Good day, ladies and gentlemen, and thank you for standing by. Welcome to the Vail Resorts Fiscal 2013 Fourth Quarter Results Conference Call. [Operator Instructions] This conference is being recorded today, September 27, 2013. I would now like to turn the conference over to our host, Rob Katz, CEO of Vail Resorts. Please go ahead, sir.

Thank you. Good morning, everyone. Welcome to our Fiscal 2013 Year End Earnings Conference Call. Joining me on the call this morning is Michael Barkin, our Chief Financial Officer. Before we start, 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 the press release that we issued this morning, along with our remarks today, are made as of today, September 27, 2013, and we undertake no duty to update them as actual events unfold. Today's remarks also include certain non-GAAP financial measurements. A reconciliation of these measurements is provided in the tables 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 www.vailresorts.com. In addition, during this call, we will discuss results that exclude certain acquisitions and transactions in fiscal 2013 and fiscal 2012, including Kirkwood, Afton Alps, Mt. Brighton and Canyons Resort, which we will refer to collectively as "the Acquisitions." So with that said, let's turn to our fiscal 2013 results. We are very pleased with our performance this fiscal year. We reported record Resort revenue and Resort EBITDA that reflect higher overall visitations, improved pricing, increased average guest spend and strong pass sales. We generated significant real estate net cash flow, driven by the increasing strength in our Resort real estate markets. We were successful in our acquisition strategy during fiscal 2013, completing our transaction for Canyons Resort in Park City, Utah, and acquiring Afton Alps in Minnesota and Mount Brighton in Michigan. We…

Thanks, Rob, and good morning, everyone. Before discussing our results and fiscal 2014 guidance, I want to remind you that you can find a full discussion of our financial results for fiscal 2013, ended July 31, 2013, in our Annual Report on Form 10-K, which we filed today with the Securities and Exchange Commission. Our Form 10-K and our earnings announcement can be found on our website at www.vailresorts.com. As Rob mentioned, we're very pleased with the results from fiscal 2013 and the momentum we've created from our strategic growth initiatives. As you know, our fourth fiscal quarter is typically an EBITDA loss quarter. That said, our fiscal fourth quarter Resort revenue was favorable to the prior year by 8.7%, reflecting improved summer visitation and ancillary spend, along with the additions of Canyons Resort and the Urban ski areas. Excluding these new acquisitions, Resort revenue was up 4.2% over prior year. Our fourth quarter Resort Reported EBITDA was unfavorable to the prior year by 13.5%, primarily due to operations at Canyons. Excluding Canyons and Urban ski areas operations and associated transaction, transition and integration costs, our fourth quarter Resort Reported EBITDA was essentially flat with prior year, with an unfavorable variance of 0.1%. These results reflect the increases in summer activities revenue and favorability in the Lodging business, offset by higher labor costs. For fiscal 2013, Resort net revenue was $1,078,500,000, or up 10.4% compared to the prior fiscal year. Excluding the Acquisitions, Resort net revenue increased 7%. As Rob mentioned, Resort Reported EBITDA increased 17.3% to $240.9 million for fiscal 2013 compared to the prior fiscal year. Excluding the Acquisitions, Resort Reported EBITDA increased 18.4% to $242.9 million. Mountain Reported EBITDA for fiscal 2013 increased $29.8 million or 15% to $228.7 million compared to the prior fiscal year. Excluding…

Thanks, Michael. We are excited about the upcoming ski season and expect to build upon the positive momentum from fiscal 2013 with several new initiatives in fiscal 2014 that we hope will continue to elevate the guest experience and financial results at our resorts. We are thrilled to provide our guests with full-season access to Canyons Resort in Park City, Utah. This further exemplifies our commitment to providing the best and most diverse season pass in the industry, while enhancing the overall guest experience. On top of the exciting addition of Canyons Resort in Park City, Utah, we have expanded our pass partnerships in Europe. We recently announced that the Epic Pass will now include 5 days of skiing at Les 3 Vallées, France, which is the largest ski area in the world. This new partnership with Les 3 Vallées is an addition to offering 5 days of skiing at 5 resorts in the Albert region in Austria and expanded access to Verbier in Switzerland, which increased from 3 to 5 days of skiing. Skiers and riders at our resorts this season will also witness remarkable on-mountain improvements we are making to continue to elevate the guest experience. At Breckenridge, we'll be opening Peak 6 this winter, which will represent a 23% expansion of terrain at the resort and is the first significant North American terrain expansion since the opening of Blue Sky Basin at Vail. The expansion will include 400 acres of lift-served terrain and 143 acres of hike-to terrain, along with a new high-speed 6-person chairlift and a new fixed-grip chairlift. Peak 6 will become another iconic feature of Breckenridge and improve the guest experience across the resort, which is perennially the #1 or #2 most-visited mountain resort in the United States. I'm also glad to report that…

[Operator Instructions] And our first question comes from the line of Joel Simkins with Crédit Suisse. Joel H. Simkins - Crédit Suisse AG, Research Division: A couple of quick questions here. To the extent that you can talk about PCMR and where that stands, maybe what the next steps are here with the court date coming up? And I guess, given that this is still sort of going to be carrying on in the media out there in Utah, just are you guys sort of mindful of any sort of perception with locals?

Yes, I guess -- I think, at this point, I'm not really going to comment on that. I think, obviously, there's a fair amount of publicly available information, both from court filings and in the media out there, about the litigation. And I don't -- at this point, I don't think we really have much to add from some of the comments we made earlier. And I think that ultimately, people can make their own impressions of, certainly, local reaction. I think, maybe, the only thing I would say is that things are proceeding completely consistent with, I think, how we expected. And our views and confidence in the situation is completely unchanged. Joel H. Simkins - Crédit Suisse AG, Research Division: Sure. And 2 quick follow-ups, if I may, Rob. Just where are you guys at in the U.S. Forest Service approval process for the summer attractions next year? And then, you touched upon, briefly, the early booking trends. Obviously, you're only kind of 15% of the way in. Just, could you give us some anecdotal color on international, inbound, and what you're expecting, as Europe seems to be bottoming a little bit?

Yes, so on the Forest Service approval process, we are expecting the Forest Service to shortly be issuing their draft policy regarding the summer activities. The Congressional bill basically gave them 2 years, which would be the end of November, to issue a final policy. We are obviously hopeful that we will stay on that time frame, but obviously, we can't guarantee that. But we're expecting that draft policy to be issued shortly. In terms of booking trends, I guess, at this point, I don't think it'd be appropriate to comment on -- given that it's pretty early. I'd say, right now, we feel very good, very positive results across the board, but -- including international markets. But I think we'll have more color to share on that in December.

And our next question comes from the line of Felicia Hendrix with Barclays Capital.

Do you guys think that you've gained market share in your season passes since you've announced the Canyons, Afton Alps and Mt. Brighton deals? I know you guys have talked about improvement, but just maybe wanted to talk about some market share, like specifically, do you know of any former Deer Valley skiers that are now buying your Epic Passes for access to both the Canyons and the Colorado resorts?

I think it's a little -- it's early. I'm sure there's anecdotal evidence about that, Felicia. I think it's a little early, though, to make any conclusions on that. I think, the way we've described our approach is that we're converting people, clearly, we feel, who were ticket buyers who are now buying season pass and -- with us. And what that means is we do feel that is a market share opportunity because, one, people sometimes don't make up their minds until further into the season or the last minute, or they might take one trip at one of our resorts and then another trip with somebody else. So if they buy our season pass versus buying lift tickets, that tends to mean that they're going to ski only at our resorts during the season. And then I would say, in some cases, we feel we're actually increasing skier visits because folks who buy our pass tend to ski more days than folks who buy lift tickets in total, at all resorts. And so we feel like that's an additional opportunity for us. Whether we have post-Deer Valley skier, I think maybe we'll have more evidence of that, certainly, at the end of the season. But again, our strategy isn't that as much as it's kind of get loyalty and kind of capturing every trip from one of these skiers versus maybe sharing with another mountain.

Okay. Helpful. And Michael, your year-end cash balance is the highest it's been in a long time, and your debt remains low. Can you just talk about the dividend and how you're thinking about that and potential growth of the dividend?

Yes, I think we feel like it was a great year from a cash flow generation perspective. As consistent with what we've done in the past, we'll revisit the dividend later in the year, most likely in March. But I think we feel very good about how our balance sheet lines up going into the new year and, certainly, continuing to have the flexibility to pursue opportunities as they come up.

Okay. And then, you guys have just talked in the recent past about providing us a more detailed roadmap regarding CapEx. You did give us some color, Rob, on some of your projects, but just wondering when you might be prepared to provide some more quantifiable data points regarding your capital projects?

Yes, no, we haven't. What I would say is that my expectation would be to stay with our current cycle of announcing capital in March. Having said that, I think we are looking internally at whether or not we can provide more consistent guidance, longer-term guidance on capital. And that's something that I would say we're either going to wind up doing in December or March, depending, but that is absolutely a priority for us, and it's something that both we and, of course, our board is actively looking at.

And our next question comes from the line of Shaun Kelley with Bank of America Merrill Lynch.

Just a couple of questions about the guidance that you provided. So first of all, on the Resort guidance in the prepared remarks, Michael, I think you mentioned that the Canyons was actually performing a little bit better than your initial underwriting. Could you explain, maybe give us a little bit of color on what's driving that? And if that is opportunity to, I guess, improve the EBITDA contribution above what you thought or improvements just pending a little bit above what you thought?

Yes, I think we continue to be very optimistic about the contribution that the Canyons is going to make in the coming year. I think we also -- particularly, as we've seen the strength in season pass sales over the summer, obviously, a big part of our opportunity in being at Canyons in Park City, Utah, is the season pass piece, and we feel like the outlook for that has improved slightly.

Great. And then, second of all, the contribution from Afton Alps and Brighton. I think you guys haven't given, I don't think, specific numbers regarding that. But could you just talk about the pace of the ramp-up there? Is that basically in line with your expectation? Or is that -- kind of how do you feel about those opportunities right now?

Yes, I think they are in line with our expectation, and we feel good about it, obviously. I think they're incorporated kind of in our guidance consistent with when we first launched these. I think, obviously, I would say, separate from that, I would say that if the season pass -- again, the season pass piece from those markets has also exceeded our expectations thus far. So much like Canyons, I think, we're seeing both good -- everything that we're learning about these businesses as we look to make estimates for next year, I think, are consistent and very positive. And then, the season pass piece continues to outperform.

That's helpful. And then maybe lastly, switching over to the Lodging side. It looks like, if we look at the midpoint of this year’s guidance, this would be pretty close to an all-time record for you in the Lodging segment. Could you just talk a little bit about -- we know you've reduced some cost there historically, but we saw a huge ramp in that division last year, and it looks like it's expected to continue this year. So is this year more revenue-driven or is it more margin and flow through driven?

I think it's -- I would say 2 things. One, I think the restructuring that we did in the Lodging segment a couple of years ago, right, was specifically targeted to improve profitability. And I think we're absolutely seeing the benefit of that. We saw part of that last year. I think we'll continue to see that this year. I think you're also seeing better focus. So I think, within our current properties, we're seeing good strength there and I think -- driving better results and better flow through, candidly, at our existing properties. We also, this year, are adding the Lodging business from the Canyons, which is included in those Lodging results. So that's another pickup there. I think our operations in detail C [ph] are also continuing to grow. So again, in total, I just think we have a lot of things all working in the right direction for that division.

And just one quick clarification on that then, Rob. The contribution from the Canyons in Lodging, could you just explain like what exactly is driving that? I didn't know if there were any hotels that were actually in that line item, or is it managed product?

Yes, it is. It's managed condominiums. There's no owned hotels in that.

And our next question comes from the line of Smedes Rose with Evercore.

I was just wondering if you could update us on your condo sales activity, if there were any sold in the quarter and if there were any pending sales post the end of the quarter?

So we won't give guidance on what's happened this quarter. But obviously, last year was a very strong year in our Real Estate business, I think, reflected in the sales that we had at both of our development projects at Ritz in Vail and One Ski Hill Place in Breckenridge. I think the other key thing in our fourth quarter results was certainly the land sale that we've talked about before, which is booked in our fourth quarter, which is going to be a great opportunity, also, at the base of Peak 8 for a timeshare development.

And our next version comes from the line of Brad Dalinka with MKM Partners.

I wanted to ask you a little bit about Epic Discovery. You called out the first openings at Vail in the press release. It seems like a nice incremental opportunity. And I was wondering if there was any early results you could speak to or to what degree it was incorporated into the guidance?

Sure. I would say it was incorporated in the guidance, although obviously, it's -- and that would be basically -- the summer months, the prime summer months in Colorado were July and August. And so for next -- for our fiscal year, you only have one month of that. And obviously, you have only a small portion of August from 2013. So you have a small portion in August in 2013, and then the full month of July. I'd say it's a modest contribution, really, relative to the total of Epic Discovery. I would say, yes, enthusiasm for the activities is very high. There's no question that -- I mean, people who are in Vail are anxious to get up on the mountain and do new activities and especially things that are really accessible to such a wide array of guests. So I think the experience really just reinforced for us -- as did, by the way, the summer activities we have at Breckenridge -- just reinforces the point that, that initial opportunity for us, which is to take the people who are already in these high-traffic, high-visitation summer tourism sites, is very ripe and very available to us once we get the approvals and can get all this in. What I'd say is next summer in total will be, again, more of a moderate part of the overall plan. And it'll really be the summer of 2015, and then, ultimately, the summer of 2016, where I think we'll see the full ramp-up.

And our final question comes from the line of Whitney Stevenson with JMP Securities.

Michael, Rob, I was just wondering if you could talk a little more about where you're seeing any mix shift in terms of customer habits for when they buy passes during the preseason?

Sure. So I would say the primary piece, I think, we've seen so far is trade-up into the Epic Pass. So the Epic Pass this year is one of our best-performing products. And that's, I think, a terrific sign, and I think points to, I think, adding the resorts in Europe that are only available on the Epic Pass, adding Eldora in Colorado, which is only available on the Epic Pass. And so that's been a really positive sign for us. On the other side, we've also had a tremendous amount of traction in our new Keystone A-Basin Pass, which is a lower-priced product. And so that's why you see our effective pass price, or the differential between units and sales, kind of hasn't skyrocketed. It's stayed more modest because we're both driving folks at the high end, and now also making inroads, we think, in the value segment, particularly here in Colorado. We're not a seeing huge-trade down, though. We're seeing new people come into that product or people trading up sometimes from 4-Packs or other discount products. So right now, we feel like one of the reasons why our pass sales are strong is because we are successful, really, in each of these targeted segments and really moving the needle and moving growth. So on a net basis, I'd say the effective pass price shift increase that we're seeing is pretty consistent with the past, but it's not because there's a 3% or 4% price increase across the board, it's because we're seeing real strength at the high end and new entrants at the low end.

Okay. And then, do you see any difference in terms of timing in the preseason when the higher pass prices are being committed to relative to the lower price offerings?

So far, no. I think, obviously, we -- the Keystone A-Basin product is new for us this year. So we'll have more information on that in December in terms of how it performed at the end of the season. So right now, we're seeing, I think, good momentum on both. I think we'll have more to share on the rest of the season when we announce final results in December.

And we do have one final question from the line of Bruce Zessar with Advisory Research.

I have a question coming back to the Park City litigation, and it just relates to the disclosure in the 10-K today. It says, if the outcome of the litigation is unfavorable, we will be entitled to receive from Talisker the rent payments that Talisker receives from the current resort operator until such time as the current resort operator's lease has ended. I was just wondering how long that would run?

It would run, assuming -- I think, assuming the lease was -- assuming that there was a ruling in the case that the existing lease with Park City Mountain Resort was extended in 2011, I believe that it would run until 2051. And so whatever rent payments were due to Talisker from 2011 to 2051, Talisker would then turn over to us.

And what would those rent payments, per year, be?

Well, I would say that there's a portion of it that's fixed, I believe, and a portion of it that's based on revenue. And so I can't say exactly, but it's in the hundreds of thousands of dollars.

Hundreds of thousands, wait, hundreds of thousands of dollars a year?

Yes, exactly. There have been press reports out, I think, quoting $150,000, $160,000, depending on the revenue on any particular year. Again, I don't know the exact figure. And obviously, without knowing the revenue, we don't know the exact lease figure. But it's, again, relatively to our company, from a materiality perspective, it's in that range.

Okay. But then the next question would be, if their lease is held valid, would you still be on the hook for $25 million a year to Talisker in annual fixed payments?

Yes. So the $25 million payment that we make to Talisker does not change based on the outcome of that litigation. And the value of that lease on our books would not change based on the outcome.

But I mean, in that situation, though, the other operator would be operating the resort, wouldn't they?

Right, but when we -- absolutely, but when we made -- the deal we cut was to sign up to this lease of $25 million a year and all the other terms that are in there for the Canyons Resort and the opportunity that we have with Canyons. And I think what we've shared is, over time, that, that is an opportunity that -- if it turns we lose the litigation, then this opportunity is not, obviously, as good for us. But we still think it's an incredibly strategic decision by our company on account of that we are already seeing those results, given the impact that Canyons is having on our season pass sales. To the extent that we win the litigation, obviously, then this opportunity becomes that much better.

Right. I guess, I'm just trying to understand what the downside scenario is. If you guys -- if you lose the litigation, then, you're not operating a resort and you basically are only going to get $150,000 a year from the current operator, but then you have to pay $25 million a year...

No, I think you're confusing -- sorry to interrupt, but I think you're confusing. We are paying $25 million a year, again, and then all the other terms that are in that lease for the Canyons Resort and whatever happens in Park City. It's not that we're paying $25 million a year just for the opportunity, again, with PCMR. It's $25 million a year for the Canyons, right, which is a resort that's obviously going to, we think, kind of generate -- our prior guidance was that within a few years, it could be up to $25 million of EBITDA. Obviously, huge impacts on our season pass sales, very strategic in putting us in Utah, all of those things. And then, the opportunity, obviously, with Park City as well will suffer [ph]. I mean -- and as we've identified, that has -- there's not perfect certainty or clarity on that. Does that help?

I'm still a little confused because, I mean...

Why don't we -- I think we'd be happy to talk offline. We could walk you through this situation in more detail.

And we have no further questions at this time. Please continue with any closing remarks.

Thank you, operator. This concludes our Fiscal 2013 Earnings Call. Thanks to everyone who joined us on the conference call today. Please feel free to contact myself or Michael directly should you have any further questions. Thank you for your time this morning, and goodbye.

Ladies and gentlemen, that does conclude our conference for today. If you'd like to listen to a replay of today's presentation, you can do so by dialing (303) 590-3030 or 1 (800) 406-7325, and then entering in the access code of 4638135. Thank you for your participation. You may now disconnect.