Good day, and welcome to the Vail Resorts' Second Quarter and Fiscal 2016 Earnings Results Conference Call. Today’s conference is being recorded. At this time, I would like to turn the conference over to Mr. Robert Katz, Chief Executive Officer. Please go ahead, sir.

Thank you. Good morning, everyone. Welcome to our fiscal second quarter 2016 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 our press release issued this morning, along with our remarks on this call are made as of today, March 10, 2016 and we undertake no duty to update them as actual events unfold. Today’s remarks also include certain non-GAAP financial measures. A reconciliation of these measures is provided in the tables included with our press release and in our quarterly report on Form 10-Q 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. Let’s turn to our results. We had outstanding results in the second quarter of fiscal 2016 across each of our western geographies with great conditions and strong demand. Total lift revenue increased 20.2%, driven by a 12.5% growth in visitation and a 6.8% increase in effective ticket price compared to the prior year. We continue to see robust spending trends that drove an 8.3% increase in ski school revenue, and a 15.8% increase in food and beverage revenue compared to the prior year. The Tahoe market has seen a significant rebound in visitation this year with great conditions since opening and a strong reactivation amongst skiers in Northern California driving the recovery from the prior two years. We are pleased with the double-digit visitation and revenue growth in the second fiscal quarter at Park…

Thanks, Rob and good morning everyone. Before discussing our results, I want to remind you that you can find a full discussion of our financial results for our second quarter of fiscal 2016, ended January 31, 2016 in our quarterly report on Form 10-Q which we filed this morning with the Securities and Exchange Commission. As Rob mentioned our second quarter results were very strong. Resort net revenue was $595.7 million for the second quarter, an increase of 14% compared to the prior year. Resort Reported EBITDA was $242.1 million, an increase of 21.2% compared to the prior year. Importantly, we continue to drive profitable growth and our Resort EBITDA Margin for the fiscal quarter improved 240 basis points over the prior year as we continue to drive strong flow through from our revenue growth. Mountain revenue was $532.9 million for the second quarter up 15.1% from the prior year while Mountain reported EBITDA was $236.6 million for the second quarter up 21.8% from the prior year. Our second fiscal quarter lodging results were also strong with 9.8% RevPAR growth compared to the prior year. Revenue excluding payroll cost reimbursements increased 5.1% compared to prior year and we are experiencing robust demand at our lodging properties across each of our geographies. Regarding real estate, we continue to see momentum in our resort markets including interest by third party developers in our land parcels. Net real estate cash flow for the second quarter of fiscal 2016 was $2.2 million and during the fiscal quarter we closed on one unit at The Ritz-Carlton Residences, Vail. Net income attributable to Vail Resort Inc. was $117 million for the second quarter of fiscal 2016, or $3.14 per diluted share as compared to net income of $115.8 million or $3.10 per diluted share for the…

Thanks Michael. We continue to be very focused on our capital allocation strategy. I’m happy to announce that our board of directors has decided to increase our quarterly dividend by 30% to $0.81 per share payable on April 13, 2016 to stockholders of record as of March 29, 2016. This increase highlights the strong and growing cash flow that we are generating which allows us to pursue disciplined reinvestment in the business including pursuing strategic acquisitions to drive growth while also increasing our return of capital to shareholders. We did not complete any share repurchases in the past quarter, but intend to continue to take an opportunistic, yet methodical approach to future buybacks. Moving to our calendar year 2016, capital plan consistent with prior estimates and our long term capital guidance we expect to invest approximately $100 million in capital during calendar year 2016 excluding capital expenditures for summer related activities and the one time transformational investment at the recently acquired Wilmot Mountain. The plan includes approximately $60 million of maintenance capital expenditures and a number of high-impact, high ROI discretionary investments. We plan to build a new 500-seat restaurant at the top of the Peak 7 chairlift at Breckenridge. This will improve the dining experience at the most visited ski resort in the United States with a modern restaurant located adjacent to the new Peak 6 terrain, which is not currently served by a major food and beverage venue. We are also upgrading the Sun Up chairlift at Vail Mountain, Chair 17, from a fixed grip triple to a high-speed four-passenger chairlift. This upgrade will increase capacity of the lift by approximately 40% and reduce the ride time to four minutes in a critical area for accessing Vail Mountain's Back Bowls. This will be Vail Mountain's 9th new chairlift…

Certainly. [Operator Instructions] And we’ll pause here brief for a moment to allow questions to queue. And we’ll go ahead and take our first question from Felicia Hendricks. Please go ahead, your line is open.

Hi good morning, thank you. Rob, I was just wondering can you give us a perspective in terms of you did really well in Lake Tahoe this year, there was certainly a recovery. But just to help us put it into perspective, can you talk a bit about what Lake Tahoe has looked like in prior peak years in terms of maybe skier visits, lift ticket revenues or other metrics just to get a sense of the current season if it is more of a normal year or if it is being driven by pent-up demand?

I would say this year Tahoe is probably -- it’s hard to say normal because the last four years have so much variability. But I would say that this, the results this year certainly trapped closer to the kind of upper end of the range, so you know I don’t think necessarily as strong as the absolute peak but certainly you know more in that direction than you know if I looked at an average over the last four years.

Okay. That’s helpful. Thank you. And then Michael, I was just wondering if you could just touch upon how you are thinking about your target leverage ratio, you are now below two times on a net debt to EBITDA basis. So, just wondering how you are thinking about your leverage going forward?

Yeah. I mean, I think we are consistently looking at leverage in our capital structure. Obviously, the benefit of our results has been that it has reduced in some deleveraging and free cash flow generation that we’ve produced has been very strong. I think, certainly as Rob indicated on the call, we’ve put forward a significant increase in our quarterly dividend, continuing to evaluate our repurchases and constantly looking at both of those from a capital return perspective.

Thanks. And then just finally, there is also the Australian visitation, which is certainly a positive surprise especially with the impact of currency. I was just wondering, Rob, I know you have been loathe in the past to really give any kind of quantifiable view on this, but just wondering if you could talk about the kind of growth that you think you can generate out of Australia going forward?

I think -- and I think we talked about this before the season that ultimately, I don’t -- the currency obviously is going to drive a lot of our results. And so, I think certainly if we see a rebound in the Australian dollar, I think that will help our numbers. I think what we said at the beginning of the season was that we were confident that Australia would significantly outperform markets like Canada and the U.K., Brazil and that is exactly what we see and by very significant margins. And that’s been driven by the connection that we have with our pass between Perisher and the Western Resorts and obviously then we get all the spending that comes with that. The Australian guest stays longer than our U.S. guest, stays longer than actually a lot of our other international guests. So, I’m not going to give specific guidance because it’s hard given that there is so many other factors that drive those results. But I think we remain, we think this year has only proven the point that we wanted Australia to outperform everything else and it has.

Thank you. Thanks so much, guys.

Thanks.

Thank you. [Operator Instructions] We will take our next question from Afua Ahwoi. Please go ahead. Your line is open.

Thank you. Good morning. Just one or two questions for me. First, as we think about the skier visit growth you have seen season-to-date, obviously the season has slowed a little from the first half and we expected that. But maybe it is a little below what we -- just slightly below what we thought. So is there anything driving that. I know you said international has moderated, so is there anything else maybe we were missing when we initially sort of came out with our numbers? And then as we think about your acquisition in Chicago, is there any way to help us think about what the potential lift could be of sort of overall season pass revenue? I know that all season pass visits, I know that is part of your strategy to bolt on these resorts and just enhance that whole network. So anything you can help us think about what the lift could be?

Sure. So on the first point, on the growth, some of that, I would say is that there are some technical components to it too just in terms of the percentage -- when you are looking at an overall percentage, obviously and you are starting at the beginning of the season, the relative sizing of Tahoe and Colorado and so. Some of this is -- some of that growth, I think some of those trends are not necessarily indicative of a change. But we have such a mix now of all these different markets, I’d say that would be one piece. That said, I think, obviously as we go into March, when we factored into our guidance the fact that March is going to be and April right at slightly shorter season than we had last year because Easter is so much earlier and so that certainly also affects our thinking as we think about kind of the growth for the remainder of the year, which is included in the updated guidance that we provided. On Chicago, we are not going to give specifics. I think this is something we will probably talk a little bit more about as we give guidance for all of next year. What I can say is that we have seen particularly in the first couple of years after we do the acquisition a dramatically improved season pass growth. That is at least so far kind of wildly ahead of every other destination market that we have, kind of that first couple of years after an acquisition we can make a quantum change. And I think we are hopeful to be able to do that here as well. We don’t give specific pass numbers by market but Chicago is one of our strongest markets. And we are hopeful to be able to replicate some of the great results we saw in Minneapolis and Detroit. And I think you do see some of those results driving the overall growth we’ve shown in our season pass numbers for the last couple of years. So, we feel like it will be a significant contributor.

Got it. And actually one follow-up question. When can we expect to see a sort of press release announcing the sales of season passes for the next season? I think it comes out around this time.

Yeah. Actually, I think it came out yesterday or Monday. So it’s out already.

Got it.

Great. Thanks.

Thank you. And we will go next to Shaun Kelly with Bank of America. Please go ahead. Your line is open.

Hey. Good morning, guys. Rob, you guys usually give guidance based on sort of normalized snowfall and obviously this year for the first time in a number of years, we are seeing it feels like all three mountains kind of firing on all cylinders. So, I know you are probably not going to get into specifics but just at a high level, would you characterize snowfall across the resorts and as we think about guidance and maybe next year’s season things being above your expectations or generally sort of in line what you think the normalized season would be or how would you sort of characterize that?

I think I would characterize that Colorado and Utah as good but not wildly out of the range. I would say that Tahoe has been absolutely, certainly through the second quarter at the top of the range in terms of snowfall. Now, how it will finish? When you look at kind of Feb and March and then early April there, I’m not sure. So, we will be able to talk more about that probably in April and then in June. But I would say in the end that is -- I'd say that Tahoe is certainly from last year to this year, there is no doubt that Tahoe has gyrated from one of the worst years we have ever seen to a very good year.

Got it. But I guess to sort of just say it out loud. It doesn't feel like you think based on the trends that we are saying based on snowfall themselves would be the largest driver of some of the growth that you are seeing. It does seem like all of the other initiatives -- it is just getting hard for us to add up when it is acquisitions plus the integration of Utah plus the urban stuff and Perisher and everything you have done to piece together the pieces. But it seems like most of it if you were to try and line it up, it seems like you feel it would be organic. Would that be fair?

Yeah. I would say that we, certainly through the metrics that we released today, I think we feel like the drivers in Colorado and Utah. I think it is good that there have been good conditions but the drivers of the growth in U.S. destination guests is because of our business strategies. Certainly the growth we are seeing in Park City this year, certainly the growth we are able to drive in Colorado are because of the U.S. consumer, are because of the capital that we’ve invested, the marketing strategies, all of that. And in some respects, I would say, obviously we went into the season and maybe the most important, we went into the season with a very strong increase in season pass sales. So that was well before right, there was any snowfall. And obviously that helps to drive the season and so that’s a huge percentage of our lift ticket revenue and visitation. And we have baked in a good growth and then on top of that we are driving other pieces.

Very helpful. Last question for me and I’m sure you guys will get into this probably at the Analyst Day as well. But I mean, big picture ballpark, what innings do you think we are in now that you’ve seen the numbers and you’ve seen some of the reaction to the capital improvements that you’ve made in Utah? Where do you think we are relative to the penetration ratios and frankly the EBITDA and margins you know you can achieve at some of your other big mountains? Where do you think we are in the lifecycle of what you want to accomplish at Park City and Canyons?

So, I would say, I think we are in the early innings from the standpoint that we obviously just made the improvements and are just dialing in everything there. And I think we will be able to make a lot more operational improvements from this year to next year just because right, it’s the nature of starting something new. But there is no doubt that we’ve already seen from our season pass efforts and even from this year, we’ve already seen a big improvement and a big advance. I would say though. So on the financial result side, I would say kind of middle innings in terms of if the ninth inning is kind of tracking along with Vail and Breckenridge, I would say yeah, we have a bunch of innings to do before we are kind of at that level meaning, I think we see Park City is having more growth than Colorado resorts over the next number of years.

Great. Thank you very much, guys.

Thank you. [Operator Instructions] We will take our next question from Scott Hamann with KeyBanc Capital. Please go ahead. Your line is open.

Yes. Thank you. Good morning. Just in terms of some of the visitation trends you’re seeing this year obviously strong numbers and likely gaining some share, is there any sense you can provide as to where some of these people are coming from? Is there a share shift within your portfolio and are you seeing any benefit that you might be able to quantify from some of the weaker conditions in the Northeast?

That’s a hard one for us to track obviously. So, if somebody went to a – was not our guest of ours last year and then came to us this year, try to know exactly where they skied last year, if they did ski. There’s a big chunk of the ski population who we call samplers, people who try to resorts every year. And our goal is just to kind of incrementally get an increased share of those samplers. And I would say that we certainly feel, but the data is not all in and we have to wait till the end of the season and really be able to look at it closely. But yes, we do feel like we’re obviously picking up a good piece of that. And I’d say that certainly Park City, we feel like we’re doing that there. Certainly, even in Tahoe we’ve got lot of that business that we’re seeing in Tahoe is Northern California, but then we also have a big chunk of destination visits that’s coming in as well outside of that region. So, I think we don’t have a kind of quantifiable answer on that. But there’s no doubt that we’ve made real progress at this. So, again I’ll go back to the previous answer, just the sheer increase in season passes going into the season, we know represents us locking in a lot of guests to get all of their visits and then bring their family and friends with them and that in and of itself help to drive our overall share of ski market.

Okay. In terms of M&A, obviously the East has had a bit of a more challenging year and it seems like there are a few more markets that you might like to add within the urban portfolio. I mean, do you feel like there might be some opportunities to do that as we move through the next couple of quarters?

I think we’re out there trying to make acquisitions really in every quarter and I think we’re very cognizant of the variation of weather and I think most people who own ski resorts are too. So, we don’t see dramatic changes in our acquisition activity such because of a bad snow year in one region. We’re also pretty focus. We’re not just – our company is not such looking to make un-acquisition. We have a very particular interest in certain targets and we really wait and are patient about creating the right opportunity for those. So, whether this weather pattern really has an impact on that? I’m not sure. I think if I look back over the last five to ten years, I don’t know that I see a huge correlation there. But I would say that we will continue to be aggressive about looking for resorts that we think really add value to our customer network until the season pass offering.

Okay. And then the last question just on Tahoe. I think coming into the season, the season passes were a little bit light there not surprisingly coming out of the last couple of years. Obviously with the snowfall, the results seem to be good. Was there a disproportionate benefit from people kind of buying single day, higher-margin, higher price products versus really getting on the season pass program because it was too late once they realized the snow is here?

Yes. I would say, I think certainly on the margin, yes, I think there is probably some benefit in our results from that. And that something – I guess the way that plays out though is typically we would expect to see some good tailwinds in season pass sales going into Northern California as we head into next year. So, even though there is some benefit from that, the benefit of actually locking in more of our guests ahead of time in our mind is actually the true long term benefit as we look at the future.

Agreed. Thanks for the thoughts.

Thanks.

Thank you. And we’ll go ahead and take our next question from Matthew Brooks with Macquarie. Please go ahead. Your line is open.

Thanks for taking my question. Just sort of following on some of the earlier questions about acquisitions, just wondering if you could make any sort of conceptual sort of high level thoughts about what adding a large destination resort in Canada potentially could add to your portfolio and to your pass? And related to that whether you would consider buying assets that would cost more than $500 million?

Yes. I’m not going to respond to that directly. I would say we – I think certainly we have an interest in large destination resorts because those resorts typically have a real impact on our season pass, obviously bringing their guest into our network, I think is a huge positive and that something obviously we’re interested in United States. It’s something we’ve been very public on, we’re interested in other country certainly including Canada or other countries around the world that have strong ski market. So, and I would say, yes, the size for us is absolutely a factor and certainly the more expensive in acquisition is for us, bigger impact whatever we’re buying would have to have on the company. And we feel like we’ve taken incredibly disciplined approach and its part of our analysis is about the multiple what EBITDA multiple would be we buying, but the big part of the analysis to is just even if we could buy something at a good multiple is what is the overall impact on our network, and we’re very careful about that. So, I’d say, yes, we absolutely would look for acquisitions of size, but then we have to make sure that they are the right ones.

Just as a follow on, have you looked at Japan and potential markets in the past with the idea that maybe that becomes a stepping stone to try and get Chinese skiers into the USA?

Yes. I would say, we absolutely have looked at Japan in the past and can at least still consider it an important opportunity for us in the long term because it does – it is very proximate to China, so it does benefit from I think growing Chinese tourism and growing Chinese engagement in winter sports. Obviously Japan also has a strong connection to Australia and so our acquisition of Perisher has made Japan I think more unique for us. But that said, I think that all, the same thing I just talk about apply, discipline, the right acquisition, the right time, the right relationship, all of that. So, yes, I’d say that, that stays on our radar, but again in a methodical way.

Thank you very much. Good results guys.

Thanks.

Thank you. And we’ll go ahead and take our next question from Christopher Agnew with MKM Partners. Please go ahead. Your line is open.

Thanks very much. Good morning. From memory I think Tahoe closed early last year and I can't remember about Park City. But is there potential for the season to be extended this year versus last year? And then also on Easter, I know it was in your third quarter this year, third quarter this year but given that it is earlier in March, does that have a benefit in terms of skier visits? Thank you.

We make a decision on extending based on the conditions at our resorts. I’d say that extending the season is typically not something that becomes material to our overall financial results, but it’s something we definitely do and I think we want to provide a great experience to all of season pass holders and certainly anyone who wants to make the trip. And so, I think if we see really strong conditions that something we consider we consider it across every resorts and I think if you look back historically we have very often extended the season where make sense. On Easter, I would say, we feel like Easter being this early is a negative because it tends to shrink the season and although it obviously make so that week of Easter that is in March, a strong week, it certainly takes away other weeks where the travel pattern drops off pretty dramatically. As I said obviously that’s factored into all the numbers we put out. But yes, ideally we would – if we could lock Easter and I think we’d rather have Easter in kind of early April. But that said, I think this is something we’ve obviously addressed and dealt with many years looking backwards, so we’re certainly comfortable with it.

Great. Thank you.

Thanks.

Thank you. And it does appear we have no further questions at this time. I will now hand it back over to the speakers for any additional or closing remarks.

Thank you, operator. This concludes our fiscal second quarter 2016 earnings call. Thanks to everyone who joined us on the conference call today. Please feel free to contact Michael or myself directly should you have any further questions. Thank you for your time this morning and good-bye.