Greetings and welcome to the Intrawest Resorts Holdings’ Fiscal 2016 Year End Earnings Call. At this time all participants are in a listen-only mode. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Ms. Liz Derosier, Director of Investor Relations. Thank you. Please go ahead.

Thank you. Good morning, everyone and welcome to the Intrawest Resorts Holdings fiscal 2016 year-end earnings conference call. After our prepared remarks, there will be a brief question-and-answer session. I would like to remind you that some of the comments made by management during the conference call contain forward-looking statements that are subject to risks and uncertainties that could cause actual results to vary, which are discussed in our public filings filed with the SEC, including reports filed under the Securities Exchange Act of 1934. We caution you not to put undue reliance on forward-looking statements. Forward-looking statements made during this call speak only as of the date of this call and we undertake no duty to update or revise these statements. In addition, some of the comments made on this call may refer to certain measures such as adjusted EBITDA, which are non-GAAP measures. Although adjusted EBITDA is not a substitute for net income or other GAAP measures, management believes adjusted EBITDA is useful in measuring the operating performance of our business. For a full reconciliation of adjusted EBITDA to GAAP results in accordance with Regulation G, please see our press release furnished as an exhibit for our Form 8-K dated September 8, 2016. This and the presentation that accompanies today’s call are located in the Investor Relations section of our Web site at intrawest.com. Our call today will include remarks from Tom Marano, Chief Executive Officer, and Travis Mayer, Chief Financial Officer. I will now turn the call over to Intrawest’s CEO, Tom Marano.

Thank you, Liz and welcome everyone. I will keep my remarks brief as our fourth fiscal quarter is a relatively quiet time period for us when our resorts conduct limited operations between the core winter and summer seasons. As a result, I will focus my comments primarily on our full year results and outlook for next season. We finished the year with total segment revenue of $568.2 million and adjusted EBITDA of $113.1 million, exceeding the high end of our guidance range for adjusted EBITDA by $4.1 million. On a same store basis, when excluding the impact of the weakened Canadian dollar and Intrawest Resort Club Group or IRCG, which was sold on January 29, and including 100% of Blue Mountain's results during all periods, our full year adjusted EBITDA grew by more than 11%. Outstanding growth at our Colorado resorts and CMH more than offset the record setting warmth in the east, to drive another year of double digit same store growth. This success reflects the strength of our season pass and frequency product program, the continued impact of our recent capital improvement and the exceptional guest experience we provide. We exceeded the high end of our guidance range as a result of cost efficiencies across the company and robust firefighting in the fourth quarter. For the second summer in a row, our ancillary aviation services had a strong start to the fire season as we flew more than anticipated to support fire suppression activity in Canada. Looking forward, season pass and frequency product sales for the 2016-17 season are pacing well ahead of last year. As of September 4, season pass and frequency product sales were up 16% compared to the same time last year. While we are seeing a modest impact from the challenging weather last year…

Thank you, Tom and good morning everyone. For fiscal year 2016, total segment revenue was $568.2 million and total adjusted EBITDA was $113.1 million. It's important to note that the U.S. to Canadian dollar exchange rate averaged 1.38 in the fiscal 2016 versus 1.24 in the prior year. The weakened Canadian dollar and associated non-cash currency adjustments unfavorably impacted fiscal 2016 total segment revenue by $27.4 million and adjusted EBITDA by $5.5 million relative to the prior year. As I discuss our fiscal 2016 results, I will reference several same store metrics that were calculated on a constant currency basis, include 100% of Blue Mountain and exclude IRCG during all periods. We believe these same store metrics best capture the true underlying performance of our business. On a same store basis, total segment revenue increased 3.3% and total adjusted EBITDA increased by 11.2%. We exceeded the high end of the guidance range that we provided in February for both revenue and adjusted EBITDA due to stronger than anticipated fourth quarter performance in our ancillary aviation services and by achieving cost efficiencies across the company. In fiscal 2016, mountain segment revenue was $421.3 million, down 1.1% and mountain adjusted EBITDA was $84.3 million, down 5.2% compared to the prior year. However, on a same store basis, non-segment revenue was flat and adjusted EBITDA was down 2.9%. Given the unprecedented warmth at our eastern resorts this season, we are pleased with these results and believe they speak to the importance of the geographic diversification and the strength of our Colorado resorts where revenue grew by 10% and skier visits were up 1.7%, offsetting much of the impact of the challenging weather in the east. Additionally, our ability to deliver same store growth in fiscal 2016 further highlights the importance of our seasons…

[Operator Instructions] Our first question comes from the line of Joe Edelstein with Stephens. Please proceed with your question.

Just hoping you can add a bit more detail there to the key drivers around the margin expansion. You said it's really the return to normalized weather. Also the expense controls, if there's any particular areas that you could call out, just maybe by bucket how much each of those would represent, would be helpful?

Sure. I think to start with assuming even average conditions in the east, we expect the volume rebound there which contributes substantial growth both revenue and EBITDA in part will help with the margin thing. Separately, just in totality, if we can hit the revenue numbers within the range and particularly towards the top end of the range, the nature of our cost structure is such that we are going to have high flow through on that revenue growth and that will help with the margin expansion. And then completely separately, we are in the process of examining our cost structure. Everything really that doesn’t touch the guest experience or safety with the goal of trying to find actual cost efficiencies. So in combination we are confident that those three things will yield the margin expansion that’s built into the guidance.

Okay. And just the conditions in the east and kind of that flow through, those were the higher components at least in terms of how you get to that 300 plus?

Yes. I think those are the bigger pieces.

Right. Okay. And at what point would you get to feel comfortable in terms of putting that real estate into development, really starting to monetize the appraised values that you just spoke to in terms of the valuation. How we should be thinking about that?

Well, as you know, we have sold some land along the way here and each of those sales have been at a gain. So as we look at opportunities that come to us or in our marketing of the land, you will see parts of that come along the way. We are currently very focused on the master plan and obviously entitlements and permits take some time, so our sense is that what you are really going to see now in the short term is us adding catalyst that will further increase the value and desire of folks to purchase land. Generally, I don’t want to give a time at this point but it is a high priority and prices per square foot continue to move in our direction.

And just in terms of the pricing dynamics that you are seeing in those real estate markets, do you have any stats there that you could share?

Yes. We are looking at prices that on average are going up 5% to 6%, a little bit higher on some of the higher end product, and that’s on a per square foot basis.

That's helpful, Tom. And at this point has there been any change just in terms of how you guys think about allocating your excess cash, particularly really when you look at your net debt leverage, it looks like that's going to come down closer to 3.5 times really by the end of next year. So just the flexibility that that gives you and if there's been any change in terms of your capital allocation plan?

Short answer is no. We certainly are happy about the fact that leverage is coming down. I think on a net basis we are close to four turns right now and as you point out, after next year hopefully we will mid threes. We still think about allocating capital to kind of the highest return and best use. Every year we take a look at our growth capital opportunities, potential acquisitions and real estate development and we will think about deploying it, how it makes the most sense.

And just to add to that, I think what's exciting about the business is there are plenty of opportunities where we can deploy capital at a mid-teens return. If you kind of look at the market overall, there is not a lot of opportunity for that and our business I think is really attractive in the sense that we have those opportunities.

Our next question comes from the line of Ben Chaiken with Credit Suisse. Please proceed with your question.

With regard to your season pass, at this point in the year how booked are you, typically?

Typically at this point in the selling season we have sold about 50% of what we will sell in totality for the year. So we are about half way there.

Okay. Got it. And then just back to your comment around giving guidance based on normalized weather or normalized skier visits. Clearly the season pass trends give you some insight but what else did you guys -- any other color there would be pretty helpful too. Like what else did you guys do?

Yes. I think in the east we assume kind of a return to okay average conditions both with respect to snowfall and temperature. We did take into account the fact that there is likely to be a little bit of a snow hangover. When you have bad years like the one we had last year, it takes a little while to get people back in the mood of skiing. So that's contemplated in the guidance. And then here in Colorado and at CMH, very modest assumptions around visitation growth, and then pricing kind of consistent with what we have told you guys in the past, targeting 3% to 4% on those products with some being higher, some being a little lower depending on the product.

Our next question comes from the line of Chris Woronka with Deutsche Bank. Please proceed with your question.

I want to ask you if you expect, I think you mentioned 43% of your lift revenues this past year were from season pass, frequent use, and that was up about three points year over year. Are you expecting a similar increase this year and does that factor into kind of the total revenue EBITDA guidance?

It's a little bit difficult to predict that percentage because in part it went up because the revenue from other lift products went down with the challenges we had in the east. So I think at a bigger picture level, we are still focused on growing season passes. Whenever we have the opportunity to sell somebody a pass that is something else and make more money from them, we will continue to be [that] [ph]. We like the certainty it gives us with respect to the winter because they are sold in advance of the season. But I don’t think we have a really firm view specific to next year of what that percentage of the lift revenue is likely to be.

Okay. That’s fine. Just to clarify, you are expecting another uptick in the ancillary, the kind of the all-in spend per visit. Is that right?

Yes. Yes, we are.

Okay. Great. Then just kind of curious, after last winter and the tough conditions in the east, have you guys seen any of the, maybe, I guess I would say the smaller players. Is there any kind of distress that resulted from last winter that maybe creates more of an opportunity for you guys to grow?

The broader answer to that is, yes. Last winter was absolutely horrible in the east and some of the smaller players are under pressure. The question for us is whether or not the smaller players are an attractive bolt-on for us and that’s on a case by case basis. If we find something that we think is an attractive bolt-on and kind of fits in with the nature of our resorts, we would pursue it. But absolutely, it was a tough year. There were resorts that were barely open last year.

Yes. That's helpful. And then just as we think about potential, additional potential share repurchases. Is that likely to be more tied to some real estate monetization or can that kind of happen independently. Because I think last year the sale of timeshare helped on share repurchase. Should we make that same kind of tie-in or are those two completely independent?

Yes. I think they are separate issues. The last tender we did, we actually did from cash on hand not from the proceeds of the IRCG sale. We have the flexibility to do additional tenders. We got that as part of the fourth amendment to the credit agreement and we think about tenders like any other potential investment or use of cash. We prioritize it against other opportunities at the time and we will continue to do that.

Our next question comes from the line of Shaun Kelly with Bank of America. Please proceed with your question.

Travis, you split out a lot of helpful metrics for us but one that I was searching for and maybe I missed was, could you just give us a sense of same-store metrics for visitation and lift ticket revenues? Like just trying to get a sense of what the sensitivities were around the shortfall in the east?

So for the full year in totality, same store skier visits were down 14%. I don’t have the ticket revenue here, I apologize. As you would expect, ETP went up 16.9% on a same store basis and revenue [indiscernible] went up 13.5%. A lot of that was driven by price and yield growth in Colorado and then the mix of business as well.

Great. Okay. And I think you mentioned just a moment ago, you are targeting a weighted average price increase across the products this year of 3% to 4%. Did I catch that correctly?

That’s correct.

That's right. And that's not necessarily an ETP increase because the ETP is impacted by mix as well. But when we think and talk about prices, we're talking about the actual pricing on the underlying profits.

Right, of course. And then I guess my last big question is on thinking through the M.A.X. Pass and the early results on that. First of all, is it big enough to give us a sense yet of how much your overall season pass mix, or even if you can't give us a number, is it material to the overall season pass mix at this point?

At this point I wouldn’t say it's very material. The sales are up, basically double for our product at this point in the cycle. We are really pleased with it. As we get further into the season, we might be able to give you more color on that. But it is selling extremely well this year and we are very excited about it.

Great. And last thing would be just the local market in Denver. We keep hearing some pretty positive feedback from what's coming out of there. Can you just give us a sense of what you might be seeing on the ground in terms of local economic activity, behavior? And how much you think that is contributing to some of the early season pass metrics that you are posting?

Well, the economy here is still very solid. But to be quite honest, I think what is really helping us this year is that we introduced Kids Ski Free. We've gotten an enormous amount of buzz in social media for that, then followed on by the Ski Train, another enormous boost in the media and social media. So I think it's more some of the things we have been introducing and the real value that comes when we put a Kids Ski Free pass out there and make it a pass that parents can purchase, or even other adults who may have kids that are relatives or whatever. It's really the value I think those things we have added to our product that has helped boost the sale. Close to 60% of the folks who bought passes this year from us were new and that's a pretty impressive statistic.

Our next question is a follow up question from Ben Chaiken with Credit Suisse. Please proceed with your question.

Just one last one. Is there anything you learned last year in terms of your snow distribution that's going to help you this year or anything we should be aware of?

I would tell you, a couple of things that were learned last year was the approach we took to snow making in Vermont was very smart. We concentrated on a few key areas of the resort and built up a good base. And then I think the second thing that was very helpful was the investments we have made in prior years in Tremblant in snowmaking. The improvements were necessary and they paid off. We were able to recover very quickly up there and have a record up there. And then the last thing and it's extremely important and it's coloring our approach to this year going forward, it's the cost controls. We were aggressive in managing in our cost across the network but in particular at the eastern resorts. And that was really what enabled us to deliver earnings that exceeded expectations on a full year basis by as much as they did.

Our next question comes from the line of Joe Edelstein with Stephens. Please proceed with your question.

Thanks for taking a follow up here. I know the guidance assumes a normalized weather pattern here, but just in prior years, I'm curious what has been the net effect of La Niña weather pattern. If that's been helpful to you in the past, could actually help you more so in the east, really swing around the performance year to year as you compare against that easier comparison there?

Well, Joe, I am definitely no Al Roker, okay. But from everything that we see historically and that we read and the meteorologists are talking about, you can expect a colder winter in the north east which will really help us. The ability to make snow is key there and you can expect a colder winter in the northwest. So we are optimistic about it but as everyone knows, it's the weather and we will make the best of whatever we get but we are optimistic that La Niña will be very good for us.

There are no further questions at this time. I would like to turn the call back over to Tom Marano for closing remarks.

Guys, I just want to thank you all for joining the call and for sharing your time, and we look forward to delivering great results for 2017.

This concludes today's conference. Thank you for your participation. You may disconnect your lines at this time and have a wonderful day.