<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 11-K
ANNUAL REPORT
ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended December 31, 1998
Commission File No.: 1-13079
Gaylord Entertainment Company
401(k) Savings Plan
(Full title of plan)
Gaylord Entertainment Company
One Gaylord Drive
Nashville, Tennessee 37214
(Name of issuer of securities held pursuant to the plan
and address of principal executive office)
<PAGE> 2
GAYLORD ENTERTAINMENT COMPANY
401(K) SAVINGS PLAN
FINANCIAL STATEMENTS AND SCHEDULES
AS OF DECEMBER 31, 1998 AND 1997
TOGETHER WITH
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
<PAGE> 3
GAYLORD ENTERTAINMENT COMPANY
401(K) SAVINGS PLAN
FINANCIAL STATEMENTS AND SCHEDULES
DECEMBER 31, 1998 AND 1997
TABLE OF CONTENTS
<TABLE>
<S> <C>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS 1
FINANCIAL STATEMENTS
Statement of Net Assets Available for Benefits, with Fund
Information - December 31, 1998 2
Statement of Net Assets Available for Benefits, with Fund
Information - December 31, 1997 3
Statement of Changes in Net Assets Available for Benefits,
with Fund Information for the Year Ended December 31, 1998 4
NOTES TO FINANCIAL STATEMENTS AND SCHEDULES 5
SCHEDULES SUPPORTING FINANCIAL STATEMENTS
Schedule I: Item 27a - Schedule of Assets Held for Investment
Purposes at December 31, 1998 13
Schedule II: Item 27d - Schedule of Reportable Transactions
for the Year Ended December 31, 1998 15
</TABLE>
<PAGE> 4
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Benefits Trust Committee of the Gaylord Entertainment
Company 401(k) Savings Plan:
We have audited the accompanying statements of net assets available for
benefits, with fund information, of the GAYLORD ENTERTAINMENT COMPANY 401(K)
SAVINGS PLAN as of December 31, 1998 and 1997, and the related statement of
changes in net assets available for benefits, with fund information, for the
year ended December 31, 1998. These financial statements and the schedules
referred to below are the responsibility of the Plan's management. Our
responsibility is to express an opinion on these financial statements and
schedules based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Gaylord
Entertainment Company 401(k) Savings Plan as of December 31, 1998 and 1997, and
the changes in its net assets available for benefits for the year ended December
31, 1998, in conformity with generally accepted accounting principles.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of assets held
for investment purposes (Schedule I) and reportable transactions (Schedule II)
are presented for the purpose of additional analysis and are not a required part
of the basic financial statements but are supplementary information required by
the Department of Labor's Rules and Regulations for Reporting and Disclosure
under the Employee Retirement Income Security Act of 1974. The fund information
in the statements of net assets available for benefits and the statement of
changes in net assets available for benefits is presented for purposes of
additional analysis rather than to present the net assets and changes in net
assets for each fund. The supplemental schedules and fund information have been
subjected to the auditing procedures applied in the audits of the basic
financial statements and, in our opinion, are fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
ARTHUR ANDERSEN LLP
Nashville, Tennessee
June 4, 1999
- 1 -
<PAGE> 5
GAYLORD ENTERTAINMENT COMPANY
401(K) SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS, WITH FUND INFORMATION
DECEMBER 31, 1998
(IN THOUSANDS)
<TABLE>
<CAPTION>
CORE
STOCK STABLE BALANCED AGGRESSIVE INTERNATIONAL BOND
FUND VALUE FUND FUND STOCK FUND STOCK FUND FUND
---- ---------- ---- ---------- ---------- ----
<S> <C> <C> <C> <C> <C> <C>
ASSETS:
Investments:
Mutual funds $27,911 $13,875 $15,698 $11,907 $3,207 $1,794
Common stock -- -- -- -- -- --
Loans to participants -- -- -- -- -- --
------- ------- ------ ------- ------ ------
Total investments 27,911 13,875 15,698 11,907 3,207 1,794
Cash and cash equivalents -- -- -- -- -- --
Interest and dividend
income receivable -- -- -- -- -- 10
Transfers due among funds 145 89 117 127 50 23
------ ------- ------ ------- ------ ------
Total Assets 28,056 13,964 15,815 12,034 3,257 1,827
------ ------- ------ ------- ------ ------
LIABILITIES:
Accrued administrative
expenses -- -- -- -- -- --
------ ------- ------ ------- ------ ------
Total Liabilities -- -- -- -- -- --
------ ------- ------ ------- ------ ------
NET ASSETS AVAILABLE FOR
BENEFITS $28,056 $13,964 $15,815 $12,034 $3,257 $1,827
======= ======= ======= ======= ====== ======
<CAPTION>
GET STOCK CBS STOCK LOANS TO CONTROL
FUND FUND PARTICIPANTS ACCOUNT TOTAL
---- ---- ------------ ------- -----
<S> <C> <C> <C> <C> <C>
ASSETS:
Investments:
Mutual funds $ -- $ -- $ -- $ -- $74,392
Common stock 2,986 -- -- -- 2,986
Loans to participants -- -- 2,155 -- 2,155
------ ------- ------ ----- -------
Total investments 2,986 -- 2,155 -- 79,533
Cash and cash equivalents -- -- -- 621 621
Interest and dividend
income receivable -- -- -- -- 10
Transfers due among funds 60 -- -- (611) --
------ ------- ------ ----- -------
Total Assets 3,046 -- 2,155 10 80,164
------ ------- ------ ----- -------
LIABILITIES:
Accrued administrative
expenses -- -- -- 10 10
------ ------- ------ ----- -------
Total Liabilities -- -- -- 10 10
------ ------- ------ ----- -------
NET ASSETS AVAILABLE FOR
BENEFITS $3,046 $ -- $2,155 $ -- $80,154
====== ======= ====== ===== =======
</TABLE>
The accompanying notes to financial statements are an integral part of
this financial statement.
- 2 -
<PAGE> 6
GAYLORD ENTERTAINMENT COMPANY
401(K) SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS, WITH FUND INFORMATION
DECEMBER 31, 1997
(IN THOUSANDS)
<TABLE>
<CAPTION>
CORE
STOCK STABLE VALUE BALANCED AGGRESSIVE INTERNATIONAL BOND
FUND FUND FUND STOCK FUND STOCK FUND FUND
---- ---- ---- ---------- ---------- ----
<S> <C> <C> <C> <C> <C> <C>
ASSETS:
Investments:
Mutual funds $22,455 $13,331 $15,985 $9,584 $2,751 $1,635
Common stock -- -- -- -- -- --
Loans to participants -- -- -- -- -- --
------- ------- ------- ------ ------ ------
Total investments 22,455 13,331 15,985 9,584 2,751 1,635
Cash and cash equivalents -- -- -- -- -- --
Interest and dividend
income receivable -- 12 -- -- -- 50
Transfers due among funds 144 102 129 132 46 24
------- ------- ------- ------ ------ ------
Total Assets 22,599 13,445 16,114 9,716 2,797 1,709
------- ------- ------- ------ ------ ------
LIABILITIES:
Accrued administrative
expenses -- -- -- -- -- --
------- ------- ------- ------ ------ ------
Total Liabilities -- -- -- -- -- --
------- ------- ------- ------ ------ ------
NET ASSETS AVAILABLE FOR
BENEFITS $22,599 $13,445 $16,114 $9,716 $2,797 $1,709
======= ======= ======= ====== ====== ======
<CAPTION>
GET STOCK CBS STOCK LOANS TO CONTROL
FUND FUND PARTICIPANTS ACCOUNT TOTAL
---- ---- ------------ ------- -----
<S> <C> <C> <C> <C> <C>
ASSETS:
Investments:
Mutual funds $ -- $ -- $ -- $ -- $65,741
Common stock 2,320 3,491 -- -- 5,811
Loans to participants -- -- 2,018 -- 2,018
------ ------ ------ ----- -------
Total investments 2,320 3,491 2,018 -- 73,570
Cash and cash equivalents -- -- -- 724 724
Interest and dividend
income receivable -- -- -- -- 62
Transfers due among funds 73 1 -- (651) --
------ ------ ------ ----- -------
Total Assets 2,393 3,492 2,018 73 74,356
------ ------ ------ ----- -------
LIABILITIES:
Accrued administrative
expenses -- -- -- 10 10
------ ------ ------ ----- -------
Total Liabilities -- -- -- 10 10
------ ------ ------ ----- -------
NET ASSETS AVAILABLE FOR
BENEFITS $2,393 $3,492 $2,018 $ 63 $74,346
====== ====== ====== ===== =======
</TABLE>
The accompanying notes to financial statements are an integral part of
this financial statement.
- 3 -
<PAGE> 7
GAYLORD ENTERTAINMENT COMPANY
401(K) SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS, WITH FUND INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 1998
(IN THOUSANDS)
<TABLE>
<CAPTION>
STABLE
CORE STOCK VALUE BALANCED AGGRESSIVE INTERNATIONAL BOND
FUND FUND FUND STOCK FUND STOCK FUND FUND
---- ---- ---- ---------- ---------- ----
<S> <C> <C> <C> <C> <C> <C>
ADDITIONS:
Contributions:
Participants $ 1,211 $ 660 $ 963 $ 1,118 $ 407 $ 198
Employer, net of forfeitures 429 319 341 389 134 73
-------- -------- -------- -------- ------- -------
Total contributions 1,640 979 1,304 1,507 541 271
-------- -------- -------- -------- ------- -------
Investment income:
Net appreciation
(depreciation) in fair
value of investments 2,800 681 (286) 1,679 193 (13)
Interest 1 95 1 -- -- --
Dividends 3,881 -- 1,366 294 150 178
-------- -------- -------- -------- ------- -------
Total investment income 6,682 776 1,081 1,973 343 165
-------- -------- -------- -------- ------- -------
Total additions 8,322 1,755 2,385 3,480 884 436
-------- -------- -------- -------- ------- -------
DEDUCTIONS:
Benefits paid to participants 4,095 1,934 2,394 1,396 437 341
Other 76 45 48 31 9 5
-------- -------- -------- -------- ------- -------
Total deductions 4,171 1,979 2,442 1,427 446 346
-------- -------- -------- -------- ------- -------
LOANS TO PARTICIPANTS, NET (85) (104) (63) (15) (2) 7
INTERFUND TRANSFERS 1,391 847 (179) 280 24 21
-------- -------- -------- -------- ------- -------
NET INCREASE (DECREASE) 5,457 519 (299) 2,318 460 118
NET ASSETS AVAILABLE FOR BENEFITS:
Beginning of year 22,599 13,445 16,114 9,716 2,797 1,709
-------- -------- -------- -------- ------- -------
End of year $ 28,056 $ 13,964 $ 15,815 $ 12,034 $ 3,257 $ 1,827
======== ======== ======== ======== ======= =======
<CAPTION>
GET STOCK CBS STOCK LOANS TO CONTROL
FUND FUND PARTICIPANTS ACCOUNT TOTAL
---- ---- ------------ ------- -----
<S> <C> <C> <C> <C> <C>
ADDITIONS:
Contributions:
Participants $ 484 $ -- $ -- $ 10 $ 5,051
Employer, net of forfeitures 179 (2) -- -- 1,862
------- ------- ------ ---- -------
Total contributions 663 (2) -- 10 6,913
------- ------- ------ ---- -------
Investment income:
Net appreciation
(depreciation) in fair
value of investments (111) (474) -- -- 4,469
Interest -- -- 191 -- 288
Dividends 55 5 -- -- 5,929
------- ------- ------ ---- -------
Total investment income (56) (469) 191 -- 10,686
------- ------- ------ ---- -------
Total additions 607 (471) 191 10 17,599
------- ------- ------ ---- -------
DEDUCTIONS:
Benefits paid to participants 295 258 338 73 11,561
Other 8 8 -- -- 230
------- ------- ------ ---- -------
Total deductions 303 266 338 73 11,791
------- ------- ------ ---- -------
LOANS TO PARTICIPANTS, NET 29 (51) 284 -- --
INTERFUND TRANSFERS 320 (2,704) -- -- --
------- ------- ------ ---- -------
NET INCREASE (DECREASE) 653 (3,492) 137 (63) 5,808
NET ASSETS AVAILABLE FOR BENEFITS:
Beginning of year 2,393 3,492 2,018 63 74,346
------- ------- ------ ---- -------
End of year $ 3,046 $ -- $2,155 $ -- $80,154
======= ======= ====== ==== =======
</TABLE>
The accompanying notes to financial statements are an integral part of
this financial statement.
- 4 -
<PAGE> 8
GAYLORD ENTERTAINMENT COMPANY
401(K) SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998 AND 1997
1. DESCRIPTION OF PLAN
The following summary of the Gaylord Entertainment Company 401(k) Savings
Plan (the "Plan") is provided for general information purposes.
Participants should refer to the Plan Document for more complete
information.
PURPOSE OF THE PLAN
The Plan was established on October 1, 1980, to encourage and assist
employees in adopting a regular savings program and to help provide
additional security for their retirement. The Plan is subject to the
provisions of the Employee Retirement Income Security Act of 1974 (ERISA).
Prior to January 1, 1992, the Plan was named "The Retirement Savings Plan
and Trust for Employees of The Oklahoma Publishing Company and Affiliated
Corporations (the `Prior Plan')" and participants in the Prior Plan
included employees of both the Oklahoma Publishing Company ("OPUBCO") and
Gaylord Entertainment Company (the "Company"). As a result of a
reorganization on October 30, 1991, in which both OPUBCO and the Company
participated, effective July 1, 1992, the net assets related to
participating employees of OPUBCO were transferred to the newly
established "Retirement Savings Plan and Trust for the Employees of The
Oklahoma Publishing Company," and the Prior Plan was restated and named
"The Retirement Savings Plan and Trust for Employees of Gaylord
Entertainment Company and Affiliated and Adopting Corporations."
Since that time, the Plan has been amended and restated both on January 1,
1995 and April 1, 1996. As part of the April 1, 1996 amendment and
restatement, the Plan became the "Gaylord Entertainment Company 401(k)
Savings Plan."
- 5 -
<PAGE> 9
ELIGIBILITY
An employee is eligible to participate in the Plan upon the earliest of
January 1, April 1, July 1 or October 1 (the "entry dates") as of which
such employee has both completed one thousand hours of service during an
eligibility computation period, as defined by the Plan, and attained the
age of twenty-one years. Classes of employees excluded from participation
in the Plan include (see the Plan Document for more complete information):
(1) certain employees covered by collective bargaining agreements, (2)
casual employees, (3) leased employees and (4) hourly employees who were
hired on an "on-call" basis.
Participation in the Plan is voluntary. In order to participate, an
eligible employee must apply for participation on the Plan's application
for enrollment form at least twenty days prior to the entry date on which
the employee desires to begin participation.
CONTRIBUTIONS AND VESTING
Until April 1, 1998, a participant could elect to make tax deferred
contributions in amounts between one and sixteen percent of his or her
compensation through regular payroll deferrals (the "Compensation
Reduction Contribution"). Thereafter, a participant may elect to make tax
deferred contributions in amounts between one and twenty percent as their
Compensation Reduction Contribution. For each Compensation Reduction
Contribution, the Company makes a contribution (the "Employer Matching
Contribution") to the Plan in an amount equal to fifty percent of that
portion of the participant's Compensation Reduction Contribution which is
not in excess of six percent of the participant's compensation.
Participants are fully vested at all times in their Compensation Reduction
Contributions, rollover contributions and any earnings thereon.
Participants vest in the Employer Matching Contributions beginning at
forty percent after completing two years of service, as defined by the
Plan, increasing by twenty percent with each additional year of service.
As such, participants with five or more years of service are fully vested
in their entire account balances. Participants retiring at the normal
retirement age or becoming permanently and totally disabled, as defined by
the Plan, are fully vested in their entire account balances. The forfeited
balances of terminated participants' nonvested accounts are used to reduce
future employer contributions. In general, the Plan has the right to limit
employee and employer contributions in order to comply with ERISA and the
Internal Revenue Code.
INVESTMENT OPTIONS
Participants may direct the investment of all contributions and prior
account balances into funds established by the Plan. Participants can
allocate their investments in 1% increments in seven investment funds:
Core Stock Fund- Invests in shares of a fund of an equity
separate account that invests primarily in a
portfolio of common stocks and American
Depositary Receipts.
- 6 -
<PAGE> 10
Stable Value Fund- Invests in a combination of guaranteed
investment contracts with unaffiliated
insurance companies and investment contract
common collective trust funds issued by
banks.
Balanced Fund- Invests in shares of a fund of a registered
investment company that invests in a
combination of stocks and convertible
securities which are deemed to offer the
potential for capital growth and/or income
over the intermediate and long-term.
Aggressive Stock Fund - Invests in shares of a fund of a registered
investment company that invests primarily in
common stocks, emphasizing small to
medium-size emerging-growth companies.
International Stock Fund - Invests in shares of a fund of a registered
investment company that invests primarily in
common stocks and convertibles of foreign
issuers.
Bond Fund - Invests in shares of a fund of a registered
investment company that invests in debt
securities, including U.S. government
securities, corporate bonds, mortgage-related
securities and securities denominated in
foreign currencies.
GET Stock Fund- Invests in shares of Gaylord Entertainment
Company common stock.
Participants can elect to change their investment allocations at any time
by use of a telephone voice response system maintained for such purpose.
Participants may allocate no more than 30% of their contributions and
account balances to the GET Stock Fund.
DISTRIBUTIONS
Participants may withdraw their vested account balances upon retirement,
death, disability, termination of employment, or early retirement as
defined by the Plan. Participants can choose to have the amount of their
vested account balances either paid to them in lump sum, rolled over
directly into another qualified Plan or individual retirement account, or
used to purchase an annuity with an unaffiliated insurance company.
Participants with vested account balances less than $3,500 for 1997 and
$5,000 for 1998 automatically receive lump sum distributions.
- 7 -
<PAGE> 11
In the event of financial hardship (as defined by the Plan) or where a
participant has attained the age of 59-1/2 years, a participant may elect,
while still in the employment of the Company, to withdraw all or part of
the amount invested in his or her account from Compensation Reduction
Contributions. Cases of financial hardship are reviewed and approved by
the Plan's Benefits Trust Committee or its designee in accordance with the
applicable provisions of ERISA. A participant may elect at any time to
withdraw amounts that were contributed to the Plan as a rollover
contribution (subject to certain limitations of the Plan).
Upon the death of a participant who has an Hour of Service (as defined by
the Plan) prior to January 1, 1992, and prior to the start of his or her
benefit payments, the participant's spouse (if any) is eligible to
receive benefits in the form of a qualified pre-retirement survivor
annuity. If, at the time of death, a participant's vested account balance
was less than $3,500 in 1997 and $5,000 in 1998, a lump sum distribution,
rather than a qualified pre-retirement survivor annuity, is made to the
eligible surviving spouse.
TRUSTEE
The assets of the Plan are administered under the terms of a trust
agreement between the Company and Charles Schwab Trust Company.
PLAN TERMINATION
Although it has not expressed any intent to do so, the Company has the
right under the Plan to terminate the Plan at any time subject to the
provisions of ERISA. In the event the Plan is terminated, participants
vest fully in their account balances.
ADMINISTRATIVE EXPENSES
Substantially all administrative expenses of the Plan are paid by the plan
participants based on a flat dollar fee plus an asset based fee or actual
expenditures of the Plan.
LOANS TO PARTICIPANTS
A participant may borrow the lesser of $50,000 or 50% of his or her vested
account balance with a minimum loan amount of $1,000. Loans are repayable
through payroll deductions over periods ranging up to 60 months unless the
loan is to be used to acquire, construct or substantially reconstruct the
participant's principal residence. Each loan bears an interest rate of
prime plus 2% and is fixed over the life of the note. The interest rate at
December 31, 1998 was 9.75%.
PLAN AMENDMENTS
During 1997, the Plan was amended to fully vest all participants who were
terminated during the year as a result of the Merger (see Note 7) and
certain other Company restructurings. In order to give participants who
were terminated the ability to fully transfer their investment balances
into another employers' qualified benefit plan, the Plan was amended to
allow transferability of outstanding loan balances into another plan.
- 8 -
<PAGE> 12
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF ACCOUNTING
The accompanying financial statements are prepared on the accrual basis of
accounting. The preparation of the financial statements in conformity with
generally accepted accounting principles requires the Plan's management to
use estimates and assumptions that affect the accompanying financial
statements and disclosures. Actual results could differ from these
estimates.
INCOME RECOGNITION
Interest income is recorded as earned on the accrual basis. Dividend
income is recorded on the ex-dividend date.
INVESTMENT VALUATION
Cash equivalents are stated at cost, which approximates market value.
Marketable securities are stated at fair value. Securities traded on a
national securities exchange are valued at the last reported sales price
on the last business day of the year. Investments traded in the
over-the-counter market and listed securities for which no sale was
reported on the last day of the plan year are valued at the last reported
bid price. Investment contracts which are held in the Stable Value Fund
are reported at contract value, which approximates fair value, as of
December 31, 1998 and 1997, respectively, in accordance with SOP 94-4
"Reporting of Investment Contracts Held by Health and Welfare Benefit
Plans and Defined-Contribution Plans."
NET APPRECIATION IN FAIR VALUE OF INVESTMENTS
Net realized gains and losses and changes in unrealized appreciation are
recorded in the accompanying statement of changes in net assets available
for benefits, with fund information, as net appreciation in fair value of
investments.
3. CONTRACTS WITH INSURANCE COMPANIES
The Plan has investment contracts with unaffiliated companies which expire
in various years and typically reinvest funds from expiring contracts into
new investment contracts. These contracts pay a stated rate of interest
and require that all interest be reinvested in the respective contracts.
One such contact was an investment with the Executive Life Insurance
Company ("Executive Life"). During 1998, all investments in insurance
contracts matured.
- 9 -
<PAGE> 13
On April 11, 1991, the Insurance Commissioner of California placed
Executive Life into conservatorship. On February 9, 1994, the Retirement
Savings Plan Committee elected, on behalf of the Plan, to opt into a Court
appointed Rehabilitation Plan (the "Rehabilitation Plan") whereby the
original investment in Executive Life would be replaced by an "Interest
Only Pension GIC Contract" with Aurora National Life Assurance ("Aurora").
This restructured contract paid a fixed rate of interest, provided for
recovery of the majority of the investment's original principal value and
accrued interest as of April 1, 1991, and extended the original maturity
of the investment to September 3, 1998.
Under the terms of the Rehabilitation Plan, amounts distributed by Aurora
were restricted from access and deposited in the name of the Plan into the
Executive Life Insurance Company Rehabilitation Plan Holdback Trust (the
"Holdback Trust") as appointed by the Superior Court of California. During
fiscal 1996, this investment in the Holdback Trust was distributed to the
Plan.
As of December 31, 1996, the amount equal to the difference between the
original carrying value of the Executive Life contract and the contract
value of the rehabilitated investment with Aurora was carried as an
investment income adjustment receivable in the accompanying statement of
net assets. During 1997, the Plan was amended to allow a one-time
contribution from the Company in the amount of the investment income
adjustment receivable. On April 18, 1997, the Plan received this one-time
contribution from the Company.
4. INVESTMENTS
As of December 31, 1998 and 1997, the following investments were in excess
of 5% of net assets (in thousands):
<TABLE>
<CAPTION>
1998 1997
---- ----
<S> <C> <C>
John Hancock Diversified Stock Fund (1K) $ 27,911 $ 22,455
Firstar Trust Company Institutional
Investors GIC Fund 13,875 10,776
Dodge and Cox Balanced Fund 15,698 15,985
AIM Constellation Fund 11,907 9,584
</TABLE>
During the year ended December 31, 1998, the Plan's investments
appreciated(depreciated) in fair value by $4,468,520, as follows (in
thousands):
<TABLE>
<CAPTION>
1998
----
<S> <C>
Mutual funds $ 5,054
Common stock (585)
--------
$ 4,469
========
</TABLE>
- 10 -
<PAGE> 14
5. TAX STATUS
The Plan obtained its latest determination letter on December 3, 1997, for
all Plan amendments made up to November 1996, in which the Internal
Revenue Service stated that the Plan, as then designed, was in compliance
with the applicable requirements of the Internal Revenue Code. A
determination letter has not been requested for all amendments made
subsequent to November 1996; however, the Plan Administrator and the
Plan's tax counsel believe the Plan is currently designed and is being
operated in compliance with applicable requirements of the Internal
Revenue Code. Therefore, they believe the Plan is qualified, and the
related trust is tax exempt as of the financial statement date.
6. RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500
As discussed in Note 2, the financial statements of the Plan, as prepared
under generally accepted accounting principles, record distributions to
participants as deductions when paid. The Department of Labor requires
that amounts allocated to participants who have elected to withdraw from
the Plan, but have not yet been paid, be recorded as a liability on the
Form 5500.
The following is a reconciliation of the net assets available for plan
benefits and benefits payable at December 31, 1998 and 1997, per the
financial statements to the Form 5500 (in thousands).
<TABLE>
<CAPTION>
NET ASSETS AVAILABLE
BENEFITS PAYABLE FOR BENEFITS
1998 1997 1998 1997
---- ---- ---- ----
<S> <C> <C> <C> <C>
Per the financial statements $ -- $ -- $ 80,154 $ 74,346
Amounts allocated to
withdrawing participants 83 74 (83) (74)
------ ------- -------- --------
Per the Form 5500 $ 83 $ 74 $ 80,071 $ 74,272
====== ======= ======== ========
</TABLE>
The following is a reconciliation of benefits paid to participants for the
year ended December 31, 1998, per the financial statements to the Form
5500 (in thousands).
<TABLE>
<CAPTION>
1998
----
<S> <C>
Per the financial statements $ 11,561
Add: Amounts allocated to withdrawing
participants at December 31, 1998 83
Deduct: Amounts allocated to withdrawing
participants at December 31, 1997 (74)
---------
Per the Form 5500 $ 11,570
=========
</TABLE>
- 11 -
<PAGE> 15
7. MERGER
On October 1, 1997, the Company merged with a subsidiary of CBS
Corporation ("CBS", formerly Westinghouse Electric Corporation) (the
"Merger"). Immediately prior to the Merger, the Company was restructured
so that certain assets and liabilities that were part of the Company's
hospitality, attractions, music, television and radio businesses,
including all of the Company's long-term debt, were transferred to New
Gaylord Entertainment Company ("New Gaylord"), a wholly owned subsidiary
of the Company. As a result of the restructuring and the Merger,
substantially all of the assets of the Company's cable networks business
(other than CMT International and Z Music) (the "Cable Networks
Business"), and certain liabilities related thereto, were held by the
Company and were acquired by CBS in the Merger. The Plan and its trust
were assigned to New Gaylord and the obligations thereunder were assumed
by New Gaylord.
On September 30, 1997, (immediately following the restructuring but prior
to the Merger), the Company distributed pro rata to its stockholders all
of the outstanding capital stock of New Gaylord, resulting in a
redistribution of stock equal to one third the number of shares held by
each participant. At the time of the Merger, the Company's stockholders
received shares of CBS common stock valued at the agreed upon transaction
price of $1,550,000,000, at a per share consideration of .606 share of CBS
common stock for every share of Gaylord Entertainment Company common
stock. Accordingly, 134,691 shares of CBS common stock were received by
the Plan and allocated to the participants based upon the number of shares
held in each participant's GET Stock Fund account prior to the Merger.
These shares were held in a non-participant directed fund (CBS Stock
Fund). As required by the Retirement Savings Plan Committee, each
participant was required to sell his or her CBS common stock prior to
September 30, 1998, at which time, all shares remaining in this fund were
sold by the trustee with proceeds reinvested consistent with each
participant's then-current investment elections.
At the time of the Merger, the Plan was amended which fully vested all
Cable Network Business employees who participated in the Plan prior to the
Merger. The Plan will continue to maintain the investment balances for
these participants; however, these former employees are no longer allowed
to contribute to the Plan.
No part of the Plan or its assets were merged with any employee benefit
plan of CBS. Upon completion of the Merger and assignment, New Gaylord
changed its name to Gaylord Entertainment Company.
- 12 -
<PAGE> 16
SCHEDULE I
PAGE 1 OF 2
GAYLORD ENTERTAINMENT COMPANY
401(K) SAVINGS PLAN
ITEM 27A - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
AT DECEMBER 31, 1998
(IN THOUSANDS)
<TABLE>
<CAPTION>
DESCRIPTION OF INVESTMENT,
IDENTITY OF ISSUER, BORROWER, INCLUDING MATURITY DATE, CURRENT
LESSOR, OR SIMILAR PARTY RATE OF INTEREST OR COLLATERAL COST VALUE
------------------------ ------------------------------ ---- -----
<S> <C> <C> <C>
Core Stock Fund:
John Hancock Diversified
Stock Fund (1K) Equity separate account $ 22,830 $ 27,911
Stable Value Fund:
Firstar Trust Company
Institutional Investors GIC Common and collective
Fund trust fund 12,665 13,875
Balanced Fund:
Dodge and Cox Balanced Fund Equity and fixed income
mutual fund 14,496 15,698
Aggressive Stock Fund:
AIM Constellation Fund Equity mutual fund 10,035 11,907
International Stock Fund:
American AAdvantage
International Equity Fund-
Institutional Class Equity mutual fund 2,988 3,207
Bond Fund:
PIMCO Total Return Fund Debt securities and fixed
income mutual fund 1,805 1,794
</TABLE>
(continued)
The accompanying notes to financial statements are an integral part of
this supplemental schedule.
- 13 -
<PAGE> 17
SCHEDULE I
PAGE 2 OF 2
GAYLORD ENTERTAINMENT COMPANY
401(K) SAVINGS PLAN
ITEM 27A - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
AT DECEMBER 31, 1998
(IN THOUSANDS)
(continued)
<TABLE>
<CAPTION>
DESCRIPTION OF INVESTMENT,
IDENTITY OF ISSUER, BORROWER, INCLUDING MATURITY DATE, CURRENT
LESSOR, OR SIMILAR PARTY RATE OF INTEREST OR COLLATERAL COST VALUE
------------------------ ------------------------------ ---- -----
<S> <C> <C> <C>
GET Stock Fund:
* Gaylord Entertainment
Company Common stock, 99,124 shares $ 1,421 $ 2,986
Loans to Participants:
* Various plan participants Loans to participants - interest
rates ranging from 9.75% to 10.5% 2,155 2,155
--------- ---------
Total Assets Held for
Investment Purposes $ 68,395 $ 79,533
========= =========
</TABLE>
* Represents a party in interest.
The accompanying notes to financial statements are an integral part of
this supplemental schedule.
- 14 -
<PAGE> 18
Schedule II
GAYLORD ENTERTAINMENT COMPANY
401(K) SAVINGS PLAN
ITEM 27D - SCHEDULE OF REPORTABLE TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 1998
<TABLE>
<CAPTION>
PURCHASES SALES
-------------------------- ---------------------------------------------------
IDENTITY OF ISSUER, BORROWER, DESCRIPTION OF NUMBER OF PURCHASE NUMBER OF SELLING COST OF
LESSOR OR SIMILAR PARTY INVESTMENT TRANSACTIONS PRICE TRANSACTIONS PRICE ASSETS NET GAIN
----------------------- ---------- ------------ ----- ------------ ----- ------ --------
<S> <C> <C> <C> <C> <C> <C> <C>
AIM Constellation Fund Equity mutual fund 205 $ 3,201,933 333 $ 2,381,412 $ 2,173,878 $ 207,534
Dodge and Cox Balanced Fund Equity and fixed
income mutual fund 96 4,011,578 400 3,852,625 3,365,475 487,150
Firstar Trust Company Common and collective
Institutional Investors trust fund 251 5,980,955 339 3,561,775 3,250,575 311,200
GIC Fund
John Hancock Diversified Equity separate account 227 8,380,900 372 5,298,934 4,060,805 1,238,129
Stock Fund (1K)
</TABLE>
The accompanying notes to financial statements are an integral part of
this supplemental schedule.
- 15 -
<PAGE> 19
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Administrator of the Gaylord Entertainment Company 401(k) Savings Plan has
duly caused this Annual Report to be signed on behalf by the undersigned
hereunto duly authorized.
GAYLORD ENTERTAINMENT COMPANY
401(k) SAVINGS PLAN
By: Plan Committee for the Gaylord
Entertainment Company 401(k)
Savings Plan
Date: June 29, 1999 By: /s/ Rod Connor
--------------- -------------------------------------
Name: Rod Connor
Title: Sr. VP & CAO
<PAGE> 20
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Number Description
<S> <C>
23 Consent of Independent Public Accountants
</TABLE>
<PAGE> 1
Exhibit 23
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation of our
report dated June 4, 1999 included in this Annual Report on Form 11-K of the
Gaylord Entertainment Company 401(k) Savings Plan into Gaylord Entertainment
Company's previously filed Registration Statement File Number 333-37051.
Arthur Andersen LLP
Nashville, Tennessee
June 28, 1999
