Welcome to the Gaylord Entertainment Company's Third Quarter 2008 Earnings Conference Call. Hosting the call today from Gaylord Entertainment are Mr. Colin Reed, Chairman and Chief Executive Officer; and Mr. David Kloeppel, Chief Financial Officer. They are also joined by Mr. Mark Fioravanti, Senior Vice President and Treasurer and Mr. Carter Todd, Senior Vice President and General Counsel. This call will be available for digital replay. The number is 1800-642-1687 and the PIN number is 68135409. At this time, all participants have been placed on listen-only mode and the phone will be open for question following the presentation. It is now my pleasure to turn the floor over to Mr. Carter Todd. Sir, you may begin.

Good morning. My name is Carter Todd and I am the General Counsel and Senior Vice President for Gaylord Entertainment Company. Thank you for joining us today on our third quarter 2008 earnings call. You should be aware that this conference call may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements among others, regarding Gaylord Entertainment's expected future financial performance. For this purpose, any statements made during this call that are not statements of historical fact may be deemed to be forward-looking statements. Without limiting the foregoing, words such as believes, anticipates, plans, and expects and similar expressions are intended to identify forward-looking statements. You are hereby cautioned that these statements maybe affected by the important factors among others, set forward in Gaylord Entertainment's filings with the Securities and Exchange Commission and in our third quarter 2008 earnings release. Accordingly, actual operations and results may differ materially from the results discussed or projected in the forward-looking statements. Gaylord Entertainment undertakes no obligation to update publicly any forward-looking statements whether as the result of new information, future events or otherwise. I'd also like to remind you that in our call today, we will discuss certain non-GAAP financial measures and a reconciliation of those non-GAAP financial measures to the most directly comparable GAAP financial measures has been provided as an exhibit to our earnings release and is also available on our website under the Investor Relations section. At this time, I'd like to turn the call over to our Chairman and Chief Executive Officer, Colin Reed.

Thank you, Carter. Hello and good morning everyone. Welcome to Gaylord Entertainment's third quarter 2008 conference call. As always, I will kick off time today by providing an overview of our business and perception of the boarder hospitality industry. And then our Chief Financial Officer, Dave Kloeppel will add an additional color on the details of our financial results this quarter on the company's outlook for the rest of the year. And then we will take time at the end to take questions. As I have described over the last few quarterly calls, we are at a historic point in the US and global economy that creates some unique challenges for businesses and management teams. So now certain domestic and global recession, the evaporation of the credit markets, the sub-prime mortgage crisis and the consequential huge disruption in home price values have left the economy in shambles and the near-term outlook remains miserable. The impact the broader economy is having on the hospitality industry is substantial. Demand for rooms in North America has fallen and the outlook for the balance of the year in 2009 appears pretty dreary. Multiples on hotel assets accreted and very few assets are trading. And the last hotel stocks are trading at or near record lows as the market has priced in low expectations related to the buckling out of the hospitality cycle and the potential impact of further contraction in consumer demand. Indeed Gaylord's own has traded at levels none of us ever expected to see. Yet despite the poor economic conditions and negative momentum of the hospitality sector, Gaylord's group-centric business remains pretty solid in the third quarter. While we are certainly not impervious to current economic conditions and I will discuss with you in just a moment how our business is being…

Thanks, Colin and good morning everyone. As always, I'll discuss the financial performance of our business during the quarter and then take you through a more detailed review of the results of each of our properties. I'll then provide you with the bit of perspective as to what we are seeing having entered the first quarter of next year. First so, let me take a moment to further describe the general health of the business. Of the years, we've had numerous conversations with investors and analysts, who questions our model, specifically related to how our business would be expected to perform in both the downturn in the economy and the hospitality cycle. Well given where the markets right now and continued strains in the hospitality sector, we're pleased that our business had performed as it was designed in the third quarter and through the year to-date. While in general health of our group business remains solid, we have some concerns related to our holiday transient business in the fourth quarter, which we'll discuss later. Our group-centric business enabled us to deliver a $4 increase in same-store CCF this quarter, while year-to-date same-store CCF is up 11.7%. At the same time, same-store RevPAR was up a nominal 0.4% year-to-date. The difference can be partially attributed to the 28.8% increase in attrition we've seen in our same-store property this year, which we were able to offset a portion of, with a 19% increase in transient room nights. Outside-the-room spending, an important part of our business continued to grow this quarter, with food and beverage revenue per occupied rooms. So therefore, the amount of spending per person attending... staying in our hotel was up 2.9% over the same period last year. Banquet spending per occupied room grew a modest 1.2% and discretionary F&B…

Okay David, thank you. Lot of information there to digest. Christie we will now open up the phone lines for questions. Thank you. Question And Answer

Thank you. [Operator Instructions]. And your first question comes from the line of Chris Woronka with Deutsche Bank.

Hey good morning guys. Can you just give a little more color on kind of what happened to National during the quarter in terms of your expectations relative to back in July and maybe just kind of frame for us how much of that business is transient. And then on the margins side, if you can maybe delineate a little bit from there as to what comes from transient versus your groups and then, if you still have confidence that you ultimately kind of get that high 20% to 30% stabilized margin there? Thanks.

Chris its Dave. When we came into the year and set expectations, we anticipated forward transient occupancy there than we had... then we see in our other three hotels. The summer time is a transient, it's the time when transient is more prominent at all of our hotels and we expected that to occur at the National as well. At that time, the developer was supposed to have completed National Harbor by the beginning of April when we opened, which didn't occur until actually just a couple of weeks ago and we'd also, when we took guidance at the end of last year didn't certainly anticipate the kind of economy we were going into in the summer of this year. So the midst on the transient side was about 75% or 80% of the mix from our expectations. The group side of the business has continued to be strong. Bookings there year-to-date has continued to be better than bookings that we saw prior year and that really applies to all booking periods in the year, for the year T-plus one and T-plus two, then they continue to book the group business I mean group's there and how it continue to stand as evidenced by the comments that we had in our scripts, that you look outside-the-room spend at the National it was higher than all of the other hotels. And so it really set a standard for outside-the-room spend. So, from our perspective, the National is on track from a group perspective, we think next year is going to be a good strong year because as we said today, we've got almost 59 points of occupancy on the books versus about 46 that we had this time last year for 2008. So we're running with 13 points of occupancy kind of in our pockets. And it's up to us to begin the market, the destination from a transient perspective more effectively and now that National Harbor is complete and we have a more mature management team and marketing focus there, we think we can achieve those objectives.

Okay great thanks.

And your next question comes from the line of Bill Crowe with Raymond James. William A. Crow - Raymond James & Assoc: Good morning guys. Couple of quick questions. The Dallas expansion, any plans to hold that?

Phil this is Colin. Good morning. I think what we want to do is repeat what we've said the... I'm sorry. I didn't say that to you. I thought you said Phil, it's Bill. My hearing is not what it should be. Let me re-amplify what we've said in... I think it was early August. I look at all these expansions a little bit like one of these space shuttles going to the moon. We're on the launch pad right now and we're watching the weather and the good news is that we don't expect to make any decisions about go, no-go until end of the first quarter, some time into the second quarter of next year and the go, no-go will be based upon capital markets, financing markets, it will be based on how this economy is performing. So right now, I would say that we're on hold watching the weather. William A. Crow - Raymond James & Assoc: Alright, let's transition to that capital markets and financial markets. In the past, you talked about exploring strategic alternatives, selling several or all you're of assets et cetera. Any update on how those discussions are going or whether you have had discussions in that vein?

Well, look right at this stage I would say, we're not optimistic, that in the next three to six months anything material is going to happen. One, because the multiples of which this industry is currently trading and two the capital markets right now, are just as are gonzo. Look at what those MGM bonds were sold out a week ago. And so we are not going to do anything silly here to bring new capital into this company. We're going to... our free cash flow next year, will be fairly substantial and we are not in any rush to do anything that's going to put stress on a company's balance sheet. William A. Crow - Raymond James & Assoc: Alright and then finally, you're suggesting that RevPAR could be down 3%. I think it is next year. Under that scenario, what is your expectation for the cancellation fee recapture, give a ballpark number?

Generally, Bill, we're anticipating that attrition in cancellation levels will be a little bit higher than we've seen this year, year-to-date. year-to-date, we've collected about $8.5 million worth of cancellation in attrition fees. That number will probably grow to north of $10 million or so by the end of next year... sorry by the end of this year. You should anticipate that those collections would be $10 million to $12 million for 2009. William A. Crow - Raymond James & Assoc: Okay, thank you. I appreciate it.

Thank you.

Your next question comes from the line of Kevin Milota with J.P. Morgan.

I was hoping you guys presumably with the commentary that you gave on Chula Vista and Mesa, the programs at the Texan and the upper Atlanta will be pushed out as well and with that said, what were your expectations for CapEx in '09?

David, you want to take that?

Sure. Kevin maintenance CapEx for us is about $45 million to $50 million a year and that's the current plan at this point. We don't have any commitments to initiate any other construction projects at this point. We'll spend a few million dollars to complete some design that is underway, as Colin said to get us through to the spring of next year. So I think $45 million to $50 million is a reasonable number for right now until we make our announcement that we're initiating some larger expansion projects.

Okay. So I guess that would mean that the current business environment would ... you guys are still monitoring and will make a decision in the spring?

Yes.

Okay. Thank you very much.

Thank you.

Your next question comes from the line of Will Marks with JMP Securities.

Thanks and a hurried day to look on. Sorry. I had a question on in terms of RevPAR and total RevPAR. It seems to be running at about the same pace and I think the guidance is for the same pace is... I guess I would assume that the total RevPAR figure would take more of a hit. Can you maybe walk me through that?

Let me try to rephrase the question to see if I got it right. Your supposition was that if booking pace is on about the same pace, but attrition is a little bit higher, you would expect for a total RevPAR to be hit more than RevPAR?

Actually no. Maybe my question should be that the average ... are you seeing change in spending from the average guest, because your guidance would imply that you aren't, that the guests are spending about the same. In fact for next year even ... the total RevPAR figure is even better that the RevPAR figure?

Right. Part of the change in growth rate is kind of a lot small number, or the lot big numbers. You've got a bigger denominator on total RevPAR than on RevPAR. But to answer your question more directly about outside-the-room spend. We are still seeing increases in per-occupied room spend even into the third quarter where the financial news got worse and worse everyday from a headline perspective. We saw about 3% ... about a 3% increase in spending per-occupied room. And that's a kind of a ... and that is outside-the-room spending, not just inside-the-room spending. So, that's not quite as robust as it was in 2007 and 2006 from a growth-rate perspective, but it still shows that we're able to drive kind of average check and average ticket price if you will, even in a difficult environment.

Okay, great. Another question on, Colin had mentioned strong cash flows for '09 and you give guidance on the CCF figure. Can you take that down more and you touched a little bit on a CapEx, really what we should be looking at an absolute free cash flow for year 2009?

Yes. Maybe they do it. Assume we do know capital, big capital things, just maintenance capital and where we're guiding.

Sure. If you take roughly the midpoint of guidance which I think is around $220 million, we should be in the neighborhood of $90 million of interest expense next year. Our cash taxes should be in the neighborhood of $10 million to $20 million and then our maintenance capital should be in the neighborhood of $45 million to $50 million. So that should get you to around about $100 million of free cash.

Okay. Great. And then just my final question, changing management the National, can you discuss that, I may have missed that in your comments?

Well, the gentlemen that we've brought in, Phil Coffey prior to working for us and coming to our company, his previous job was the Head of the Marriott World Center in Orlando. And this guy is an awesome General Manager, someone that we have watched and competed with for many years and a man that has the sign sort of believes in the way our business should be run as we do, believes in the people side of the business and the customer services side of the business, has great, respect in the meeting planning community. And I think we told the world about four months ago that we had the General Manager have opened the hotel for us left us. And I don't think we should get in and discuss that in anyway shape or form and we have had Palm's General Manager, Ken Gallano [ph] managing the National for three months period as we were searching for new general manager and this guy that we brought in, I think it's an endorsement to our company that we were able to attract someone of his caliber and we're very delighted with the performance so far.

Great, that's all form me. Thank you.

Thanks Will.

Our next question will come from Steve Kent of Goldman Sachs.

Hi, good morning. Just three question, just quickly. One is, are you seeing increased competition from some of the other hotels as you have noted they are showing weakness selling more aggressively after convention business, what you are hearing from your sales people as they try to offset their decline in trends? Second are strongly to give concession to your groups or, how flexible are you with penalties in this environment, again with meeting planners? And then third, just because... maybe I don't understand this but on these cancellation fees, do you put anything aside for potentially not being able to collect on them or whether these entities may not be able to pay the cancellation fees, since they're collected over a few months or longer?

Let me find Steve, Colin. Good morning to you. Let me try and answer some of these questions and David if I miss some, promptly jump in. First the increase of what we are seeing for that competition. Obviously, we get ... I get calls from our Head of Sales all the time saying; hey, our sales people are telling us that company A is doing crazy things and company being B is doing crazy things in terms of waving attrition fees and waving this and waving that. And our answer is look at customer satisfaction scores are so much better than our competition, the meeting planning community loves that business. Our hotels are all recognized in the awards that are given out by these meeting planning magazines as the best in the business and we to tend to turn down a lot of good business for the busy times. We're not going to be lendings and follow craziness and frankly, if you've got a strong brand, I mean I have seen recessions before and what tends to happen are the weak brands tend to be lendings and the strong brands hold their position and that's the position that we have taken. In terms of concessions and penalties, what are we doing along that? Frankly it really, really depends on who the customer is. If we... look a contractor is a contract and that's the way we look at everything and I've got a General Counsel sitting to my right and he will tell you the same thing. We have very strong, strict, enforceable contracts and our customers go into contracts with eyes wide open and understand that. However, the reality is if we've got a customer that comes to us and says look, I can't do this, I can't…

Okay. Thank you.

Thank you.

Your next question comes from the line of Nap Overton with Morgan Keegan.

Good morning. Most of my questions has actually been answered but curious that did you mean to indicate from your prepared comments that you still expect to give National to stabilize at the CCF north of $100 million by 2010?

Nap one thing that I don't want to do is get too far ahead here, because I don't know, you've been around a long time. I've never seen anything like this economy. I doubt whether you've ever seen anything like this economy. And I think what we would like to do is before we get into projections about 2010, I'd like to understand where the next 90 days to 180 days are going. But let me make one observation about the National, if I could and just bear with me here for a second. One of the questions that I think is implicit in the questions that we've had on the National this morning and your question too. Is this another gaming facility that you've seen built in Las Vegas often over the last three to four years? It costs a lot of money and basically doesn't make a lot of money. Is that sort of the implied question that's going on here and we believe categorically, unequivocally the answer to that question is no. We have almost 58 points of occupancy on the books for next year. The amount of activity we're seeing with meeting planners gets stronger and stronger, our customer satisfaction levels are going up in that hotel. I had a conversation last week with one of the... week before last week, one of the top meeting planners in the pharmaceutical industry. They just held a conference in that place two, three weeks ago. And this person said, I could not believe the quality of this convention about the food, the hall, the whole service levels, the quality of the asset and I have told our senior management in our big pharmaceutical company that this is the place we need to hold our business. That's the sort of stuff that we're hearing on this hotel. So this hotel will make us a lot of money and unfortunately, we've opened it in a blasted [ph] tsunami and the truth of the matter is in the first two months, because of late delivery of the product, we didn't do a very good job there. But things have really improved and there is very little we can do at this stage about the decline in transient, but the group side of this business gets stronger and stronger and I believe 2009, the hotel will do very well and I think in 2010, providing we're not facing an economic depression across this globe, I think 2010 will be even stronger and this hotel like Texas, like the Palms, will continue to build and get stronger and stronger and stronger and will produce a deep decent return on capital here.

And I would add to Colin's comments just in terms of what helps us have that confidence is if you look at the bookings pace at National, and continued to have even through this economic downturn, we're running I think 60% year-to-date ahead of what we have last year in terms of bookings for the National for future periods. Now if you look at the bookings for the next couple of years, that's where we're seeing some of the biggest increases. So the National is continuing to give us confidence that it's going to generate sufficient returns.

And because of the events of yesterday, and all of the activity that's going to be seen in Washington. We've pretty much discounted that for next year. I mean we just have. So I'm very optimistic with this hotel within a reasonably short period of time will show the type of the performance that we expect to see from this type of investment.

Okay, alright. The second thing I've got is ... in terms of this go or no go decision on expansion some time in the first half of 2009, the planned opening days for those are late 2010 and early 2011 if I recall correctly, if they were move forward kind of on a reasonable schedule. Isn't this strategically important to move ahead with those, given those early distant opening dates or do your worst scenarios include continued difficult trends through that kind of ...through 2010 and into 2011.

Nap, the problems that David and I have and our Board has is really understanding what is going to happen three months from now, let alone three years from now. And I think we don't need to sit here and say why we believe that, but you read the papers, you're in touch with the calamities of the last 90 days. I don't know how all of that frankly will be extrapolated over the next one to two years. So, we're doing what we think is the right thing by just putting a pause on any material capital decisions, until we get comfortable that this economic nightmare that this world is facing, not just this country, it's well on it's way for healing. And so, we're not going to risk the company and do silly thing given the state of this economy. We're going to be very cautious and prudent here over the next six to nine months.

And Nap we're in a very, very comfortable financial position right now. We've got, we have not maturities until 2012. We've got $3 million available on line of credit. We've got $50 million of cash on the balance sheet. We're going to generate $100 million of free cash next year. So those are all good facts in the market where liquidity is extremely scarce. So until we see significant changes in the market for liquidity and some improvements in the economic environment, we think it's appropriate for us to continue to manage the balance sheet cautiously.

I would say to you that and it's wrong for me to get in discussing other corporations decision making. But it catches my attention and David's attention when we see MGM last week selling at 15% 5 year no call; in order to fund capital projects where they have a gap. And a company that year and a half ago was trading 85 bucks a share was considered to be the very best capitalized gaming company in America. And so the world has changed. And it will be irresponsible of us to pretend that it hasn't and for us to just blindly go on with these capital projects like the world was the same. And so we're going to be very cautious here and very prudent and we're going to run our business the right way and when things start to improve, hopefully, the well run companies will have the ability to take advantage of the environment that will be improving.

Okay. Thank you very much.

Your next question comes from the line of David Katz of Oppenheimer. David Katz - Oppenheimer & Co: Hi. Good morning.

Good morning David. David Katz - Oppenheimer & Co: Sorry about that. A couple of quick ones, I just want to clarify firstly some comments you made about October trends, and we think we heard you say revenue for same-store hotels, October was down 5.2%. Did you make some other comments with respect to RevPAR versus total RevPAR? I just want to make sure we had that straight?

Yes, David. The number in the release, the 5.2% is preliminary total RevPAR if you will because we have a comfortable number of rooms. So, 5.2% is the total RevPAR number. The RevPAR number is closer to 4% and the comparison I was making on... in my comments was that while we were down 4%, we look at Smith Travel Research for our competitors spend across all of our markets, they were down 8.8%. David Katz - Oppenheimer & Co: Got it. And then on net-definite room nights booked, you talked about future bookings which appear to be remaining on a room-night basis, at the same level. What kind of rate level are you booking those relative to what you were booking a year ago?

Rate generally has held up, frankly over better than we anticipated. We're showing... rates tend to be more competitive for shorter-term booking windows less competitive for longer-term booking windows. So Steve Feldman's... sorry, Steve Kent's question earlier, about companies from other hotels that makes it more difficult for us to really push rate forward. The short-term but rates for the longer-term are holding steady as much as they were a year, or two years ago.

Right but let's be clear David, the other thing is that our RedMax system that literally identifies a rate per day out for the next five years, our sales people when they are making a booking for 2010 to 2011 have to be within a very tight... timely because of that RedMax pricing grid for that particular day. And if it falls outside, it has the come up the chain of command to get approved. And I think that the RedMax rate for the third quarter was within the bandwidth of targets. So embedded into our RedMax pricing. I'm giving you a lot of detail here, our price increases year-over-year-over-year, so we're not slashing our prices. The other thing, David, let me just say one thing. There are two parts to October that got us a little nervous. One was the fact that as David just described we were up 4%, but still we had very high levels of occupancy in the month of October. We had a very good market. The three hotels about $58 million in revenue, which is tremendous. But the other thing was the forward bookings for the Christmas period, what we monitor on a day-by-day, week-by-week basis how many ice tickets we're selling? How many rocket tickets we're selling? How many room night we're booking for our week-end packages for November and December. It is interesting, because our week-end packages ... our packages are actually running at or around where we would want them to be, but what's we've seen is our rocket tickets off about 10,000 seats to pace and we will normally sell a 120,000 to 130,000 of them. So its not, its not gone into the ditch. It's just that we're seeing a pause in discretionary spending here, and we just believed that we should be cautious about that and reflect that in our guidance. This is no good being Herculean here in the short term. So I'm giving you probably too much data there. David Katz - Oppenheimer & Co: No I think the no good Herculean comment is right on. And one last quick one, since I know, since I know we're running out of time here. But with respect to...we've tried to go through the exercise of figuring out what the offset from attrition fees is and how that plays out in some sensitivity analysis. It would be great if can talk about your fixed cost base at the various hotels versus variable, meaning if no one showed up hypothetically of course, what kind of fixed, what percentage-wise or anything... what kind of fix cost base you have at the various hotel that would need to be offset? Or is this a better question for offline?

I would say it's probably better offline, because we can get into an enormous amount of detail if you want to get into that question. I mean the fixed cost basis of the hotels are not insignificant, but they're also probably not the majority of our costs. The variable costs relates to cleaning the rooms, the cost of the food that we would otherwise serve them, the servicing of the food and beverage outlets, the servicing of the banquet functions, and those kind of things. So I looked as we can turn the lights off, but I mean we don't expect that to happen. I mean we saw what happened after 9/11and our business performed pretty solidly. David Katz - Oppenheimer & Co: Fine. Okay, we'll circle back. Thanks very much.

Just to follow up on David's question. I mean, he's really driving in a question of what happens in an extreme attrition example and October was the highest attrition we've seen year-to-date at 13% and I think the number we saw post 9/11 was close to about 20%.

That's right.

That was in part due to lack of available flights and fear on being on airplanes. In our 2009 expectations, we have assumed that elevated levels of attrition such as we saw in October, continues through 2009. So, to the extent that we think the economy is in a bad patch and it's going to remain in a very bad patch. We're assuming that end of our 2009 guidance.

Yes, that's a good point. I think we'll do one more question Christy please. And then if there are any other questions, the individuals can either call Dave, Mark Fioravanti or me offline. Thank you.

Thank you and your final question comes from the line of William Truelove with UBS.

Last one, alright. So my biggest question is, given that your hotels are mostly group focused and if you see a slowdown in transient business, what can you do from employee level at the hotel point of view. Because I would assume most of the employees are there to focus on the group services. So if transient falls off, is there a... how do you correlate that with the change in staffing levels at the hotel?

Okay I think I understand the question, good question. We have a bunch of that staff in each of our hotels who are full time and then we have a bunch of that staff that are on-call part time. And it changes from hotel to hotel, because group mix slightly changes from hotel to hotel. But we have the ability to scale our employee base as star base to 5 point clock in transient occupancy, we have the ability to do that because of the relationship between full time and part time.

The other key component to that Will is, if you think about it the travel patterns of the group business versus the transient business especially if you get in to the holiday periods like its coming up, the transient business is concentrated into non-group patterns until. So really shift in, we really shift in at around Thanksgiving, just after Thanksgiving from a group house to a transient house and so to the extent the transient business level are lower, we're going to adjust staffing appropriately.

So just to be crystal clear here, I think you asked the question, I just want to be absolutely clear. If you have a large group show-up, you need a certain amount of staff obviously for that to run that and then all of a sudden transient isn't there. So you are saying that during that time period where there is a large group but not much transient, you are able to still adjust the staffing levels appropriately? Because that's what I worry about in the margin front right?

Well yeah but most of the large group, a lot of the large groups stay in the hotel, so the hotel is full. And what happens is, is the transient still around edges. There'll be a hundred rooms via 200 rooms say and maximum 300 rooms in all the hotels outside of National because we have 3,000 rooms there. But typically, National we're not doing more than 300 to 400 room nights a night in transient business, save the Christmas period, save the holiday period when we'll be doing 1,000 to 2,000 people there. So, it's not as problematic as I think you describe it, because the transient piece tends to fill around the edges every one to two weeks.

Okay. That's clear. Thank you so much guys.

Thank you.

All right. Thank you everyone for joining us this morning. And again, any other follow up questions, please feel free to call David Kloeppel, Mark Fioravanti, or me. You know our telephone numbers and thanks for joining us this morning. Thank you very much.

Thank you. And this does conclude today's conference call. You may now disconnect. .