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EDITED TRANSCRIPT

MTN - Q1 2015 Vail Resorts Inc Earnings Call


EVENT DATE/TIME: DECEMBER 08, 2014 / 4:30PM GMT
OVERVIEW:
Co. reported 1Q15 net loss attributable to Co. of $64.3m or loss of $1.77 per diluted
share.

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DECEMBER 08, 2014 / 4:30PM, MTN - Q1 2015 Vail Resorts Inc Earnings Call
CORPORATE PARTICIPANTS
Rob Katz Vail Resorts, Inc. - CEO
Michael Barkin Vail Resorts, Inc. - CFO

CONFERENCE CALL PARTICIPANTS


Felicia Hendrix Barclays Capital - Analyst
Shaun Kelley BofA Merrill Lynch - Analyst
Scott Hamann KeyBanc Capital Markets - Analyst
Chris Agnew MKM Partners - Analyst
Bob Lafleur JMP Securities - Analyst
Afua Ahwoi Goldman Sachs - Analyst

PRESENTATION
Operator
Good day, and welcome to the Vail Resorts first quarter FY15 earnings results conference call. Today's conference is being recorded. At this time,
I would like to turn the conference over to Rob Katz, CEO. Please go ahead.

Rob Katz - Vail Resorts, Inc. - CEO


Thank you. Good morning everyone. Welcome to our fiscal first quarter 2015 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. Actual future results may vary materially.
Forward-looking statements in the press release that we issued this morning along with our remarks today are made as of today, December 8,
2014, 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.
So with that said, let's turn to our first quarter FY15 results. Our first fiscal quarter is historically a loss quarter, since our mountain resorts are not
open for winter ski operations. The quarter is driven primarily by our summer mountain activities, dining, retail and lodging operations and
administrative expenses for our year round employees.
Our resort reported EBITDA loss for the quarter was consistent with our expectations, reflecting strong operating results and the addition of Park
City, which operated at a loss for the quarter. Mountain segment net revenue in the quarter increased 5.3% to $60.4 million, compared to the prior
year, driven by an increase in our summer activities revenue of 31.2%, compared to the prior year, along with strong pre-ski season retail results.
Our lodging segment net revenue excluding payroll cost reimbursement increased $1.5 million or 2.7%, driven primarily by a strong finish to the
summer season at the Grand Teton Lodge Company.
Turning to our real estate segment, we are very pleased with the continued level of sales activity at both of our development projects. In the first
fiscal quarter, we closed on sales of two Ritz-Carlton Residence Vail units and two units at One Ski Hill Place in Breckenridge.

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DECEMBER 08, 2014 / 4:30PM, MTN - Q1 2015 Vail Resorts Inc Earnings Call
Net real estate cash flow totaled $5 million for the quarter. We continue to see positive momentum in our resort real estate markets and closed on
two additional One Ski Hill Place units subsequent to October 31, 2014.
I'm also very pleased to announce that our Board of Directors has declared a quarterly cash dividend on Vail Resorts common stock. The quarterly
dividend will be $0.4150 per share of common stock and will be payable on January 12, 2015 to shareholders of record on December 29, 2014.
Now turning to season pass sales. Our season pass sales results continue to be very strong as sales including four packs are up approximately 13%
in units and 16% in sales dollars through December 4, 2014, compared with the similar period in the prior year and including results from Park City
in both periods.
The biggest driver of our growth was new pass sales in our US and international destination markets. These results were bolstered this fall by the
addition of Park City Mountain Resort to our pass products, driving significant interest from our destination markets as well as in Utah.
We continue to see very strong growth in Minneapolis and Detroit. In Colorado, we saw very healthy growth. In Tahoe, we experienced only a
modest decline, which was better than our expectations given the very challenging conditions in Tahoe last season.
Our season pass program now has over 400,000 pass holders and will generate more than $200 million in revenue in FY15, far surpassing any other
season pass program in the industry. Our growth in the program is a testament to our strategy of consistently adding benefits to our season passes,
primarily through our most recent resort acquisitions, and continuing to improve our personalized and data driven marketing efforts. As a reminder,
revenue from season pass sales is recognized over the course of the second and third fiscal quarters.
Apart from season pass sales, advanced lodging bookings for the season are also looking positive, with good momentum across our properties
with strong rate growth as well, particularly in the Colorado markets. Based on historical averages, approximately 50% of the bookings for the
winter season have been made by this time. Now I'd like to turn the call over to Michael to further discuss our financial results and our FY15 outlook.

Michael Barkin - Vail Resorts, Inc. - CFO


Thanks, Rob, and good morning everyone. Before discussing our results and FY15 guidance, I want to remind you that you can find a full discussion
of our financial results for our first quarter of FY15 ended October 31, 2014, in our quarterly report on Form 10-Q, which we filed this morning with
the Securities and Exchange Commission. Our Form 10-Q and our earnings announcement can be found on our website at www.VailResorts.com.
As Rob mentioned, we are pleased with our results this quarter. MTN net revenue in the quarter increased 5.3% to $60.4 million, driven by growing
summer visitation, associated dining revenue, and strong retail activity. Our results were favorably impacted by increases in summer visitation at
both our Colorado and Tahoe mountain resorts and increased group business in Utah, compared to the same period in the prior year.
Retail and rental revenue increased $0.6 million or 2% for the three months ended October 31, 2014, compared to the same period in the prior
year. The increase in retail sales was driven by an increase in sales volume at our Colorado Front Range and Colorado resort stores, which benefited
from strong sales at pre-ski season sales events, offset by lower sales at our stores in the San Francisco Bay area.
Total lodging net revenue excluding payroll cost reimbursements for the three months ended October 31, 2014 increased $1.5 million or 2.7% as
compared to the three months ended October 31, 2013. This increase was primarily due to a strong finish to the summer season at GTLC and strong
results from CME, our transportation business.
Our first quarter resort reported EBITDA was a loss of $54.1 million, including a $16.4 million non-cash gain on Park City litigation settlement.
Excluding this gain on Park City litigation settlement, resort reported EBITDA was a loss of $70.5 million, an increase in our loss of $4 million or 6%
as compared to the prior year.

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DECEMBER 08, 2014 / 4:30PM, MTN - Q1 2015 Vail Resorts Inc Earnings Call
Resort reported EBITDA for the quarter included operating losses from Park City, and $3.1 million of litigation, integration and transaction related
costs. The non-cash gain on the Park City litigation settlement represents the estimated fair value of the foregone rent from PCMR that the Company
may have been entitled to and was forgiven as part of the acquisition and ultimate settlement of the litigation.
Our net real estate cash flow was $5 million for the three months ended October 31, 2014, a decrease of $2.5 million from the same period in the
prior year. Real estate reported EBITDA was a loss of $2.2 million for the three months ended October 31, 2014, an increase in the loss of $1.8 million
as compared to the same period in the prior year. Finally, net loss attributable to Vail Resorts Inc. was $64.3 million or a loss of $1.77 per diluted
share for the first quarter of FY15.
Our balance sheet remains very strong. We ended the quarter with $29.8 million of cash on hand and $183 million in borrowings under the revolver
portion of our Senior Credit Facility. Our net debt including the capitalized Canyons obligation was 3.1 times trailing 12-month total reported
EBITDA excluding the non-cash gain on Park City litigation settlement and does not include the contribution from a full year of Park City operations.
We are also pleased to reiterate our guidance for FY15. Our guidance originally issued in September 2014 remains unchanged. We expect FY15
resort reported EBITDA will be between $340 million and $360 million, which includes approximately $5 million of litigation, transaction, and
integration expense and excludes the $16.4 million non-cash gain on Park City litigation settlement. Now I will turn it back to Rob.

Rob Katz - Vail Resorts, Inc. - CEO


Thanks, Michael. I first want to go over all the amazing improvements to our resorts that guests will see when they come for vacations this season.
Most notably, we were thrilled to welcome the first skiers and riders of the year to Park City as we begin our first season with Park City as part of
the Vail Resorts family of mountains and as part of the Epic Pass. While Park City and Canyons are not connected for this year, guests can ski both
resorts on the same single day or multi-day lift ticket which we think offers a great benefit for visitors to Park City and across Utah.
Guests in Breckenridge will enjoy the new upgraded six-person Colorado chair that will alleviate crowds at the resort's central base area and help
skiers and riders enjoy efficient access to Peak 8, Peak 7 and Peak 6, our incredible terrain expansion which will be in its second year of operation.
In addition, Beaver Creek enhanced its Best-in-Class guest experience with the addition of the new combination gondola and six-person chair lift
replacing the old Centennial chair right at the base of the resort, significantly increasing uphill capacity and providing guests with faster and easier
access to the upper mountain from the village.
We've also made significant investments this year in snow making at Beaver Creek, renovated a major restaurant at Breckenridge, upgraded rooms
at the lodge at Vail and continued to invest in our data, analytics and marketing tools, most notably our express ticket platform which allows guests
to purchase their lift ticket on their mobile device, all the way out to the day they are skiing and skip the lines with express pickup, much like you
see at the movies, concerts or sporting events. We also added EpicMix Guide, our latest upgrade to our ground-breaking and award-winning app
which will allow guests to put in their skiing ability and preferences and receive suggested itineraries put together by our ski schools.
While the 2014-2015 ski season has just barely begun, we are already hard at work planning for the guest improvements we will make for the
2015-2016 ski season. I'm thrilled to announce that the centerpiece of those efforts will be our plan to transform Park City and Canyons into the
single largest resort in the United States along with numerous other high-impact upgrades that will only further elevate the combined resort to
be one of the top resorts found anywhere in the world. This transformative plan, which remains subject to regulatory approval, includes a new
eight-passenger two-way gondola that will connect the two resorts, creating a new destination resort with more than 7300 acres of skiable terrain.
The capital plan also includes the upgrade of a high-speed quad chair lift to a new high-speed six-person chair lift and an upgrade of a slower fixed
grip triple chair lift to a high-speed detachable quad chair lift. Both of these upgrades will increase lift capacity in critical areas of Park City. The plan
also includes a new 500 seat restaurant in Park City near the proposed gondola and upgraded chair lifts, a 250 seat expansion of an existing
restaurant in Canyons and an expanded maintenance plan to address the lack of spending at the resort over the past number of years.

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DECEMBER 08, 2014 / 4:30PM, MTN - Q1 2015 Vail Resorts Inc Earnings Call
We estimate the total cost of this transformational plan for calendar 2015 will be approximately $50 million, including normal annual maintenance,
and excluding any third party reimbursements. Based on our estimates for Park City and Canyons, we expect the two acquisitions will add $70
million in total EBITDA in FY16 and increase our ongoing annual capital target by $6 million.
Our preliminary estimate for the remainder of our calendar year 2015 capital plan totaled between $60 million and $65 million, including estimates
of third party reimbursements but excluding investments in summer activities and the one time $50 million investment in Park City and Canyons
I just outlined. While we will provide additional details in March 2015, a signature part of the capital plan will be replacing the Avanti chair or Chair
2 at Vail Mountain, going from a four-person to a six-person high-speed chair lift, increasing capacity by approximately 30%, at one of the most
popular beginner and intermediate areas at the resort and a critical link as people make their way from Lion's Head to the Back Bowls and Blue Sky
Basin.
As you know, we set annual capital guidance last year at $85 million, and said that figure would be adjusted for inflation and increased as we added
new resorts. We also said that the $85 million would exclude any investments for summer activities and any one time improvements that we made
as part of an acquisition. With inflation and the impact of adding Park City, we would have expected normal capital spending to be about $93
million for calendar 2015.
While our guidance specifically excluded one-time capital programs, like the $50 million capital plan for Park City, we are very focused on maintaining
strong discipline and prioritization in our capital decisions and, therefore, made room for $30 million of the Park City plan from within our existing
capital target, with only $20 million of the Park City spending going above the guidance. Absent any new acquisitions, we would expect capital
spending excluding summer to be about $96 million in calendar 2016.
As we wrap up, I am pleased to report that the season is off to a strong start with all of our resorts open. Colorado conditions have been outstanding
with one of the best Thanksgiving ski experiences we have had for quite some time with the Back Bowls at Vail open for the holidays and Blue Sky
Basin opening last week.
Utah also has good early season conditions with more terrain open this year than last year. Tahoe's conditions have developed later than Colorado
or Utah, but a recent storm has brought good snow to all three of our resorts there. Of course it's still very early in the season for that market.
Finally, and most importantly, our attention to service and our commitment to delivering an outstanding guest experience will continue to be the
hallmarks of our Company and the focus of all of our efforts. I would like to thank all of our employees for their passion, hard work and commitment
to our organization, which as always lies at the center of our success, and we look forward to a great 2014-2015 season ahead. Operator, we are
ready for questions.

QUESTIONS AND ANSWERS


Operator
Thank you.
(Operator Instructions)
We will take our first question from Felicia Hendrix from Barclays.

Felicia Hendrix - Barclays Capital - Analyst


Good morning, everybody.

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DECEMBER 08, 2014 / 4:30PM, MTN - Q1 2015 Vail Resorts Inc Earnings Call

Rob Katz - Vail Resorts, Inc. - CEO


Good morning.

Felicia Hendrix - Barclays Capital - Analyst


Rob, since you ended on Utah, I will start there. I was just wondering if you could go into some more detail about your projection to $70 million in
EBITDA from Park City/Canyons in 2016. You've said before you expect to generate $35 million at PCMR in 2015.
You generated $[15] million at Canyons last year. So just wondering does that mean you expect your expansion plans in Utah are going to generate
$20 million in incremental EBITDA in year one?

Rob Katz - Vail Resorts, Inc. - CEO


Approximately, yes. That is -- I'm not going to go through every little detail of how we came up to it, but yes, that's exactly right.
Those were the two previous pieces of guidance that we gave. You total them up, you get to $50 million. Yes, we think that the plan and additional
maturity and of course business development that we've already been doing will bring the EBITDA up to $70 million.

Felicia Hendrix - Barclays Capital - Analyst


Okay. And I think in the press release you intimated that while it was a first look, could be conservative. As you look forward, is there any way to
help us think about how that could grow?

Rob Katz - Vail Resorts, Inc. - CEO


No, I think we will -- my guess is we can continue to more broadly chat about it. What I would say is I think it's not that the $70 million is conservative,
but that we obviously feel like the first year impact of this plan, whatever it is, will obviously have additional upside as skiers and riders from around
the world continue to learn about the experience that we're providing at Park City.
And so that's true both for season pass sales, that's true for daily lift ticket sales, all of it. Destination skiers, local skiers. We feel like this sets us up.
I think we believe that this is really creating one of only a handful of top destination resorts in the world, both in terms of the experience, but also
in terms of the financial performance. And obviously a very unique situation.

Felicia Hendrix - Barclays Capital - Analyst


Obviously. Thank you very much. Just moving to your -- the season pass sales. We thought that the 13% increase in unit sales was impressive,
particularly given how well you did last year.
You mentioned in the release and also in your remarks that that was primarily driven by your domestic and international destination resorts. Just
wondering if you could go into some more detail there, in particular what was driving -- what's been driving the good numbers?

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DECEMBER 08, 2014 / 4:30PM, MTN - Q1 2015 Vail Resorts Inc Earnings Call
Rob Katz - Vail Resorts, Inc. - CEO
Sure. Not our destination resorts, but it's being driven by our destination guests, meaning guests that live outside of Colorado, Utah or the Bay
area. And so that has been the big driver of our success over the last couple of years. It has really transformed our season pass program, of course
has been happening over the last seven to eight years, from primarily a local program to now obviously much more of a destination program.
And we saw terrific strength, both in the spring and then I think when we announced our results at the end of September, I think our expectation
was we might see a slowdown. Obviously as the numbers get bigger over the overall plan, to maintain that growth rate is usually more difficult.
But we saw tremendous enthusiasm following the announcement of the Park City acquisition and the fact that Park City Mountain Resort was now
going to be on the pass, so that really maintained our strength.
I'd say Detroit and Minneapolis continued to be some of our best performing markets, but we saw strength across all of our major markets and
across our international markets. I think the destination markets, both in the US and internationally, generated close to 65% to 70% of our total
growth that we actually reported for this year.

Felicia Hendrix - Barclays Capital - Analyst


Okay. Great. Thank you.

Rob Katz - Vail Resorts, Inc. - CEO


Thanks.

Operator
We will take our next question from Shaun Kelley with Bank of America-Merrill Lynch.

Shaun Kelley - BofA Merrill Lynch - Analyst


Hey, good morning, guys. I think Felicia hit on a bunch of the salient points here. One key follow-up would be, so for Park City and Canyons, did
you say that the approval of the CapEx plan is subject to regulatory?
Can you just -- is there any chance of slippage here be it environmental given the scale and scope of what you're doing or be it regulatory or
something else that we're not factoring in. Just walk us through what some of the risks around that plan might be.

Rob Katz - Vail Resorts, Inc. - CEO


The plan would need to be approved by both the city of Park City and Summit County. The Summit County in Utah, not the one in Colorado. We
obviously have been in dialog broadly with the community and obviously are taking input and feedback about the plan.
We feel good about the timing, but with that said, obviously there is -- I can't say there's no risk. We're very committed to making sure we do a
thorough process with the community and that everybody feels good about where we're heading. Again, I think we have a sense that this is headed
in the right direction.
The process that we would go through with Park City and with Summit County is not as complex as the processes we go through with the US forest
service. One, I'd say -- and the other piece I would say is that obviously we feel like we started early. We started very quickly to try and get out and
make sure everybody understood where we were trying to head so we would have enough time to put the entire plan together.

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DECEMBER 08, 2014 / 4:30PM, MTN - Q1 2015 Vail Resorts Inc Earnings Call
Is there any risk? There's always risk. Obviously, that's why we always say that it is subject to those approvals. But at the moment, we feel pretty
good.

Shaun Kelley - BofA Merrill Lynch - Analyst


Got it, that's really helpful. Second question would be on CapEx and summer.
If you could just give us -- I think you gave us very detailed capital guidance now for the Park City and Canyons component, and we have a good
sense of your maintenance base. And that leaves us with what do we expect or what should we be thinking that you will have to spend for summer
in the next -- I guess in calendar year 2015.
So could you give us an update or your thoughts generally around that? And then just any update on summer overall as you've been going through
approvals for that would be helpful as well.

Rob Katz - Vail Resorts, Inc. - CEO


We would expect to be announcing and then implementing a good portion of the Vail summer activities plan this summer 2015. So with the
approvals for Vail in hand, I think we're ready to proceed on that. And so I think the majority of the spending that we will have this summer will be
for Vail.
I think the approval processes for both Heavenly and Breckenridge are coming after Vail, and whether we have either one of those in time to actually
get going on them for this summer is not completely clear yet. So that's why I think we will be talking more about that in March.
So I would say this summer at a minimum the focus will be on Vail. And certainly a number of the critical activities that we've gotten approved
there I think you will -- the plan will include that. And we will provide more details on some guidance around that in March.

Shaun Kelley - BofA Merrill Lynch - Analyst


And just as a reminder, Rob, the total capital number for summer was $50 million, so roughly $15 million per resort for the major -- for the big three.
Is that correct?

Rob Katz - Vail Resorts, Inc. - CEO


It was $25 million per resort for the big three, but obviously we spent some of that already. And the plan that we -- let's say for Vail, the plan that
we would be implementing this summer would not be the total plan. We would be doing a portion of it, which we will announce in March, and
then there will be a portion of it that will come in the next year or two.

Shaun Kelley - BofA Merrill Lynch - Analyst


Okay.

Rob Katz - Vail Resorts, Inc. - CEO


It will be a chunk of that $25 million.

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Shaun Kelley - BofA Merrill Lynch - Analyst
Okay. Got it. And my last question would just be, you gave a little bit of color on bookings, not a ton.
Could you just help us understand if those are running ahead or below your general expectation? And that's it for me.

Rob Katz - Vail Resorts, Inc. - CEO


I would say that -- I think we feel bookings are strong, particularly certainly in Colorado and Utah where we have more vision into what's going on.
I think across the board, we're seeing both I think the impact certainly of the economy, I think the momentum that we built from last season.
I think we're also seeing obviously some good early season conditions. That obviously also helps bookings.
And as we commented on, obviously when we see rate continue to increase, that typically is a sign obviously that product categories are filling
up. So I'd say right now where I think it matters most in Colorado and Utah we feel very good.

Shaun Kelley - BofA Merrill Lynch - Analyst


Great. Thank you very much.

Operator
Our next question comes from Scott Hamann.

Scott Hamann - KeyBanc Capital Markets - Analyst


Thanks. Good morning. Just two questions. First one on Park City, Rob.
Just in terms of the status of the assets there, what's the local reception been? Employees, management at the resorts, what's your lay of the land
now that you've been in there for a little while?
Secondly, on the season pass program, I know you've been looking for some penetration in new regions like the Southern California area and
internationally in some new areas. Have you seen that diversification with Utah becoming a bigger part of the pass this year?

Rob Katz - Vail Resorts, Inc. - CEO


Great. So yes, on the first piece, we're very, very pleased. I think there's no question that there's been a lot of anxiety obviously in the Park City
community and certainly a lot of anxiety for employees at Park City Mountain Resort over the last couple years and certainly this past summer.
I think there's a lot of relief obviously that the resorts will be opening. One. Two, I think that there's a real sense of collaboration. There's a sense of
really trying to come together to work for the future.
Our Company has now really gotten incredibly engaged both with our employees there in terms of helping to set the new leadership team up for
the combined resort, which includes a number of key leaders from Park City Mountain Resort and working with the local nonprofit community,
working with Park City, working with Summit County, working with the state. And right now we feel very good about all the dialogue and engagement
that we have across the board.

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DECEMBER 08, 2014 / 4:30PM, MTN - Q1 2015 Vail Resorts Inc Earnings Call
And so I think we really feel like we're starting off on the right foot, and obviously that doesn't mean there won't be things that we will discuss and
debate and disagree over. We do that in every one of our resort communities, and obviously that's part of a healthy relationship. And so -- but
again, couldn't be happier about that as it stands right now.
I think on the season pass piece, we're very pleased. So yes, I think we've been absolutely reaching out, making a bigger effort across our international
markets, very happy with what we're seeing out of the UK right now.
The UK, because of their economic issues, has been a more challenging market over the last number of years, and this is really the first year, maybe
the second year -- last year we saw some of this. This is really the first more significant year where we're seeing real momentum, both in bookings
and in season pass sales.
The other market that I'd say we're very pleased with is Australia, seeing again some real engagement, some real momentum out of that market.
Obviously a critical market in terms of the level of outbound ski trips that are taken from that market.
Southern California, very good results there, but I'd say much more at the beginning. I think that's a market that will take a number of years to fully
bring into -- unfortunately, the Park City acquisition only closed toward the end of -- middle of September. So really didn't give us much time to
really attack that market as we would like to.
On the other side, I would say I think we do attribute on the Tahoe side we saw real pickup in sales in that market in the Bay area, once we added
the resort. I think probably the quick surprises that we've seen is how much adding Park City and Canyons to the pass helps our season pass sales
and engagement in the Bay area, San Francisco market.
So I think that's been a quick win right away. I would say broadly speaking, obviously very, very pleased with our overall numbers, and we think
the LA, Southern California market offers just another opportunity over the next couple of years.

Operator
We will take our next question from Chris Agnew with MKM Partners.

Chris Agnew - MKM Partners - Analyst


Thank you very much. Good morning. First question want wanted to ask about EpicMix, see if you could share with us any metrics to illustrate the
penetration and the reception of the app amongst skiers and guests. And do your other competitor resorts companies have anything comparable
to your product? Thanks.

Rob Katz - Vail Resorts, Inc. - CEO


Sure. Thanks. I don't have -- we can get back to you with some of our updated numbers on that, but we've been very pleased with the penetration
on the app.
I would say the app really helps us in two ways. One is that it provides a reason obviously for people -- people enjoy using it and tracking their day.
It gives people a reason to give us more information on them so they can use the app and engage with the app. People then share their photos
and their pins and other accomplishments on Facebook and Twitter, so obviously they're promoting our resorts.
Most importantly for us, it gives us things that when we talk to our guests, we have more to talk to them about than just trying to get them to buy
something. For instance, when we send out an e-mail, it allows us to tell a guest, hey, remember you were here last year. Here is your photo. You
skied 40,000 vertical feet. Here were the pins that you had.

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DECEMBER 08, 2014 / 4:30PM, MTN - Q1 2015 Vail Resorts Inc Earnings Call
What we see is an open rate on those e-mails that's twice as big, twice as high as the open rate on the e-mails that don't have the EpicMix information
in there. From that standpoint, again, very, very pleased.
In terms of other competitors, I think there are a number of resorts that have similar efforts, but nothing that's anywhere near as comprehensive.
And certainly in our mind the user experience, the design and as broad, particularly on the photo side.
I think one resort that has taken it up is Perisher in Australia. That I think is very clear that they took a lot of what we've done here and replicated it
down in Australia. I think it's going great for them there too. We're quite happy with it.

Chris Agnew - MKM Partners - Analyst


Thanks very much. Last question. What's your appetite, or maybe I should ask capacity to explore incremental real estate opportunities, and how
would you balance the long-term opportunity versus where we are in the economic cycle? Thanks.

Rob Katz - Vail Resorts, Inc. - CEO


I think where we see the real estate side of our business going is much more of a focus on land development rather than necessarily vertical
development. I think that given the number of resorts that we have, I think we've been pretty clear for a while that we don't see putting real estate
projects on our balance sheet today like we did over the last couple of years. In the last years of the last real estate cycle back in 2006-2008.
I think that our focus is going to be on getting great projects done. We certainly might invest capital in some of those projects or reinvest our land.
But I think our approach is going to be a little bit more capital light and getting the maximum benefit that we could get for the resort. But we
absolutely intend to remain very active, very engaged in that business.
In terms of where we are in the cycle, I think we are seeing real strength at our -- across all of our markets. I think we have absolutely passed a few
thresholds in terms of new projects getting started. A lot of those are renovations of existing projects or more unique situations.
I don't think we've -- we're not back to 2006, 2007, 2008. But if I gave a comparable, maybe we are back in the 2005 type arena, where I think there's
a lot of interest and a lot of dialogue.
I think that's a huge opportunity for us, again, certainly to monetize some of our land, but much more importantly the industry has gone a long
time without seeing new product, new lodging being developed. We feel we can be on the front of that trend, and that typically translates into
resort EBITDA growth for the mountains because obviously drives more people to come and visit.

Chris Agnew - MKM Partners - Analyst


Thank you.

Operator
Our next question comes from Bob LaFleur with JMP Securities.

Bob Lafleur - JMP Securities - Analyst


As we think about the growth in EBITDA in Utah from this year to next, how much of that $20 million is dependent on the CapEx you're putting
into the mountain versus how much of it is from just your second year of fully being integrated into the Vail system?

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Rob Katz - Vail Resorts, Inc. - CEO


I would say a big chunk is related to the capital, and no question that we would see higher than normal growth at Park City Canyons next year,
even without the capital. So we would certainly expect it to be our fastest growing resort from a profitability perspective. But I would say in terms
of making that big an impact in one year, yes, big chunk of that is really coming from the capital plan because of what that does to the experience.

Bob Lafleur - JMP Securities - Analyst


Okay. And just related to the capital plan, just because I have no idea, how long does it take to build a 500 seat restaurant from scratch, and when
do you have to be moving dirt in order for that to be open on time for next season?

Rob Katz - Vail Resorts, Inc. - CEO


So again, our expectation right now is that based on how we see the approval process and our discussions with the community, we certainly
anticipate that we have enough time to get the restaurant open for next season. And in that case, obviously the restaurant is new, so even if there
were some delays from getting it open let's say before Thanksgiving or mid-November, even if it slips a little bit, that will be fine vis-a-vis impacting
the full season for next year.
So we actually -- we feel very good about the timing on that. Of course obviously we do need to certainly get the support of the local communities,
which is critical. But we feel comfortable that we have enough time to get that construction project completed.

Bob Lafleur - JMP Securities - Analyst


Assuming the approvals are forthcoming, do you at this point need to wait to the spring to break ground or is that something that can be started
during the winter?

Rob Katz - Vail Resorts, Inc. - CEO


That's something we would need to wait until the spring.

Bob Lafleur - JMP Securities - Analyst


And then the last question I have is on your pace of season pass sales. We went back and looked at last year and the September update versus the
December update.
There was a deceleration in the growth rate last year which was more pronounced than it was this year. I was wondering if there's anything to read
into that, is maybe that a function of just the late selling season inclusion of Park City, or was there some other dynamic at work there that was
different than the season pass selling dynamic last year?

Rob Katz - Vail Resorts, Inc. - CEO


I would say I think that Park City was one of the primary drivers of the strength that we saw in the fall of this year, and I think that did help that
deceleration. I would also say that we obviously as the program continues to grow every year, replicating the same growth rate is an even bigger
challenge in terms of obviously driving that many more passes into the program. And I think all of this is really -- we see this as the culmination of
a number of the acquisitions that we've done, a lot of data analytics and CRM efforts to really drive both higher repeat and new people into the
program.
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Bob Lafleur - JMP Securities - Analyst


And I lied. I had one more that I just thought of. Can you give us your current thoughts of your pace of return of capital to shareholders? And then
that's it from me.

Rob Katz - Vail Resorts, Inc. - CEO


I think we feel very good when we look over the last number of years in terms of our approach to increasing our dividend, and I think we closely
monitor our free cash flow. And I think we absolutely look to adjust the dividend based on that.
I think we will be doing -- certainly taking a look at that again in March or June whenever it is in this year with our Board. We will remain in the
posture that we have been. Although we certainly want to retain capital to continue to invest in our business, we're also incredibly committed to
returning capital and to increasing that dividend when we can.

Bob Lafleur - JMP Securities - Analyst


Thank you.

Operator
(Operator Instructions)
We will take our next question from Afua Ahwoi with Goldman Sachs.

Afua Ahwoi - Goldman Sachs - Analyst


Thank you. Just a couple from me. First, on the Park City, a little bit on the $20 million or the new -- the updated guidance, how much of that do
you think will come from raising prices as a result of some of these investments or drawing new people into that market that weren't going there
before, and now because of all these new investments, it does look much more appealing to them.
Second, as we think about what combining them, given there is a blueprint for that happening before in terms of Whistler and we saw the lift in
benefit that did to the Whistler momentum. Do you think -- what would be -- do you think we can see similar benefits to Park City? What structural
reasons would prevent from becoming as big or profitable as a driver a Whistler was when they combined their two mountains?
Finally, I noticed in your comments on the CapEx you did mention saw CapEx outside of new acquisitions. Curious where do you stand on acquisitions?
Are you still looking at some of the urban resorts?
Is there anything out there that you're looking at? Do know there's a seller out there? Just curious your thoughts on that.

Rob Katz - Vail Resorts, Inc. - CEO


On the improvement in profitability from Park City Canyons, we absolutely see it really is a combination. We're not going to get into more detail
than that.

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DECEMBER 08, 2014 / 4:30PM, MTN - Q1 2015 Vail Resorts Inc Earnings Call
We do see a combination of pricing, and I would say it's not necessarily price increases but yield. So I would say that as we bring in more destination
guests into the market, as destination guests buy season passes from outside markets and then come to Park City, we also see as our season pass
grows that a lot of these destination guests take longer trips, spend more time at the resort.
We have pretty clear data shows that season pass holders spend more on ski school, on retail, on rental, on F&B, lodging. We see this as a benefit
to the overall community. But yes, it's a combination of all those factors that I think will help drive things.
On Whistler, I would say we do think that this opportunity and this combination is certainly as significant and as impactful, in some ways maybe
more so than the combination of Whistler and was years ago. And we feel like now comparing the exact profitability structure of the two mountains,
many, many factors that would go into that, including the size of the town, international, inbound, local, all these different things, the position that
Whistler has in Canada. So I'd say this will be like Whistler, like Vail, like Breckenridge, like Beaver Creek, one of the top destination ski resorts certainly
in North America.
And then on acquisitions, we absolutely continue to look at opportunities. We're very focused that anything that we acquire is something that's
very much on our core strategy of either adding value to our season pass in terms of adding benefit that our guests would see, driving more people
like the urbans to our destination resorts.
But it's -- we're very disciplined and very discerning in terms of what we think makes sense, not just what a resort -- not just whether it's a good
resort or not but how does it fit within our core strategy. And to the extent that we find something that we think makes sense for that and obviously
the price and all the other factors can align, then yes, we intend to be as aggressive going forward as we have been in the past.

Afua Ahwoi - Goldman Sachs - Analyst


Got it. Thank you.

Operator
(Operator Instructions)
That concludes today's question-and-answer session. Mr. Rob Katz, I'd like to turn it back over to you for any additional or closing remarks.

Rob Katz - Vail Resorts, Inc. - CEO


Thank you, operator. This concludes our fiscal first quarter 2015 earnings call. Thanks to everyone who joined us on the conference call today.
Please feel free to contact me or Michael directly should you have any further questions. Thank you for your time this morning and good-bye.

Operator
That concludes today's conference. Thank you for your participation.

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