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Edited Transcript of MTN earnings conference call or presentation 10-Mar-17 4:30pm GMT

Thomson Reuters StreetEvents

Q2 2017 Vail Resorts Inc Earnings Call

BROOMFIELD Mar 11, 2017 (Thomson StreetEvents) -- Edited Transcript of Vail Resorts Inc earnings conference call or presentation Friday, March 10, 2017 at 4:30:00pm GMT

TEXT version of Transcript

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Corporate Participants

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* Rob Katz

Vail Resorts, Inc. - CEO

* Michael Barkin

Vail Resorts, Inc. - CFO

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Conference Call Participants

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* Shaun Kelley

BofA Merrill Lynch - Analyst

* Anthony Powell

Barclays Capital - Analyst

* Chris Agnew

MKM Partners - Analyst

* Brad Boyer

Stifel Nicolaus - Analyst

* Matthew Brooks

Macquarie Research Equities - Analyst

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Presentation

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Operator [1]

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Good day and welcome to the Vail Resorts second-quarter FY17 conference call. Today's conference is being recorded. At this time, I would like to turn the conference over to Rob Katz, Chief Executive Officer. Please go ahead, sir.

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Rob Katz, Vail Resorts, Inc. - CEO [2]

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Thank you. Good morning, everyone. Welcome to our second-quarter FY17 earnings conference call. Joining me on the call this morning is Michael Barkin, our Chief Financial Officer.

Before we begin, let me remind you that some information provided during this call may include forward-looking statements that are based on certain assumptions, and are subject to a number of risks and uncertainties as described in our SEC filings, and actual future results may vary materially. Forward-looking statements in our press release issued this morning, along with our remarks on this call are made as of today, March 10, 2017, and we undertake no duty to update them as actual events unfold.

Today's remarks also include certain non-GAAP financial measures. Reconciliations of these measures are provided in the tables included with our press release, which along with our quarterly report on Form 10-Q were filed this morning with the SEC, and are also available on the investor relations section of our website at www.VailResorts.com.

So with that said, let's turn to our second-quarter FY17 results. We are very pleased with our results for the quarter. Despite tough early season conditions at our US resorts, we finished the quarter with strong performance. We benefited from our strong season pass sales, solid demand from our high-end consumers, and good conditions during the holiday and the month of January.

Including results from Whistler Blackcomb since the acquisition date, our total lift revenue increased 24.5%, driven by a 15.7% growth in visitation, and a 7.7% increase in effective ticket price in the second quarter, compared to the prior year. We continue to see robust destination guest spending trends, which along with the addition of Whistler Blackcomb, drove a 25.9% increase in ski school revenue and a 21.5% increase in food and beverage revenue compared to the prior year.

Results from Whistler Blackcomb in the second quarter of FY17 were stronger than our initial expectations, and helped to offset the slower start at our US resorts. Whistler Blackcomb had benefited from good conditions throughout the season, a low Canadian dollar versus the US dollar, and the outstanding brand and guest experience delivered by the Whistler Blackcomb team.

Excluding Whistler Blackcomb operations, total lift revenue increased 7.3% and yields improved in each of our ancillary businesses. Park City continues to deliver the strongest growth among our US resorts, with increasing visitation and yield in our second season, following the transformational investments to combine Park City and Canyons.

Our Colorado resorts delivered results that were in line with their record prior-year performance, despite the slower start to the season, benefiting from robust guest spending and growth in season pass sales. The Tahoe resorts benefited from significant snowstorms, that while creating outstanding conditions for the rest of the season, led to road and resort closures during the month of January, primarily during off-peak periods.

While US destination visitation was robust, international visitation to our US resorts was down in the second quarter, due to the impact of the strong US dollar and a decline in Mexican visitation. As we suggested at the time of the deal, we expected Whistler Blackcomb to mitigate the impact of currency movements on our business, by offering our international guests a Canadian dollar denominated destination resort option. Whistler Blackcomb's strong international visitation this season has demonstrated the benefit and stability of this diversification.

Our strong results also demonstrate the success of our season pass and destination guest-focused marketing strategies. Now, I would like to turn the call over to Michael, to further discuss our financial results and our season-to-date metrics

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Michael Barkin, Vail Resorts, Inc. - CFO [3]

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Thanks, Rob, and good morning, everyone. Before discussing our results and FY17 guidance, I want to remind you that you can find a full discussion of our financial results for the second-quarter and year-to-date periods of FY17 in our quarterly report on Form 10-Q, which we filed this morning with the SEC. Our Form 10-Q and our earnings announcement can be found on our website at www.VailResorts.com.

As Rob mentioned, we are pleased with our second-quarter results. Including results from Whistler Blackcomb in the second quarter of FY17, resort net revenue was $720 million, an increase of 20.9% compared to the prior year.

Resort reported EBITDA was $305.2 million, an increase of 26.1% compared to the prior year. Our resort EBITDA margin for the second fiscal quarter improved 180 basis points over the prior year, as we continue to drive strong flow-through from our revenue growth and leverage our scale.

These results include $2.1 million of transaction, transition and integration costs associated with the Whistler Blackcomb acquisition. Excluding Whistler Blackcomb operations, and transaction, transition and integration costs, resort reported EBITDA increased 6.5% compared to the prior year.

Including results from Whistler Blackcomb in the second quarter of FY17, mountain revenue was $654.1 million, up 22.7% from the prior year, while mountain reported EBITDA was $299 million for the second quarter, up 26.4% from the prior year. Excluding Whistler Blackcomb operations, and transaction, transition and integration expenses, mountain revenue increased 3.3%, and mountain reported EBITDA increased 6.6%.

Our second fiscal quarter lodging results were positive, but were adversely impacted by the poor early season conditions. Lodging segment net revenue, excluding payroll cost reimbursements, increased 4% compared to the prior year, primarily driven by the addition of Whistler Blackcomb.

Regarding real estate, during the quarter we closed on one condominium unit at the Ritz Carlton Residences Vail and the final two condominium units at 1 Ski Hill Place in Breckenridge, which is now completely sold out. Net real estate cash flow for the second quarter of FY17 was $3.9 million. Since January 31, 2017, we have closed on two additional units at Ritz Carlton Residences Vail, with only one unit remaining to be sold at the property.

Net income attributable to Vail Resorts, Inc. was $149.2 million for the second quarter of FY17, or $3.63 per diluted share, as compared to net income of $117 million or $3.14 per diluted share for the same period in the prior year.

Our balance sheet remains very strong. We ended the quarter with $140.9 million of cash on hand and our net debt, including the capitalized Canyons lease obligation, was 2.2 times trailing 12-months total reported EBITDA. Though it is important to note that while this ratio includes our outstanding debt, as of January 31, 2017, it only includes Whistler Blackcomb's EBITDA results from the date of the acquisition.

Turning now to our season-to-date metrics for the period. From the beginning of the ski season through March 5, 2017, compared to the prior-year period through March 6, 2016. The reported ski season metrics are for our North American resorts, adjusted as if Whistler Blackcomb was owned in both periods, using comparable exchange rates in each applicable period.

The metrics exclude results from Perisher and our urban ski areas in both periods. Additionally, this data is interim period data, and is subject to fiscal quarter-end review and adjustments.

Despite the slow start to the season, our metrics have meaningfully improved since our last update in January. The challenging early season conditions were mitigated by our strong season pass sales, in a period where our pass holders represent a higher proportion of our visits. As conditions improved during important destination periods over the holidays, and into January and February, our results improved significantly, with strong demand and spending from our guests.

Season-to-date total lift revenue at the Company's North American resorts, including an allocated portion of season pass revenue for each applicable period was up 6.7%, compared to the prior-year season-to-date period. Customer spending has continued to increase in our ancillary businesses. Our ski school revenue increased by 5.2%, dining revenue increased by 1.8%, and resort retail rental revenue increased by 3.2%, all compared to the prior-year season-to-date period.

While total visitation is down 4% compared to the prior-year season-to-date period, our visitation has improved significantly since our last metrics update, due to the stronger performance in January and February. Given our performance to date and assuming normal conditions through the remainder of the season, we now expect resort reported EBITDA for FY17 to be between $577 million and $597 million.

This guidance includes an estimated $9 million of transaction, transition and integration costs in FY17 related to our acquisition of Whistler Blackcomb. The guidance does not include any estimate for the operating results of Stowe Mountain Resort or any related transition or integration expenses. Our updated guidance highlights the success of our efforts to drive destination visitation, grow season pass sales, enhance our network of resorts through strategic acquisitions, and be disciplined in our investments to drive strong financial results.

Before turning the call back to Rob, I want to highlight our recent announcement that we have entered into an agreement to acquire the mountain operations of Stowe Mountain Resort in Vermont. We are thrilled to add the premier, high-end ski resort on the east coast to our family of world-class mountain resorts. The cash purchase price for Stowe will be $50 million, subject to certain adjustments.

At closing, the purchase price will be adjusted with a reduction or an increase in the purchase price by the amount that Stowe's EBITDA exceeds capital expenditures for the period from November 1, 2016 through the closing of the acquisition, which is expected to take place in late spring. I'll now turn the call back over to Rob.

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Rob Katz, Vail Resorts, Inc. - CEO [4]

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Thanks, Michael. We remain confident in the strong cash flow generation and stability of our business model, and we are committed to returning capital to our shareholders.

I'm happy to announce that our Board of Directors has approved a 30% increase to our quarterly dividend, and declared a quarterly cash dividend on Vail Resorts' common stock of $1.053 per share, payable on April 13, 2017, to stockholders of record as of March 29, 2017. This increase highlights the strong and growing cash flow that we are generating, which allows us to pursue disciplined reinvestments in the business, including pursuing strategic acquisitions to drive growth, while also increasing our return of capital to shareholders.

Moving to our calendar year 2017 capital plan. Consistent with prior estimates and our long-term capital guidance, we expect to invest approximately $103 million in capital during calendar year 2017, excluding anticipated investments at Whistler Blackcomb, capital expenditures for US summer-related activities, and one-time integration capital expenditures at Whistler Blackcomb.

The plan includes approximately $65 million of maintenance capital expenditures, and a number of high-impact, high-ROI discretionary investments. At Vail Mountain, we will continue to improve lift capacity at one of the Resort's busiest chair lifts, by upgrading the Northwoods high-speed four-person chair, Chair 11, to a new high-speed six-person chair lift.

At Breckenridge, we will be upgrading the Peak 10 Falcon chair from a four-person high-speed chair to a six-person high-speed chair, allowing guests to experience some of the best intermediate and advanced terrain on the mountain. At Keystone, we'll be investing significant capital to continue to enhance the experience at this outstanding family focused resort. We'll be upgrading the four-person Montezuma chair to a six-person high-speed chair to improve circulation on the front side of the mountain, and we'll be renovating and expanding Labonte's Restaurant by 150 indoor seats, to increase mountain dining capacity at the fourth most-visited resort in the US.

At Beaver Creek, we will be upgrading the fixed grip two-person Drink of Water chair, Chair 5, to a four-person, high speed chair, increasing the capacity for important beginner and intermediate terrain, and upon completion, all primary chair lifts on Beaver Creek will be high speed. Our capital plan also includes the second phase of a two-year process to revamp our primary websites to a single responsive desktop/mobile platform, which will be integrated with our data-based and personalized marketing technology, and the first phase of a three-year plan to completely revamp and modernize RPOS, the primary software platform for all of our resort operations.

We also plan to invest approximately $6 million in calendar year 2017 for Epic Discovery summer activities. This capital will be focused on activity construction at Breckenridge, in conjunction with the official launch of Epic Discovery at the resort this summer, with more modest spending at Vail and Heavenly.

At Whistler Blackcomb, we plan to invest approximately CAD23 million or $17 million in calendar year 2017 for maintenance and discretionary projects. The plan includes key summer investments for the resort, with the expansion of the bike park into the creekside area, the construction of a signature suspension bridge at the top of Whistler Mountain and other summer amenities that support the already robust summer visitation at the resort.

These investments are the first capital projects associated with the Renaissance plan. Following the recently announced renewal of the Whistler Blackcomb Master Development Agreements with the province of British Colombia, and approval of the associated master plans. The execution of these 60-year agreements is a major milestone for Whistler Blackcomb, and is important to ensure that Whistler Blackcomb remains one of the top global mountain resort destinations.

We anticipate that the MDA renewals will allow us to evaluate additional spending related to the Renaissance development plan in calendar year 2018, and additional details will be provided as the timing of the projects is refined. Additionally, we plan to invest approximately $17 million in capital during calendar year 2017 for the Whistler Blackcomb integration. These investments will allow us to fully integrate Whistler Blackcomb systems, marketing and operations, including hardware at the resort, to achieve our anticipated synergies, and create the streamlined, centralized approach that is consistent across our network for guests and employees.

We are continuing to look for opportunities to create new affordable housing options for our employees across our resorts, as part of the $30 million commitment we made to this effort last year. We are pursuing opportunities in each of our communities, and hope to be able to bring a number of projects online over the coming years. Earlier this week, we launched season pass sales for the 2017-2018 season, the first season with Whistler Blackcomb fully integrated into our pass offering and marketing efforts.

We continue to use our sophisticated marketing approach to target season pass sales to both our destination and local guests. Our season pass products provide an excellent value in exchange for our guests' commitment to purchase their resort access ahead of the season.

In closing, I want to take a moment to thank all of our Vail Resorts employees for their passion and tireless dedication, to continue to deliver an experience of a lifetime to our guests and to each other. At this time, Michael and I would be happy to answer your questions. Operator, we are now ready for questions.

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Questions and Answers

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Operator [1]

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(Operator Instructions)

We'll take our first question from Shaun Kelley with Bank of America Merrill Lynch.

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Shaun Kelley, BofA Merrill Lynch - Analyst [2]

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So, Rob, I just wanted to start with the season-to-date results. So visitation has definitely improved from what you had announced before, but it is still running down low to mid-single digit.

Could you just give us a little more color by region? it sounds like Colorado is probably where things have been the choppiest given pass visitation, how you started out the season. But could you give us a little more color on where, you're still behind last year?

And then my second or followup would just be, could you give us a little sense within Colorado of how your higher end resorts, Beaver Creek and Vail are performing relative to Keystone and Breckenridge?

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Rob Katz, Vail Resorts, Inc. - CEO [3]

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Sure. I would say that, yes, the primary driver of this decline is definitely pass usage and certainly the early season. I think some of the numbers in the early -- we have resorts that were delayed in opening by a number of weeks, and so all of those visits obviously are factoring into the numbers.

I would say our Colorado resorts are typically the first resorts to open, often opening in the beginning of November, middle of November. Many of our other resorts don't open until Thanksgiving or later, more traditionally, so that's where you're seeing the bigger decline. Last year we obviously also had a fairly strong beginning.

So I would say that Colorado is definitely a primary drag I think around that visitation. But I think what's been great to see is obviously our financial results have been able to outperform that, because obviously we've locked in that season pass revenue, providing the stability and the growth before we even began the season.

I would say in terms of our four Colorado resorts, actually Keystone has been one of our best-performing resorts of the four. I think a great testament to the team there building that family brand, offering a terrific experience at a more accessible value, and so that was true last year, and it continues to be true this year, one of the driving reasons why one of our big focuses of our capital plan this year was on Keystone.

Amongst the rest of the resorts, I think we're seeing pretty consistent performance, with I think Vail probably lagging a little bit mainly because of two pretty significant hotel properties in Vail, that actually have been closed through the season because they've been going through renovations. We're pretty confident that once those come back online for next season, that will turn around pretty quickly.

So what I would say is we're seeing -- and then obviously we've talked about Park City, which has really been the strongest US resort that we have. And so I think what we're now seeing really is an ability to move people throughout our resort network, for whether it's based on price or value, experience, we can use our pass and our marketing efforts to deliver more consistent, stable results even during fluctuating times at any one of our resorts, whether that's because of internal dynamics, weather, economy. I think we're building that consistency.

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Shaun Kelley, BofA Merrill Lynch - Analyst [4]

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Great. And my second question would just be maybe a strategic one. So thinking through the Stowe acquisition, a two-part question here, the first one would be -- just as we see the $5 million full-year contribution next year, once you have this fully integrated, I think for most of us who are familiar with the northeast would probably thought that number was a little higher. So especially once we factor in some of the synergies you can bring -- you can bring to the table.

So the first question is why is that one maybe not a little more profitable right now, or out of the box? And then the second question would just be the high level of -- where do you sit right now in terms of the Northeast? Is this all you need, or is there more that you could do in that region?

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Rob Katz, Vail Resorts, Inc. - CEO [5]

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Well, no, I appreciate that. And I would say that I think the -- it's challenging I think for resorts that are smaller in size or don't have the amount of volume to necessarily deliver consistent profitability, and very often when we come into those resorts, we're starting from a place that's actually fairly low, and it may surprise some people. But it is -- I think it takes a certain number of visits to actually generate consistent profitability.

So what I'd say, number one, is that is the $5 million does include our ability to more consistently drive profitability at the resorts, from what they had been able to do before. I'd also say we did talk about how it would be in excess of $5 million, and we do think that there's opportunity beyond the $5 million, and probably we'll be talking more about that. We want to spend more time really analyzing what we see.

Obviously there's some consolidation opportunities for us, with some duplication of effort between what we do and what they may do, but I think the bigger opportunity is obviously around season passes and driving that in the Northeast, particularly in Boston and New York. So we'll be providing more color on that as we go forward.

For the Northeast in general, no, we think they're -- we would say that there are additional opportunities that we'll continue to look at and pursue. We think there's certainly the possibility of us creating multiple choices for our pass holders within the Northeast region. That said, as always, we're patient, we take a disciplined approach.

We don't feel like we're in a rush to do anything, and, honestly, I think Stowe, we felt was just a very unique situation where the power of that brand and the opportunity to use our pass at Stowe was going to be a big driver. I would also say Stowe actually has a fairly robust database and customer information, for a resort of its size.

Candidly and at a pretty high level we think actually also gives us a unique amount of insight, further insight into that Northeast guest. So that was one of the other big drivers. But more to come on how we see Stowe playing out. We'll probably share more over the next few months and quarters.

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Shaun Kelley, BofA Merrill Lynch - Analyst [6]

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Thank you very much.

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Operator [7]

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We'll take our next question from Anthony Powell with Barclays.

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Anthony Powell, Barclays Capital - Analyst [8]

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Following up on the Park City growth there, it's gaining momentum. Are you gaining share from either within the Park City market, or do you believe that your investments have driven more visitation from the general Western US?

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Rob Katz, Vail Resorts, Inc. - CEO [9]

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I would say I think it's a bit of both. There's not -- within the ski industry, it's not always easy to have perfect market share information, so it's hard to exactly assess that, but we certainly, our guess would be that Park City is growing faster than most resorts in the US, so it's I think, clearly taking share. And I also think that our -- by introducing the pass, which is such a great value, we do see that when people buy a pass, they actually ski more days in any particular season.

So I think we're -- it's a bit of both. I think we are able to bring people because of the new experience, and really just an elevated vacation opportunity for people now, I think we're bringing them in for trial, and obviously we're now seeing that repeat visitation at the resort, but also driving that incremental visit. And I would say that's -- it's happening in Park City, obviously, probably to the largest degree this season, but it's something, a pattern that we've seen I think consistently throughout the last decade, as we have introduced the pass in a more database targeted marketing effort.

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Anthony Powell, Barclays Capital - Analyst [10]

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Thanks. And you mentioned declining Mexico visitation for obvious reasons, likely. Were you able to accommodate those guests at Whistler and do you think that may be a one-time issue this year?

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Rob Katz, Vail Resorts, Inc. - CEO [11]

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I would say Whistler is a business it's very robust across the board, including with Mexico and Latin America. Now, Mexico and Latin America are much smaller business for Whistler than they are for our US resorts. So I would not say that there was a perfect offset on that, but it is a big opportunity, I think.

Obviously for all the reasons that are out there that people may choose to go to Canada, including Canada has been pretty aggressive at opening up their Visa process, making it easier, I think, for people from Mexico and Latin America. So that's been helpful as well, I think, for the resort. And in terms of the -- there are bigger issues involved I think with some of this international visitation that it's hard for us to say exactly how that will play out over time.

Part of that -- a big part of it is going to be how the US dollar performs. I would say that we -- the Company as Michael talked about, we've created this diversity, and the currency piece of that diversity is quite compelling, and so we feel like we are able to, regardless of how things move on some of these geopolitical or economic factors, I think our Company will hopefully be able to outperform those.

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Anthony Powell, Barclays Capital - Analyst [12]

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Thanks. And a couple more housekeeping questions. Given the bigger contribution to Whistler, did FX have an impact on your forward guidance? And also interest expense came down a bit. I believe there's a limited partner interest at Whistler that we were modeling that didn't occur. So if you could go through those, that would be great.

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Rob Katz, Vail Resorts, Inc. - CEO [13]

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Sure, yes. Currency had a modest impact on the quarter relative to guidance, so certainly not something to -- not something to call out there. I can follow up with you on your specific interest question. I'm not sure exactly what you're asking.

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Anthony Powell, Barclays Capital - Analyst [14]

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The interest guidance came down a bit, so we can follow up after the call. That would be great. Thanks.

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Operator [15]

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(Operator Instructions)

We'll take our next question from Chris Agnew with MKM Partners.

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Chris Agnew, MKM Partners - Analyst [16]

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Followup on the weakness in the international destination guests. Is there a particular seasonality to that? Essentially is it more impactful in the third quarter or the second quarter?

And then also, with these international guests particularly from Mexico, is there disproportionately higher portion on season pass sales to these international guests? Thanks.

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Rob Katz, Vail Resorts, Inc. - CEO [17]

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Yes. So I would say it's different. So inbound visitation from Australia would be stronger in January, so therefore stronger in Q2. Mexican visitation is definitely stronger in Q3, primarily driven by Easter.

So I would say we'll have to see how those dynamics, I think, shake out over the next month or so. Again, we've factored that into our thinking, in terms of the updated guidance that we're providing.

And the second question on Mexico was?

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Chris Agnew, MKM Partners - Analyst [18]

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Just is there any implications for season pass sales? I don't know if they're disproportionately higher to international destination guests, season pass sales?

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Rob Katz, Vail Resorts, Inc. - CEO [19]

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It's a good question. Again, you know we just started season pass sales in the spring, so we'll have to see how that plays out. We don't see that as a huge driver to our overall result, given the size and breadth of the program

Now we had seen, even when the US dollar had been increasing over the last 12 months, we still saw pretty strong growth on the international side into our pass programs. So obviously our strategies and tactics is to really continue to drive the value that that provides. It's one of the best ways, I think, for our pass holders to be able to do something about the stronger US dollar.

The other piece, obviously is that with Whistler now on the Epic pass and the Epic local pass, buying our product now allows people to choose where they want to go, and if they ultimately choose to go to Whistler or they want to choose to come to the US, depending on currencies at that time, they'll have that optionality. We think that will be a big driver, obviously in Australia as well. So in our minds the pass really provides us a terrific way to help combat some of the challenges of inbound foreign visitation into the US.

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Chris Agnew, MKM Partners - Analyst [20]

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Thanks. And then last question, you had strong flow-through in EBITDA margins in second quarter. Is it fair to assume that given the slow start in 2Q that the flow-through should be stronger in the third quarter and looking for a little bit margin expansion year over year, over and above 2Q? Thanks.

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Rob Katz, Vail Resorts, Inc. - CEO [21]

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I think the best thing to point to is our full-year guidance that we updated in the release which our original EBITDA margin guidance was for 30.5% and we've increased that to 31.2%. So certainly expecting full-year flow-through to be better than where our original guidance was.

I think, certainly with the addition of Whistler Blackcomb and the strong profitability and strong performance of the resort, that certainly helps on our flow-through, and continuing to leverage the scale that we're driving in the business. So I think we feel really good about where we stand from both a flow-through and a cash flow generation perspective, and, yes, we're certainly pleased to be able to increase our guidance on that by another 70 basis points for the full year.

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Chris Agnew, MKM Partners - Analyst [22]

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Great. Thank you.

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Operator [23]

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We'll take our next question from Brad Boyer with Stifel.

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Brad Boyer, Stifel Nicolaus - Analyst [24]

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Just a quick one on pass sales in Australia. Curious if you could comment to any degree on what you're seeing there, now that you have Whistler in the mix?

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Rob Katz, Vail Resorts, Inc. - CEO [25]

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I would say by the time we actually introduced, had closed on the acquisition with Whistler, was pretty much after their spring, our fall, their spring pass sales. So I think it was definitely a positive, but hard to really assess how big of a driver it is. I think we'll have more information on that as they go into their fall, our spring.

But their fall, pass sales leading into their current season coming up. Those pass sales really run from about right around now, a little bit later, actually, to maybe close to Memorial Day. So I think we'll have more information probably on how that performed that we can give some color on during the June earnings call.

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Brad Boyer, Stifel Nicolaus - Analyst [26]

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Okay. That's great. And then second, I'm not sure to what degree you can comment, and I know it's early, but if you look at Whistler in the quarter, and you look at the usage amongst Epic pass holders, are you seeing that Whistler is actually driving incremental visits throughout the network, or are you seeing that some of those visits are coming at the expense of visitation to other resorts?

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Rob Katz, Vail Resorts, Inc. - CEO [27]

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Well, I guess what I would say it's a couple of components there. But one is on the pass sale itself, again we again saw modest benefit by announcing that there would be a few days on the Epic Pass if you purchased one last year.

But, again, we only closed the transaction in October, and so we really could not include Whistler really in our marketing efforts for this past year. Certainly our expectation is that Whistler will have a very positive effect on pass sales going forward, and we think that optionality will go a long way for our guests really from around the world.

I think in terms of visitation itself, we did see some visitation from our Epic Pass folks into Whistler this year. I mean, given how late in the process we actually announced and introduced it, and so therefore people didn't really have time to plan for it, I think we were pretty pleased with the visitation that we saw. I think we would expect that to increase dramatically as we go forward.

What I would say is I think -- I think it's probably a little too early for us to even guess at whether or not adding Whistler will add more days to existing pass holders or not. I think there's no doubt that as we put more people into passes they will ski more days, but whether people who are already in our program will ski more days because of Whistler, I think that's something we'll have to see. I think our gut would be the majority of those visits would be replacing visits that might have been at one of our other properties.

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Brad Boyer, Stifel Nicolaus - Analyst [28]

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Okay. Thanks a lot. I appreciate the color.

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Operator [29]

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We'll take our next question from Matthew brooks with Macquarie.

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Matthew Brooks, Macquarie Research Equities - Analyst [30]

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I would guess you look at consensus expectations the different quarters. I was just wondering if you have any thoughts about whether you think the cadence looks right, in particular the off-season quarters. Do you think they're correctly accounting for what you've done in the past at your old resorts, plus Whistler, which does pretty well in summer?

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Rob Katz, Vail Resorts, Inc. - CEO [31]

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Yes. I think I think what I would say on that is that our orientation is to focus in on the full-year guidance. And so clearly folks have a year-to-date number that gets you halfway through the year. So that's really our orientation.

Clearly one of the differences between Whistler Blackcomb and the contribution that it makes versus where we were before Whistler Blackcomb is that they have a more -- a bigger scale summer operation, and because of the way that we've integrated them, we've not had to add significant infrastructure, on terms of bringing Whistler Blackcomb on. So that certainly is a difference in terms of Whistler's business in the summer quarters, than where we were before them. But I would orient to the full-year guidance that we provide because we don't break it out by quarter.

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Matthew Brooks, Macquarie Research Equities - Analyst [32]

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Okay. Thanks for your time.

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Operator [33]

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That concludes today's question and answer session. At this time, I would like to turn the call back to Rob Katz for additional comments and closing remarks.

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Rob Katz, Vail Resorts, Inc. - CEO [34]

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Thank you, operator. This concludes our second quarter FY17 earnings conference call. Thanks to everyone who joined us on the conference call today. Feel free to contact myself or Michael directly should you have any further questions. Thank you for your time this morning and good-bye.

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Operator [35]

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This concludes today's conference. Thank you for your participation. You may now disconnect.