Welcome to the Intrawest Resorts Holdings’ 2017 First Quarter Earnings Call. As a reminder, all participants are in listen-only mode and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. [Operator Instructions]. I would now like to turn the conference over to Liz Derosier, Director of Finance. Please go ahead.

Thank you. Good morning, everyone, and welcome to the Intrawest Resorts Holdings fiscal 2017 first quarter 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 to our Form 8-K dated November 3, 2016. This and the presentation that accompanies today’s call are located in the Investor Relations area on our website 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. We are pleased with our first quarter results and the progress we have made growing our summer operations and diligently managing our year-end expenses. We consider summer to be an ongoing opportunity for future growth. We are also happy with the progress we have made with our capital structure, including our most recent repricing of our term loan, which we completed in October. Total segment revenue for the quarter was $80.2 million, down 6.5%, and adjusted EBITDA was negative $13.9 million, an improvement of 1.6% over the prior-year period. However when excluding Intrawest Resort Club Group, which we sold in January, from all periods, adjusted EBITDA increased by more than 7%. This builds on the 30% improvement we made in the prior-year period over fiscal 2015. Our adjusted EBITDA growth during the first quarter was driven by strong summer visitation in the Mountain Segment, which was up by approximately 13%, offset partially by a decline in Adventure adjusted EBITDA due to more normalized forest fire activity as we had anticipated. In our Mountain Segment, we benefited from owning 100% of Blue Mountain for the second full summer. Blue continues to grow its summer business and contributes positive adjusted EBITDA during the first quarter. With its robust summer activities, conference and lodging businesses, Blue attracts significant visitation from the nearby Toronto metropolitan area. We believe there is an opportunity to replicate aspects of Blue’s summer operations, as many of our resorts as each is either within close proximity to a major metropolitan market or already hosts a large number of summer guests. The investments we are currently making at Steamboat, where peak summer visitation is comparable to a winter weekend, are an example of our focus on monetizing existing summer visitation and we look forward…

Thank you, Tom, and good morning, everyone. Our first quarter is historically a loss quarter, with results driven by year-out of operating and administrative expenses, partially offset by positive contributions in summer operations. Our primary summer operations include outdoor activities and attractions, lodging and food and beverage in the Mountain Segment, heli-hiking and firefighting in the Adventure Segment, and our hospitality businesses in the Real Estate Segment. While the Mountain Segment produced an adjusted EBITDA loss for the quarter, as the resorts do not open for ski operations until midway through our fiscal second quarter, the Adventure and Real Estate Segments both generated positive adjusted EBITDA. As Tom mentioned, total segment revenue for the first quarter was $80.2 million, down 6.5%, and adjusted EBITDA was negative $13.9 million, which represents an improvement of 1.6% over the prior-year period. Excluding and IRCG in all periods, which we sold in January, total segment revenue was down 1.5% and adjusted EBITDA improved by 7.4%. The U.S. to Canadian dollar exchange rate average of 1.3 in the first quarter of both fiscal 2016 and fiscal 2017, and did not material impact the comparability of results. In the Mountain Segment, first quarter revenue increased 8.5% to $54 million, primarily due to revenue growth in lodging from both higher ADR and occupancy, with notable gains at our eastern resorts, as well as increased summer visitation and the associated revenue from increased participation in our summer activities across our resorts. We enjoyed growth throughout all lines of business within the Mountain Segment with lift revenue of 18.6%; lodging up 10.7%; ski school up 10.2%; food and beverage up 7.5%; retail and rental up 2%. During the summer, lift and ski school revenues are primarily related to sightseeing and mountain biking lift access and instruction. Our Mountain adjusted…

We will now begin the question-and-answer session. [Operator Instructions]. We will pause for a moment as callers join the queue. The first question comes from Shaun Kelley with Bank of America. Please go ahead.

Hi. Good morning guys. So I just wanted to maybe dig in a little bit. You called out summer sort of throughout the prepared remarks, and you did mention a little bit about some of the activities that you're seeing. But maybe you could elaborate a little bit, because I don't think you talked a ton about this in the past. Just what in particular is working at Blue in terms of programming and where do you think you can extend that? Where is the biggest opportunity in the rest of the portfolio to maybe take some of those learnings?

Good morning. So I think what's really working at Blue is having a combination of activities such as roller coasters, ropes courses, but also the ability to host conferences. Overwhelming all of that is the fact that they are only about 90 minutes away from Toronto. If you take a look at places like Tremblant, they get close to a million visitors in summer, and there again we have activities for them to do on the mountain. Very simple stuff, but it occupies peoples’ time. As we come out west, again Winter Park has good proximity to Denver, and Steamboat has already got a lot of activities going on there in the sports area, but the mountain had very little for people to do and that's why we put the investment out at Steamboat. So it will be more things like roller coasters, zip lines, ropes courses, activities for kids, things that are really family activities and can complement someone’s vacation, and then some good programming for conferences at any of the resorts.

Great. And I think as we thought about these types of investments in the past, as we look at other people in the industry, they tend to be - you can tend to get a pretty high return on investment for some of these. Is that something you would think of earmarking a little bit of capital for, but yet be able to maybe drive some really significant flow-through from or where do you sit on the capital front of how you might think about this opportunity?

Sure. Well, Tom mentioned the coaster at Steamboat, that's in process right now and will be completed prior to the core summer operation next year. And we underwrite everything to mid-teens or better returns, and we think a lot of the summer traction features have been potential to exceed that threshold by a considerable margin. So we are looking at more investments we could potentially make in the summer, and the plan is to talk about the capital plan for calendar year ‘17 in a little bit more detail on the February call.

Great. And the last question I have was just the summer visitation number, you talked about, was up 13%. In any way you could just help us break that down a little further? Is this frequency of guests coming from local areas? Is it more on destination-driven? Just kind of wondering how the mix is trending and where you're seeing the demand from?

I think we may be had a little bit of confusion with the wording in the prepared remarks that, I think what Tom was trying to convey is that the EBITDA for the Mountain Segment is up 13%. We don't track summer visitation in a way that's kind of digestible and readily disclosable. So that was just the EBITDA number he was talking about.

Okay. My apologies. So you don't have really like a hard visitation number, a way to track where the guest is at or coming from at this point?

Yes, that’s right. I mean, we have obviously the amount of people who are staying in lodging and then we have people who use the attractions, but we sell attractions differently at our different resorts. Sometimes people pay individual attraction tickets, sometimes they get a ticket for the whole day to use everything. So we don’t have a super crisp clean metric we can throw out to you for summer visitation unfortunately.

Okay, got it. I’ll jump back in queue. Thanks a lot guys.

The next question comes from Matthew Brooks with Macquarie. Please go ahead.

Good morning, guys. I was wondering, you mentioned the debt refinancing. Can you remind us how much of your debt now is still variable versus fixed?

Pretty much the entire thing. Our cap structure is simple. We have the term loan which is $554 million and then we have separately capital leases that are around $40 million, and that’s pretty much the total of the debt. The term loan is offloading. It’s got a LIBOR floor of 1 point, so we’re still paying the floor. We had actively decided not to fix a portion of that. Just taking the view that interest rates are unlikely to go up a lot very quickly at least. We constantly look at the credit markets, and if our view changes on that, then we’ll take the according steps.

Okay, makes sense. And maybe just, I guess, you probably can't comment, but just trying to think about capital allocation following this year, because the leverage has come down quite a lot in the last couple of years for the things that you’ve done. Does it open up the opportunities instead of doing pass or agreements with other companies that you might be able to tack-on extra resorts rather than those agreements?

Everything is on the table. You’re right. We are building up a fair amount of cash but everything is on the table. We could deploy that cash in investments at the resorts, which again as Travis alluded to, our threshold is mid-teens but most of them generate significantly above that. We could deploy the capital into a resort acquisition. We could do a real estate project with it or of course we could pay down debt among - that's a limited number of things we could do. But we're building up the cash and we are evaluating what our options are.

All right. If it did happen to be a resort, what do you think would make more sense? Obviously it depends on the pass, but do you think something in the Northeast or Canada or something in California would make more sense?

I think primarily we would want to buy a resort that complements our existing footprint. So just to refresh, we like to buy a resort near relatively large metropolitan populations but we also have an interest in potentially acquiring another destination resort. Most likely the acquisition would be out west, but you're absolutely right, you never know it all depends upon price.

Okay. Thanks guys.

The next question comes from Ben Chaiken with Credit Suisse. Please go ahead.

Hi, guys. When you think about Tremblant versus Blue, which one is more strategic for your portfolio? So, I guess another way of saying that, which will - between Tremblant and Blue, which one is more important to your season pass, if you can bring it up?

That's a tough call. They are both very attractive resorts because of their proximity to major population centers. I have to be honest with you, I like them both and they are both unique and they draw an unbelievable amount of people, which is why they are real opportunity not just in winter but in summer as well.

Got it. That’s helpful. Thanks.

[Operator Instructions]. This concludes the question-and-answer session. I would like to turn the conference back over to Tom Marano for any closing remarks.

Guys, I just want to thank you very much for your time today, and we are thinking snow and looking forward to the season.

This concludes today's conference call. You may disconnect your lines. Thank you for participating, and have a pleasant day.