Vail Resorts Inc (MTN) 2004 Q4 法說會逐字稿

Good morning, ladies and gentlemen, and welcome to the Vail Resorts fourth quarter and 2004 fiscal year-end conference call. At this time all participants are in a listen-only mode. Following today's presentation instructions will be given for the question and answer session. If anyone needs assistance at any time during the conference please press the star followed by the zero. As a reminder this conference is being recorded today, Thursday, September 30th of 2004. I would now like to turn the conference over to Mr. Adam Aron, Chairman and CEO of Vail Resorts. Please go ahead, sir.

Thank you very much, operator. Good morning, everyone and welcome to the Vail Resorts fiscal 2004 4th quarter and year-end earnings conference call and simultaneous webcast, both open to the public and press at large. As you know I'm Adam Aron, Chairman and CEO of Vail Resorts. I'm in New York City this morning for a round of television and press interviews in connection with our announcement of fiscal 2004 year-end results. Joining me here on the call are Jeff Jones, our Senior Vice President and Chief Financial Officer, and Leslie Roubos, our Director of Corporate Financial Planning and Investor Relations. Today, September 30, 2004, is a very special day for me, as, no accident, it just happens to be my 50th birthday. Since running Vail Resorts has been the epicenter of my life for the past 8 years, for reasons that will become clear as we discuss our fabulous 2004 year-end results, it's a special pleasure to share the wonderful news detailed in our press releases on this particular day with each of you. Earlier this morning we issued 2 press releases, in fact. The first release announced a major improvement in our corporate governance that we think will be of enormous interest to you. After more than a decade of the controlling shareholder of Vail Resorts Apollo Ski Partners has voluntarily waived and permanently foregone its special rights. Specifically, Apollo has converted all its Class A common stock into common stock and forfeited its annual $500,000 management fee for providing strategic and advisory services to the Company. Therefore, we have eliminated our dual class share structure. Apollo no longer will have any special rights to elect directors to the Vail Resorts board and the Company will now have only 1 class of directors voted for and representing all shareholders equally on our Board of Directors.

The second press release issued this morning discussed our earning for the fourth quarter and fiscal year ended July 31, 2004. Needless to say with Resort reported EBITDA up from $103.6 million last year to $144.6 million this year, we could not be more thrilled to announce earnings for what turned out to be a spectacular and record year for Vail Resorts. Jubilant is the word that comes to mind to describe the mood at Vail Resorts this morning. Just in case you might have missed what I just said, Resort reported EBITDA increase from $103.6 million to $144.6 million this year, essentially same store internal growth with no acquisitions. Mountain segment reported EBITDA improved by 34.6%, Lodging segment reported EBITDA more than doubled, up 138.6%, total Resort reported EBITDA increased by 39.6% percent, and if that's not enough, Real Estate reported EBITDA increased 74.6%. Up 34.6%! Up 138.6%! Up 39.6%! Up 74.6%! Well, that concludes my prepared remarks. We can now turn to your questions. Nay, I'm just kidding but I do have lots of color for you. But in a sense I could have concluded my comments at this juncture. Vail Resorts completed a terrifically successful year in fiscal 2004 and we are very well positioned for another successful year in fiscal 2005. On today's call I would like to proceed first by discussing the Apollo stock conversion and what it means to Vail Resorts. I'll then give you a short overview of the fourth quarter followed by a summary of the year-end earnings and the record results the Vail Resorts achieved for the fiscal year. I will also review what we expect from our Real Estate division over the foreseeable future given the magnitude of the all important real estate projects now at hand, especially Vail's New Dawn.

I will briefly touch on some of the rumors that have been swirling around our Company in the media this past summer and I will conclude by giving you our perspective on our expectations for all of Vail Resorts' operating segments in fiscal 2005. At the conclusion of my prepared remarks Jeff and I will be happy to take any questions you may have. Before we do so I want to remind you that in conjunction with the new SEC rules regarding the use of non GAAP financial measures we are using the term reported EBITDA to report earnings for each of our operating segments, namely Mountain, Lodging, Resort and Real Estate. The resort segment as you know is the combination of the Mountain and Lodging segments. Reported EBITDA for the Mountain, Lodging and Resort segments is defined as segment net revenue of segment operating expenses plus segment equity investment income. Real Estate reported EBITDA is defined as Real Estate net revenue less Real Estate operating expense plus gain on transfer of property plus Real Estate equity investment income. A full recollection -- a full reconciliation of these and other non GAAP measures to GAAP can be found in our press release and on the vailresorts.com website in the Investor Relations section under the Regulation G compliance tab. Now let's focus our attention on this mornings press releases which announce that Apollo Ski Partners, who had owned approximately 6.1 million shares of Class A common stock at Vail Resorts, has of its own volition this week converted all of its shares into Vail Resorts common shares. As a result Apollo Ski Partners who previous could elect up to 66% of the Company's Board of Directors will no longer have any special rights to elect members to the Company's board.

Our 2 class share structure has been ended. There will only be 1 class of directors going forward elected by all shareholders. As part of this announcement the publicly disclosed shareholder agreement that has been in place since 1997 between Apollo Ski Partners, Ralcorp Holdings and the Company is being terminated in which Apollo had enjoyed certain additional contractual commitments from Ralcorp. Apollo also voluntarily terminated its annual management fee as I mentioned. Apollo Ski Partners will no longer be deemed an affiliate of Vail Resorts. Apollo will no longer be considered to be in control of Vail Resorts either directly or indirectly. Apollo's actions announced this -- this morning reflect its confidence in the management of Vail Resorts, in the world class appeal of our trophy resort hotel and real estate assets and in understanding that the financial community prefers a single class of shares and directors over a structure in which a minority owner had disproportionate control. It also reflects Apollo's responsibility after 12 years of ownership to put its Vail Resorts shares directly into the hands of Apollo's limited partner investors. If Apollo Ski Partners is going to voluntarily give up control over our Company, it and its limited partner investors who've owned these shares since 1992 certainly deserve the right to have freely tradable shares. Accordingly, Apollo Ski Partners has advised the Company of its intension to distribute its holdings of common stock directly to its limited partner investors within 30 days or as soon as is practical. The Company will cooperate as needed to make Apollo shares tradable including filing a shelf registration for certain of the distributed shares. Even with the shelf filing, I have personally been in touch with several of Apollo's limited partners and it may surprise you to know that I have repeatedly heard great confidence and optimism expressed about the near-term future of Vail Resorts and the comment from all with whom I spoke that they expected to hold rather than sell their distributed Vail Resorts shares.

Of course I do not come anywhere close to canvassing everyone and regardless of current intention these new shareholders will be free to buy, hold or sell, whenever they like, just like each of you on this call. In connection with these corporate governance changes this week we also downsized the Vail Resorts board of directors from 12 to 7 members, of which all 6 non management directors will be independent. We did so to have a smaller, more tightly focused board and one which will continue to take its governance responsibilities seriously as certainly has been the case with our previous board. I am pleased to report to you that with these 7 directors we have some extraordinarily experienced bright talented and committed directors. Of course it is also true that we have some equally exceptional individuals leaving the board. Their departure was fully amicable and makes sense given the change in Apollo's control status. Even so I want to go way out of my way to publicly praise and most sincerely thank these 5 great people leaving our board for all of their advise to me and their service to Vail Resorts for many years now. Also I'm announcing both in this call and in this morning's press release we are now fully compliant with all New York Stock Exchange corporate governance rules of which we are aware including having adopted new corporate governance guidelines or revised code of ethics in business conduct and new board committee charters as well as having appointed a lead director and independent directors to the board committees as needed among other steps. Now let's move back to the wonderful earnings news at hand. The second press release we issued this morning announced that fiscal 2004 did indeed turn out to be a fantastic year for Vail Resorts. As we discussed in our third quarter earnings call in June, we were then well on pace at that time to have record reported EBITDA for the full year and we are pleased to announce that we had a fine fourth quarter and did in fact achieve those record numbers. With record resort revenue, record resort reported EBITDA and record Real Estate reported EBITDA.

Before I give a summary of the year I would like to only briefly touch on the fourth quarter, a seasonally slow period and one in which Vail Resorts typically operates at a loss. Because it sort of goes without saying there are not a lot of skiers on our Colorado, California and Nevada slopes in July, not a whole lot of activity to discuss in our Mountain segment for the fourth quarter but I would like to point out the $7.1 million year-over-year decrease in expenses in the quarter. We've been given -- giving you updates all year long as to our fully implementing the $25 million savings plan we krafted and announced at the beginning of the year. The fourth quarter expense reduction is simply further evidence that our plan was implemented successfully in the quarter and throughout the year. In most cases we expected the savings only to partially offset inflation, variable costs and other expense increases occurred in the normal course of business but in this instance we actually saw a significant decrease in actual expense levels from last year in the fourth quarter. Moving to our Lodging segment, we are similarly pleased to report that our fourth quarter Lodging segment results also improved over last year. We reported positive reported EBITDA for the Lodging segment of $503,000 in the fourth quarter of fiscal 2004 compared with $3 -- a $3.2 million improvement in comparison from the negative $2.7 million of reported EBITDA we reported last year in the same period. The growth was the result of a 3.9% increase in occupancy and $2.08 increase in ADR, average daily rate, at our own RockResorts Hotels. Our non RockResorts hotels also did well in the quarter with a 2.9. increase in occupancy and $1.04 increase in ADR. Needless to say we are very pleased with the rebound we are seeing and enjoying in our Lodging business this summer. Our Real Estate segment reported slightly better financial results in the quarter for the quarter but more importantly in the fourth quarter our Real Estate had blowout success in entering into new sales contracts for our coming Vail and Jackson hole development projects that close in future years. More about that later.

Moving to fiscal 2004 as a whole, for the year resort reported EBITDA of $144.6 million, is an all time record high for Vail Resorts and a whopping $41.0 million or 39.6% increase over fiscal 2003. Our Mountain segment reported EBITDA rose a stunning $34.2 million from $98.7 million last year to $132.8 million at fiscal 2004, a 34.6% year-over-year increase. We enjoyed a health growth in Mountain revenue of 36.3 million for the year, up 7.8% despite a 1.6% drop in total Company secured visits. The drop in skier visits was almost entirely due to a decrease in visitation by local and front range Colorado season pass holders as a result of so so ski conditions at the start of the season and much warmer than average temperatures in the month of March. But remember because these are the guests who purchased approximately 120,000 of our season passes, the revenue we collected from these individuals in fiscal 2004, regardless of the actual days skied, was actually 6.3% higher than in fiscal 2003. In adesh -- in addition destination guests, the customers who generate higher profit margins for us, increased in fiscal 2004 over fiscal 2003. The increase in season pass revenue coupled with an increase in visits from higher spending destination skiers combined with actual price increases at the window resulted in an almost incredible 10.4% increase in our average realized list ticket price known as effective ticket price, or ETP. In total this all translated to an approximate 9% year-over-year increase in list ticket revenue for the fiscal year. Looking specifically at our Resorts, Beaver Creek completed the year with record skier visits, revenue and reported EBITDA. While skier visits grew 7% over last year Beaver Creek's ETP for the year was up an extraordinary 20%. Skier visits in ETP were also up markedly at Heavenly which continues to be a highly successful acquisition story for Vail Resorts and the completion of its seconds season under our ownership and management. And while our other 3 resorts have slightly fewer skier visits than the prior year, they each saw a 9 to 11% increase in ETP, indeed in dollars. Vail, Breckenridge, Heavenly and Beaver Creek all enjoyed their best revenue years ever.

Non lift ticket Mountain revenues also grew a healthy 7.2% year-over-year also benefiting from price increases as well as the increase in the higher spending destination skiers. This latter metric includes ski school revenue up 5.7%, dining revenue up 6.6%, retail revenue up 6.8%, and miscellaneous ancillary Mountain revenues up 10.2%. To be sure revenue growth was solid but the lack of expense growth, the result of our cost cutting efforts, is simply astounding. Mountain expense increased a very impressive and minimal 0.7 of 1% year-over-year. As Porky the Pig would say, that's all folks. 0.7%. Just $2.5 million of expense growth against $36.3 million in revenue growth. The flow through of incremental revenue to the bottom EBITDA line was a breathtaking 93.1%. Our management is very proud of the success we had in tightly controlling our spending all the while keeping employee morale and guest satisfaction with the experience we offer quite high. As a result of the revenue increases in tight management expenses reported EBITDA for the Mountain segment grew to a record $132.8 million, the resulting EBITDA margin grew from 21.2% last year to 26.5% in fiscal 2004. That's a 5.3. increase in margin and as I just said, a stunning 93% flow through of incremental revenues to the bottom line. While we are delighted by the strong ski area performance for the year we have to be just as proud by the improvements we realized in our Lodging segment which more than doubled its reported EBITDA for the year from $4.9 million last year to $11.8 million this year. Lodging revenue for the year increased $10.4 million or 6.3% over last year, primarily due to increased average daily rates or ADRs in our own RockResorts Hotels as well as both increased occupancy and ADR in our own non RockResorts branded hotels. Lodging expense for the year grew $6.2 million or just 4%, primarily due to general inflation, increased volume related variables expenses and other expenses incurred in the normal course of business.

Flow through in our Lodging business of incremental revenue to the bottom reported EBITDA line was also an impressive 40.4%. Also good news was that Lodging equity income improved $2.6 million year-over-year due to the improved second year operations at the new Ritz Carlton Bachelor Gulch in Beaver Creek. I want to remind you that since we use the equity method of accounting for the Ritz Carlton, approximately $4.5 million in interest and depreciation expense at the Ritz is reported on the Vail Resorts Lodging equity income line which in turn is include in Lodging reported EBITDA. In fiscal 2004 our lodging properties benefited from the improvement in the economy, improvements in the U.S. travel industry as a whole, our focus on generating increased revenues and our careful management of expenses. Increased ADRs in our RockResorts luxury hotels, occupancy in ADR growth in our non RockResorts branded hotels as well as positive consumer response to the renovated Vail Marriott and the 2 year old Ritz Carlton Bachelor Gulch all contributed to our success in Lodging. As always let me provide you with some operating statistics for our own hotels. RockResorts owned hotels experienced a 1% growth in revenue per available room, or RevPAR. This was the result of a 1 point decline in occupancy to 60% offset by a 3% increase in ADR to $181 for the year. Results for our non RockResorts branded owned hotels, those properties primarily located at the base of our ski reports, was a healthy 8% increase in RevPAR, again with occupancy totaling 60% for the year, up 2 points from 58% the year before, and with an average daily rate increasing $7 year-over-year from $143 to $150. Looking at both our Mountain and Lodging segments combined total resort reported EBITDA in fiscal 2004 was an all time record for Vail Resorts. Resort reported EBITDA totaled $144.6 million as I have said. A $41 million increase or 39.6% improvement over last year's resort reported EBITDA impacted as it was by the Iraqi war. I'm sure you can all understand my enthusiasm as I recite these numbers to you. It does take all the pain out of turning 50.

Turning to Real Estate, as expected Real Estate revenue decreased $35.3 million to 40. -- to 45.1 million for the year reflecting an expected change in the mix of what was sold this year versus last. But Real Estate expense decreased even more by some $49.9 million, 15.1 million of which was due -- due to a credit to expense in the third quarter as previously announced due to the release of a $15.1 million liability of the Company's balance sheet from the early pay-off of the outstanding Smith Creek Metropolitan District bonds. As a reminder for those of you who do not recall the specifics of this transaction the Bachelor Gulch Metropolitan District is controlled by Bachelor Gulch homeowners. The Smith Creek Metropolitan District bonds were issued a long time ago to support infrastructure in Bachelor Gulch. The other resorts undertook to subsidize and credit enhance these bonds until such time as the revenue base in Bachelor Gulch was sufficient to allow Bachelor Gulch to stands on its own legs without such Vail Resorts subsidiaries. The good news here is that the Bachelor Gulch development has been so successful that the Bachelor Gulch Metropolitan District was able to issue its own bonds and completely payoff the Smith Creek bonds many years in advance of what we could ever have anticipated. Therefore the liability for the subsidy and credit enhancement on our books was no longer required. In eliminating that liability we properly wrote the $15.1 million back to Real Estate EBITDA in the form of a credit to Real Estate expense offsetting a similar amount which had been charged to Real Estate expense in prior years. Real Estate reported EBITDA increased $13.2 million to $30.9 million for the year, compared to $17.7 million during the same period last year. In addition to positive financial results for the year, we are excited with the momentum we have established in our Real Estate division. Vail's New Dawn, our dramatic redevelopment of Vail Village and Lionshead, is coming to fruition after years of planning as evidenced by major developments in recent months in Vail.

We broke ground in May on the substantially sold out $100,000 per space parking structure in Vail Village. Presales for phase I of the Gore Creek Place town homes located next to the Vail Marriott in Lionshead were a blowout success in July and presales in phase I and phase II now stand at about $48 million, although that number is subject to some fluctuation. We also contracted in 2004 to sell for $10.5 million as 4 home sites, about 2 acres of land at Forest Place in Vail's Lionshead which heretofore was a handful of unused, weed infested and otherwise dilapidated tennis courts. The Forest Place sale actually closed in August and is our first major real estate transaction of fiscal 2005. More importantly we have received formal final government approval from the Town of Vail allowing us to proceed on the Vail front door project and we are very close to receiving such approval for the Lionshead core development as well as Gore Creek Place. In addition to the momentum in Vail we have also successfully presold in the past several months more than $30 million of homesite lots and 2 bedroom cabins at our Jackson Hole Golf and Tennis Club development. Moving to the remainder of the income statement. Vail Resorts posted a net loss for the year of $6.0 million or a loss of 17 cents per diluted share compared to a loss of $8.5 million or 24 cents per diluted share in fiscal 2003. However, as you know, we successfully tendered for the vast majority of our 8.75% senior subordinated notes in January, 2004, with the remaining amount called in May, 2004. Replacing those notes which matured in 2009 was a new $390 million issue of 6.75 senior subordinated notes which mature in 2014. This resulted in a 200 basis point improvement in our interest rate and the extension of the maturity of our senior subordinated notes with these low historic rates for 5 additional years. We similarly lowered the interest rate margin on our $100 million term B loan by 50 basis points and extended that maturity to 2010. This will save the Company more than $5 million in annual cash interest costs for at least the next 5 years and locks in these low rates for a full decade on a majority of our long-term debt.

To effect these transactions the Company recorded a charge of $37.1 million which was comprised of the January tender premium, the make all premium, transaction fees and the non-cash write-off of the unamortized balance of deferred financing and original issue costs associated with the now retired 8.75% notes. We have also previously disclosed that in the second quarter of 2004 the Company recorded a $5.5 million mold remediation charge to repair the mold and water intrusion damage at the Breckenridge Terrace LLC unit, one of the Company's employee housing joint ventures. Incidentally we anticipate that that employee housing unit will be open and usable by us for the upcoming 2004/2005 ski season. Excluding these previously announced charges which are separate line items on our income statement that being the 1 for early extinguishment of debt and mold remediation, the Company's net income for the fiscal year 2004 would have been $20.4 million, 20.4, or 58 cents per diluted share using a normalized tax rate of 40%, compared to a net loss of $8.5 million or a minus 24 cents per diluted share in the prior fiscal year. That's the news for 2004. A fabulous year of which we are quite excited. Now let me turn to fiscal 2005 which began on August 1. After all, ski season is but a short 6 weeks away from today. Indeed the signs are bright. For the past 3 months the weather has been cold and wet and it snowed all night on Vail mountain last night and continues to snow as we speak. You know, that's damned fine weather for ski country in September. Moving away from the weather and moving to other signs of success for the 2004/2005 ski season, advanced sales of season passes for the 2004/2005 ski season are also robust. They are currently running up about 26% year-over-year in dollars. Airlift capacity into Vail's Eagle airport is also up some 3.5% year-over-year. This season, again, the Nation's 6 largest airlines will all serve Vail/Eagle, all operating 757 jet aircraft from around the nation. And happily United Airlines has added 2 daily round trips on comfortable 757 aircraft between Denver and Vail with immediate connections to most of the country's major population centers from United's huge Denver hub.

Bookings into our central reservation center in dollars are up 7.3% versus the same time last year. Ski magazine just came out with their prestigious and influential ski resort rankings. Vail Resorts cleaned up. For the 13th time in 17 years, Vail is ranked number 1. Beaver Creek had its highest rating ever at number 4. Breckenridge was number 6. All 3 resorts ranked ahead of both Aspen and Whistler/Blackcomb. That's real bragging rights in Colorado and real bragging rights in the broader North American ski industry. Both Breckenridge and Keystone finished well ahead of Intrawest Copper Mountain and Winter Park. Heavenly ranked considerably higher than when it was managed by the American Skiing Company. Speaking of magazine rankings, Golf Magazine also just came out and heralded our new Red Sky Ranch. In its prestigious review of the top 100 golf courses you can play, essentially all the golf courses in the nation excluding private country clubs, Golf Magazine named Red Sky Ranch as having the first and fourth best golf courses in Colorado and the 25th and 90th best golf courses in the United States. That's almost unheard of for 2 new golf courses in their first and second years of -- second and third years of operation. It also named our Greg Norman course as the single best new golf course to open in the United States this past year, being named the so-called Golf Magazine Rookie of the Year. We are pleased that our reputation as golf managers is starting to rival the world class reputation we've enjoyed for decades as ski resort operators.

Again looking to 2005, we are also improving the product offering at several of our ski resorts and hotels. We are installing new high-speed lifts at both Beaver Creek and Heavenly and we have begun the renovation of The Lodge at Rancho Mirage. Keystone guests will enjoy a massive 800 acre terrain expansion for snow cat served bowl skiing. We have purchased more snow cats and are initiating this season a single year 33% increase year-over-year in grooming at each of Vail and Beaver Creek for the 2004/2005 ski season. We think this will be so positively impactful for our Vail and Beaver Creek guests that we again expect to be able to charge among the highest lift ticket prices for skiing in the world, achieving premium lift ticket pricing which should in turn allow us to enjoy premium lift ticket margins. As you can see we have every reason to be quiet bullish about the coming year. As such, to give you some guidance, we currently expect non reported EBITDA for fiscal 2005 to range from between $138 million and $146 million and for Lodging reported EBITDA to range from between 10 and $18 million with total resort reported EBITDA ranging between 152 and $160 million. As for Real Estate, it's important that all of you understand that the next two years will be periods of major construction for Vail Resorts Development Company, especially as we build the major Vail's New Dawn projects. Despite huge contracted presales closings will substantially occur in fiscal 2006, 2007 and 2008, add-in that the benefit of the Smith Creek Metro District bonds payoff will not be repeated in fiscal 2005, Real Estate earnings for fiscal 2005 will take an expected dip this year. As such at this time we are comfortable giving Real Estate reported EBITDA guidance of 10 to $16 million for fiscal 2005.

The good news does not stop in Real Estate, lest you be concerned about how we are going to finance our real estate projects, we do have ample room under existing revolver facility to finance the staggered construction over time. As an alternative, especially on the larger projects, we are having intriguing success in securing financing for some of these real estate projects on a non recourse basis. For example, mobile lenders in our bank syndicate have already provided term sheets for Gore Creek Place, offering non recourse financing at relates - at rates below our current bank revolver rates. Lenders appear to be excited about the various real estate projects, especially those in Vail, given their anticipated profitability and the high expected percentage of presales. We are also currently projecting net income in fiscal 2005 to range from between 14 and $22 million. As for the leverage found on our balance sheet, there is yet another positive note especially for our bondholders on today's call. Thanks to our improved resort and Real Estate reported EBITDA for fiscal 2004 our liquidity position has improved markedly. At year-end we had zero borrowings under our revolving line of credit and positive invested cash. We are pleased to say that our leverage ratio of total debt to EBITDA was less than 4. The ratio of net debt to EBITDA was below 3.5. Both of these leverage statistics show considerable improvement over last year. I'd now like to turn the conversation to the inherent value of Vail Resorts as a company. Despite current year Real Estate earnings expectations, I would point out that we expect that this may be the most important real estate year ever for us, although success this year will be measured by the degree to which we enter into preconstruction, presale contracts with closings scheduled for the next few years. Let me clearly and bluntly say this about our real estate projects. If presales continue as at present, these projects will be very, very profitable. In such an event that Vail's New Dawn takes off, in my opinion anyone valuing our real estate only at book would be seriously undervaluing our real estate assets by an easy $1 per share and possibly much, much more.

Look at the history of our Real Estate business. We've had healthy EBITDA margins in our Real Estate business year in and year out and at least in Eagle County, Colorado the luxury real estate market is boiling red hot. For the first 7 months of calendar 2004 total Real Estate closings in Eagle County exceeded $1 billion and were up a very healthy 62% year-over-year. Of course, by way of counter balance, there is not an absolute guarantee that Vail's New Dawn will in fact takeoff. We are also exploring the inherent value of our hotel asset portfolio. The market for hotel sellers seems to be quite frothy these days. We believe it is possible we could retain our management and the RockResorts brand affiliation but nonetheless sell 1 or more of our RockResorts owned hotels at a significant positive arbitrage above their current valuation as a multiple of immediate term cash flow. Similarly, our 49% interest in the Ritz Carlton Bachelor Gulch is coveted by others. And a few of our smaller hotel properties appear quite ripe to us for profitable condominium or timeshare conversion. Despite press reports to the contrary we have no current intension to sell all of our hotel division, nor to give up management of our hotel, nor to give up their current brand affiliations. We do believe, however, that an argument could easily be put forward that Vail Resorts shareholder value could be enhanced by 1 to $2 per share if we were to be successful in selling, converting or redeveloping even less than a handful of our currently owned properties. Importantly, it's easy to concede we could do so without having to change our strategic direction as we may be able to retain our management and RockResorts brand affiliation. Other major hoteliers manage rather than own many of their properties and we believe that option may be open to us as well. Of course, nothing has been sold as of yet. Stay tuned for a progress report later in fiscal 2005 and into fiscal 2006.

From what we can tell our Company is currently valued by most of you as some multiple of resort reported EBITDA plus some value for the value of our real estate held for sale, less debt. I would strongly encourage you to take a hard look both at the stunning resort operating numbers we posted this year combined with the underlying, I would say, hidden value of our Real Estate and hotel assets. I personally am a shareholder of Vail Resorts and have a meaningful percentage of my own net worth invested in Vail Resorts common stock and in the money options. But I don't want to ask that you just accept what I say or do so merely on faith. By all means do your own analysis. However, if you do and if you agree with all that I have been discussing, I think it is clear that you may share the view that I and others hold. I am very bullish about Vail Resorts. So, too, is our board as are several of the major shareholders of our Company as are many financially sophisticated individuals with whom we interact. Which takes me to the many press reports about Vail Resorts that have been breathlessly reported in the media this summer. You must have heard the old adage don't believe everything you read in the papers. Our Company was quite tight lipped over the past few months, confirming or denying nothing. I have to tell you, it was painful to sit in the very heart of rumor central but to say nothing publicly or privately that would comment on the inaccuracies that we would read from time to time, especially from so called informed sources, or experts, who sometimes it seemed either to be outright stupid or just to be making things up. As much fun as it would be to share all the to and fro with you, on the advice of counsel I am simply going to have to continue the summers refrain of not commenting on rumors or speculation. Instead, I will say this, I and others connected with Vail Resorts are squarely focused on the exciting future of Vail Resorts.

We have a very well positioned company with intriguing prospects and now we have posted what must be considered by all to be great results for the most recent fiscal year. Assuming snow and barring terrorism or war, we are genuinely optimistic about the near-term prospects for and long-term value of our Company. At this juncture Jeff and I will be happy to answer your questions. As you prepare for your questions I need to point out that the comments made during this conference call other than statements of historical information are forward-looking statements that are made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those projected. Listeners are cautioned not to place undue reliance on these forward-looking statements which speak only to the dates here of. Such risks and uncertainties include but are not limited to general business and economic conditions, competitive factors in the ski and resort industries, failure to successfully integrate and operate future acquisitions, failure to successfully diversify certain assets, adverse consequences resulting from the existing SEC formal investigation, failure to receive needed government approvals or to commence or complete the planned real estate development projects and redevelopment projects, and/or an inability to obtain financing on favorable terms for such projects, adverse changes in the real estate market, adverse changes to hotel valuations, terrorist acts upon the United States, threat of actual war, economic downturns, the results of the 2004 elections, the impact of SARS or similar unforeseen global events in the travel industry on the Company, expenses or adverse consequences arising from current or potential litigation, implications arising from any new FASB governmental legislation rulings or interpretation and last but not least the weather. Investors are also -- also directed to other risks discussed in documents filed by the Company with the U.S. Securities and Exchange Commission. Investors having been been so directed we are now ready to take your questions. Operator?

Thank you, sir. Ladies and gentlemen, at this time we will begin the question and answer session. (Caller Instructions) Our first question is from Scott Barry with Credit Suisse First Boston. Please go ahead.

Hey, Adam, it's Ed Loh for Scott. Hi, Ed. Got a couple quick ones for you. First is can you just talk a little to the tax rate during the quarter? It seemed -- seemed like the benefit was -- is a little low relative to history. And then second, I'd like to get a viewpoint on your long-term strategy on -- on the Real Estate division and if you can talk to some of the expected seasonality in the year next year, particularly with respect to revenues that would be great. And then if you can -- and lastly if you can give some more color to your recent distribution agreement with expediahotels.com, that would be great. Thanks.

Okay. I will take 3 of those 4 and let Jeff talk to the tax rate in a minute. Let's talk about Real Estate for a second. We obviously had some very exciting real estate projects at hand. I've certainly described them on this call as being potentially immensely lucrative. Most of the real estate approvals are now in hand to proceed. If we don't have them yet we hope to have them soon. Some projects have gone into presales and those presales have been through the roof. We expect to go into presales for more projects as early as this Christmas, continuing into fiscal 2006. You know, the amazing thing about real estate is if you can presell it before you build it, it only takes about 2 years to build the buildings, close the presold contracts and get all your money back and then some, meaning the and then some is both monetizing the value of the land and collecting a profit. We have a -- we have $135 million or so of land on our balance sheet as of year-end. Our expectation is that we have enough real estate projects to last for at least 5 years. Having said that we expect you are going to see a real surge of real estate profitability in fiscal 2006 and fiscal 2007. I'm actually glad you asked the seasonality question because I am going to give you one of these little odd bizarre facts when you run a company in the travel business. Christmas and New Years are both going to fall on Saturdays this current -- this coming Christmas season, New Years season. It's very possible that vacationers who might have taken a week's Christmas vacation or a week's New Years vacation will collapse instead their trip into a 10 or 11 day single vacation, starting Friday, December 24, and ending September, January 2. It is possible, not definite, but possible, therefore, that our Christmas/New Year period this year, just because of this quirky day of the week thing, may not be all that robust in comparison to prior years. Similarly as a result of -- well, similarly last year was leap year. We enjoyed an extra key day, February 29, right at the heart of the ski season. February 29 does not exist this year so we are going to lose a major operating day in February. That alone, the leap year lost day, could cost us $3 million or so of EBITDA. Having -- so if you think of the year, I said, I don't know how strong Christmas is going to be because of the day of the week thing and we are certainly going to lose Feb 29. Offsetting that, we got off to a really slow start in the early season last year. It was very little snow. It's already snowing in September in Colorado this year. But more important than the early season, Easter falls in March this year. Which means the South Americans, who are big customers at Vail and Beaver Creek who travel with Easter, are going to be arriving when our lift tickets and hotel rooms are at their absolute highest prices of the year compared to coming April 15 to 25, if they come at all, when our lift ticket prices and our hotel prices are a bargain. Whenever Easter has fallen in March before we've had the strongest kind of a March we've ever seen. We are hoping that will repeat itself. What happens in March should so much more than offset the leap year day and anything going on at Christmas. So if we were looking at seasonality I would tell you this: I've already given you guidance for the year. I would tend to back-end load some of that Mountain resort EBITDA into the fiscal third quarter rather than put it in the fiscal second. As for Expedia, we are working with Expedia and many other on line travel distribution partners. It's amazing but Expedia and Travelocity have become the 2 largest sellers of Vail Resorts travel of any distributors of travel anywhere in the world and, of course, just a few years ago Expedia and Travelocity didn't even exist. We're very -- we think we've got good relations with all the online distributors and we are doing all in our power to advance our efforts with them. As for the tax rate I'll let Jeff Jones, our CFO, talk to that issue. Jeff?

Thanks, Adam. As many of you are aware tax rate that's used to either provide or benefit for taxes in any given quarter is what's needed to adjust the tax rate of what it should be anticipated to be for the whole fiscal year. In the fourth quarter it actually is what's needed to adjust the final tax provision or benefit for the final year tax calculation. In the last year's fourth quarter there was actually a large benefit of nearly 50% required because I think the fourth quarter had a much larger loss than was anticipated and that 50% benefit was need to adjust the final year-end tax benefit for the year. In the current year we are hitting much closer to that fourth quarter tax benefit rate being what was essentially needed for the full year. We had a little over 32% benefit in the fourth quarter and a 30% benefit for the full year. So that 32% benefit in the fourth quarter is needed to adjust the full year benefit to and as required 30%. Now why is that a benefit of 30% and not something closer to the statutory rate of near 40%? The reason for that is really the absolute level of the loss in the current year is quite small and when you are dealing with a small absolute pretax number and you have some certain nondeductible expenses such as meals and entertainment that have to be deducted against that it has a disproportionately larger impact on the smaller numbers than if we had not had, for instance, the loss on extinguishment and mold remediation charge and if we had a much larger pretax income then the nondeductible items would be a much smaller percentage of that and the tax provision rate would have been much closer to the statutory rate of 40%.

Great. Thanks, guys, thanks very much.

Thank you. Our next question is from Bryan Maher with Calyon Securities. Please go ahead.

Good morning, guys. Happy birthday, Adam.

Thank you, did you like the year, Bryan?

What's that?

Did you like the year, Bryan.

It was all right.

Yeah, thanks.

I just want to confirm one thing and then ask another question regarding the Real Estate development. Is it accurate to say that you guys are going through a bit of a strategy shift whereas historically you were not comfortable necessarily taking on the vertical construction risk and the debt associated with that and now you are? And if so what do you anticipate debt levels increasing, you know, by what amount over the next couple of years while you develop out these projects?

You know, I think the answer is it's sort of a strategy shift. We've done a number of construction projects over the last several years to test our metal(ph). We built the Arrowhead Alpine Club with around 20 condos. We built the Breckenridge Mountain Thunder project with about 80 condos. We've built some other big buildings. The -- the Two Elk replacement in '98 for 12 million. We did a $23 million renovation of the Vail Marriott. We did close to a 20 -- $15 million renovation of Snake River Lodge and Spa. So over the past several years we have put our toe in the water with some of these projects. At the same time -- and therefore we're pretty confident given the profitability that we expect to see in Vail. When you put it -- I want to interrupt myself. We are pretty confident in, especially in Vail, that taking construction risk in Vail is not much of a risk at all especially if you've got a guaranteed maximum price contract secured in advance. Oh, I knew there was another big building, we supervised the construction of Ritz Carlton Bachelor Gulch, that's a pretty big building, in excess of $100 million project. When you are selling things for $1,000 a square foot and building things for $400 a square foot, it's pretty hard to screw it up and that's the reason why we are so confident, especially in Vail. At the same time, though, it's not a total change in strategy because we continue to sell off land parcels and transfer the risk to third parties when we think that's in our interest and we are negotiating right now with third party developers or projects in Beaver Creek, Vail and Keystone. So we are doing -- we're doing both, selling land as a horizontal developer, building as a vertical developer, actually we've been doing that for awhile now. It's clear that there will be more vertical now relative to before but we are really cherry picking the projects on which we are doing them. The projects where presales will be high and the spread between revenues and expenses is dramatically high. As for the debt level, I don't know that our debt level is going to grow all that much because of all this. Remember, a lot of this construction is staggered over many years, 4 or 5 years. And a lot of money will be coming in in that same period. For example, already in several of our projects the IRRs are infinite because we've received more in deposits from customers than we have to actually layout in construction costs. And under Colorado law deposits do not need to be escrowed, they can be used to pay toward construction costs. So when you stagger these over time, get customer deposits in and then add to the fact that we are going to get some fairly big profits coming in early in this period because we are doing some of the most profitable projects first, it really doesn't -- it really doesn't trigger a lot of debt. And if it were to trigger some debt, we are looking at non recourse debt which will not be consolidated.

Thanks. And can you give us just a quick update as to what you are seeing for Heavenly for this upcoming season.

Well, we've had 2 great years in a row at Heavenly. Lift tickets sold by ASC in their last year of ownership were 830,000. I think we finished at 965, 966 this year, up from last year. We're clearly on a run at Heavenly. At the same time as lift ticket sales were growing, lift ticket prices were growing. We are investing about another $10 million or so in improving Heavenly this summer for this coming ski season. We have invested at something like $16 million so far in the first 2 summers of ownership. We are adding another high-speed lift at Heavenly taking out 2 crummy old slow lifts and putting in a major new high-speed 6-pack at a very important thorough fair. We are improving some of the restaurants again at Heavenly. So I guess what I'm driving at is I think we are on a roll at Heavenly. We clearly have been growing at Heavenly. You know we bought it cheap but our EBITDA is up about a third higher than what it was when we bought it. And I guess my view at Heavenly is I see no reason for that being on a roll not to continue. We are pretty excited about what it could be in store for Heavenly this year. Of course we won't know until the season actually commences.

Thanks, Adam.

Thank you. Our next question is from Ray Cheesman with Jefferies and Company. Please go ahead.

Congratulations on a good year, Adam.

Thank you, Ray.

We are all, obviously, all aware and you especially as an industry veteran in your past that the airline business is a pretty uncertain business at the moment. You pointed out earlier that your airlift at the moment is scheduled to increase this year. Do you have -- what kind of commitments do you have that they will see it through? I mean, you know, you see Delta kind of teetering and other guys trying to survive and get through various court hearings. Are you confident that people who book on those airlines are going to actually get here to spend the money that you are counting on?

Yes, I am confident that that airlift is going to materialize and I will tell you why. In many cases our Company has guaranteed the financial success of those flights for the carrier -- carriers. So they have a lot of risk in other places that's on their nickel. The risk for these flights is on our nickel. That's one reason I think that they will continue. The second reason I think they will continue is because airlines tend to make their money in the summer and have trouble making money in the winter. They have much more demand in the summer travel season than they have in the fall and winter travel seasons. We peak in the fall -- not the fall, we peak in the winter travel season. So whereas demand may be weak in a lot of markets in the winter, I think the carriers have their best bet, and then I'm speaking as a former airline executive, in having full planes bringing those happy little skiers and snowboarders out to Colorado. On a broader theme, not just sort of short-term capacity for this winter, as painful as all this turmoil is for all of my friends in the travel industry I actually think this is very good news for those of us who are the recipients of air travelers because what you are seeing going on in the airline business, obviously fuel prices are escalating and that's hurting the carriers and they are raising ticket prices as a result of fuel price changes. But what's really going on structurally in the airline business is people with much lower labor costs who are able to put a seat in the sky, or 20%, 35% less than the major carriers, are giving the existing trunk carriers with their high labor costs fits. And what all those so-called major carriers are doing is scrambling to lower their labor costs which is a significant expense component of providing air travel. If those labor costs come down, those lower costs are going to translate into lower fares for the traveling public. And in fact if you look at airfares in the United States today they are lower than they were a year ago. I think that bodes very well for those of us who rely on people wanting to reach into their wallets and buy an airline ticket to come to our resorts, that the long-term foreseeable trend is that low cost carriers are going to increase their market share and high cost carriers are going to be forced to lower their costs and therefore lower their fares.

Earlier you mentioned that you were testing your metal by partaking in certain horizontal type development projects. Do you think that there is an opportunity as your supply of land, which you mentioned was about 5 years and will generate big profits for you in '06, '07, '08, are there other projects where you can leverage the expertise that you have proven in your own backyard and get other people to pay you for it without risking even $1?

Yeah, I think there may be but we have so much opportunity within 50 miles of where I sit every day that we are not looking at that opportunity now. We want to bring to fruition the very profitable opportunity that's right at our door step.

And lastly if you'll allow me, expenses, you did an extraordinary job of holding the line in 2004. I don't think it's -- would be reasonable for all of us out here to sit here and think that you could hold it at that kind of growth for 2005, or can you?

Well, A, thank you -- A, thank you and B, yeah, we just -- we blew ourselves away with a 0.7% growth in expenses in the Mountain Division and 93% flow through of revenues. And we are especially proud of the fact that, you know, it's not easy to -- to deal with -- with a large employee force when one is having to go through cost containment efforts. On balance we think employee morale is quite high. Maybe even more importantly, we measure our debt satisfaction rankings at our resorts every single week. Our guest satisfaction rankings were like -- ratings were like through the roof. You know, Ski Magazine put us right at the top of the heap. Our ranking there have never been better. So we pulled off this cost containment effort without any serious erosion of employee morale and with our guest thinking our product was better than ever. So that makes the accomplishment all the more impressive. I don't know that we can pull that off again. We are certainly of a mindset to be very careful about managing our expenses. We've been in a tight cost control mode for-- really since 9/11. Actually, even since March of 2001 when we started to sense the economy was falling somewhat. I think you have -- have to assume that expenses are going to grow at a more normal 3 or 4% this coming year. But if we can do better, we'll do better. I mean, clearly our guys now know how to manage expenses tightly.

Thank you very much.

Thank you. Our next question is from Grant Jordan with Wachovia Securities. Please go ahead.

Good morning and happy birthday. A couple of housekeeping questions. First, can you give us the CapEx and investment Real Estate in Q4?

Jeff will pull that out as we go to your next question. Go ahead.

And kind of following along with that, you've given us good guidance for profitability for fiscal '05. Can you also give us similar guidance for CapEx and investment?

Yeah. Let's start with CapEx.

Okay.

I don't know exactly what our CapEx -- you know, we do our operating budgets on an August to July basis and our CapEx on a January to December basis. I don't know precisely what our CapEx is going to be next year because we haven't gone to our board yet with our recommendation nor has our board considered a management proposal. I can say this strategically. Looking at our Resort business and our Real Estate businesses separately, we do believe that it is a mistake in strategy to starve your Resorts of capital because we think some of the projects in which we can invest might bring dramatic return. Take Heavenly as an example. We bought it for $99 million. We invested 15 in CapEx. We were able to drive EBITDA at Heavenly from around $15 million and change to more than $20 million and change in just 2 years. That's a great return on $15 million of CapEx. On the other hand, if we were going to be critical of ourselves over the 8 years in which I've run this company I think we did not necessarily get all the returns we might have hoped for in some of the early years and we have tried to scale back CapEx only to the best projects and to be somewhat tight fisted in the CapEx that we are investing. Maintenance CapEx for our resort business is in the neighborhood of $35 million a year. And, you know, I think we are going to try to hold Resort CapEx above and beyond maintenance CapEx either investments where in ROI projects we hope to get a real return. I don't know, maybe to a level of $25 million or something. I mean, that's not a precise number but it's a ballpark. You know, that compares with 4 or 5 years ago when we might be spending 50, $60 million of CapEx above and beyond maintenance levels. So I -- I think generally you should think that we are being much tighter in our CapEx decisions. We don't necessarily need to think -- need to -- that we need to throw a ton of capital at our mountains to sustain our position. I would like to return some cash to shareholders rather than just throw cash into the mountains. As for our Real Estate business, you know, it's a closed end loop. Whatever we spend in CapEx is really just the cost of construction of some of these projects and we seem to get it all back in 24 months when the projects are complete -- they're completing their construction cycle and we close on the contracts. So as I said well, all this construction we're doing is staggered over many year, some will be financed from third party -- third party outside sources. You know, our Real Estate CapEx could -- could be as much as, you know, 80 to $100 million. But as I said we may finance some of that with non recourse debt from third parties and anything that we do invest, you know, comes right back really quick so you really shouldn't thinking of it as, you know, long-term CapEx.

Okay.

Let me answer your question on CapEx through Q4. On the resort side for fiscal '04 our CapEx was just a shade under $63 million. And on the Real Estate side it was just a shade under $28 million.

Great. Thank you. Next question is, you mentioned the possibility of freeing up some additional capital through selling a handful of the hotels potentially. You know, I look at your balance sheet and you guys have done a great job of reducing debt, lowering your leverage levels, refinancing long-term debt at very attractive rates. What are your priorities for cash? It seems like on a leverage basis you are down to where you want it to be. You free up more capital, does that mean you invest more in the Real Estate or resort business, are there acquisitions, is a dividend possible?

Well, number 1, in terms of where we would like to be, we are really happy that we've improved our leverage by a full turn over the last year or so. You know, the combination of conscious management action and better resort EBITDA so if it's debt divided by EBITDA, if the denominator rises, the fraction lowers. But I don't know that we are exactly where we might want to be. You know, I think some of us might be a little -- be a little happier at 3 times debt to EBITDA -- 3 times net debt to EBITDA than 3.5 times net debt to EBITDA. So there still is some delevering that's possible. Acquisitions are possible. Ironically -- well, starting in the ski resort area, we weren't shy in investing $100 million to buy Heavenly and that's been a great success for us. You know, if -- if really -- so if a couple of really great ski resorts were to come on to the market and we could buy them at an attractive price we would not hesitate from doing so. I will tell you that there are none that fit that description on the market currently. As for hotels, even though I said we might be a seller of some of our hotels I would not put it past us to become a minority investor, 10, 15, 20% investor in acquiring some new hotels if we were side by side with third party capital for the vast majority of the purchase, especially if we were able to get an important management contract for RockResorts. Ray Cheesman earlier mentioned there may be some real estate opportunity outside our existing resorts that we could look at. So -- but I will say that in all of these things I just mentioned there is nothing immediately at hand before the company that we are currently reviewing or -- or considering. I'd like to turn to what I think is the most important comment in your question. I think one of the most intriguing options for some of this cash that we are going to generate either from operations, Real Estate profitability, or hotel divestiture, too, would either be to pay down debt or to issue a dividend to our shareholders. Clearly we are aware of the tax law that was passed a couple years ago that makes dividends more attractive. Our board has made no decision and there are some reasons not to do dividends but there are some compelling reasons to do dividends. That's something I think we will be reviewing over the next year. So there are a lot of things we can do with our cash. The important thing to us is that we are generating the cash. I just do want to make one last point on this hotel divestiture question because it's so important, I don't want anybody to misconstrue what I've been saying. Our Lodging Division EBITDA more than doubled this year. We are very pleased with what we are doing in Lodging. And we think we are experiencing some real success. So what we are talking about doing is what has been the way hotel companies have organized themselves for 4 or 5 decades which is taking some of our owned assets and flipping them into the -- flipping them into managed assets. Just because we sell a hotel doesn't mean that we are abandoning our hotel strategy. Very much to the contrary.

Great. Thank you.

Thank you. Our next question is from John Madischitz(ph) with Hayground Cove Asset Management. Please go ahead.

Hey, Adam, I was wondering if you could just talk a little bit more about your conversations with, you know, some of the Apollo investors who were going to get the shares. You know, you had mentioned that -- that they have no intension of selling now. So I just kind of wonder if we can get more color on that.

Well, you know -- I did say I haven't talked to everybody and, you know, I never know if somebody tells me something on a Wednesday whether that's operative on a Thursday. But I will tell you that person after person and institution after institution with whom I've been talking in the last couple of months looks at the kind of numbers that the Company is capable of posting on an operating basis, looks at the multiple of cash flow that we are currently trading at, looks at the real estate projects that are coming down the pike in Vail, looks at the fact that we own several fine hotels and we are trading under 8 times cash flow and hotels are trading at 10 to 13 times cash flow, and realizes that if you sell one of those there's an arbitrage opportunity in shareholder value. You put all that together, it's pretty easy to think that share price is going to be trading at a higher number down the road than it is today. No guarantees in life. And we will all find out together but I think that's driving some of the thinking by some of the people that I've talked to, that they are firm believers in this company and are holders of our shares, not sellers of our shares.

How many people have you actually spoke to.

I don't want to disclose the number or the number of shares. I want to make it very clear I haven't talked to anywhere close to everybody. I haven't canvassed in any kind of methodical way all of the Apollo limited partner investors but I have talked to people who represent significant holders of the distributed shares.

Okay, thanks.

Thank you. Our next question is from Andrew Didora with Lehman Brothers. Please go ahead.

Hi, good morning. I was just wondering if you could just give us some more color on actual what will precipitated the Apollo distribution and if possible, I know you probably can't comment on it but if this could be a precursor for potential future sale going forward?

Yeah. The -- what caused it is pretty simple. Apollo is an investment fund. This the 12th year of their holding of shares in a fund that had a 10 year life. Sooner or later Apollo by contract with its limited partner investors has to distribute the shares through the limited partner investors. As for a sale of the company, hey, we are a public company. Our shares are sold on the market every single day. Beyond that I've really said it clearly as I know how. The management team and everybody in the company is focused on operating the business, delivering great numbers going forward, overseeing these multi-year real estate projects, beyond that, there's nothing more I should appropriately say. We have a 8 year tradition as a public company of not commenting on rumors or speculation and my lawyers tell me I should not blow that precedent today merely because of the press speculation of the summer.

Okay. Thank you very much.

Thank you. (Caller Instructions) Mr. Aron, we have no additional questions. Please continue.

Operator, on -- in previous calls we've had people who tried to take a question and couldn't get through. Could you just canvas the group 1 more time, if there are any additional questions.

Certainly. (Caller Instructions) We do not have any further questions.

Operator, let me summarize for everybody what I have said for the last hour. Resort EBITDA went from $103.6 million to $144.6 million in a single year. There's not much more that needs to be said. Ski season is but a short 6 weeks away. Obviously today is a memorable day for me. Fiscal 2004 has been a memorable year for Vail Resorts. We hope to be able to say the same thing a year from now. Thank you one and all and good bye.

Ladies and gentlemen, this concludes the Vail Resorts fourth quarter and 2004 fiscal year-end conference call. If you would like to listen to a replay of today's conference please dial 303-590-3000 or 800-405-2236 followed by access number 11010235. Once again we thank you for your participation, have a great day. You may now disconnect.