Rob Katz - Chief Executive Officer Michael Barkin - Chief Financial Officer.

Shaun Kelley - Bank of America Felicia Hendrix - Barclays Matthew Brooks - Macquarie Christopher Agnew - MKM Partners Steve Wieczynski - Stifel.

Good day, everyone and welcome to the Vail Resorts Fourth Quarter Fiscal 2017 Earnings Call. Today’s conference is being recorded. At this time, I would like to turn the conference over to Rob Katz, Chief Executive Officer. Please go ahead..

Thank you. Good morning, everyone. Welcome to our fiscal 2017 year end earnings conference call. Joining me on today’s call is Michael Barkin, our Chief Financial Officer.

Before we begin, 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, September 28, 2017 and we undertake no duty to update them as actual events unfold. Today’s remarks also include certain non-GAAP financial measures.

Reconciliations of those measures are provided in the tables included with our press release, which along with our annual report on Form 10-Q were filed this morning with the SEC and are also available on the Investor Relations section of our website at www.vailresorts.com. So, with that said, let’s turn to our fiscal 2017 results.

We achieved another year of record breaking results with strong growth across our business. We are very pleased to complete the year with resort reported EBITDA of $593.4 million, which included $10.8 million of acquisition and integration related expenses.

Our results were driven by a world class network, the acquisition of Whistler Blackcomb and strong results across our resort locations. Our season pass program continued to drive both growth and stability with season pass revenue increasing 32.9% compared to the prior year, including Whistler Blackcomb results in fiscal 2017.

Resort reported EBITDA in fiscal 2017 increased $41.1 million or 9.1% compared to the prior year, excluding acquisition and integration-related expenses and results from the Inn at Keystone in both periods.

Whistler Blackcomb and Stowe operations in fiscal 2017 and the one-time $3.5 million fee associated with the termination of the management agreement for Half Moon resort Jamaica in fiscal 2016.

This year’s results highlight the positive impact of our expanding geographic diversification, the stability provided by our growing pass program and the success of our guest focused marketing efforts. Our U.S. resorts delivered another year of strong performance.

In Park City, we experienced a double-digit EBITDA growth rate as our investment to create the largest ski resort in the U.S. continues to generate excitement among skiers and drives strong yield growth.

Our Colorado resorts achieved incremental revenue and EBITDA growth over the record prior year despite less favorable conditions that impacted visitation, particularly in the early part of the season and the late timing of the Easter holiday.

Tahoe also experienced significant growth achieving record revenues in all lines of business as the region benefited from another year of good conditions.

In its first year as part of Vail Resorts, Whistler Blackcomb delivered outstanding results that were well above our expectations benefiting from excellent conditions throughout the season and a low Canadian dollar relative to the U.S. dollar driving significant destination growth from the U.S. and other international guests. Our U.S.

summer business continued to grow with the launch of Epic Discovery at Breckenridge this summer, although results in the fourth quarter of fiscal 2017 were below expectations primarily as a result of a delayed opening for Breckenridge’s new activities due to late snowfall and the heavenly coaster being closed this summer due to damage from the significant snowfall in Tahoe this past winter.

As our summer business continues to mature, we expect to continue improving and developing our operational consistency and our pricing and promotion to make the most of the already existing summer visitation at our resorts.

At Perisher, fiscal 2017 results were in line with our expectations as the current ski season got off to a slower start in June due to poor conditions, but rebounded in July supported by continued strong pass sales and growth in guest spending.

Finally, we continue to execute our strategy with a focus on disciplined cost management, which played a critical part in achieving resort EBITDA margin for the year of 31.4%, a 270 basis point expansion compared to fiscal 2016. Turning now to our 2017/2018 season pass sales for our North American resorts.

We are extremely pleased with our season pass sales today. Through September 24, 2017, North American ski season pass sales increased approximately 17% in units and 23% in sales dollars compared to the prior year period ended September 25, 2016.

We saw significant acceleration in our season pass sales, excluding Whistler Blackcomb only pass products across our destination and local products through our important Labor Day deadline.

We believe this growth continues to be driven by our increasingly sophisticated and targeted marketing efforts to move destination guests into our season pass products.

The full inclusion of Whistler Blackcomb and Stowe on the Epic Pass and Epic Local Pass for the 2017-2018 ski season as well as strong results from guests in Northern California and the Pacific Northwest following great conditions in the 2016-2017 ski season.

We also believe we are continuing to move people to purchase their season pass earlier in the selling period. Additionally, we saw significant increase in Whistler Blackcomb pass products in large part due to an earlier price deadline than Whistler Blackcomb has had in the past.

With the significant growth already achieved, we do expect our percentage growth rate for the remainder of the selling period to be more modest resulting in a lower overall percentage growth rate for the year.

Whistler Blackcomb and Stowe pass products are included in both current and prior years with the exception of one 3-day EDGE cards, of which the vast majority were sold after the beginning of the ski season and will not be offered for the 2017-2018 ski season.

Whistler Blackcomb pass sales are adjusted to eliminate the impact of foreign currency by applying the current period exchange rates to the prior year.

Finally, I am pleased to announce that our Board of Directors has declared a quarterly cash dividend on Vail Resorts common stock of $1.05 and $1.03 per share payable on October 27, 2017 to shareholders of record on October 10, 2017.

Now, I would like to turn the call over to Michael to further discuss our financial results and our fiscal 2018 outlook..

Thanks, Rob and good morning everyone. As Rob mentioned, we are very pleased with the results from fiscal 2017. With the strong high-end consumer, we are continuing to leverage our growing network of resorts and sophisticated marketing strategies to drive guest spending across our business.

For fiscal 2017, resort net revenue was $1.9 billion, representing an increase of 19.7% compared to the prior fiscal year. Resort EBITDA increased to $593.4 million, representing an increase of 31.1% compared to the prior fiscal year. Total amount net revenue increased 23.5% to $1.6 billion.

Total skier visits, including a full season of Whistler Blackcomb results, increased 20.1%, while total visitation at our U.S. resorts declined 5.4% primarily as a result of the poor early season conditions in Colorado and the late timing of the Easter holiday.

Total effective ticket price increased 3.6% driven by season pass and lift ticket price increases across our resorts and lower visitation per pass. This was partially offset by the inclusion of Whistler Blackcomb’s ETP and results in fiscal 2017, which is lower on a U.S. dollar basis in the companywide average.

Total ETP, excluding Whistler Blackcomb, increased 11.4%. Our ancillary businesses also experienced growth with ski school, dining and retail and rental revenue of 24.1%, 24.4% and 21.7% respectively compared to the prior year.

Excluding results from Whistler Blackcomb, ski school dining and retail and rental revenues were up 2.7%, 0.6%, and 1.6% respectively as yield growth was largely offset by the decline in U.S. resort visitation.

Turning to lodging, our fiscal 2017 results were impacted by less favorable conditions in Colorado during the ski season compared to the prior year as well as the sale of the Inn at Keystone in November of 2016.

Revenue, excluding payroll cost reimbursements, increased 0.8% and revenue per available room increased 4.4% compared to the prior year, while lodging reported EBITDA declined 3.8% compared to fiscal 2016.

Excluding the results from the Inn at Keystone in both periods, the Half Moon termination fee in the prior year and lodging results from Whistler Blackcomb in fiscal 2017. Lodging reported EBITDA grew 9.2% compared to the prior year. Moving on to real estate, we generated $18.5 million of net real estate cash flow in fiscal 2017.

During fiscal 2017, we closed on the sale of the land parcel at the base of Breckenridge for $9.3 million as well as 4 units at Ritz-Carlton Residences, Vail and 2 units at One Ski Hill Place in Breckenridge representing the last of our condominium inventory.

As of July 31, 2017, we had approximately $103.4 million of real estate held-for-sale and investment associated with land parcels at our resorts.

Net income attributable to Vail Resorts, was $210.6 million or $5.22 per diluted share for fiscal 2017 compared to net income attributable to Vail Resorts of $149.8 million or $4.01 per diluted share in the prior fiscal year.

Included in net income for fiscal 2017 on a pre-tax basis are charges for an increase in the Canyons’ contingent consideration of $16.3 million, a future contribution to Town Of Vail Parking of $4.3 million, as well as a foreign currency gain of $15.3 million on the intercompany loan to Whistler Blackcomb.

Finally, our balance sheet continues to be very strong. We ended the fiscal year with $117.4 million of cash on hand, $50 million of borrowings under the revolver portion of our senior credit facility and total long-term debt, including debt due within 1 year of approximately $1.3 billion.

As of July 31, 2017, we had available borrowing capacity under the revolver component of our Vail Holdings Inc. credit facility of $280.2 million. In addition, we had $126.7 million available under the revolver component of our Whistler Blackcomb credit facility.

Our net debt was 1.9 times trailing 12 months total reported EBITDA, which includes $328.8 million of long-term capital lease obligations associated with the Canyons’ transaction. Now, turning to our outlook for fiscal 2018, net income attributable to Vail Resorts Inc. is expected to be between $234 million and $272 million in fiscal 2018.

We estimate resort reported EBITDA for fiscal 2018 will be between $652 million and $682 million. Our resort reported EBITDA guidance includes the first full fiscal year of operating results for Whistler Blackcomb and Stowe and also includes an estimated $2.6 million of anticipated integration-related expenses.

Given the very strong performance of Whistler Blackcomb in fiscal 2017, we expect the resort’s fiscal 2018 contribution will exceed our initial expectations, but the year-over-year growth will be slower due to the outperformance of the resort in fiscal 2017.

We do expect to see a rebound in our performance in Colorado assuming more normal early season conditions, the earlier Easter holiday and more available lodging inventory in both Vail and Breckenridge. We expect Stowe’s fiscal 2018 results to be in line with our previously issued expectations.

We expect the resort EBITDA margin to be approximately 31.9% in fiscal 2018 using the midpoint of the guidance range, which is an estimated 50 basis point increase over fiscal 2017. We estimate fiscal 2018 real estate reported EBITDA to be between negative $8 million and negative $2 million.

Net real estate cash flow is expected to be between $0 million and $10 million, excluding our expected $4.3 million contribution to the Town Of Vail Parking structure.

We expect our growth will be driven by the continued success of our core strategy of increasing guest loyalty by offering an expanded network of resorts, moving skiers and riders into our season pass products, creating a more personalized and relevant conversation with each of our guests, and using sophisticated approaches to drive yield increases.

We also expect to be able to drive continued growth in our ancillary businesses based on continued increases in guest spending. Our estimates are predicated on an exchange rate of $0.81 between the Canadian dollar and the U.S.

dollar related to the operations of Whistler Blackcomb in Canada and an exchange rate of $0.80 between the Australian dollar and U.S. dollar related to the operations of Perisher in Australia. Any fluctuations in these exchange rates will impact our reported financial results.

As was the case in fiscal 2017, we anticipate variability in our net income driven by the value of the contingent consideration related to the Park City Canyons lease which is remeasured to fair value each quarter.

Additionally, we expect continued volatility in the value of our intercompany loan to Whistler Blackcomb, which requires foreign currency remeasurement to Canadian dollars, the functional currency for Whistler Blackcomb on a quarterly basis.

As a result, foreign currency fluctuations associated with the loan are recorded within our results of operations. I will now turn the call back to Rob..

Thanks, Michael. We are proud of our fiscal 2017 results and looking forward to the opportunities and challenges ahead. We are excited to welcome guests to Whistler Blackcomb for the 2017/2018 season after completing the full integration of the resort. Our teams at Whistler Blackcomb and in the U.S.

have made great progress in our systems and process implementations to create a seamless experience for our guests in the upcoming season, including direct-to-lift scanning for our season pass holders.

We plan to integrate Stowe next spring in summer in advance of the 2018/2019 fees, but Epic Pass and Epic Local Pass holders will still be able to access Stowe this coming season. We have been hard at work over the summer making significant improvements to our resorts and elevating the guest experience for the upcoming ski season.

At Vail Mountain, we are continuing to improve lift capacity by upgrading the Northwoods chair to a high-speed 6-person chairlift. At Breckenridge, we are upgrading the Peak 10 Falcon Chair, allowing more guests to experience some of the best intermediate and advanced terrain on the mountain.

At Keystone, we are making significant investments to enhance the guest experience at this family focused resort, including the upgrade of the Montezuma chair to a high-speed 6-person chair as well as renovating and expanding LaBonte’s restaurant by 150 indoor seats.

At Beaver Creek, we are upgrading the Drink Of Water chair to a high-speed 4-person chair. Upon completion, all primary chairlifts at Beaver Creek will be high-speed. We continue to invest in the update of our primary websites to a single responsive platform, which will be integrated with our database and personalized marketing technology.

As part of this effort, our updated Epic Pass site went live for pass sales this year. We were also in the first phase of a 3-year plan to completely revamp and modernize RPOS the primary software platform for all of our resort operations. This summer, we announced our effort Epic Promise for a Zero Footprint.

Our ambitious goal to reach zero net emissions, zero waste to landfill and zero net operating impact to forests and habitat by 2030. The natural environments in which we operate are our business and we have a special obligation to protect them.

As a growing global company so deeply connected to the outdoors, we are making a commitment to address the most pressing global environmental challenges and protect and sustain our local communities and natural resources.

To improve business practices, capital investment and continued innovation and environmental stewardship, we are setting a goal of achieving the zero net operating footprint by 2030. With our Epic Promise for a Zero Footprint, Vail Resorts is both doing the right thing for the environment and for our business.

I would like to close by thanking our employees and members of our resort communities for making fiscal 2017 another amazing year. At this time, Michael and I will be happy to answer your questions. Operator, we are now ready for questions..

Thank you. [Operator Instructions] We will take our first question from Shaun Kelley from Bank of America. Please go ahead, sir..

Okay, thank you. Good morning, everyone. So, Rob, Michael, maybe you could start with just a little bit more color on the pass sales statistics and specifically the comment you made around the slower growth for the remainder of the season.

So, we appreciate it sounds like you pulled forward some demand, particularly at Whistler given our earlier deadline.

When we think about magnitude of things possibly slowing off, I mean, is that something people should be concerned of or do you think this is just reverting back to closer to maybe where we started the season?.

I don’t think people should be concerned at all. I think the results that we have to Labor Day were outstanding. And I think as we analyzed them what we are seeing is obviously to move from a 10% growth rate to a 17% growth rate. The growth rate in the middle there obviously was pretty significant.

When we analyzed that, what we feel is that some of that growth, some of the new pass holders, new people we are bringing to the program, we assume might come in later in the selling period. Actually, we were able to get them in earlier. That’s obviously great for the program.

It’s great in our ability to actually reduce risk and get people more committed. But when you just do the math, obviously right the growth rate comes down as you pull people forward and in our minds that’s – we would love to see this happen every year, because we think it puts us in an incredible position for the season.

And it’s also worth noting that similar to our results in the spring, we are going up against quite a challenging comp. And so I think the results through Labor Day were very encouraging..

Yes, I think – and just to maybe clarify the point you made, yes, I do think as we – I think we do feel that yes, that it will be more modest just because of how the numbers play out and yes, it will trend down towards I think where we started..

Great, appreciate that. And when we think about just on some of the initiatives and you commented a little bit on some of the things that are driving just this meaningful growth.

But in your mind, I mean, as we went through the kind of pass selling period so far, did you see whether it was Whistler or Stowe, was there some sort of specific call out that you think people should be looking at when they are thinking about what’s really driving the double-digit numbers that we are seeing here.

Was there something that really surprised you?.

I think it’s the number of components we outlined, but certainly couple of the most important one is, yes, we are seeing just continued success in bringing our destination guests into the program and considering how big the program is and the growth we have last year, I just think it’s a striking result to be able to continue to add new guests and continue to move them from paid lift ticket buyers either at our resorts or other people’s resorts into our program again really set us up well.

It takes a lot of risk out of the upcoming season when you are able to do that, not all the risk, but certainly this program has been instrumental in doing that. So, that’s one piece.

I think the other piece is we do feel that both Whistler and Stowe’s inclusion on the program had an impact and obviously we are not asking guests specifically that, but at this point, because we are still going through obviously the selling period, but by looking at geographies that we think have an interest in those resorts, we are able to kind of assess, yes, hey, we are seeing the kind of growth rate from these various geographies whether those are geographies in the Northeast, geographies in the Pacific Northwest, where we can say wait a minute, we are seeing right, they are performing much better than other geographies who are performing well, but these are performing even better.

And so we tend to attribute that to the inclusion of these new resorts much like we have done every time we add a new resort, we are able to track back and say hey, we can’t know precisely, but we have a sense of the trend that they are creating and there is no doubt that those two acquisitions have helped tremendously..

Great. One more quick one for me, which would be just as we think about you were – it was great that you guys sort of gave the core growth, which I believe for this year on the resort side was about 9.1%. You said however that obviously Whistler meaningfully outperformed some of your expectations, but I guess that would not be in that number.

So, as we think about this coming season, the pricing that you took. Can you just give us a sense of either what kind of organic growth you think is sort of underlying the guidance or just how you guys are thinking about the amount of pricing that you have taken on products so far.

So, we can just get a sense of what we think the core is growing here?.

I think you are seeing a mix right between Whistler growing slower into next year, because we saw so much of the benefit. One, they had a good season on their own. We saw some of our synergies come in last year. We saw obviously there were some Epic pass holders who went up there this year.

And so some of that is we are just assuming that as that trends yes, we are going to see that grow, but not grow in the same way that we are seeing, we expect to see particularly in Colorado and particularly in Park City.

But when you blend that, yes, that the overall growth rate comes down a little bit, but again, when we look at this kind of over a continual period, we feel very good about the underlying trends that we are seeing.

You are always – there is always going to be a little bit – and again, I would say that the benefit of having this geographic diversity is that if one area is going to under perform a little, another area can pickup for that and that happens in reverse right as well.

I think as we look to the future what we are looking at is this kind of long-term growth rate and we see huge outperformance by one resort in one particular period, then yes, we are still going to moderate that as we look to forecast for the upcoming season..

Yes. And I think just worth noting that as we said in the comments earlier that Whistler Blackcomb despite having outstanding season last year, we still expect it to exceed our initial expectations that we set out when we did the deal because of the momentum that the resort has..

Great. Thank you very much..

Thanks, Shaun..

And we will take our next question from Felicia Hendrix from Barclays..

Hi, good morning and thank you. Just sticking on the topic of Stowe for a moment kind of in the answer to Shaun’s question, you kind of touched on this, but you didn’t really specifically call out the impact/benefit of the inclusion of the season pass for the Northeast.

So, just acknowledging that it’s early, I was just wondering if you could talk about the integration of Stowe so far, I know you are about to embark upon your first ski season owning the resort, but what have you learned so far and where do you think the potential is and how additive do you think it can be to your season pass sales in overall performance?.

I would say based on what we have so far, we feel like Stowe is having a very positive impact on our season pass sales and which we certainly expected. We thought that it was a resort that had tremendous appeal in connection to many skiers in the Northeast. And I think so far we are seeing that play out.

It’s again very difficult to provide precision around that, because obviously why somebody is buying a particular pass product is becomes a very individual decision and we are seeing putting aside Stowe or Whistler, it’s very clear that we are seeing strong growth independent of that.

But when we look at the market, we are comfortable that I think what we would hope to gain from the resort on the season pass side is absolutely playing out. And I think on the resort itself, I think we feel great. I think we have got a terrific team.

All of our conversations within the local community and longtime gap, I think people are incredibly excited about what’s possible for next year.

We use to have some concepts for some improvements on the parking side and kind of how you get to the resort and reducing some of that friction in the first year and then we will be I think studying all the trends and dynamics we see this season to decide where we see the long-term plan and upgrades and opportunities for the resort going forward..

Thanks. That’s helpful. And then just moving to a bigger picture question, you have a competitor now who is obviously attempting to replicate your model.

And as you watch their growth and assume at some point they will replicate that Epic Pass across their resorts, how confident do you feel about your company’s ability to maintain market share? And can you just help us understand the barriers to entry that exists regarding your season pass model and the sophisticated marketing and targeting systems that you have developed over time?.

So, I think it’s important to realize that we have been competing with many resorts in North America for a long time period. And obviously, we have been competing with a strong pass product in the Mountain Collective, then more recently the M.A.X. Pass, which have offered I think a good selection of resorts. And I think it’s good for the industry.

And I do think we hope and my guess is skiers and riders across the industry hope that KSL and Aspen come out with an incredibly compelling product, because I think that will build enthusiasm.

And I think I am not sure whether they will replicate exactly what we are doing, but if they do, I think, yes, that will be fantastic, because skiers and riders will get so many more options.

And I think our goal is really to build this concept that is important to buy skiing before the season begins and the more people that get out there with that drumbeat, I think good for again everyone in the North American mountain resort industry.

I would say that we have noted that although adding resorts is definitely impactful, the biggest impact is by the marketing and the data and using it in a personalized and targeted way to bring people who are not the core most loyal people to a resort obviously when you introduce the pass, yes, it’s easier to move those people on to your product.

But as you get to the more infrequent resort visitor or somebody we might call a sampler, somebody who likes to go to different resorts all the time, I think those people getting them on to those – these season pass products requires I think multiyear process of really having a pretty sophisticated and targeted approach.

And I think that’s really what’s at the core of our results and there is no doubt that I think other people, other pass products other companies like KSL, there is no doubt that they can absolutely go into that. But we think it takes a little bit of time.

So, we are going to continue to kind of move forward on our pathway and are pretty confident and feel good about that it will be our company and our ability to execute. That’s really the determiner of our own success.

And the competitive landscape is just I think it’s been out there for quite some time, it doesn’t mean, it doesn’t have an impact, but I think we are a little bit more creating our own path here..

Thanks. And then just the follow-up from me as if I just wanted if you could give us an update on your potential acquisition pipeline, are you still focused on expanding internationally Japan and Europe, for example.

Are there sizable opportunities in North American that still just interest you?.

I think we are absolutely – we are looking at all of that. I think we have talked before about how we do – we think that there are still unique opportunities in North America. And I think it’s a matter of getting the right match.

So, it’s probably only a couple of resorts that we feel are – could be very impactful for us and so how do you find the best timing and the right dynamics and the right conversations with people, where yes, it’s a good opportunity for the communities, good opportunity for employees, good opportunity for skiers and we are pretty disciplined and patient about that, but we are absolutely going to remain as we have for the last decade, still very focused on the opportunities here and we do feel like we have probably a little bit more attention on Europe and what’s going on in that market and making sure that we are very focused on that and certainly on Japan as well.

So, I don’t think we haven’t really shifted kind of our – what we have been doing over the last 5 to 6 years.

We still are going to prioritize right, those acquisitions that we feel when we look at the kind of relative cost benefits, the cost of the acquisition, the cost of integrating it and what that would take on versus the benefit that, that resort provides to the rest of our networks.

We are still going to be making our kind of decisions and priorities around that kind of calculation..

Great. Thank you so much..

Thanks..

We will take our next question from Matthew Brooks from Macquarie..

Good morning, guys. I am sure you are watching movements about tax etcetera, tax reform in the U.S.

I was just wondering if maybe uncertainty about ability to deduct interest impacts your ability or willingness to increase leverage and maybe do a deal?.

No. I mean, I think we haven’t factored that in yet to our thinking. I think we are certainly monitoring the chatter around potential changes to the tax law. And I think currently there could be some benefits to us depending on how it comes out. There could be some detriments, I guess.

I think I would say we feel like we are in a pretty good spot, where we have a good access to capital. We can really reach out to I think a number of different markets to finance any kind of acquisition.

Yes, at this point, we are not seeing anything on the horizon that’s being talked about that we think would in anyway hamper our ability to do deals going forward..

Okay.

And sort of as a follow-up I guess like if it is harder to close the deal like for this season or this coming year, would you consider retaining more capital or would you rather keep that capital in anticipation of doing the deal perhaps later?.

I would say I think we are certainly always going to preserve flexibility, but I would say I think at this point, we can really do both. I think we feel we are in a position where we can absolutely return capital to shareholders and be aggressive about that. And I think we can still remain in an aggressive posture around the deals.

I think the success we have had over the last number of years and some of the discipline that was shown I think pays off, because it does preserve our options. And at this point, I think we feel all of them are available to us..

Alright. And last one for me, if I can.

The recent hurricanes do you think the Florida one in particular could have any impact on visits, I would guess that would be a pretty sizable market for you in terms of selling process?.

Yes, I would say certainly both Houston and Miami are certainly major markets for us. At this point, we are not seeing anything significant there that gives us pause, but it’s obviously still early and certainly still possible that we could see some kind of dynamic from that, but at this point, we haven’t seen anything material..

Okay. Thank you very much, guys..

Thank you..

And our next question comes from Christopher Agnew with MKM Partners..

Hello, thank you. Good morning. I was just wondering follow-up on the pass sales and how you can tell sales or pull forward versus what might be incremental sales, how you actually track that and is it possible to quantify in anyway for us to reframe for us what you believe is pull forward? Thanks..

I would say there is a couple of pieces here, one is we do have our pass program that excludes Whistler Blackcomb only pass product. There is two dynamics that we would see there. One would be pull forward from the sense of somebody who last year bought their pass, let’s say in October and this year, we have seen them by earlier than that.

And so we are kind of seeing a pass renewer who have moved earlier in the cycle and we do see that – we don’t quantify it, I would say, that’s not the biggest driver of our view around that we think our growth rate will come down is less around that and a little bit more around the total number of new people that we would see bringing into the program and how we see those folks coming in.

And I want to acknowledge that, yes, there is no precision around that, because we obviously do not know sitting here today exactly how many new people will come into our program between now and the end of the selling period, but we have a sense by looking at the trends that if we see a big increase in our new population in some periods, we have a sense that we can pay.

We are unlikely to see that same dynamic in the next period, but obviously, there is no – yes, no guarantee that we might do better, we might do worse, but that’s the pull forward or kind of moving new people into earlier in the selling period that we are talking about.

On Whistler Blackcomb, we do feel like we are seeing – we had significant growth there, but we do feel like that is mostly, if not all related to the fact that we had an earlier time period for our price deadline, but that will correct itself out.

That is a huge driver of the overall growth rate though, because the Whistler Blackcomb only products are relatively a minor portion of the overall season pass program..

Got it. That helps.

And then on Epic Discovery, you talked about a little bit of a slow start and what happened at the Heavenly and Breckenridge, how did Epic Discovery perform in the first quarter and therefore does that give you confidence in the program remaining on track overall? And just the final question, quick question, an update on Perisher in the first quarter? Thanks..

So, we obviously are not releasing results for the first quarter on this call. I think we also factoring in anything we see in our guidance for the year. And so I would say any of those trends have factored in, but I can’t really comment on anything that’s happened in the first quarter so far.

I would say yes, with Epic Discovery, I think that we feel like it was too bad that this past year we had these kind of operational downtime challenges. It really prevented us I think from being able to see right how the program and its many resorts in its second year and Breckenridge in its first year, right, really could perform.

We felt when we originally announced this that it would take up to 5 years to really have the program fully mature and I’d say we are in the process of still assessing well, what are the learnings from this given that there were so many kind of exogenous events to our core drivers.

So, we will continue to talk about this, but again, yes anything that happened in the first quarter is all factored into how we put out guidance..

Okay, thank you..

Thanks..

And we will take our next question from Steve Wieczynski with Stifel..

So, Rob, a topic that’s come up pretty much, it had to come up recently, but with the economy moving in a sustained positive direction, can you give us an idea of how you are viewing future real estate development at this point? Obviously, Ritz and One Ski Hill are basically done, but maybe help us think about what’s next if anything and would a pre-sell process still be in place?.

Yes. So, I think we are absolutely seeing that continued momentum, particularly in the upper end of the economy, which is where most of our resorts are focused and certainly the real estate projects are focused. We really shifted our real estate business to be much more about selling development parcels to third-parties.

We are not – don’t anticipate focusing on building buildings and selling real state in terms of like condo inventory, but we are seeing real enthusiasm and interest from a number of people in a variety of projects and are hopeful that over the next couple of years we will be able to bring these projects to life with third-party developers really being the ones taking them on.

And we would expect – those projects what I would say is, you don’t have the same kind of profit margin obviously when you are just showing the land as when you are selling the inventory. On the other hand, you have dramatically reduced the risk for the company, dramatically reduced our capital allocation to it.

And I think these projects not only do they bring cash flow into the company in terms of the sale, but they then bring huge new amenities and rooms – hotel rooms or condo rooms that go into or time share that go into reservation system. So, we think those are big positives for the communities for our business.

But typically, we are focused more on the net cash flow opportunity with these land sales rather than the real estate EBITDA, because obviously the real estate EBITDA is a little bit especially on these unique land parcels about the kind of historical basi, may get from a long time ago.

We are focused on how do we bring in incremental cash into the company and add new hotbeds into the resorts..

Thanks for that, Rob. And then second question, I wanted to see if you could give any color on how you guys are thinking about international visitation this year probably specifically from Latin America, I mean, given our beloved President at this point continues to make pretty controversial remarks around some of those markets and their citizens.

Are you expecting any issues this year trying to draw those folks into your properties?.

I would say, we have seen over the last couple of years, I think absolutely some challenges I think on bringing international guests into the U.S. market, but primarily that’s been about a strong U.S. dollar and making it just more expensive for a lot of these folks to come to the U.S. certainly in our U.S.

resorts our primary markets in Mexico and Australia. We feel we have actually outperformed the market, the U.S. market on both of those for whatever we could tell by in terms of what other people are putting out there in terms of their results. We think it’s critical for the U.S.

to remain focused on building inbound tourism and so anything we can do at any level of government to help improve that I think is important and we fully support that. At this point, we think that international business to the U.S. certainly will continue to have challenges, because of that the U.S.

dollar dynamic, but we are not actually expecting anything different than kind of some of the trends we saw last year and potentially even a stabilization in our U.S. resorts. Now, the other side of it obviously is in Canada, Whistler Blackcomb has really benefited from huge numbers of the inbound visitation both from the U.S.

and from all of these other countries, including in Latin America. And so we do feel as a company we have a bit of a hedge on that. And so again, all factored into the guidance that we provided for this season..

Okay, great. I appreciate it, Rob. Thanks..

Thanks..

And that does conclude today’s question-and-answer session. I will now turn the conference over to Rob Katz for any concluding remarks..

Thank you, operator. This concludes our fiscal 2017 earnings call. Thanks to everyone who joined us today. Please feel free to contact me or Michael directly should you have any further questions. Thank you for your time this morning and goodbye..

And once again, ladies and gentlemen, that concludes today’s conference. We appreciate your participation. You may now disconnect..