENT COMPANY AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

		March 31,				December 31,
		2008				2007
ASSETS
Current assets:
Cash and cash equivalents — unrestricted		$	15,883			$	23,592
Cash and cash equivalents — restricted			1,236				1,216
Trade receivables, less allowance of $974 and $468, respectively			59,282				31,371
Estimated fair value of derivative assets			937				—
Deferred income taxes			7,689				7,689
Other current assets			38,143				30,180
Current assets of discontinued operations			147				797
Total current assets			123,317				94,845
Property and equipment, net of accumulated depreciation			2,335,174				2,196,264
Intangible assets, net of accumulated amortization			162				174
Goodwill			6,915				6,915
Indefinite lived intangible assets			1,480				1,480
Investments			4,409				4,143
Estimated fair value of derivative assets			4,467				2,043
Long-term deferred financing costs			13,466				14,621
Other long-term assets			18,719				16,382
Total assets		$	2,508,109			$	2,336,867
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Current portion of long-term debt and capital lease obligations		$	2,093			$	2,058
Accounts payable and accrued liabilities			257,080				240,827
Current liabilities of discontinued operations			2,741				2,760
Total current liabilities			261,914				245,645
Long-term debt and capital lease obligations, net of current portion			1,163,424				979,042
Deferred income taxes			67,936				73,662
Estimated fair value of derivative liabilities			4,414				—
Other long-term liabilities			97,322				96,484
Long-term liabilities of discontinued operations			520				542
Commitments and contingencies
Stockholders’ equity:
Preferred stock, $.01 par value, 100,000 shares authorized, no shares issued or outstanding			—				—
Common stock, $.01 par value, 150,000 shares authorized, 40,841 and 41,236 shares issued and outstanding, respectively			409				413
Additional paid-in capital			701,831				721,196
Retained earnings			223,452				230,758
Accumulated other comprehensive loss			(13,113	)			(10,875	)
Total stockholders’ equity			912,579				941,492
Total liabilities and stockholders’ equity		$	2,508,109			$	2,336,867

The accompanying notes are an integral part of these condensed consolidated financial statements.

GAYLORD ENTERTAINMENT COMPANY AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

		2008				2007
Cash Flows from Operating Activities:
Net (loss) income		$	(7,306	)		$	3,464
Amounts to reconcile net (loss) income to net cash flows (used in) provided by operating activities:
Loss (income) from discontinued operations, net of taxes			458				(2,807	)
(Income) loss from unconsolidated companies			(236	)			1,918
Impairment and other charges			12,031				—
Unrealized gain on Viacom stock and CBS stock and related derivatives, net			—				(6,780	)
(Benefit) provision for deferred income taxes			(3,441	)			2,408
Depreciation and amortization			21,211				19,460
Amortization of deferred financing costs			997				7,424
Write-off of deferred financing costs			—				1,192
Stock-based compensation expense			2,946				2,424
Excess tax benefit from stock-based compensation			(830	)			(581	)
Loss (gain) on sales of assets			32				(4,376	)
Changes in (net of acquisitions and divestitures):
Trade receivables			(27,911	)			(13,662	)
Accounts payable and accrued liabilities			5,659				(300	)
Other assets and liabilities			(9,445	)			(6,562	)
Net cash flows (used in) provided by operating activities — continuing operations			(5,835	)			3,222
Net cash flows provided by operating activities — discontinued operations			7				11,374
Net cash flows (used in) provided by operating activities			(5,828	)			14,596
Cash Flows from Investing Activities:
Purchases of property and equipment			(162,442	)			(134,727	)
Returns of investment in unconsolidated companies			—				301
Proceeds from sales of assets			9				4,993
Other investing activities			(1,775	)			(379	)
Net cash flows used in investing activities — continuing operations			(164,208	)			(129,812	)
Net cash flows used in investing activities — discontinued operations			(122	)			(1,041	)
Net cash flows used in investing activities			(164,330	)			(130,853	)
Cash Flows from Financing Activities:
Borrowings under credit facility			182,000				120,000
Purchases of Company’s common stock			(19,999	)			—
Deferred financing costs paid			—				(3,681	)
Increase in restricted cash and cash equivalents			(20	)			—
Proceeds from exercise of stock option and purchase plans			—				3,029
Excess tax benefit from stock-based compensation			830				581
Other financing activities, net			(362	)			(380	)
Net cash flows provided by financing activities — continuing operations			162,449				119,549
Net cash flows used in financing activities — discontinued operations			—				(8,466	)
Net cash flows provided by financing activities			162,449				111,083
Net change in cash and cash equivalents			(7,709	)			(5,174	)
Cash and cash equivalents — unrestricted, beginning of period			23,592				35,356
Cash and cash equivalents — unrestricted, end of period		$	15,883			$	30,182

The accompanying notes are an integral part of these condensed consolidated financial statements.

GAYLORD ENTERTAINMENT COMPANY AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1. BASIS OF PRESENTATION:

The condensed consolidated financial statements include the accounts of Gaylord Entertainment Company and its subsidiaries (the “Company”) and have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the financial information presented not misleading. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K as of and for the year ended December 31, 2007 filed with the SEC. In the opinion of management, all adjustments necessary for a fair statement of the results of operations for the interim period have been included. All adjustments are of a normal, recurring nature. The results of operations for such interim periods are not necessarily indicative of the results for the full year.

2. INCOME PER SHARE:

The weighted average number of common shares outstanding is calculated as follows:

		Three Months Ended March 31,
(in thousands)		2008				2007
Weighted average shares outstanding			41,246				40,802
Effect of dilutive stock options			—				1,310
Weighted average shares outstanding - assuming dilution			41,246				42,112

For the three months ended March 31, 2008, the effect of dilutive stock options was the equivalent of approximately 582,000 shares of common stock outstanding. Because the Company had a loss from continuing operations in the three months ended March 31, 2008, these incremental shares were excluded from the computation of diluted earnings per share for those periods as the effect of their inclusion would have been anti-dilutive.

3. COMPREHENSIVE (LOSS) INCOME:

Comprehensive (loss) income is as follows for the three months of the respective periods:

		Three Months Ended
		March 31,
(in thousands)		2008				2007
Net (loss) income		$	(7,306	)		$	3,464
Minimum pension liability, net of deferred income taxes			—				(81	)
Foreign currency translation, net of deferred income taxes			—				(86	)
Unrealized gain on natural gas swaps, net of deferred income taxes			518				487
Unrealized loss on interest rate swaps, net of deferred income taxes			(2,756	)			—
Comprehensive (loss) income		$	(9,544	)		$	3,784

4. IMPAIRMENT AND OTHER CHARGES:

The Company entered into an Agreement of Purchase and Sale dated as of November 19, 2007 (the “Purchase Agreement”) with LCWW Partners, a Texas joint venture, and La Cantera Development Company, a Delaware corporation (collectively, “Sellers”), to acquire the assets related to the Westin La Cantera Resort, located in San Antonio, Texas (the “La Cantera Resort”). The Purchase Agreement also provided for the Company’s purchase of approximately 90 acres of undeveloped land adjacent to the resort property.

On January 21, 2008, the Company entered into an amendment (the “Amendment”) with Sellers to the Purchase Agreement. The Amendment extended the closing date under the Purchase Agreement to April 30, 2008 (prior to the Amendment, the closing date was scheduled to occur no later than January 31, 2008). The Amendment also provided that the $10.0 million deposit (the “Deposit”) previously paid by the Company to an escrow agent under the Purchase Agreement, which was recorded in property and equipment in the accompanying consolidated balance sheet as of December 31, 2007, would be released to Sellers, and that the Deposit would be non-refundable to the Company except in connection with the voluntary and intentional default by Sellers in their obligations to be performed on the closing date.

The Amendment conditioned the closing of the transactions under the Purchase Agreement on the Company arranging financing satisfactory to the Company in its sole discretion in order to fund the transaction. On April 15, 2008, as permitted by the Amendment, the Company terminated the Purchase Agreement on the basis that it did not obtain financing satisfactory to it. Pursuant to the terms of the Purchase Agreement and the Amendment, the Company forfeited the $10.0 million deposit previously paid to Sellers. As a result, the Company recorded an impairment charge of $12.0 million to write off the deposit, as well as certain transaction-related expenses that were also capitalized in connection with the potential acquisition.

5. DISCONTINUED OPERATIONS:

The Company has reflected the following businesses as discontinued operations, consistent with the provisions of Statement of Financial Accounting Standards (“SFAS”) No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets and Accounting Principles Board (“APB”) Opinion No. 30, Reporting the Results of Operations — Reporting the Effects of Disposal of a Segment of a Business, and Extraordinary, and Unusual and Infrequently Occurring Events and Transactions. The results of operations, net of taxes, and the carrying value of the assets and liabilities of these businesses have been reflected in the accompanying condensed consolidated financial statements as discontinued operations in accordance with SFAS No. 144 for all periods presented.

ResortQuest

During the third quarter of 2005, the Company committed to a plan of disposal of certain markets of its ResortQuest business that were considered to be inconsistent with the Company’s long term growth strategy. The Company completed the sale of four of these markets in the fourth quarter of 2005, two of these markets in the first quarter of 2006, and the remaining two markets in the second quarter of 2006.

During the second quarter of 2006, the Company completed the sale of one additional market of its ResortQuest business that was not included in the plan of disposal described above, but was later determined to be inconsistent with the Company’s long term growth strategy.

During the second quarter of 2007, the Company committed to a plan of disposal of the remainder of its ResortQuest business. On May 31, 2007, the Company completed the sale of its ResortQuest Hawaii operations through the transfer of all of its equity interests in its ResortQuest Hawaii subsidiaries (“ResortQuest Hawaii”) to Vacation Holdings Hawaii, Inc., an affiliated company of Interval International, for $109.1 million in cash, prior to giving effect to a purchase price adjustment based on the working capital of ResortQuest Hawaii as of

the closing. The Company retained its 19.9% ownership interest in RHAC Holdings, LLC and its 18.1% ownership interest in Waipouli Holdings LLC, which ownership interests were excluded from this transaction. The Company recognized a pretax gain of $50.0 million related to the sale of ResortQuest Hawaii during 2007. Net cash proceeds from the sale of $107.7 million were used to reduce the Company’s outstanding indebtedness.

On June 1, 2007, the Company completed the sale of the remainder of the operations of its ResortQuest subsidiary through the transfer of all of its capital stock in its ResortQuest Mainland subsidiary (“ResortQuest Mainland”) to BEI-RZT Corporation, a subsidiary of Leucadia National Corporation, for $35.0 million, prior to giving effect to certain purchase price adjustments, including a purchase price adjustment based on the working capital of ResortQuest Mainland as of the closing. The purchase price was paid by the delivery of a four-year promissory note in the principal amount of $8.0 million bearing interest at the annual rate of 10%, and the balance of the purchase price was paid in cash at closing. During the third quarter of 2007, the Company and BEI - RZT Corporation reached an agreement that the Company would be required to pay approximately $8.0 million to BEI — RZT Corporation pursuant to the final purchase price adjustment. The Company and BEI — RZT Corporation also agreed that the four-year $8.0 million promissory note received from BEI — RZT Corporation at closing would be cancelled and deemed to be satisfied and paid in full in full satisfaction of the approximately $8.0 million final purchase price adjustment described above. As a result of the final purchase price adjustments and cancellation of the note, the Company recognized a pretax loss of $59.5 million related to the sale of ResortQuest Mainland in 2007. In connection with the sale of ResortQuest Mainland, the Company recorded pre-tax restructuring charges for employee severance benefits of $0.2 million for the three months ended March 31, 2008. Net cash proceeds from the sale of $9.3 million were used to reduce the Company’s outstanding indebtedness.

The following table reflects the results of operations of businesses accounted for as discontinued operations for the three months ended March 31, 2008 and 2007:

		Three Months Ended
		March 31,
(in thousands)		2008				2007
Revenues:
ResortQuest		$	—			$	57,483
Operating (loss) income:
ResortQuest		$	(487	)		$	1,734
Restructuring charges			(178	)			—
Total operating (loss) income			(665	)			1,734
Interest expense			—				(1	)
Interest income			—				146
Other gains and (losses):
ResortQuest			(123	)			(183	)
Other			50				—
(Loss) income before benefit for income taxes			(738	)			1,696
Benefit for income taxes			(280	)			(1,111	)
(Loss) income from discontinued operations		$	(458	)		$	2,807

The assets and liabilities of the discontinued operations presented in the accompanying condensed consolidated balance sheets are comprised of:

		March 31,				December 31,
(in thousands)		2008				2007
Current assets:
Prepaid expenses		$	79			$	106
Other current assets			68				691
Total current assets			147				797
Total long-term assets			—				—
Total assets		$	147			$	797
Current liabilities:
Current portion of long-term debt		$	—			$	—
Accounts payable and accrued liabilities			2,741				2,760
Total current liabilities			2,741				2,760
Long-term debt			—				—
Other long-term liabilities			520				542
Total long-term liabilities			520				542
Total liabilities		$	3,261			$	3,302

6. DEBT:

8% Senior Notes

On November 12, 2003, the Company completed its offering of $350 million in aggregate principal amount of senior notes due 2013 (the “8% Senior Notes”) in an institutional private placement. The Company filed an exchange offer registration statement on Form S-4 with the SEC with respect to the 8% Senior Notes and subsequently exchanged the existing senior notes for publicly registered senior notes with the same terms after the registration statement was declared effective in April 2004. The interest rate on these notes is 8%, although the Company has entered into fixed to variable interest rate swaps with respect to $125 million principal amount of the 8% Senior Notes, which swaps result in an effective interest rate of LIBOR plus 2.95% with respect to that portion of the 8% Senior Notes. The 8% Senior Notes, which mature on November 15, 2013, bear interest semi-annually in arrears on May 15 and November 15 of each year, starting on May 15, 2004. The 8% Senior Notes are redeemable, in whole or in part by the Company, at any time on or after November 15, 2008 at a designated redemption amount, plus accrued and unpaid interest. The 8% Senior Notes rank equally in right of payment with the Company’s other unsecured unsubordinated debt, but are effectively subordinated to all of the Company’s secured debt to the extent of the assets securing such debt. The 8% Senior Notes are fully and unconditionally guaranteed, jointly and severally, on a senior unsecured basis by generally all of the Company’s active domestic subsidiaries. In connection with the offering and subsequent registration of the 8% Senior Notes, the Company paid approximately $10.1 million in deferred financing costs. The net proceeds from the offering of the 8% Senior Notes, together with $22.5 million of the Company’s cash on hand, were used as follows:

•

$275.5 million was used to repay the $150 million senior term loan portion and the $50 million subordinated term loan portion of a senior secured credit facility secured by the Company’s Florida and Texas hotel properties, as well as the remaining $66 million of a mezzanine loan secured by the equity interest in a wholly-owned subsidiary that owned Gaylord Opryland and to pay certain fees and expenses related to the ResortQuest acquisition; and

•

$79.2 million was placed in escrow pending consummation of the acquisition of ResortQuest by the Company. As of November 20, 2003, the $79.2 million together with $8.2 million of available cash, was used to repay (i) ResortQuest’s senior notes and its credit facility, the principal amount of which aggregated $85.1 million at closing, and (ii) a related prepayment penalty.

The 8% Senior Notes indenture contains certain covenants which, among other things, limit the incurrence of additional indebtedness (including additional indebtedness under the Company’s senior secured delayed draw term loan facility), investments, dividends, transactions with affiliates, asset sales, capital expenditures, mergers and consolidations, liens and encumbrances and other matters customarily restricted in such agreements. The 8% Senior Notes are cross-defaulted to the Company’s other indebtedness.

6.75% Senior Notes

On November 30, 2004, the Company completed its offering of $225 million in aggregate principal amount of senior notes due 2014 (the “6.75% Senior Notes”) in an institutional private placement. In April 2005, the Company filed an exchange offer registration statement on Form S-4 with the SEC with respect to the 6.75% Senior Notes and subsequently exchanged the existing senior notes for publicly registered senior notes with the same terms after the registration statement was declared effective in May 2005. The interest rate of these notes is 6.75%. The 6.75% Senior Notes, which mature on November 15, 2014, bear interest semi-annually in cash in arrears on May 15 and November 15 of each year, starting on May 15, 2005. The 6.75% Senior Notes are redeemable, in whole or in part by the Company, at any time on or after November 15, 2009 at a designated redemption amount, plus accrued and unpaid interest. The 6.75% Senior Notes rank equally in right of payment with the Company’s other unsecured unsubordinated debt, but are effectively subordinated to all of the Company’s secured debt to the extent of the assets securing such debt. The 6.75% Senior Notes are fully and unconditionally guaranteed, jointly and severally, on a senior unsecured basis by generally all of the Company’s active domestic subsidiaries. In connection with the offering of the 6.75% Senior Notes, the Company paid approximately $4.2 million in deferred financing costs. The net proceeds from the offering of the 6.75% Senior Notes, together with cash on hand, were used to repay a senior loan that was secured by a first mortgage lien on the assets of Gaylord Opryland and to provide capital for growth of the Company’s other businesses and other general corporate purposes. In addition, the 6.75% Senior Notes indenture contains certain covenants which, among other things, limit the incurrence of additional indebtedness (including additional indebtedness under the Company’s senior secured delayed draw term loan facility), investments, dividends, transactions with affiliates, asset sales, capital expenditures, mergers and consolidations, liens and encumbrances and other matters customarily restricted in such agreements. The 6.75% Senior Notes are cross-defaulted to the Company’s other indebtedness.

$600.0 Million Credit Facility

On March 10, 2005, the Company entered into a $600.0 million credit facility with Bank of America, N.A. acting as the administrative agent. This credit facility, which replaced a $100.0 million revolving credit facility, consisted of the following components: (a) a $300.0 million senior secured revolving credit facility, which included a $50.0 million letter of credit sublimit, and (b) a $300.0 million senior secured delayed draw term loan facility, which could be drawn in one or more advances during its term. The credit facility also included an accordion feature that allowed the Company, on a one-time basis, to increase the credit facilities by a total of up to $300.0 million, subject to securing additional commitments from existing lenders or new lending institutions. At the Company’s election, the revolving loans and the term loans had an interest rate of LIBOR plus 2% or the lending banks’ base rate plus 1%, subject to adjustments based on the Company’s financial performance. Interest on the Company’s borrowings was payable quarterly, in arrears, for base rate loans and at the end of each interest rate period for LIBOR rate-based loans. Principal was payable in full at maturity. The Company was required to pay a commitment fee ranging from 0.25% to 0.50% per year of the average unused portion of the credit facility.

As a result of the refinancing of the $600.0 million credit facility, which is discussed below, the Company wrote off $1.2 million in deferred financing costs during the first quarter of 2007, which is included in interest expense in the accompanying condensed consolidated statement of operations for the three months ended March 31, 2007.

$1.0 Billion Credit Facility

On March 23, 2007, the Company refinanced its $600.0 million credit facility by entering into an Amended and Restated Credit Agreement by and among the Company, certain subsidiaries of the Company party thereto, as guarantors, the lenders party thereto and Bank of America, N.A., as administrative agent. The $1.0 billion amended and restated credit facility (the “$1.0 Billion Credit Facility”) represents an increase of the Company’s previous $600.0 million credit facility, which is discussed above.

The $1.0 Billion Credit Facility consists of the following components: (a) a $300.0 million senior secured revolving credit facility, which includes a $50.0 million letter of credit sublimit and a $30.0 million sublimit for swingline loans, and (b) a $700.0 million senior secured delayed draw term loan facility, which may be drawn on in one or more advances during its term. The $1.0 Billion Credit Facility also includes an accordion feature that will allow the Company to increase the $1.0 Billion Credit Facility by a total of up to $100.0 million, subject to securing additional commitments from existing lenders or new lending institutions. The revolving loan, letters of credit and term loan mature on March 9, 2010. At the Company’s election, the revolving loans and the term loans will bear interest at an annual rate of LIBOR plus an applicable margin ranging from 1.25% to 1.75% or the lending banks’ base rate plus an applicable margin ranging from 0.00% to 0.50%, subject to adjustments based on the Company’s borrowing base leverage. As further discussed in Note 8, the Company has also entered into interest rate swaps with respect to $403.0 million aggregate principal amount of borrowings under the delayed draw term loan facility to convert the variable rate on these borrowings to a fixed weighted average interest rate of 2.98% plus the applicable margin on these borrowings during the term of the swap agreements. Interest on the Company’s borrowings is payable quarterly, in arrears, for base rate loans and at the end of each interest rate period for LIBOR rate-based loans. Principal is payable in full at maturity. The Company is required to pay a commitment fee ranging from 0.125% to 0.35% per year of the average unused portion of the $1.0 Billion Credit Facility.

The purpose of the $1.0 Billion Credit Facility is for working capital and capital expenditures and the financing of the costs and expenses related to the continued construction of the Gaylord National hotel. Construction of the Gaylord National hotel is required to be substantially completed by October 31, 2008 (subject to customary force majeure provisions). Construction of the Gaylord National hotel was substantially completed in April 2008.

The $1.0 Billion Credit Facility is (i) secured by a first mortgage and lien on the real property and related personal and intellectual property of the Company’s Gaylord Opryland hotel, Gaylord Texan hotel, Gaylord Palms hotel and Gaylord National hotel (which was substantially completed in April 2008, as described below) and pledges of equity interests in the entities that own such properties and (ii) guaranteed by each of the four wholly owned subsidiaries that own the four hotels. Advances are subject to a 60% borrowing base, based on the appraisal value of the hotel properties (reduced to 50% in the event a hotel property is sold).

In addition, the $1.0 Billion Credit Facility contains certain covenants which, among other things, limit the incurrence of additional indebtedness, investments, dividends, transactions with affiliates, asset sales, acquisitions, mergers and consolidations, liens and encumbrances and other matters customarily restricted in such agreements. The material financial covenants, ratios or tests contained in the $1.0 Billion Credit Facility are as follows:

•

The Company must maintain a consolidated funded indebtedness to total asset value ratio as of the end of each calendar quarter (i) following the closing date of the $1.0 Billion Credit Facility through the calendar quarter ending immediately prior to the first full quarter during which the Gaylord National hotel is substantially completed, of not more than 70% and (ii) for all calendar quarters thereafter, of not more than 65%.

	•		The Company must maintain a consolidated tangible net worth of not less than the sum of $550.0 million, increased on a cumulative basis as of the end of each calendar quarter, commencing with the calendar quarter ending March 31, 2005, by an amount equal to (i) 75% of consolidated net income (to the extent positive) for the calendar quarter then ended, plus (ii) 75% of the proceeds received by the Company or any of the Company’s subsidiaries in connection with any equity issuance.
	•		The Company must maintain a minimum consolidated fixed charge coverage ratio of not less than 2.00 to 1.00 for all calendar quarters during the term of the credit facility.
	•		The Company must maintain an implied debt service coverage ratio (the ratio of adjusted net operating income to monthly principal and interest that would be required if the outstanding balance were amortized over 25 years at an interest rate equal to the then current seven year Treasury Note plus 0.25%) of not less than 1.60 to 1.00.

As of March 31, 2008, the Company was in compliance with all covenants. As of March 31, 2008, $580.0 million of borrowings were outstanding under the $1.0 Billion Credit Facility, and the lending banks had issued $10.7 million of letters of credit under the facility for the Company, which left $409.3 million of availability under the credit facility (subject to the satisfaction of debt incurrence tests under the indentures governing our senior notes). The $1.0 Billion Credit Facility is cross-defaulted to our other indebtedness.

7. SECURED FORWARD EXCHANGE CONTRACT:

During May 2000, the Company entered into a seven-year secured forward exchange contract (“SFEC”) with an affiliate of Credit Suisse First Boston with respect to 10,937,900 shares of Viacom, Inc. Class B common stock. Effective January 3, 2006, Viacom, Inc. completed a transaction to separate Viacom, Inc. into two publicly traded companies named Viacom, Inc. and CBS Corporation by converting (i) each outstanding share of Viacom, Inc. Class A common stock into 0.5 shares of Viacom, Inc. Class A common stock and 0.5 shares of CBS Corporation Class A common stock and (ii) each outstanding share of Viacom Class B common stock into 0.5 shares of Viacom, Inc. Class B common stock and 0.5 shares of CBS Corporation Class B common stock. As a result of this transaction, the Company exchanged its 10,937,900 shares of Viacom, Inc. Class B common stock for 5,468,950 shares of Viacom, Inc. Class B common stock (“Viacom Stock”) and 5,468,950 shares of CBS Corporation Class B common stock (“CBS Stock”) effective January 3, 2006.

Prior to its maturity in May 2007, the seven-year SFEC had a notional amount of $613.1 million and required contract payments based upon a stated 5% rate. The Company’s obligation under the SFEC was collateralized by a security interest in the Company’s Viacom Stock and CBS Stock. The SFEC protected the Company against decreases in the combined fair market value of the Viacom Stock and CBS Stock below $56.05 per share by way of a put option; the SFEC also provided for participation in the increases in the combined fair market value of the Viacom Stock and CBS Stock in that the Company received 100% of the appreciation between $56.05 and $64.45 per share and, by way of a call option, 25.93% of the appreciation above $64.45 per share, as of March 31, 2007. The Company realized cash proceeds from the SFEC of $506.5 million, net of discounted prepaid contract payments and prepaid interest related to the first 3.25 years of the contract and transaction costs totaling $106.6 million. In October 2000, the Company prepaid the remaining 3.75 years of contract interest payments required by the SFEC of $83.2 million. As a result of the prepayment, the Company was not required to make any further contract interest payments during the seven-year term of the SFEC. Additionally, as a result of the prepayment, the Company was released from certain covenants of the SFEC, which related to sales of assets, additional indebtedness and liens. The Company recognized the prepaid contract payments and deferred financing charges associated with the SFEC as interest expense over the seven-year contract period using the effective interest method, which resulted in non-cash interest expense of $0 and $6.6 million for the three months ended March 31, 2008 and 2007, respectively.

During May 2007, the SFEC matured and the Company delivered all of the Viacom Stock and CBS Stock to Credit Suisse First Boston in full satisfaction of the $613.1 million debt obligation under the SFEC. As a result, the debt obligation, Viacom Stock, CBS Stock, put option, call option, and deferred financing costs related to the SFEC were removed from the consolidated balance sheet.

In accordance with the provisions of SFAS No. 133, as amended, certain components of the secured forward exchange contract are considered derivatives, as discussed in Note 8.

8. DERIVATIVE FINANCIAL INSTRUMENTS:

The Company utilizes derivative financial instruments to manage risk exposure to changes in the variable interest rate on portions of its variable rate debt, changes in the value of portions of its fixed rate debt, and changes in the prices at which the Company purchases natural gas. Prior to May 2007, the Company also used derivative financial instruments to manage risk exposure to changes in the value of its Viacom Stock and CBS Stock.

Variable Rate Debt

On February 26, 2008, the Company entered into a series of forward-starting interest rate swaps with a combined notional amount of $403.0 million to convert the variable rate on $403.0 million aggregate principal amount of borrowings under the delayed draw term loan portion of the Company’s $1.0 Billion Credit Facility to a fixed rate to manage the Company’s exposure to changes in interest rates on these borrowings. Under these swap agreements, which expire on various dates through March 9, 2010, the Company receives a variable rate equal to 3-month LIBOR and pays a weighted average fixed rate of 2.98% during the term of the swap agreements. The critical terms of the swap agreements match the critical terms of the borrowings under the delayed draw term loan portion of the Company’s $1.0 Billion Credit Facility. The Company has designated these interest rate swaps as cash flow hedges. As of March 31, 2008, the Company determined that, based upon dealer quotes, the fair value of the interest rate swap agreements was a $4.4 million liability. The Company recorded a derivative liability of $4.4 million and accumulated other comprehensive income, net of tax, of $2.8 million. The Company recorded no ineffectiveness through operations related to these interest rate swaps during the three months ended March 31, 2008.

Fixed Rate Debt

Upon issuance of the 8% Senior Notes, the Company entered into two interest rate swap agreements with a combined notional amount of $125.0 million to convert the fixed rate on $125.0 million of the 8% Senior Notes to a variable rate in order to access the lower borrowing costs that were available on floating-rate debt. Under these swap agreements, which mature on November 15, 2013, the Company receives a fixed rate of 8% and pays a variable rate, in arrears, equal to six-month LIBOR plus 2.95%. The terms of the swap agreement mirror the terms of the 8% Senior Notes, including semi-annual settlements on the 15^th of May and November each year. Under the provisions of SFAS No. 133, as amended, changes in the fair value of this interest rate swap agreement must be offset against the corresponding change in fair value of the 8% Senior Notes through earnings. The Company has determined that there will not be an ineffective portion of this fair value hedge and, therefore, no impact on earnings. As of March 31, 2008 and December 31, 2007, the Company determined that, based upon dealer quotes, the fair value of these interest rate swap agreements was $4.5 million and $2.0 million, respectively. The Company recorded a derivative asset and an offsetting increase in the balance of the 8% Senior Notes accordingly.

Natural Gas Risk Management

The Company uses variable to fixed natural gas price swap contracts to manage unanticipated changes in natural gas and electricity prices. The contracts are based on forecasted usage of natural gas measured in dekatherms.

The Company has designated the variable to fixed natural gas price swap contracts as cash flow hedges. The Company values the outstanding contracts based on pricing provided by a financial institution and reviewed by the Company, with the offset applied to other comprehensive income, net of applicable income taxes, and earnings for any hedge ineffectiveness. Any gain or loss is reclassified from other comprehensive income and recognized in operating costs in the same period or periods during which the hedged transaction affects earnings.

At March 31, 2008, the Company had variable to fixed natural gas price swap contracts that mature from April 2008 to June 2008 with an aggregate notional amount of approximately 353,000 dekatherms. The fair value of these contracts was $0.9 million as of March 31, 2008. The Company recorded a derivative asset and an offsetting increase in accumulated other comprehensive income, net of applicable income taxes, accordingly. At December 31, 2007, the Company had variable to fixed natural gas price swap contracts that matured from January 2008 to June 2008 with an aggregate notional amount of approximately 601,000 dekatherms. The fair value of these contracts was $45,000. The Company recorded a derivative asset and an offsetting increase in accumulated other comprehensive income, net of applicable income taxes, accordingly.

The ineffective portion of the derivative is recognized in other gains and losses within the accompanying condensed consolidated statements of operations and was not significant for the periods reported. The amount that the Company anticipates that will be reclassified out of accumulated other comprehensive loss and into earnings in the next twelve months is a gain of approximately $0.9 million.

Viacom Stock and CBS Stock

Upon adoption of SFAS No. 133, the Company valued the SFEC based on pricing provided by a financial institution and reviewed by the Company. The financial institution’s market prices are prepared on a mid-market basis by reference to proprietary models and do not reflect any bid/offer spread. As further discussed in Note 7, the SFEC matured in May 2007. For the three months ended March 31, 2007, the Company recorded net pretax gains in the Company’s condensed consolidated statement of operations of $9.6 million related to the increase in the fair value of the derivatives associated with the SFEC.

9. SUPPLEMENTAL CASH FLOW DISCLOSURES:

Cash paid for interest related to continuing operations for the three months ended March 31, 2008 and 2007 was comprised of:

		Three Months Ended
		March 31,
(in thousands)		2008				2007
Debt interest paid		$	8,388			$	6,876
Deferred financing costs paid			—				3,681
Capitalized interest			(8,388	)			(5,728	)
Cash interest paid, net of capitalized interest		$	—			$	4,829

Total capitalized interest for the three months ended March 31, 2008 was $15.2 million. Income taxes paid were $0.03 million and $0.5 million for the three months ended March 31, 2008 and 2007, respectively.

10. GOODWILL AND INTANGIBLES:

The carrying amount of goodwill in continuing operations was $6.9 million at March 31, 2008 and December 31, 2007. The carrying amount of indefinite-lived intangible assets not subject to amortization in continuing operations was $1.5 million at March 31, 2008 and December 31, 2007. The gross carrying amount of amortized intangible assets in continuing operations was $1.1 million at March 31, 2008 and December 31, 2007. The related accumulated amortization of amortized intangible assets in continuing operations was $0.9 million at March 31, 2008 and December 31, 2007. The amortization expense related to intangible assets from continuing operations during the three months ended March 31, 2008 and 2007 was $12,000. The estimated amounts of amortization expense for the next five years are as follows (in thousands):

Year 1		$	48
Year 2			48
Year 3			42
Year 4			3
Year 5			3
Total		$	144

11. STOCK PLANS:

The Company has adopted, and the Company’s shareholders have approved, the 2006 Omnibus Incentive Plan (the “Plan”) to replace the Company’s 1997 Omnibus Stock Option and Incentive Plan. The Plan permits the grant of stock options, restricted stock, and restricted stock units to its directors and employees for up to 2,690,000 shares of common stock, which includes approximately 2,000,000 newly authorized shares and 690,000 shares that were authorized and available for grant under the Company’s 1997 plan. The Plan also provides that no more than 1,350,000 of those shares may be granted for awards other than options or stock appreciation rights. The Company believes that awards under the Plan better align the interests of its directors and employees with those of its shareholders. Stock option awards are generally granted with an exercise price equal to the market price of the Company’s stock at the date of grant and generally expire ten years after the date of grant. Generally, stock options granted to non-employee directors are exercisable after one year from the date of grant, while options granted to employees are exercisable one to four years from the date of grant. The Company records compensation expense equal to the fair value of each stock option award granted on a straight line basis over the option’s vesting period. The fair value of each option award is estimated on the date of grant using the Black-Scholes-Merton option pricing formula. At March 31, 2008 and December 31, 2007, there were 3,992,025 and 3,668,728 shares, respectively, of the Company’s common stock reserved for future issuance pursuant to the exercise of outstanding stock options under the Plan.

The Plan also provides for the award of restricted stock and restricted stock units (“Restricted Stock Awards”). Restricted Stock Awards granted to non-employee directors generally vest one year from the date of grant, with certain restrictions on transfer. Restricted Stock Awards granted to employees generally vest one to four years from the date of grant. The fair value of Restricted Stock Awards is determined based on the market price of the Company’s stock at the date of grant. The Company records compensation expense equal to the fair value of each Restricted Stock Award granted over the vesting period. At March 31, 2008 and December 31, 2007, Restricted Stock Awards of 142,876 and 95,630 shares, respectively, were outstanding.

Under its Performance Accelerated Restricted Stock Unit Program (“PARSUP”) pursuant to the Plan, the Company granted selected executives and other key employees restricted stock units, the vesting of which occurred upon the earlier of February 2008 or the achievement of various company-wide performance goals.

The fair value of PARSUP awards was determined based on the market price of the Company’s stock at the date of grant. The Company recorded compensation expense equal to the fair value of each PARSUP award granted on a straight line basis over a period beginning on the grant date and ending February 2008. All PARSUP awards vested in February 2008, but certain recipients elected to defer receipt of their vested PARSUP awards. At March 31, 2008 and December 31, 2007, PARSUP awards of 178,000 and 521,000 shares were outstanding.

Under its long term incentive plan for key executives (“LTIP”) pursuant to the Plan, in February 2008 the Company granted selected executives and other key employees 449,500 restricted stock units (“LTIP Restricted Stock Units”) and 650,000 stock options (“LTIP Stock Options”), which will replace annual grants of stock based compensation awards to these employees over the next three years. The LTIP Restricted Stock Units cliff vest at the end of their four-year term. The number of LTIP Restricted Stock Units that vest will be determined at the end of their term based on the achievement of various company-wide performance goals. The Company expects that the performance goals will be achieved and all of the LTIP Restricted Stock Units granted will vest at the end of their term. The Company is recording compensation expense equal to the fair value of all LTIP Restricted Stock Units granted on a straight-line basis over the vesting period. The fair value of the LTIP Restricted Stock Units was determined based on the market price of the Company’s stock at the date of grant. The LTIP Stock Options, which vest two to four years from the date of grant and have a term of ten years, were granted with an exercise price of $38.00, while the market price of the Company’s common stock on the grant date was $31.02. As a result of this market condition, the Company will record compensation expense equal to the fair value of each LTIP Stock Option granted on a straight-line basis over the requisite service period for each separately vesting portion of the award. At March 31, 2008 LTIP Restricted Stock Units and LTIP Stock Options of 449,500 and 650,000 shares were outstanding.

The compensation cost that has been charged against pre-tax income for all of the Company’s stock-based compensation plans was $2.9 million and $2.4 million for the three months ended March 31, 2008 and 2007, respectively.

The Company also has an employee stock purchase plan whereby substantially all employees are eligible to participate in the purchase of designated shares of the Company’s common stock. Participants in the plan purchase these shares at a price equal to 95% of the closing price at the end of each quarterly stock purchase period. The Company issued 4,968 and 2,856 shares of common stock at an average price per share of $28.78 and $50.23 pursuant to this plan during the three months ended March 31, 2008 and 2007, respectively.

12. RETIREMENT AND POSTRETIREMENT BENEFITS OTHER THAN PENSION PLANS:

Net periodic pension expense reflected in the accompanying condensed consolidated statements of operations included the following components for the three months ended March 31 (in thousands):

		Three months ended
		March 31,
		2008				2007
Service cost		$	64			$	60
Interest cost			1,306				1,220
Expected return on plan assets			(1,204	)			(1,094	)
Amortization of net actuarial loss			296				564
Amortization of prior service cost			1				1
Total net periodic pension expense		$	463			$	751

Net postretirement benefit expense reflected in the accompanying condensed consolidated statements of included the following components for the three months ended March 31 (in thousands):

		Three months ended
		March 31,
		2008				2007
Service cost		$	22			$	27
Interest cost			300				284
Amortization of net actuarial loss			—				10
Amortization of net prior service cost			—				(24	)
Amortization of curtailment gain			(61	)			(61	)
Total net postretirement benefit expense		$	261			$	236

13. INCOME TAXES:

The Company’s effective tax rate as applied to pre-tax income was 28% and 79% for the three months ended March 31, 2008 and 2007, respectively. The Company’s lower effective tax rate during the three months ended March 31, 2008, as compared to the same period in 2007, was due primarily to the tax effects of intercompany interest charged to ResortQuest International, Inc. during the three months ended March 31, 2007 and the tax effects of a statutory rate change in the three months ended March 31, 2008.

As of March 31, 2008 and December 31, 2007, the Company had $15.1 million of unrecognized tax benefits, of which $7.5 million would affect the Company’s effective tax rate if recognized. These liabilities are recorded in other long-term liabilities in the accompanying condensed consolidated balance sheets. It is expected that the unrecognized tax benefits will change in the next twelve months; however, the Company does not expect the change to have a significant impact on the results of operations or the financial position of the Company.

14. NEWLY ISSUED ACCOUNTING STANDARDS:

In September 2006, the FASB issued SFAS No. 158, “Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans, an amendment of FASB Statements No 87, 88, 106, and 132(R).” SFAS No. 158 requires plan sponsors of defined benefit pension and other postretirement benefit plans (collectively, “postretirement benefit plans”) to recognize the funded status of their postretirement benefit plans in the statement of financial position, measure the fair value of plan assets and benefit obligations as of the date of the fiscal year-end statement of financial position, and provide additional disclosures. On December 31, 2006, we adopted the recognition and disclosure provisions of SFAS No. 158. The effect of adopting SFAS No. 158 on the Company’s financial condition at December 31, 2006 has been included in the accompanying consolidated financial statements. SFAS No. 158’s provisions regarding the change in the measurement date of postretirement benefit plans is effective for fiscal years ending after December 15, 2008. The Company will adopt the measurement date provision in the fiscal year ending December 31, 2008. The Company does not expect the adoption of SFAS No. 158 to have a material impact on its consolidated financial position and results of operations.

In December 2007, the FASB issued SFAS No. 160, “Non-controlling Interests in Consolidated Financial Statements—an amendment of ARB No. 51.” This statement establishes accounting and reporting standards for the non-controlling interest in a subsidiary and for the deconsolidation of a subsidiary. SFAS No. 160 clarifies that a non-controlling interest in a subsidiary, which is sometimes referred to as minority interest, is an ownership interest in the consolidated entity that should be reported as a component of equity in the consolidated financial statements. Among other requirements, SFAS No. 160 requires consolidated net income to be reported at amounts that include the amounts attributable to both the parent and the non-controlling interest. It also requires disclosure, on the face of the consolidated income statement, of the amounts of

consolidated net income attributable to the parent and to the non-controlling interest. This statement is effective prospectively, except for certain retrospective disclosure requirements, for fiscal years beginning after December 15, 2008. The Company will adopt the provisions of this statement in the first quarter of 2009. The Company is assessing the potential impact of this statement on its consolidated financial statements.

In December 2007, the FASB issued SFAS No. 141(R), “Business Combinations—a replacement of FASB Statement No. 141.” SFAS No. 141(R) replaces SFAS No. 141, “Business Combinations,” and applies to all transactions and other events in which one entity obtains control over one or more other businesses. SFAS No. 141(R) requires an acquirer, upon initially obtaining control of another entity, to recognize the assets, liabilities and any non-controlling interest in the acquiree at fair value as of the acquisition date. Contingent consideration is required to be recognized and measured at fair value on the date of acquisition rather than at a later date when the amount of that consideration may be determinable beyond a reasonable doubt. SFAS No. 141(R) requires acquirers to expense acquisition-related costs as incurred rather than allocating such costs to the assets acquired and liabilities assumed, as was previously the case under SFAS No. 141. Under SFAS No. 141(R), the requirements of SFAS No. 146, “Accounting for Costs Associated with Exit or Disposal Activities,” would have to be met in order to accrue for a restructuring plan in purchase accounting. Pre-acquisition contingencies are to be recognized at fair value, unless it is a non-contractual contingency that is not likely to materialize, in which case, no amounts should be recognized in purchase accounting and, instead, that contingency would be subject to the probable and estimable recognition criteria of SFAS No. 5, “Accounting for Contingencies.” This statement is effective prospectively, except for certain retrospective adjustments to deferred tax balances, for fiscal years beginning after December 15, 2008. The Company will adopt the provisions of this statement in the first quarter of 2009. The Company is assessing the potential impact of this statement on its consolidated financial statements.

In March 2008, the FASB issued SFAS No. 161, “Disclosures About Derivative Instruments and Hedging Activities — an amendment of FASB Statement No. 133”. SFAS No. 161 is intended to improve financial reporting about derivative instruments and hedging activities by requiring enhanced disclosures to enable investors to better understand their effects on an entity’s financial position, financial performance, and cash flows. SFAS No. 161 is effective for fiscal years beginning after November 15, 2008. The Company will adopt the provisions of this statement in the first quarter of 2009. The Company is currently assessing the impact that the adoption of SFAS No. 161 may have on the financial statements.

15. COMMITMENTS AND CONTINGENCIES:

On February 23, 2005, the Company acquired approximately 42 acres of land and related land improvements in Prince George’s County, Maryland for approximately $29 million on which the Company is developing the Gaylord National Resort & Convention Center (“Gaylord National”). Gaylord National was substantially completed and opened in April 2008. Approximately $17 million of the cost of the land was paid in the first quarter of 2005, and an additional $2 million was paid upon substantial completion of Gaylord National in April 2008. The remaining $10 million of the cost of the land, which is subject to downward adjustment based on the completion of certain development milestones, is expected to be paid within the next twelve months. The project was originally planned to include a 1,500 room hotel, but the Company expanded the planned hotel to a total of 2,000 rooms. In connection with this expansion, the Company paid an additional $8 million in April 2008 for land improvements related to the expanded facility. Prince George’s County, Maryland has issued three series of bonds related to the development of this hotel project. The first bond issuance, in the amount of $65 million, was issued by Prince George’s County, Maryland in April 2005 to support the cost of infrastructure being constructed by the project developer, such as roads, water and sewer lines. The second and third bond issues, in the amount of $95 million and $50 million, respectively, were delivered to the Company on April 2, 2008. The Company will initially hold the $95 million and $50 million bond issuances and receive the debt service thereon, which is payable from tax increment, hotel tax and special hotel rental taxes generated from the development. Accordingly, during the second quarter of 2008, the Company will record the present value of the future debt service payments as a bond receivable with a like amount as an offset to property and equipment. The Company has entered into commitments for various expenditures in connection with our Gaylord National development, including for the purchase of

land, furniture, fixtures, and equipment, and procuring services in connection with the development. The Company has entered into several agreements with a general contractor and other suppliers for the provision of certain construction services at the site. Construction costs to date have exceeded the Company’s initial estimates from 2004. These increased costs are attributable to: (a) construction materials price escalation that has occurred over the past four years; (b) increased cost of construction labor in the Washington, D.C. marketplace due to historically low unemployment and a high degree of construction activity; (c) the Company’s 500-room expansion and related additional meeting space, and the acceleration of its construction so that the expansion opened concurrently with the original project; and (d) enhancements to the project design. As of March 31, 2008, the Company has spent approximately $846.7 million (excluding $65.9 million of capitalized interest and $45.6 million in preopening costs) on this project and has accrued an additional $113.8 million in the accompanying condensed consolidated balance sheet. The Company expects it will receive additional billings as well as proposed change orders from the general contractor for additional costs. The Company intends to vigorously negotiate any such proposed changes with the general contractor to minimize any cost increases.

On July 25, 2006, the Unified Port of San Diego Board of Commissioners and the City of Chula Vista approved a non-binding letter of intent with the Company, outlining the general terms of our development of a 1,500 to 2,000 room convention hotel in Chula Vista, California. The parties extended the termination date for the non-binding letter of intent to May 31, 2008, and the parties continue to discuss the terms under which the Company would develop and operate the convention hotel project. If the parties can reach a final agreement, such agreement would be subject to a number of closing conditions and approvals, including but not limited to approval by the California Coastal Commission. At this time, the Company is unable to predict whether such approvals would be forthcoming.

The Company is considering other potential hotel sites throughout the country. The timing and extent of any of these development projects is uncertain, and the Company has not made any commitments, received any government approvals or made any financing plans in connection with these development projects.

On June 20, 2006, the Company entered into a joint venture arrangement with RREEF Global Opportunities Fund II, LLC, a private real estate fund managed by DB Real Estate Opportunities Group (“RREEF”), and acquired a 19.9% ownership interest in the joint venture, Waipouli Holdings, LLC, in exchange for the Company’s capital contribution of $3.8 million to Waipouli Holdings, LLC. On June 20, 2006, through a wholly-owned subsidiary named Waipouli Owner, LLC, Waipouli Holdings, LLC acquired the 311-room ResortQuest Kauai Beach at Makaiwa Hotel and related assets located in Kapaa, Hawaii (“the Kauai Hotel”) for an aggregate purchase price of $70.8 million. Waipouli Owner, LLC financed the purchase of the Kauai Hotel by entering into a series of loan transactions with Morgan Stanley Mortgage Capital, Inc. (the “Kauai Hotel Lender”) consisting of a $52.0 million senior loan secured by the Kauai Hotel, an $8.2 million senior mezzanine loan secured by the ownership interest of Waipouli Owner, LLC, and an $8.2 million junior mezzanine loan secured by the ownership interest of Waipouli Owner, LLC (collectively, the “Kauai Hotel Loans”). In October 2006, Waipouli Owner, LLC requested RREEF and the Company to make an additional capital contribution of $1.7 million to Waipouli Holdings, LLC to fund the purchase of the land on which the Kauai Hotel is built. The Company elected not to make the requested capital contribution, which diluted its ownership interest in Waipouli Holdings, LLC from 19.9% to 18.1% as of March 31, 2008. In connection with Waipouli Owner, LLC’s execution of the Kauai Hotel Loans, RREEF entered into three separate Guaranties of Recourse Obligations with the Kauai Hotel Lender whereby it guaranteed Waipouli Owner, LLC’s obligations under the Kauai Hotel Loans for as long as those loans remain outstanding (i) in the event of certain types of fraud, breaches of environmental representations or warranties, or breaches of certain “special purpose entity” covenants by Waipouli Owner, LLC, on the one hand, or (ii) in the event of bankruptcy or reorganization proceedings of Waipouli Owner, LLC, on the other hand. As a part of the joint venture arrangement and simultaneously with the closing of the purchase of the Kauai Hotel, the Company entered into a Contribution

Agreement with RREEF, whereby the Company agreed that, in the event that RREEF is required to make any payments pursuant to the terms of these guarantees, it will contribute to RREEF an amount equal to its pro rata share of any such guaranty payments. The Company estimates that the maximum potential amount that the Company could be liable for under this contribution agreement is $12.4 million, which represents 18.1% of the $68.4 million of total debt that Waipouli Owner, LLC owes to the Kauai Hotel Lender as of March 31, 2008. As of March 31, 2008, the Company had not recorded any liability in the condensed consolidated balance sheet associated with this guarantee. The Company retained its ownership interest in Waipouli Holdings, LLC after the sale of ResortQuest Hawaii.

On May 31, 2005, the Company, through a wholly-owned subsidiary named RHAC, LLC, entered into an agreement to purchase the 716-room Aston Waikiki Beach Hotel and related assets located in Honolulu, Hawaii (“the Waikiki Hotel”) for an aggregate purchase price of $107.0 million. Simultaneously with this purchase, G.O. IB-SIV US, a private real estate fund managed by DB Real Estate Opportunities Group (“IB-SIV”), acquired an 80.1% ownership interest in the parent company of RHAC, LLC, RHAC Holdings, LLC, in exchange for its capital contribution of $19.1 million to RHAC Holdings, LLC. As a part of this transaction, the Company entered into a joint venture arrangement with IB-SIV and retained a 19.9% ownership interest in RHAC Holdings, LLC in exchange for its $4.7 million capital contribution to RHAC Holdings, LLC. RHAC, LLC financed the purchase of the Waikiki Hotel by entering into a series of loan transactions with Greenwich Capital Financial Products, Inc. (the “Waikiki Hotel Lender”) consisting of a $70.0 million senior loan secured by the Waikiki Hotel and a $16.3 million mezzanine loan secured by the ownership interest of RHAC, LLC (collectively, the “Waikiki Hotel Loans”). On September 29, 2006, RHAC, LLC refinanced the Waikiki Hotel Loans with the Waikiki Hotel Lender, which resulted in the mezzanine loan increasing from $16.3 million to $34.9 million. In connection with RHAC, LLC’s execution of the Waikiki Hotel Loans, IB-SIV, entered into two separate Guaranties of Recourse Obligations with the Waikiki Hotel Lender whereby it guaranteed RHAC, LLC’s obligations under the Waikiki Hotel Loans for as long as those loans remain outstanding (i) in the event of certain types of fraud, breaches of environmental representations or warranties, or breaches of certain “special purpose entity” covenants by RHAC, LLC, on the one hand, or (ii) in the event of bankruptcy or reorganization proceedings of RHAC, LLC, on the other hand. As a part of the joint venture arrangement and simultaneously with the closing of the purchase of the Waikiki Hotel, the Company entered into a Contribution Agreement with IB-SIV, whereby the Company agreed that, in the event that IB-SIV is required to make any payments pursuant to the terms of these guarantees, it will contribute to IB-SIV an amount equal to 19.9% of any such guaranty payments. The Company estimates that the maximum potential amount for which the Company could be liable under this contribution agreement is $20.9 million, which represents 19.9% of the $104.9 million of total debt that RHAC, LLC owes to the Waikiki Hotel Lender as of March 31, 2008. As of March 31, 2008, the Company had not recorded any liability in the condensed consolidated balance sheet associated with this guarantee. The Company retained its ownership interest in RHAC Holdings, LLC after the sale of ResortQuest Hawaii.

On February 22, 2005, the Company concluded the settlement of litigation with Nashville Hockey Club Limited Partnership (“NHC”), which owns the Nashville Predators NHL hockey team, over (i) NHC’s obligation to redeem the Company’s ownership interest, and (ii) the Company’s obligations under the Nashville Arena Naming Rights Agreement dated November 24, 1999. Under the Naming Rights Agreement, which had a 20-year term through 2018, the Company was required to make annual payments to NHC, beginning at $2,050,000 in 1999 and with a 5% escalation each year thereafter, and to purchase a minimum number of tickets to Predators games each year. At the closing of the settlement, NHC redeemed all of the Company’s outstanding limited partnership units in the Predators pursuant to a Purchase Agreement dated February 22, 2005 effectively terminating the Company’s ownership interest in the Predators. In addition, the Naming Rights Agreement was cancelled pursuant to the Acknowledgment of Termination of Naming Rights Agreement. As a part of the settlement, the Company made a one-time cash payment to NHC of $4 million and issued to NHC a 5-year, $5 million promissory note bearing interest at 6% per annum. The note is payable at $1 million per year for 5 years, and the second payment was made on October 5, 2007. The Company’s obligation to pay the outstanding amount under the note shall terminate immediately if, at any time before the note is paid in full, the

Predators cease to be an NHL team playing their home games in Nashville, Tennessee. In addition, pursuant to a Consent Agreement among the Company, the National Hockey League and owners of NHC, the Company’s guaranty described below has been limited as described below.

In connection with the Company’s execution of an Agreement of Limited Partnership with NHC on June 25, 1997, the Company, its subsidiary CCK, Inc., Craig Leipold, Helen Johnson-Leipold (Mr. Leipold’s wife) and Samuel C. Johnson (Mr. Leipold’s father-in-law) entered into a guaranty agreement executed in favor of the National Hockey League (NHL). This agreement provides for a continuing guarantee of the following obligations for as long as any of these obligations remain outstanding: (i) all obligations under the expansion agreement between NHC and the NHL; and (ii) all operating expenses of NHC. The maximum potential amount which the Company and CCK, collectively, could be liable under the guaranty agreement is $15.0 million, although the Company and CCK would have recourse against the other guarantors if required to make payments under the guarantee. In connection with the legal settlement with the Nashville Predators consummated on February 22, 2005, this guaranty has been limited so that the Company is not responsible for any debt, obligation or liability of NHC that arises from any act, omission or circumstance occurring after the date of the legal settlement. As of March 31, 2008, the Company had not recorded any liability in the condensed consolidated balance sheet associated with this guarantee.

The Company, in the ordinary course of business, is involved in certain legal actions and claims on a variety of other matters. It is the opinion of management that such legal actions will not have a material effect on the results of operations, financial condition or liquidity of the Company.

16. FAIR VALUE MEASUREMENTS:

In September 2006, the FASB issued Statement No. 157, “Fair Value Measurements” (SFAS No. 157). SFAS No. 157 defines fair value, establishes a framework for measuring fair value in accordance with accounting principles generally accepted in the United States of America, and expands disclosures about fair value measurements. The Company adopted the provisions of SFAS No. 157 during the first quarter of 2008. Although the adoption of SFAS No. 157 did not materially impact its financial condition, results of operations, or cash flow, the Company is now required to provide additional disclosures as part of its financial statements.

SFAS No. 157 establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include: Level 1, defined as observable inputs such as quoted prices in active markets; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions.

As of March 31, 2008, the Company held certain assets and liabilities that are required to be measured at fair value on a recurring basis. These included the Company’s derivative instruments related to interest rates and natural gas prices.

The Company’s interest rate and natural gas derivative instruments consist of over-the-counter (“OTC”) swap contracts, which are not traded on a public exchange. See Note 8 for further information on the Company’s derivative instruments and hedging activities. The Company determines the fair values of these swap contracts based on quotes by counterparties to these contracts. Therefore, the Company has categorized these swap contracts as Level 2. The Company has consistently applied these valuation techniques in all periods presented and believes it has obtained the most accurate information available for the types of derivative contracts it holds.

The Company’s assets and liabilities measured at fair value on a recurring basis subject to the disclosure requirements of SFAS No. 157 at March 31, 2008, were as follows:

						Quoted Prices				Signficant
						in Active				Other				Significant
						Markets for				Observable				Unobservable
		March 31,				Identical Assets				Inputs				Inputs
		2008				(Level 1)				(Level 2)				(Level 3)
Variable to fixed natural gas swaps		$	937			$	—			$	937			$	—
Fixed to variable interest rate swaps			4,467				—				4,467				—
Total assets measured at fair value		$	5,404			$	—			$	5,404			$	—
Variable to fixed interest rate swaps		$	4,414			$	—			$	4,414			$	—
Total liabilities measured at fair value		$	4,414			$	—			$	4,414			$	—

In February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities—including an amendment to FASB Statement No. 115,” which permits entities to choose to measure eligible items at fair value at specified election dates. Unrealized gains and losses on items for which the fair value option has been elected are reported in earnings at each subsequent reporting date. The fair value option (i) may be applied instrument by instrument, with certain exceptions, (ii) is irrevocable (unless a new election date occurs) and (iii) is applied only to entire instruments and not to portions of instruments. The Company adopted the provisions of this statement in the first quarter of 2008. The Company has elected not to apply the fair value option to any of its financial instruments, so the adoption of this statement did not have a material impact on its consolidated financial position and results of operations.

17. STOCK REPURCHASE PROGRAM:

On February 7, 2008, the Company announced that its board of directors approved a stock repurchase program to repurchase up to $80 million of the Company’s common stock. This program is intended to be implemented through purchases made from time to time in the open market in accordance with applicable SEC requirements. The timing, prices and sizes of purchases will depend upon prevailing stock prices, general economic and market conditions and other considerations. The repurchase program does not obligate the Company to acquire any particular amount of common stock and the repurchase program may be suspended at any time at the Company’s discretion. During the three months ended March 31, 2008, the Company repurchased 656,700 shares of its common stock at a weighted average purchase price of $30.42 per share.

18. FINANCIAL REPORTING BY BUSINESS SEGMENTS:

The Company’s continuing operations are organized and managed based upon its products and services. The following information from continuing operations is derived directly from the segments’ internal financial reports used for corporate management purposes. As further discussed in Note 5, the Company disposed of its ResortQuest segment during the second quarter of 2007. The results of operations of the ResortQuest segment have been reflected as discontinued operations for all periods presented.

		Three Months Ended
		March 31,
(in thousands)		2008				2007
Revenues:
Hospitality		$	177,944			$	166,461
Opry and Attractions			17,116				15,842
Corporate and Other			175				55
Total		$	195,235			$	182,358
Depreciation and amortization:
Hospitality		$	18,261			$	16,425
Opry and Attractions			1,300				1,556
Corporate and Other			1,650				1,479
Total		$	21,211			$	19,460
Operating (loss) income:
Hospitality		$	35,492			$	27,562
Opry and Attractions			(1,044	)			(1,006	)
Corporate and Other			(13,454	)			(13,011	)
Preopening costs			(15,575	)			(2,945	)
Impairment and other charges			(12,031	)			—
Total operating (loss) income			(6,612	)			10,600
Interest expense, net of amounts capitalized			(3,579	)			(18,777	)
Interest income			324				517
Unrealized loss on Viacom stock and CBS stock			—				(2,789	)
Unrealized gain on derivatives			—				9,569
Income (loss) from unconsolidated companies			236				(1,918	)
Other gains and (losses), net			59				5,863
(Loss) income before (benefit) provision for income taxes		$	(9,572	)		$	3,065

19. INFORMATION CONCERNING GUARANTOR AND NON-GUARANTOR SUBSIDIARIES:

Not all of the Company’s subsidiaries have guaranteed the 8% Senior Notes and 6.75% Senior Notes. The 8% Senior Notes and 6.75% Senior Notes are guaranteed on a senior unsecured basis by generally all of the Company’s active domestic subsidiaries (the “Guarantors”). The Company’s investment in joint ventures and certain discontinued operations and inactive subsidiaries (the “Non-Guarantors”) do not guarantee the 8% Senior Notes and 6.75% Senior Notes.

Prior to May 31, 2007, ResortQuest and its subsidiaries were guarantor subsidiaries and were included in the results of operations and cash flows of the Guarantors for the three months ended March 31, 2007 in the consolidating financial information presented below. As further discussed in Note 5, on May 31, 2007 and June 1, 2007, the Company sold ResortQuest and its subsidiaries and they were released from their guaranties of the 8% Senior Notes and 6.75% Senior Notes. Therefore, the Company has classified the balance sheet, results of operations, and cash flows of ResortQuest and its subsidiaries as of March 31, 2008 and December 31, 2007 and for the three months ended March 31, 2007 with the Non-Guarantors in the consolidating financial information presented below.

The condensed consolidating financial information includes certain allocations of revenues and expenses based on management’s best estimates, which are not necessarily indicative of financial position, results of operations and cash flows that these entities would have achieved on a stand alone basis.

GAYLORD ENTERTAINMENT COMPANY AND SUBSIDIARIES

Condensed Consolidating Statement of Operations

For the Three Months Ended March 31, 2008

										Non-
		Issuer				Guarantors				Guarantors				Eliminations				Consolidated
		(In thousands)
Revenues		$	2,723			$	195,189			$	—			$	(2,677	)		$	195,235
Operating expenses:
Operating costs			—				113,515				—				(26	)			113,489
Selling, general and administrative			4,459				35,145				—				(63	)			39,541
Management fees			—				2,588				—				(2,588	)			—
Preopening costs			—				15,575				—				—				15,575
Impairment and other charges			12,031				—				—				—				12,031
Depreciation			886				19,307				—				—				20,193
Amortization			503				515				—				—				1,018
Operating (loss) income			(15,156	)			8,544				—				—				(6,612	)
Interest expense, net of amounts capitalized			(18,687	)			(25,506	)			(130	)			40,744				(3,579	)
Interest income			5,981				29,813				5,274				(40,744	)			324
Unrealized loss on Viacom stock and CBS stock			—				—				—				—				—
Unrealized gain on derivatives			—				—				—				—				—
Income from unconsolidated companies			—				236				—				—				236
Other gains and (losses), net			—				59				—				—				59
(Loss) income before (benefit) provision for income taxes			(27,862	)			13,146				5,144				—				(9,572	)
(Benefit) provision for income taxes			(10,678	)			6,046				1,908				—				(2,724	)
Equity in subsidiaries’ (earnings) losses, net			(9,878	)			—				—				9,878				—
(Loss) income from continuing operations			(7,306	)			7,100				3,236				(9,878	)			(6,848	)
Income (loss) from discontinued operations, net of taxes			—				31				(489	)			—				(458	)
Net (loss) income		$	(7,306	)		$	7,131			$	2,747			$	(9,878	)		$	(7,306	)

GAYLORD ENTERTAINMENT COMPANY AND SUBSIDIARIES

Condensed Consolidating Statement of Operations

For the Three Months Ended March 31, 2007

										Non-
		Issuer				Guarantors				Guarantors				Eliminations				Consolidated
		(In thousands)
Revenues		$	6			$	182,427			$	—			$	(75	)		$	182,358
Operating expenses:
Operating costs			—				108,585				—				(32	)			108,553
Selling, general and administrative			4,826				36,017				—				(43	)			40,800
Preopening costs			—				2,945				—				—				2,945
Depreciation			982				17,567				—				—				18,549
Amortization			487				424				—				—				911
Operating (loss) income			(6,289	)			16,889				—				—				10,600
Interest expense, net of amounts capitalized			(24,472	)			(35,876	)			(141	)			41,712				(18,777	)
Interest income			6,730				31,249				4,250				(41,712	)			517
Unrealized loss on Viacom stock and CBS stock			(2,789	)			—				—				—				(2,789	)
Unrealized gain on derivatives			9,569				—				—				—				9,569
Loss from unconsolidated companies			—				(543	)			(1,375	)			—				(1,918	)
Other gains and (losses), net			5,750				113				—				—				5,863
(Loss) income before (benefit) provision for income taxes			(11,501	)			11,832				2,734				—				3,065
(Benefit) provision for income taxes			(3,517	)			5,881				44				—				2,408
Equity in subsidiaries’ (earnings) losses, net			(11,448	)			—				—				11,448				—
Income (loss) from continuing operations			3,464				5,951				2,690				(11,448	)			657
Income from discontinued operations, net of taxes			—				—				2,807				—				2,807
Net income		$	3,464			$	5,951			$	5,497			$	(11,448	)		$	3,464

GAYLORD ENTERTAINMENT COMPANY AND SUBSIDIARIES

Condensed Consolidating Balance Sheet

March 31, 2008

										Non-
		Issuer				Guarantors				Guarantors				Eliminations				Consolidated
		(in thousands)
ASSETS
Current assets:
Cash and cash equivalents — unrestricted		$	11,154			$	4,729			$	—			$	—			$	15,883
Cash and cash equivalents — restricted			1,236				—				—				—				1,236
Trade receivables, net			—				59,282				—				—				59,282
Estimated fair value of derivative assets			937				—				—				—				937
Deferred income taxes			5,350				2,399				(60	)			—				7,689
Other current assets			7,394				30,875				—				(126	)			38,143
Intercompany receivables, net			164,206				—				247,973				(412,179	)			—
Current assets of discontinued operations			—				—				147				—				147
Total current assets			190,277				97,285				248,060				(412,305	)			123,317
Property and equipment, net of accumulated depreciation			54,755				2,280,419				—				—				2,335,174
Intangible assets, net of accumulated amortization			—				162				—				—				162
Goodwill			—				6,915				—				—				6,915
Indefinite lived intangible assets			—				1,480				—				—				1,480
Investments			1,879,634				335,039				—				(2,210,264	)			4,409
Estimated fair value of derivative assets			4,467				—				—				—				4,467
Long-term deferred financing costs			13,466				—				—				—				13,466
Other long-term assets			10,054				8,665				—				—				18,719
Total assets		$	2,152,653			$	2,729,965			$	248,060			$	(2,622,569	)		$	2,508,109
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Current portion of long-term debt and capital lease obligations		$	1,355			$	738			$	—			$	—			$	2,093
Accounts payable and accrued liabilities			32,271				225,290				(190	)			(291	)			257,080
Intercompany payables, net			—				342,312				69,867				(412,179	)			—
Current liabilities of discontinued operations			—				—				2,741				—				2,741
Total current liabilities			33,626				568,340				72,418				(412,470	)			261,914
Long-term debt and capital lease obligations, net of current portion			1,161,552				1,872				—				—				1,163,424
Deferred income taxes			(31,738	)			99,658				16				—				67,936
Estimated fair value of derivative liabilities			4,414				—				—				—				4,414
Other long-term liabilities			55,961				40,656				540				165				97,322
Long-term liabilities of discontinued operations			—				—				520				—				520
Stockholders’ equity:
Preferred stock			—				—				—				—				—
Common stock			409				2,387				2				(2,389	)			409
Additional paid-in capital			701,831				2,258,043				6,322				(2,264,365	)			701,831
Retained earnings			239,711				(240,991	)			168,242				56,490				223,452
Other stockholders’ equity			(13,113	)			—				—				—				(13,113	)
Total stockholders’ equity			928,838				2,019,439				174,566				(2,210,264	)			912,579
Total liabilities and stockholders’ equity		$	2,152,653			$	2,729,965			$	248,060			$	(2,622,569	)		$	2,508,109

GAYLORD ENTERTAINMENT COMPANY AND SUBSIDIARIES

Condensed Consolidating Balance Sheet

December 31, 2007

										Non-
		Issuer				Guarantors				Guarantors				Eliminations				Consolidated
										(In thousands)
ASSETS
Current assets:
Cash and cash equivalents — unrestricted		$	17,156			$	6,436			$	—			$	—			$	23,592
Cash and cash equivalents — restricted			1,216				—				—				—				1,216
Trade receivables, net			1				31,370				—				—				31,371
Deferred income taxes			5,350				2,399				(60	)			—				7,689
Other current assets			7,522				22,784				—				(126	)			30,180
Intercompany receivables, net			15,592				—				243,466				(259,058	)			—
Current assets of discontinued operations			—				—				797				—				797
Total current assets			46,837				62,989				244,203				(259,184	)			94,845
Property and equipment, net			55,847				2,140,417				—				—				2,196,264
Intangible assets, net of accumulated amortization			—				174				—				—				174
Goodwill			—				6,915				—				—				6,915
Indefinite lived intangible assets			—				1,480				—				—				1,480
Investments			1,869,756				334,773				—				(2,200,386	)			4,143
Estimated fair value of derivative assets			2,043				—				—				—				2,043
Long-term deferred financing costs			14,621				—				—				—				14,621
Other long-term assets			9,103				7,279				—				—				16,382
Total assets		$	1,998,207			$	2,554,027			$	244,203			$	(2,459,570	)		$	2,336,867
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Current portion of long-term debt and capital lease obligations		$	1,368			$	690			$	—			$	—			$	2,058
Accounts payable and accrued liabilities			24,022				217,286				(190	)			(291	)			240,827
Intercompany payables, net			—				188,829				70,229				(259,058	)			—
Current liabilities of discontinued operations			—				—				2,760				—				2,760
Total current liabilities			25,390				406,805				72,799				(259,349	)			245,645
Long-term debt and capital lease obligations, net of current portion			977,157				1,885				—				—				979,042
Deferred income taxes			(18,339	)			93,593				(1,592	)			—				73,662
Other long-term liabilities			56,248				39,436				635				165				96,484
Long-term liabilities of discontinued operations			—				—				542				—				542
Stockholders’ equity:
Preferred stock			—				—				—				—				—
Common stock			413				2,387				2				(2,389	)			413
Additional paid-in capital			721,196				2,258,043				6,322				(2,264,365	)			721,196
Retained earnings			247,017				(248,122	)			165,495				66,368				230,758
Other stockholders’ equity			(10,875	)			—				—				—				(10,875	)
Total stockholders’ equity			957,751				2,012,308				171,819				(2,200,386	)			941,492
Total liabilities and stockholders’ equity		$	1,998,207			$	2,554,027			$	244,203			$	(2,459,570	)		$	2,336,867

GAYLORD ENTERTAINMENT COMPANY AND SUBSIDIARIES

Condensed Consolidating Statement of Cash Flows

For the Three Months Ended March 31, 2008

										Non-
		Issuer				Guarantors				Guarantors				Eliminations				Consolidated
		(In thousands)
Net cash (used in) provided by continuing operating activities		$	(168,398	)		$	162,448			$	115			$	—			$	(5,835	)
Net cash provided by discontinued operating activities			—				—				7				—				7
Net cash (used in) provided by operating activities			(168,398	)			162,448				122				—				(5,828	)
Purchases of property and equipment			(147	)			(162,295	)			—				—				(162,442	)
Proceeds from sale of assets			—				9				—				—				9
Other investing activities			(178	)			(1,597	)			—				—				(1,775	)
Net cash used in investing activities — continuing operations			(325	)			(163,883	)			—				—				(164,208	)
Net cash used in investing activities — discontinued operations			—				—				(122	)			—				(122	)
Net cash used in investing activities			(325	)			(163,883	)			(122	)			—				(164,330	)
Borrowings under credit facility			182,000				—				—				—				182,000
Purchases of Company’s common stock			(19,999	)			—				—				—				(19,999	)
Increase in restricted cash and cash equivalents			(20	)			—				—				—				(20	)
Excess tax benefit from stock-based compensation			830				—				—				—				830
Other financing activities, net			(90	)			(272	)			—				—				(362	)
Net cash provided by (used in) financing activities — continuing operations			162,721				(272	)			—				—				162,449
Net cash used in financing activities — discontinued operations			—				—				—				—				—
Net cash provided by (used in) financing activities			162,721				(272	)			—				—				162,449
Net change in cash and cash equivalents			(6,002	)			(1,707	)			—				—				(7,709	)
Cash and cash equivalents at beginning of year			17,156				6,436				—				—				23,592
Cash and cash equivalents at end of year		$	11,154			$	4,729			$	—			$	—			$	15,883