Vail Resorts Inc (MTN) 2011 Q1 法說會逐字稿

Good morning, ladies and gentlemen. Thank you for standing by. Welcome to the Vail Resorts fiscal 2011 first quarter results conference call. During today's presentation all parties will be in a listen-only model. Following the presentation, the conference will be open for questions. (Operator Instructions) This conference is being recorded today, Tuesday, December 7, 2010.

I would now like to turn the conference over to Rob Katz, Chief Executive Officer of Vail Resorts. Please go ahead, sir.

Thank you, Operator. Good morning, everyone. Welcome to Vail Resorts fiscal first quarter 2011 earnings conference call and simultaneous webcast, both open to the public and press at large. I'm Rob Katz, Chief Executive Officer of Vail Resorts. Joining me on the call this morning is Jeff Jones, our Chief Financial Officer.

Before I turn to a discussion of our results, let me remind you that we are using the term "reported EBITDA" to report earnings for each of our operating segments, namely, Mountain, Lodging and Resorts, which is a combination of the Mountain and Lodging segments and Real Estate. The Company defines reported EBITDA as segment net revenue less segment operating expense plus or minus segment equity investment income or loss. And for the Real Estate segment, plus gain on sale of real property. The Company also uses the term "net debt" which is defined as long-term debt plus long-term debt due within one year less cash and cash equivalents. Complete reconciliations of reported EBITDA and other non-GAAP financial measures can be found in this morning's earnings release and on the VailResorts.com website in the Investor Relations section.

I also need to mention that comments made during this conference call other than statements of historical fact are forward looking statements that are made pursuant to the Safe Harbor provisions in the Private Securities Litigation Reform Act of 1995. Certain risks and uncertainties could cause actual results to differ materially from those contained in the forward looking statements. Investors are directed to the risks and uncertainties described in the documents filed by the Company with the Securities and Exchange Commission, including the Company's Form 10-K for the fiscal year ended July 31, 2010, and the Company's Form 10-Q which was filed today. In addition, the Safe Harbor language in today's press release also applies to our comments on this call. All guidance and forward looking statements made on this call are made as of the date hereof and we do not undertake any obligation to update any forecasts or forward looking statements except as may be required by law.

With that, let's turn to our fiscal first quarter 2011 financial results. While our first quarter historically is a loss quarter for the Company since our mountain resorts are not open for winter ski operations, and we have the administrative expenses of our year round employees, the quarter was exciting for us on many fronts and we are encouraged as we enter the ski season with good momentum. I am pleased to report that we experienced improving trends in both our Mountain and Lodging segments. During the quarter Mountain revenue increased 4% to $40.8 million, led by an 18.4% improvement in dining revenue as we experienced better group and wedding business at our resorts. We also had improved summer activity revenue at our Mountain resorts, representing a growing new way for our Company to capture guest spending. Our Lodging business showed signs of a rebound with RevPAR at our owned and managed hotels and condominiums increasing 21% to $64.25, and occupancy up 5.8 points.

Our summer resort, GTLC, had good visitation, generating an increase of 8% in RevPAR and 4.3 points in occupancy, while also seeing strong ancillary spending. Clearly the improving trends we saw in the summer marked a continuation of the pattern we observed in the spring of last year and were a precursor to the indicators that we are seeing for the upcoming season. Our early season metrics are positive. Season pass sales continue to gain ground over the fall selling season and are now up 5% in units and 7% in sales dollars excluding Northstar-at-Tahoe, our recent acquisition. Including Northstar, pass sales are up 8% in units and 10% in sales dollars with both Heavenly and Northstar-at-Tahoe reporting significant increases in sales since the announcement of the Northstar acquisition. The pass sales results are a clear sign that our Tahoe guests are as excited as we are about the addition of Northstar to our family of resorts.

We also were encouraged by the positive response we saw to some of our newer pass products such as the Epic 7 and the Keystone A Basin product. The success of our season pass programs is an important component of our business model, providing stability and guest loyalty and helping to drive revenue for all of our other operations. As a reminder, revenue from season passes is recognized over the course of the second and third fiscal quarters. Our lodging bookings through our central reservations and at our owned and managed lodging properties for the winter season are up at most of our properties from a range of mid single digits to double digit increases in units and sales dollars. The bookings have continued to strengthen as we advanced towards the season, including a strong response to the heavy snowfall we have recently received. Less than 50% of the bookings for the winter season have been made by this time based on historical averages.

Retail sales leading into the season have been very strong, especially in our Colorado, Front Range and San Francisco Bay area locations. The sales increases have been across all of our key product lines and were especially strong during the month of November. Finally, we could not be more pleased with the arrival of some terrific early season snowfall in both Colorado and Tahoe. This Thanksgiving we greeted our guests with ten times as many runs open across all of our resorts as compared to last year, providing an outstanding experience right at the start of the season.

Certainly the most exciting announcement we made during the quarter was the acquisition of Northstar-at-Tahoe, adding a sixth premier property to our portfolio of world-class mountain resorts. We believe that Northstar-at-Tahoe will be a great addition to our Company and build upon our leadership position in the Tahoe area. With substantial and diverse ski terrain, a completely renovated and modern base village and outstanding guest service Northstar-at-Tahoe has been one of the fastest growing mountain resorts over the past few years. It is estimated that over $350 million was spent on the base area of Northstar in the past few years prior to our acquisition. And the resort also boasts one of only a select few Ritz-Carlton hotels at any ski resort which opened on the mountain last December. We believe the modern and upscale infrastructure of Northstar is ideally suited to serve the Bay Area and Silicon Valley consumer markets. In fact, many folks from those markets have already purchased luxury homesites and condominiums in some of Tahoe's most upscale mountain communities at Northstar-at-Tahoe such as Lahontan, Martis Camp, Old Greenwood, and the Village at Northstar. We also believe guests of Heavenly and Northstar-at-Tahoe will greatly appreciate the flexibility to enjoy both the north and south shores of Lake Tahoe on a single pass and lift ticket product.

Most important for our guests, we intend to continue to invest in the resort, further driving its premier position in the area with terrain expansion, new lifts, new restaurants and new village amenities. Jeff will go into details on the financial implications of the acquisition later in the call.

Regarding Real Estate, net revenue was significantly higher on closings at the Ritz-Carlton Residences Vail. During the quarter we closed on 12 whole ownership units and all 45 fractional units which led to $149.3 million in real estate net revenue. The rate of closings of whole ownership units, while below our expectations, was a solid beginning to what we believe will be a multi-year sales process for the project. While Real Estate reported EBITDA was only $4.2 million for the first quarter despite these closings, it is important to note that since most of the costs included in the real estate results were incurred from a cash perspective in prior years, the favorable cash impact of these closings was much greater, with approximately $130 million of net cash proceeds realized from the closings at the Ritz-Carlton Residences Vail in the quarter. Since quarter end we have closed on one additional unit at each of the Ritz-Carlton Residence Vail and One Ski Hill Place Breckenridge. This is the first winter that the Ritz-Carlton Residences Vail and One Ski Hill Place in Breckenridge will be open to guests to tour. We will also be allowing select guests to truly sample the properties as we will be renting out several of the unsold units in each location. We believe all of this will stimulate additional interest as potential buyers tour these luxury properties and appreciate their respective amenities.

Most importantly, in the first fiscal quarter of 2011 we passed a critical inflection point for these projects such that future cash inflows for these two projects will significantly exceed any remaining cash outflows as the two projects are essentially complete. We also are cognizant of the challenges in the residential real estate market. And at this time we do not plan on launching any new real estate projects until we see a meaningful improvement in the market from its current state.

Now I will turn the call over to Jeff to further discuss our first fiscal quarter 2011 results and the update of our guidance.

Thanks, Rob. Good morning, everyone. Earlier this morning we released our earnings for our first quarter fiscal 2011 ended October 31, 2010, and also filed our Form 10-Q for the quarter which you can find available now at our VailResorts.com website.

Now turning to the highlights of our results. The first quarter is historically a loss quarter for our resort business, and predominantly an expense-based quarter since the mountain resorts are only open for summer mountain activities and the lodging business is at a seasonal low point. However, our seasonal businesses performed strongly. As Rob mentioned, our Mountain segment net revenue increased 4%, led by an 18.4% increase in dining. Retail rental revenue increased 2.4% in the quarter led by growth at our Colorado, Front Range and San Francisco Bay area stores. The loss in Mountain EBITDA of $41.6 million was greater than in the prior year owing to $3.1 million of transaction expenses associated with the acquisition of Northstar, $400,000 in seasonal losses for the week we owned the Northstar resort in the first quarter, and $900,000 in assessments for extensive renovations to a Breckenridge commercial property in which we are a tenant. Excluding these three factors, Mountain reported EBITDA would have been essentially flat as compared to the prior year.

In the quarter we experienced higher labor and labor related benefits expense resulting from increased staffing levels attributable to our higher sales volumes and a reinstatement of some of the prior year's wage and benefit reductions, including a 2% wage increase for employees effective April 1, 2010. Our Lodging segment results improved in the quarter. Lodging segment net revenue was up 7.3% to $44.4 million in the first quarter of fiscal 2011 compared to $41.4 million in the first quarter of fiscal 2010 on improving metrics, as ADR, average daily rate, increased 1.5% and RevPAR advanced 21% on a 5.8 point improvement in occupancy. This led to a 7.2% increase in revenue from owned hotel and managed condominium rooms.

We saw a strong pickup in our group business at Keystone which was up 28.7%, albeit off a relatively small base. Our summer lodging operation, GTLC, reported an increase of 8% in RevPAR driven by a 3% increase in ADR and a 4.3 point gain in occupancy. This followed a 10.8 point increase in occupancy in the fourth quarter of fiscal 2010. The improvements in group business and at GTLC also contributed to the 11.3% increase in lodging related dining revenue in the quarter. Lodging reported EBITDA was a positive $1.5 million in the first quarter of fiscal 2011 compared to a negative $1.3 million in the first quarter of fiscal 2010. Fiscal 2011 first quarter Lodging operating expenses and segment results benefited from the receipt of $2.9 million, net of legal expenses for the settlement of alleged damages related to the Colorado Mountain Express acquisition, partially offset by $0.4 million in lodging related assessments for that Breckenridge commercial property. Excluding these items, Lodging segment EBITDA would have totaled a loss of approximately $1 million, an improvement of approximately 24% over the prior year.

Lodging operating expense increased $2.7 million, or 6.4%, primarily due to higher staffing levels associated with the increased occupancy and reinstatement of some of the prior year's wage and benefit reductions with a 2% wage increase for employees effective April 1, 2010. Lodging EBITDA margins, adjusted for the above-mentioned factors, improved 90 basis points.

Now, moving to our Real Estate segment. Our Real Estate segment results are primarily determined by the timing of closings and the mix of our Real Estate sold in any given period. In the first quarter 2011, the Company, as Rob mentioned, closed on 45 fractional units that were sold at the Ritz-Carlton Development Company and 12 whole ownership units sold to individuals at the Ritz-Carlton Residences Vail, leading to $149.3 million of Real Estate net revenue and $4.2 million of EBITDA. The average sales price per square foot was $1,213 which includes lower yielding fractional units, and the average cost per square foot was $1,103. Also included in real estate EBITDA is $3.1 million of sales commissions, commensurate with revenue recognized, and operating expenses of $6.5 million primarily comprised of general and administrative costs which includes marketing expense for the real estate available for sale, including those units that have not yet closed, carrying costs for units available for sale, and overhead costs such as labor and labor related benefits and allocated corporate costs.

Taking a look at the bottom line, net loss attributable to Vail Resorts, Inc. was $43.0 million or a loss of $1.20 per diluted share in the first quarter of fiscal 2011 compared to a net loss attributable to Vail Resorts, Inc. of $41.2 million or a loss of $1.14 per diluted share in the first quarter of fiscal 2010. With the current year reflecting the 100% ownership of Specialty Sports Venture and the resulting additional losses in the first quarter seasonal low period as compared to our approximate 70% ownership of that entity in the same quarter last year. Our net loss before adjustments for non-controlling interest actually improved by 1% in the quarter.

Regarding the balance sheet, as of October 31, 2010, the Company had cash and cash equivalents on hand of $19.6 million, and total debt of $515.0 million including $20 million of revolver borrowings under our $400 million senior credit facility which matures in 2012 and had $299.4 million available for borrowing after considering $80.6 million in currently issued letters of credit. The Company has virtually no principal maturities due until 2014 except for amounts outstanding under the revolver. Even after acquiring Northstar-at-Tahoe in the quarter, we ended the first quarter fiscal 2011 with net debt of 2.7 times trailing 12 months total reported EBITDA.

Before I move onto guidance, I want to go through some financial details on the Northstar acquisition. We acquired Northstar for $63 million, or $60.5 million net of acquired cash. For fiscal 2011 Northstar-at-Tahoe is expected to contribute approximately $8 million in Mountain reported EBITDA after transaction and transition-related expenses and without the lost months of August through October 2010. However, on more of a pro forma basis, if we had owned Northstar-at-Tahoe from the beginning of fiscal 2011, our full year EBITDA estimate would be $10 million, excluding one-time transaction and transition expenses which will be included in fiscal 2011 results. As part of the acquisition we assumed a long-term lease for the underlying land and improvements with CNL Lifestyle Properties, Inc. And the EBITDA estimates I mentioned are after the applicable operating expense related to the CNL leases. We look forward to our new partnership with CNL as we both look to further enhance the incredible resort opportunity at Northstar.

Turning to our guidance for fiscal 2011, we are revising our guidance for fiscal 2011. Overall our key early season metrics are running well ahead of last year. However, the vast majority of the ski season remains ahead and our initial guidance did call for an improvement in our Mountain and Lodging segments on better pricing and visitation. So, while we are optimistic, we also believe it would be premature to make changes to our resort outlook for the 2010, 2011 ski season based on early indicators. However, we are raising our fiscal 2011 resort reported EBITDA guidance to reflect the recent acquisition of Northstar-at-Tahoe and the favorable legal settlement related to CME. From the closing date of October 25, through July 31, 2011, our fiscal year end, Northstar is expected to contribute approximately $8 million in resort reported EBITDA this year, after absorbing acquisition related expenses. Plus our revised guidance for fiscal 2011 calls for resort reported EBITDA to be in a range of $211 million to $221 million, after $9 million of stock compensation expense, representing a 13% to 19% increase over fiscal 2010 levels. Our prior guidance called for resort EBITDA to range between $200 million and $210 million.

However, we are lowering our Real Estate reported EBITDA guidance to reflect the reduced number of anticipated closings in our Ritz-Carlton Residences Vail project this year based on the lower number of closings from contracts in the first quarter. We are now forecasting Real Estate EBITDA range between a loss of $10 million to breakeven, and continue to hold the view that given the current economic environment our real estate estimate contemplates an extended multi-year selling period for both the Ritz and One Ski Hill Place projects. Also, as a reminder, our real estate EBITDA excludes expenses associated with standard brokerage commissions, closing costs, marketing expenses, and general segment overhead expenses. Based on our current estimates, we now are expecting net income attributable to Vail Resorts, Inc. to range between $32 million to $42 million, or $2 million higher than our prior view. As it pertains to net income, last year we capitalized approximately $16 million of interest expense in our self-funded real estate projects. This year in the absence of any construction projects, our interest expense is expected to return a more normalized total of approximately $35 million compared with $17.5 million last year.

Now I will turn the call back to Rob.

Thanks, Jeff. Just last week we announced that our RockResorts lodging group was awarded the management contract for one of the premier Caribbean destination resorts, Half Moon in Rose Hall, Jamaica. The contract will begin on January 1, 2011, and the property, which opened in 1954, is fully operational. Situated on two miles of white sand beaches, the 400-acre luxury resort features 398 rooms, suites, villas and cottages. In addition, Half Moon features the award-winning Fern Tree Spa, a Robert Trent Jones, Sr. designed 18 hole golf course, 13 tennis courts, an equestrian center, 54 swimming pools, six restaurants, seven bars, a children's village, a dolphin lagoon and more. Adding this property is another important milestone in elevating RockResorts profile as a serious player in luxury resort management, and also reflects our continued interest in expanding our resort operations outside of the United States which ultimately could also include additional mountain resort properties.

As I mentioned earlier, we have entered the 2010, 2011 ski season with a lot of momentum. We believe the conditions at all of our resorts are exceptional at this point in the season. Additionally, we are set to unveil three new exciting projects in December that will further enhance our guest experience for the season. First is Epic-Mix, our revolutionary new online and mobile application that represents the ultimate connection of technology to skiing and riding. Since the opening of our resorts only a few weeks ago, those skiing and boarding with passes or lift products that have our RF technology already have skied or boarded an outstanding 4 billion vertical feet at our resorts. To put that into perspective, it is the equivalent of skiing down Mount Everest or K2 in excess of 330,000 times. We look forward to our guests being able to register on EpicMix.com in the coming weeks and being able to enjoy their daily skiing accomplishments and sharing them with their friends. We believe that EpicMix represents the ultimate guest loyalty program in today's social media environment.

Second, a new Chair 5 in Vail will open this Friday, providing a high speed quad for skiers and boarders of the legendary Sun Up and Sun Down Bowl in Vail. This new lift will dramatically enhance the experience and expand the capacity for our guests. Third, we will open the new Tamarack Lodge in Heavenly in mid December providing a new year-round restaurant at the top of Heavenly's gondola. The Tamarack Lodge will significantly improve the on mountain dining experience for Heavenly skiers and boarders while also providing a venue for weddings and other group-related events. These newly finished projects complement our other capital initiatives including our recently opened Alpine Coaster in Breckenridge and expanded Adventure Ridge activities in Vail. As well as continued improvements in snow making to further differentiate the Vail resorts experience.

Before we conclude, I want to thank you for your interest in Vail Resorts and hope you will join us at one of our extraordinary properties this season. We are excited about the great early season conditions that have greeted our guests. We also believe we are specially suited to capture increasing propensity to travel and enhanced guest spend resulting from an improving economy. At this time I would also like to thank all of our employees for their passion and commitment to providing the ultimate in guest experience to our millions of visitors as we enter the 2010, 2011 ski season.

At this time Jeff and I will be happy to answer your questions. Operator, we are ready for questions.

(Operator Instructions) Our first question comes from the line of Shaun Kelley with Banc of America. Please go ahead.

Hi, good morning. Just had a couple quick questions about Northstar to start off with. I was wondering, Jeff or Rob, can you talk a little bit about the $10 million annualized EBITDA number this year? How does that compare to last year? What kind of growth is in that number? And then can you talk at all about how many skier visits that's dependent on and maybe the ability to either drive growth or synergies to that number over time?

Sure. What I'd say is, for the moment, the forecast we are giving for this year is fairly comparable to last year, which we do feel is on the conservative side. And I'd say we're doing that because, obviously, it's our first year getting in there and I think we wanted to take that approach. Given what we're seeing with season pass sales, we think there certainly could be room for upside there but that's probably not something we will know until we get later into the season.

That's helpful. And maybe just to dig on the synergy front a little bit, clearly you guys have had a chance to evaluate some of the cost side there. Is the opportunity to have more room to just get more visits on the mountain or is it more just to -- is there actually some room to reduce costs, as well, in your opinion?

I think there is room to reduce costs. What I'd say is there is a modest amount of that in our forecast and probably some upside there, as well. I would say that's probably not going to be material to the overall company. What will be material, and I think the reason for our acquisition, is how we feel we can drive additional visitation, also continue to drive the experience higher, which will allow us to take price, and continue to build guest loyalty with the season pass program. So what we see is the revenue side of the acquisition is really the key driver for it and really where the synergy or the strategic benefit is going to come from.

That's helpful. And then just maybe one more. I think you talked a little bit in the release about some investments on the property. Any sense on a budget there or how we should think about --- is that going to be slow and incremental or is there some work that clearly needs to be done on the outset maybe in fiscal ' 11 here or in fiscal '12?

We will provide more detail on the capital plan when we do our March earnings call, which will be consistent with how we handle the rest of our capital improvement opportunities. But what I would say is this, I do think that we will be taking an aggressive approach to the opportunities that we feel we can pursue right off the bat, and there are a number of them. Again, we will probably give more guidance when we get to March. But I think certainly on the terrain side, I think we will be looking at the restaurant side, the village. We feel like, again, the resort has tremendous momentum. And obviously our goal is going to be to continue that and to make sure we don't take our foot off the gas pedal.

Thanks, Rob. And maybe one last one, just switching gears, but it's important. On the real estate side, if you could just give us your thoughts -- I think you guys clearly mentioned that some of the closings, the closing pace missed your forecast. When we look back at what you did at One Ski Hill Place, the closing rate certainly seems to be below that, and I think you mentioned that you thought it could be closer to in line with that. Is there something else we should be worried about there? Specifically I'm referring to, you took down your forward guidance based on how many you closed this quarter, but is there still risks to those closings in the second and third quarter as we roll forward here, given the close rate you are seeing today?

Clearly we were anticipating that most of the closings would occur in the first quarter. So, given the absolute level of closing, I think that certainly transcends to the rest of the year and that's why we did lower our guidance for the year. A couple things become very clear. Number one is the project is fabulous from the standpoint of quality and what it presents to Vail and how it looks. I think as people see the finished product and are able to tour that this year, I think that's only going to help. It is a multi year process though. And in this market, that just becomes very, very evident. And so we are able to be patient. Obviously we have no third party debt on any of our projects. We funded those all off our own balance sheet and therefore we can be patient.

It really is a cash story at this point as far as no real meaningful cash going out anymore. The projects are essentially complete. All closings we do get will be cash coming in. And that's how we're looking at it. Obviously we would have preferred to have more closings in the first quarter. But at the end of the day, the project is done, they are finished, they are in great shape and we are just looking to sell over, again, a multi year period out through the project.

Thanks. I appreciate the color.

Our next question comes from the line of Anthony Powell with Barclays Capital. Please go ahead.

Hi, guys, great news on the ski season. One quick question on G&A Real Estate. That number has been $5 million, $6 million, $7 million in the past few quarters. Where does that go as you try to sell some of the final units at both projects? Does it go to $4 million or $5 million?

Anthony, I think it definitely has room to decrease a bit as units sell off but certainly I think in the short-term we have marketing expenses. We are in a marketing and sales period for those projects. So that marketing and sales expense will continue to hit each quarter in real time as that does not go into future cost of sales. That is treated as an expense when it is incurred. And certainly over the course of this winter season, we will be pushing the marketing and sales piece pretty hard. I think that estimate is probably a good one to continue to use for at least the near term.

Great. That's it, thanks.

Our next question comes from the line of Will Marks with JMP Securities. Please go ahead.

Hi, thanks. Hello, Rob, hello Jeff. On Northstar, did you give a 2010 figure for how the results performed or do you care to?

No. I think what I said was that the figure we are giving for 2011 is comparable given the adjustments.

And then you have given us bottom line or EBITDA guidance. Can you help us at all on margin or revenues? I gather you would have told us, if you could, but any thoughts?

No, that is not something we normally put out in our guidance. As we stated, the guidance did contemplate both increases in visitation and price. Clearly, like we said, we are very pleased with the early season indicators but we have a long season to go. But some of that was contemplated.

Thanks. A few other things. One is you mentioned that you are pretty much done with the construction of the two projects. You had given guidance last quarter. I think it was something like $30 million or $40 million left to spend. Is it now $5 million or can you give us some figure?

We have in our Q that we issued today as a range through the end of the year. We are in the below $20 million level, and I think there is always some amounts that you hold back until you are completely solved with your general contractor and everyone, that all the work has been completed. But it is definitely below that figure.

So that's for the two real estate projects, right?

Correct

How about for your overall CapEx budget? I can't remember whether it was $75 million to $85 million, how much is left in that?

Again, that's in the Q, Will. I can get that.

That's all right. I will take a look at the Q later. In terms of real estate cash flow, I don't think you updated that $160 million to $200 million number of net real estate cash flows. Should we assume lower end or are you going to update that?

I think, based on what we are seeing, what I would say is this. I think that we probably have some room to make up to be at the lower end of that in the rest of the year. Obviously we are seeing some pretty good economic indicators. We haven't seen that translate yet into real estate sales. So what I would say is this -- I think without an improvement in those dynamics, we may fall short of the lower end of that guidance. But, again, we haven't even really gotten into the selling season which really starts at Christmas. Again, a little unclear as to where we wind up. What I would say is certainly some of the trends we saw over the last couple of months continued and did not improve, like we are seeing on the travel side, then I'd say we'd probably fall short. If we got a bump, then we certainly might make it to the lower end of that. I think the upper end of that might be tough.

Thanks. Then just in terms of the selling strategy, can you just confirm, you talked in the past that there would be no reason to adjust your pricing until at least you get through a lot of the peak selling periods of the season on those two projects, is that correct?

I think what we said is we are really taking a patient and long-term approach. We talked about multi year. We really look at the real estate at this point as an opportunity for us to generate cash. It doesn't require, as we said, much in additional investment. For us, I think it is about finding the right time and place to monetize this. And given our leverage, again, we are not really under any rush or pressure to do so.

Shifting gears, have you announced your daily price yet at your resorts?

We have not yet. It will be coming out shortly. What we have announced is that we are taking an approach this year where we will be setting a firm price for advance purchase ticket and that that advance purchase ticket will not be above $99 for a single day at Vail, if you buy it seven days in advance. We have not announced what the ticket rates will be if you show up at the window day of. We may be taking an approach that is a little bit more seasonally based on that, than we have in the past, holidays and non holidays. But what we have confirmed and committed to our guests is that if you buy in advance, they will get that, the lowest price basically that you can find anywhere, and we are guaranteeing that. So we're really again, I think on our pricing for this year, what you're going to see is a continued effort to get people to purchase in advance and provide people the best discount, the best value when they do so.

Thank you. Last week you had a board meeting and there was no -- not that I expected it but no dividend announcement, no share repurchase increase. Can you just talk big picture about your strategy there? Are there more potential acquisitions? I know you've talked about you would love to own other resorts even after Northstar.

Sure. I think our view on cash really hasn't changed. First and foremost, obviously, it is about reinvesting in our resorts, and that is something that obviously you have seen this year and I have talked a bit about, vis-a-vis Northstar. Obviously even beyond that, looking over the last couple years, just looking at the resort side, we have been generating quite a bit of cash. We have been looking to do one of two things with that. One is either purchase other strategic properties, one of which is Mountain Resorts. And I think you will continue to see us looking at those opportunities, both in North America and outside of North America as well, as we have been talking about on some of our last investor conferences. But we're also going to take a very disciplined approach to that, as we have in the past. So we are not an a buying spree, but rather aggressively looking for the right acquisition at the right time at the right price.

And then finally, we also look for ways to return cash to shareholders. What we have been doing is a buy back program, as you know, for quite some number of years now. Quarter by quarter we look at the current situation and obviously all the various regulations and our formulas in all of our debt agreements and then make our decision as to what we're going to do. We have in the past, obviously, also looked at the dividend and I think we'll continue to study that as we go forward but at this point certainly are not ready to make any announcements on any of those fronts.

Thank you very much, that's all for me.

(Operator Instructions) Our next question comes from the line of Martin Pyykkonen with Wedge Partners. Please go ahead.

Thanks, good morning. On the real estate question, longer term, bigger picture now that we have Northstar, I'm just curious where that maybe fits in as you look at the attractiveness of building out? There's obviously been a lot of money put in there. You just mentioned spending more in terms of the mountain. But when you look at One Ski Hill Place, I think it's four, five, maybe six buildings you could add there when the time is right. I'm just curious where North tar ranks in terms of development potential, more in the home/condominium side.

Sure. What I would say is, yes, there's no question, that when the time is right, I think we do see real estate as a core part of the business and certainly something that is important to improving the base area of our resorts. But in the current market we have no plans to launch any new projects. At Northstar, we did not purchase any developable real estate, so that real estate is currently held by third parties and we have great working relationships obviously there. The developments that will go ahead at Northstar, at least at this point, would not include us in the real estate portion of that.

And then on Ever Vail, any update? I know that's long term, big picture again. But likely to be starting to move the road next year? Approvals imminent early next year?

I would not see us moving the road in calendar ' 11. We do view Ever Vail as a critical strategic opportunity for Vail Mountain but it is also something that is sizable and therefore certainly would not get going until the market shows that it has that strength. We are in the process right now of continuing to have meetings, take input, adjust the plan based on community input. I think we are making a tremendous amount of progress there and I think we feel very optimistic that we will coalesce around a plan that is not only great for our Company, great for Vail Mountain but also one that has got real support in the community and the town council in Vail. I think we have really taken a collaborative approach and we are not in any rush and we want to make sure we have the right project when it does come out.

One question on the mountain, just the last two to three weeks with, as you said, better snowfall, more trails open, so forth, both on the season pass usage as well as single day, have you seen the actual skier visits over the last two to three weeks up nicely year-over-year? I know it's a small piece of the season but curious as how it started out.

We don't comment on skier visits at this point in the season. But we will be providing an update, as we did last year, right after the Christmas and New Year's holiday.

Thanks.

(Operator Instructions) We do have a follow-up question from the line of Will Marks with JMP Securities. Please go ahead.

Thanks. Back to Northstar, the pricing, implied pricing around six times EBITDA -- this is a softball question, I guess -- is pretty low. Is there anything that we are missing? I know this is the first of your leases with a private landholder, but that is taken into account with EBITDA in terms of whatever you are paying in rent. Why the low multiple?

I do think the lease plays into that, Will. This is a purchase price after a significant and sizable lease on the property where we are leasing the underlying land and the improvements that have been made. While there is no US Forest Service fee, it still is a higher lease rate for the land than we would otherwise have been paying to the US Forest Service fee for the permit. That does enter into the equation, and did enter into the equation that we are basically buying a cash flow stream after the lease of land and improvements.

But your other resorts, EBITDA takes into account your payments to the Forest Service, right?

It does.

Is this lease more challenging in terms of growth or your ability to grow EBITDA because of this lease in the future?

What I would say is obviously there is two pieces to that. One is the partnership, obviously, that we have with the US Forest Service, some of their concerns, working with them, as we look to grow, add new terrain, add lifts, add restaurants on that land. Obviously Northstar is private land with CNL as a partner, so that is different. We feel like, both looking at the history with CNL, and we have every expectation that CNL and Vail Resorts will partner together very cooperatively for all the growth opportunities we are looking at The lease itself, yes, is I'd say more financially complicated than the Forest Service permit and is certainly a much bigger expense relative to the total EBITDA of the Company at Northstar than the Forest Service fee would be at our other resorts. It is not necessarily a bad thing as we go forward but it's certainly something that we factored into our price that we came up with.

Thanks. One final question which I'm sure you will give me a very detailed response. Did you have the opportunity to look at Squaw Valley and any thoughts on that resort? I know it is about the same size in terms of visitation.

We don't comment whatsoever on any of that, so you're right, that's about the full amount of detail that we're going to share. And secondly, we have a tremendous respect for Squaw and certainly know KSL quite well. We think that more investment in Tahoe in total is great for the overall region. We obviously welcome their presence there and, again, have nothing but the greatest of admiration and respect for Squaw.

Thank you very much.

At this time, there are no further questions. I would like to turn the call back over to management for any closing comments.

Thank you, Operator. Thank you for your interest in Vail Resorts. Jeff and I are available for additional questions should you have any follow-up. We look forward to talking to you again next quarter. Thanks very much.

Thank you. Ladies and gentlemen, this concludes the Vail Resorts fiscal 2011 first quarter results conference call. If you would like to listen to a replay of today's conference, please dial 303-590-3030, or 1-800-406-7325, followed by pass code of 438-6078. ACT would like to thank you for your participation and you may now disconnect.