RHP, Ryman Hospitality Properties

Owner earnings is what a business produces in cash after the spending needed to keep it competitive. For a property trust that spending cannot be read: the filings mix the money that replaces a roof with the money that buys a building, and management decides which is which. Rather than model the split and publish a single figure, the two ends are shown. The upper end is operating cash, which no owner could exceed. The lower end deducts every dollar of capital spending, which is too harsh, since a trust that is growing is charged for buildings it is adding. A trust whose distribution sits near the lower end is paying it out of the properties; one whose distribution exceeds the upper end is paying it from somewhere else.

The cash the properties throw off, measured against what they cost to acquire and build rather than against a market value nobody filed. Read it across the record: a portfolio whose yield on cost is rising is either raising rents faster than it is adding buildings, or buying well. Gross cost is used deliberately, so accumulated depreciation cannot shrink the denominator and flatter the return.

A REIT must distribute most of its taxable income, so a high payout is normal and the question is whether the cash covers it. This is a harder test than the industry's usual one: funds from operations adds depreciation back without deducting the capital that genuinely keeps buildings competitive, so a distribution can look covered on that measure and still be funded by borrowing or by selling buildings. Above 100% of operating cash, it is being funded by something other than the properties.

Funds from operations is defined by the industry's trade association rather than by accounting rules, and no REIT tags it in the structured data behind this site. Rebuilding it from the standard tags misses the figure these companies report by as much as half, because the gains on property sales it must exclude sit behind each filer's own custom tags. Rather than publish an invented number under the industry's name, the record shows the cash the properties actually produced.

Every REIT runs on leverage; how much is the question. Heavy debt is what turns a property downturn into a wipeout, as 2008 showed, so a conservative balance sheet is part of the moat here, not a drag on it.

How many times the property cash earnings cover the interest bill. The bill counted here is every dollar of interest the trust incurred, including the part it charged into the cost of buildings under construction rather than against this year's earnings — that money is paid to lenders all the same, and leaving it out flatters exactly the trusts doing the most building. Comfortable coverage is what lets a REIT refinance through a tight credit market instead of being forced to sell into one.

These figures are the trust's consolidated accounts. Where a REIT owns buildings through joint ventures it does not control, its share of those properties — and of the debt against them — sits outside every line here, and the filings do not tag it in a form this pipeline can read. Read the equity-method and off-balance-sheet notes in the 10-K before concluding anything about total leverage.