Vail Resorts Inc MTN
Q4 2012 Earnings Call Transcript

Transcript Call Date 09/25/2012

Operator: Good day ladies and gentlemen, and thank you for standing by. Welcome to the Vail Resorts' Fiscal 2012 Fourth Quarter Results Conference Call. During today's presentation, all parties will be in a listen-only mode. Following the presentation, the conference will be opened for questions. This conference is being recorded today, September 25, 2012.

I'd now like to turn the conference over to Rob Katz, CEO of Vail Resorts. Please go ahead sir.

Robert A. Katz - Chairman and CEO: Thank you. Good morning, everyone. Welcome to our fiscal 2012 year-end earnings conference call. Joining me on the call this morning is Jeff Jones, our Chief Financial Officer.

Before we start let me remind you that some information providing 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 filing and actual future results may vary materially. Forward-looking statements in the press release that we issued this morning, along with our remarks today are effective only today September 25, 2012 and we undertake no duty to update them as actual events unfold.

Today's remarks also include certain non-GAAP financial measurement. A reconciliation of these measurements is provided in the table included with our press release and in our Annual Report on Form 10-K filed this morning with the Securities and Exchange Commission and is also available on the Investor Relations section of our website at

So, with that said, let's turn to our fiscal 2012 results and fiscal 2013 outlook. I'm very pleased with our fourth quarter and fiscal year results. In the fourth quarter our resort reported EBITDA was improved to the prior year, reflecting enhanced summer guest visitation.

Looking back on the full fiscal year there are a number of significant accomplishments worth noting. First, resort reported EBITDA for the year declined 3.8% from fiscal 2011 when adjusting for one-time item, including the timing of the Northstar, Kirkwood and Skiinfo acquisitions and a prior year litigation settlement.

This modest decline is particularly noteworthy when considering that fiscal 2011 was a record year for snowfall and fiscal 2012 was the lowest snowfall total in our history, with levels at less than 50% of the 2010/2011 ski season. Our results in many considered 'worst case scenario' demonstrated the stability of our operating model, the quality of our resort and the comprehensive outstanding experience that we provide all of our guests.

In the Mountain segment, net revenues actually increased 1.9% in fiscal 2012 despite total ski results declining 12.1% compared to fiscal 2011. Our revenue growth was achieved due to number factors. One, the strength of season pass sales which were up $15.8 million or 13.2% over a year ago and comprised 40% of our total lift ticket revenue. Two, a 9.3% increase in our effective ticket price, excluding season passes.

Three, increased guests spending in each of our ancillary lines of business resulting in double digit growth in yield per skier visit in our ski school and dining operation. Other encouraging signs were a 2% increase in international visitation. As our international guests on average have longer length of stay and higher spending per guests and enhance summer operations at our mountain resort.

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