Vail Resorts Inc (MTN) 2012 Q4 法說會逐字稿

Good day, ladies and gentlemen, and thank you for standing by. Welcome to the Vail Resorts' fiscal 2012 fourth-quarter results conference call.

During today's presentation, all parties will be in a listen-only mode. Following the presentation, the conference will be opened for questions. (Operator Instructions) This conference is being recorded today September 25, 2012.

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

Thank you. Good morning, everyone. Welcome to our fiscal 2012 year-end earnings conference call. Joining me on the call this morning is Jeff Jones, our Chief Financial Officer.

Before we start, let me remind you that some information provided during this call may include forward-looking statements that are based on certain assumptions and are subject to a number of risks and uncertainties as described in our SEC filings. Actual future results may vary materially. Forward-looking statements in the press release that we issued this morning along with our remarks today are effective only today, September 25, 2012, and we undertake no duty to update them as actual events unfold.

Today's remarks also include certain non-GAAP financial measurements. A reconciliation of these measurements is provided in the tables included with our press release and in our annual report on Form 10-K filed this morning with the Securities and Exchange Commission and is also available on the Investor Relations section of our website at www.VailResorts.com.

So with that said, let's turn to our fiscal 2012 results and fiscal 2013 outlook. I'm very pleased with our fourth-quarter and fiscal year results. In the fourth quarter, our Resort reported EBITDA was improved to the prior year, reflecting enhanced summer guest visitation.

Looking back on the full fiscal year, there are a number of significant accomplishments worth noting. First, Resort reported EBITDA for the year declined 3.8% from fiscal 2011 when adjusting for one-time items, including the timing of the Northstar, Kirkwood and Skiinfo acquisitions and a prior-year litigation settlement. This modest decline is particularly noteworthy when considering that fiscal 2011 was a record year for snowfall and fiscal 2012 was the lowest snowfall total in our history with levels at less than 50% of the 2010/2011 ski season. Our results in what many considered a, quote, worst-case scenario, demonstrated the stability of our operating model, the quality of our resorts, and the comprehensive outstanding experience that we provide all of our guests.

In the Mountain segment, net revenues actually increased 1.9% in fiscal 2012 despite total skier visits declining 12.1% compared to fiscal 2011. Our revenue growth was achieved due to a number of factors -- one, the strength of season pass sales which were up $15.8 million or 13.2% over a year ago and comprised 40% of our total lift ticket revenue; two, a 9.3% increase in our effective ticket price, excluding season passes; and three, increased guest spending in each of our ancillary lines of business, resulting in double-digit growth in yield per skier visit in our ski school and dining operation.

Other encouraging signs were a 2% increase in international visitation as our international guests on average have longer lengths of stay and higher spending per guest and enhanced summer operations at our mountain resorts.

In addition, we successfully acquired and integrated Kirkwood in California, adding a third Tahoe resort to our portfolio. Kirkwood brings a unique offering of high Alpine terrain, a loyal and passionate guest base, and the most annual average snowfall of any resort in California. The addition of Kirkwood increases the variety of resorts available to all of our guests and even greater value to our pass holders.

Though also impacted from the challenging season, our Lodging segment reported an increase in total revenue, excluding payroll reimbursement related to managed properties, supported by an increase in ADR and a higher mix of luxury room nights, as well as strong summer operations, including at our Grand Teton Lodge Company. Additionally our Lodging group completed a reorganization this past fiscal year which will provide cost efficiencies and allow greater focus to our Lodging properties and guests at our mountain resorts.

Turning to Real Estate, we generated strong cash flow from sales of units at the Ritz-Carlton Residence at Vail and One Ski Hill Place in Breckenridge in fiscal 2012. In the last quarter of fiscal 2012, we closed on four units at the Ritz-Carlton Residence at Vail, bringing the total for the year to 13 units. We also have three additional units under contract. At One Ski Hill Place, we closed on one unit in the fourth quarter and a total of seven units in fiscal 2012.

While Real Estate reported EBITDA totaled a loss of $16 million for the year, it did include cost of sales for construction of $34.9 million paid for in prior years.

I'm very proud of our accomplishments over the past year and was encouraged with the momentum we saw in a number of key areas of our business, momentum that has continued as we look toward the 2012/2013 season. First and foremost, we are very pleased with our season pass sales, especially coming off the record performance we had last year. Sales of season passes through September 23, 2012, for the upcoming 2012/2013 season were up approximately 17% in units and approximately 21% in sales dollars versus the comparable period in the prior year, adjusted as if Kirkwood were owned in both periods. To date, we have sold approximately 178,000 passes for the upcoming 2012/2013 ski season.

We have seen strong gains across all our key products and geographies, including from both our destination and regional guests. We are seeing particularly strong gains in Tahoe with the excitement about the addition of Kirkwood and the introduction of the Tahoe Local Pass. We are also seeing a big pickup in international markets, a trend we saw last year that has picked up more steam since the recent announcement of the addition of three days of skiing at Verbier in Switzerland to our Epic Pass. We anticipate both of these trends to continue through the remainder of our sales effort.

While we believe that a portion of the significant increase in sales to date is due to some timing shift, we hope to maintain the vast majority of these absolute gains through the rest of the selling period with a resulting moderation of the ultimate percentage increase in the program. Based on historical purchasing patterns, approximately 60% of our passes have typically been sold at this point in the selling process. It's also important to remember that all of these pass sales for the upcoming 2012/2013 season will be recorded as revenue in fiscal 2013 over the course of the 2012/2013 ski season.

Second, our advanced lodging bookings are up in both room nights and revenue over the prior year at the same point in time. Although it is still early in the cycle with less than 15% of winter season bookings historically on the books by this time, the trend is certainly a positive indication for the season.

Third, we saw strong guest visitation over the summer months and higher guest consumer spending in our Mountain in our dining operations and at our lodging properties. This not only provides an indicator heading into the season but also reflects real momentum around our summer operations as we launch our plans for Epic Discovery, which I will discuss later on the call.

Now, I'd like to turn the call over to Jeff to further discuss our financial results and our fiscal 2013 outlook.

Thanks, Rob. Good morning, everyone. This morning, we released our financial results for fiscal 2012 ended July 31, 2012, and filed our annual report on Form 10-K with the Securities and Exchange Commission, which you can find available now at our VailResorts.com website.

Now, turning to the highlights of our results, overall, as Rob mentioned, we are very pleased with the strength and resiliency exhibited this season by our Resorts segment, which is the combination of our Mountain and Lodging segment.

First, discussing our fourth-quarter results, our fourth quarter is historically a loss quarter as our ski season concludes within the fiscal third quarter and this year was no exception. However, we are pleased that our current year fourth-quarter Resort reported EBITDA was favorable to the prior year by 1.4%, reflecting improved summer visitation with Mountain net revenues rising 11.3% to $46.4 million from $41.7 million in the same period of the prior year. The increases in revenue more than offset transition and transaction expenses as well as seasonal losses from the newly acquired Kirkwood and Skiinfo businesses, as well as normal expense increases in our Resort business.

For the full fiscal year in the Mountain segment, fiscal 2012 Mountain reported EBITDA decreased 6.7% from fiscal 2011. Excluding $3.1 million of Northstar fiscal 2012 first-quarter EBITDA losses and transition costs, net of the prior-year transaction costs, and $2.6 million of Kirkwood and Skiinfo acquisition timing and acquisition related costs, Mountain reported EBITDA would reflect a 4.1% decrease from fiscal 2001.

Mountain segment net revenue actually increased 1.9% despite a 12.1% decrease in total skier visits compared to fiscal 2011, reflecting the increased pass sales and ETP, excluding season passes that Rob mentioned earlier, as well as increased ancillary spending which drove a 0.6% increase in ski school revenues, a 0.5% increase in dining revenues, and also resulted in a 4.3% increase in retail rental sales, the latter also benefiting from new online sales business.

Also of note, our pass holder skied on average nine days this past season, which was only 1.2 days less this year than last, despite the significant disparity in snowfall which, while resulting in a much greater overall ETP increase than the ETP excluding season pass variance, also reflected a continued strong use of the passes by our guests, evidencing the overall strength of our pass program.

Mountain operating expense increased 5.2% for fiscal 2012 compared to fiscal 2011 primarily due to increased retail cost of sales due to higher sales volumes in our retail business, higher labor and rent expense associated with the full-year ownership of Northstar, increased utilities expense of approximately $2.5 million resulting from extended snowmaking operations due to the unprecedented weather conditions occurring during the 2011/2012 ski season, increased sales and marketing costs, including incremental costs related to EpicMix as well as increased costs associated with higher Internet advertising revenue resulting from the acquisition of Skiinfo.

Looking at Lodging for the full fiscal year, the Lodging segment net revenue decreased 1.9% from the prior year. Total Lodging revenue, excluding payroll reimbursement related to management properties, actually increased 1.1% in fiscal 2012 over fiscal 2011 despite lower occupancy, reflecting the impact of skier visitation during the winter as well as lower group business at Keystone. This revenue increase is due to increased ADR of 4.8% at our own hotels and 7.9% in our managed condominiums supported by a higher mix of luxury properties, including increased units at the Ritz Residences Vail and One Ski Hill Place in Breckenridge, as well as improved summer business, including at Grand Teton Lodge Company.

Lodging reported EBITDA for fiscal 2012 was up 9.0% over fiscal 2011 when adjusting the prior year for a $2.9 million litigation settlement gain, reflecting solid flow-through of the revenue increase.

Overall Resort reported EBITDA was $205.3 million for the fiscal 2012 which declined 7.5% compared to fiscal 2011. As Rob mentioned previously, when adjusting for one-time items, including the timing and acquisition costs of the Northstar, Kirkwood and Skiinfo acquisitions and the prior-year litigation settlement, Resort reported EBITDA declined 3.8%.

Looking at dividends and share repurchases, we declared and paid cash dividends of $0.675 per share in fiscal 2012, reflecting an increase in the quarterly dividend from $0.15 per share to $0.1875 per share starting in the third fiscal quarter. In addition to the dividend, we repurchased $22.5 million of stock in the fourth quarter at an average price of $46.78. I'm pleased to announce that our Board of Directors has declared a quarterly cash dividend of Vail Resorts common stock of $0.1875 per share payable on October 25, 2012, to shareholders of record on October 10, 2012.

Our balance sheet remains in a very strong position. We ended the seasonally low fourth quarter fiscal 2012 with $46.1 million of cash on hand, net debt at 2.3 times trailing 12 months total reported EBITDA, and no borrowings under the revolver component of our senior credit facility, and we have virtually no principal payments due on debt until 2019.

Before turning it back to Rob, I'll conclude my remarks by announcing our guidance for fiscal 2013. As always, it's important to remember that, at this point in time, our visibility on the upcoming season is limited. Our guidance for fiscal 2013 anticipates we return to more normal weather conditions and a continuation of the challenging but stable economic environment. Based on our current estimates, our fiscal 2013 guidance range anticipates Resort reported EBITDA of between $260 million and $270 million reflecting a 27% to 32% increase over Resort reported EBITDA in fiscal 2012.

Our Real Estate segment results are impacted in any given year by the timing and mix of real estate sold and closed. For fiscal 2013, we are estimating Real Estate reported EBITDA of negative $9 million to negative $17 million, including approximately $2 million of non-cash stock compensation expense. Included in these estimates is net Real Estate cash flow of a positive $15 million to $25 million, which is defined as Real Estate reported EBITDA plus non-cash Real Estate cost of sales plus non-cash stock compensation expense, plus change in Real Estate deposits less investment in Real Estate. Net income attributable to Vail Resorts, Inc. is expected to be in the range of $50 million to $60 million in fiscal 2013.

Now back to Rob.

Thanks, Jeff. I wanted to conclude by touching on some of the highlights for the upcoming year. The upcoming 2012/2013 season will mark the 50th anniversary of Vail Mountain. In conjunction with the 50th anniversary, we are looking forward to the opening of the centerpiece of our 2012 capital plan, the new 10-person, state-of-the-art gondola serving as the gateway to Vail Mountain through Vail Village where almost one-half of our Vail guests start their day.

With heated cabins, the gondola will set a standard for how guests are transported up a mountain while dramatically reducing wait time by increasing uphill capacity by 40%. The gondola will also connect Vail Village guests to our highly successful 10th restaurant at Mid-Vail, which debuted last season, including new nighttime access to this stunning venue. Additionally, we are looking forward to numerous exciting events throughout the season that will commemorate this milestone for Vail Mountain.

In addition, we recently announced the launch of EpicMix Racing, the latest addition to our award-winning EpicMix application, which brings together the digital and physical experience of skiing and riding and makes it easy to share your story. With EpicMix Racing, skiers will automatically have their race times compared to ski racing great Lindsey Vonn, with gold, silver and bronze medals awarded based on achievement. Race results and metals can be easily shared on Facebook and Twitter.

In conjunction with EpicMix Racing, the Company has created the Lindsey Vonn Race Series in which all skiers and riders will be able to compete for a chance to participate in a grand finale event in April 2013 hosted by Lindsey Vonn on the world-famous Birds of Prey World Cup course at Beaver Creek. Lindsey will also provide race tips throughout the season which will be featured on the Web and mobile applications.

We also recently announced our plans for our expanded summer activities at our resorts which we have named Epic Discovery, a Summer Mountain Adventure. Epic Discovery will encourage learn through play by featuring extensive environmental educational elements and numerous exciting new activities located in already developed areas of our resorts.

As part of these new summer activities, Vail Resorts will work with the Nature Conservancy to bring to life eco-discovery experiences encompassing both fun activities and experiential learning that will be contributing 1% of all summer lift ticket and activity revenue to the Nature Conservancy towards forest restoration projects. We have announced plans and construction has commenced to open some preliminary new activities at Vail Mountain by the summer of 2013 with additional plans to offer more comprehensive new activities in following summers pending US Forest Service approval.

Additionally, we hope to announce similar plans at Breckenridge and Heavenly in the near future. This initiative is the first proposal of its kind in the country following passage last fall of the Ski Area Recreational Opportunities Enhancement Act, and it will create a new iconic summer destination for Colorado, attracting guests from around the world and further differentiating our resorts as unique world-class assets.

Before we conclude, I should note that this coming year is not only the 50th anniversary of Vail Mountain but also the 50th anniversary of our Company. And our performance this past season is a terrific testament to all the work by so many over the years to allow Vail Resorts to break many barriers within our industry. Our core cultural ethic of guest service and our willingness to re-imagine what the mountain resort experience can be has left us poised for incredible opportunities ahead. At this time, I would like to thank all of our employees for their passion, hard work, and commitment to our organization which, as always, lies at the center of our success.

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

(Operator Instructions) Felicia Hendrix, Barclays.

Good morning. My junior high school social studies teacher used to call me Felicia. In any event, just talking about the mix of your season pass units and your price, so I'm just wondering what's the percentage -- so in your forecast, what's the percentage mix of season pass units and price in terms of an effective ticket price in your forecast?

I think maybe the best way to put it is, on average, I think prices have gone up in the neighborhood of kind of 5% to 6%. But what drives a lot of this is ultimately the mix. So depending on what proportion of various products we sell, that drives the ultimate difference between revenue and units. And what I would say is, at this point, depending on the strength of various products, that will determine how it ultimately comes out when we end the selling season.

So I guess what I was trying to get at is when you think about what your optimal level of season pass sales versus just straight window ticket or other kind of ways you sell your tickets, do you have an optimal level or are you just going to continue to drive season pass sales for as long as you can in terms of units?

No, I think our goal is actually to continue to drive season pass sales because I think, at this point, most of the folks who are heaviest users have obviously already bought a season pass in large part. So at this point, the more people that we convert from buying lift tickets to buying season passes, the more consistent our revenue stream is obviously and more stable. But also, we tend to grab more of their skier visits because many people will choose multiple resorts during a particular season and to the extent they buy a season pass with us they are more likely to choose our resorts obviously for that season. So, I don't think we feel like there is some kind of theoretical cap that would all of a sudden we would reach and then we would stop trying to push season pass efforts.

Because mainly, so if you look at it on effective ticket price, it might drive that down but because you're getting more of their visits, that would help continue to grow your revenue.

Absolutely. We have done a fair amount of our own research obviously on the kind of revenue apart from lift tickets that we get from folks. And what we track shows that, when we convert somebody from paid tickets to season passes, even if the ultimate ticket revenue is a breakeven and sometimes it could be depending on the person, we typically will pick up lodging, food, rental and ski school from every incremental day that that person comes to our resort. So even if they ultimately ski for free for three days or four days more than they might have in a prior year, we are picking up extra revenue from each one of those visits.

Okay. That's really helpful. And then just also in your forecast, I'm just wondering if you can give some kind of range of parameters, just help us understand what your expectation is for visitation increases for next fiscal year, and then also how you are thinking about your effective ticket price changes for next year?

Probably the best way to put it -- we don't give specific guidance on those metrics. What I would say is we obviously feel like we have good momentum and that will translate into certainly greater visits next year. But obviously one of our key targets is driving lift ticket revenue and then total revenue around that. But there's no question we feel good about the momentum we have, always understanding we are in an industry that is never going to see huge percentage gains in visit, and especially given our size right now.

On ETP again, what I would say is we feel, if you look at effective ticket price excluding season passes, we are expecting to make additional gains next year probably more moderate maybe than last year where we saw some mix shift, but, again, we have not seen anything that takes away our confidence in our ability to drive total lift ticket revenue well in excess of our unit growth.

Okay. Thanks. Just final question, this is a little bit follow-up from that, is when we think about your single day lift tickets for this next ski season, obviously you've been increasing that. Do you think you'll be able to continue to drive that higher? Are you going to take a break? Obviously, the bad snow last year, wondering if that might have an impact on how you're viewing your single day lift tickets or if you're just going to continue to kind of test the elasticity of the market?

I think we feel like the single day price that you would pay if you just show up at the window for that day -- we are absolutely still going to continue to drive higher, and we are still going to give people great opportunity for value through our season pass program and through advanced purchase. Now, with that said, we certainly would see continued momentum in the absolute prices of all of those products. But obviously it's that kind of last minute purchase at the window that I think we certainly feel has the most room to continue to push.

Okay, great. Thanks for the color.

Will Marks, JMP Securities.

Thank you. Good morning. And I actually missed your prepared remarks, so feel free to just tell me to read the transcript. But I think my questions I'm hoping weren't addressed. I guess the first one is -- I think I saw some filings recently from directors and maybe even Rob in terms of stock. And I don't know if they related to options. Can you just run through anything that would be relevant?

Sure. I'd love to tell you to just read the prepared remarks but I didn't address that, so I'll have to answer that.

I didn't think so.

No, that's just the vesting of RSUs, so we do make a filing, we grant our restricted stock units to directors; we also grant that to various people within management. When those vest, we make a filing regardless of whether or not the person has sold.

Okay. Thank you. Next question on -- can you tell me what your guidance implies in terms of cash flow? The $260 million to $270 million, what -- think you would do in the fiscal year?

Yes, Will, this is Jeff. I think, again, as you know, we have a capital cycle that on a calendar basis versus a fiscal year basis for our financial results, so those two don't marry up exactly. Our capital guidance for calendar 2012 is $85 million to $95 million.

Right.

For next year, we will have a -- we'll announce new guidance for our capital plan next year in March of 2013. But I think you know you can take that EBITDA, you can take what you want to assume as far as capital. Our debt service is really consistent every year, given we don't have any change in debt. And again, from a tax standpoint, I think the most conservative view someone could take would be using the statutory rate on cash taxes even though we haven't to date been paying out much in cash taxes.

So, I'm just saying you can go about that in your model. Obviously, we are not going to guide to a net cash number, and (inaudible) that could also be impacted by any other things that we do as far as you have your ongoing dividends, any kind of level of share repurchases, things like that that we are not going to guide to.

Fair enough, okay. On the Real Estate cash flow numbers and EBITDA numbers, can you tell approximately how many units that assumes, or mix or anything?

I think it's basically assuming a consistent level of sales that we saw in '12. As we had said earlier, we see this as a multi-year process and I think we just set our targets this year to be consistent from a sales volume standpoint with what they were last year.

Okay.

What I would say is obviously we mentioned we already have three under contract, so a good start in typically a seasonal low period for real estate sales to the year. That obviously helps us, gives us confidence when we set that guidance out there.

Okay. And then in terms of use of your cash balance, or your low level of net debt, should we assume that the efforts --- and I guess John Garnsey or others are looking around the world continue that Verbier was only one of what could be several?

I think we are going to remain very aggressive in looking for any and all opportunities within the ski industry where we feel we can add value, and bring value to our current collection of resorts. And we are also going to remain incredibly disciplined to make sure that we are paying the right price for the right asset, just to make sure there's no confusion. With Verbier, that certainly was not an acquisition but an agreement with them to create a pass exchange on three days on our pass, three days on their pass. I think we will on that piece also be looking for other opportunities to enhance the value that we can offer to the Epic Pass, which right now does offer free skiing, or at least it did the last two summers in Las Lenas, now offers some opportunities to go to Verbier. I think you'll see that continue as well into the future.

Were there any exclusivity issues with Verbier?

I'm not sure.

Sorry, meaning that you cannot work with other European resorts?

No.

Okay. On your pass sales, you've been saying I think for at least a couple years that you've hit the point where you can't really expect volumes to go up that much. So, where are these new pass holders coming from? You may have addressed that already.

I think what we talked about is that, in Colorado, I think we've reached a point where it's harder for us to make huge gains given the saturation point. I think what we have said is that we definitely felt like there was more opportunity in Tahoe and I think we are seeing that. I think we definitely feel like there's more opportunity from international markets; we are seeing that. And we also believe that there's more opportunity from what we call kind of out of state or really out of the Colorado and Bay Area region. And we are seeing momentum there. I actually think we have a good opportunity to continue to make gains there for years to come.

The other thing I might have said though is obviously we are looking to grow our overall lift ticket revenue as well, and so obviously our goal is last year was a tougher year, right, where we saw season pass revenue grow as a percentage in part because it grew, but also in part because non-season pass revenue, lift ticket revenue came down a bit.

And so what I would say is that obviously our goal is to grow both of those pieces. And really again, our overall goal with season passes really is to drive future growth in Resort EBITDA and stabilize our performance in Resort EBITDA. Something that I think if you look over the last couple of years we've really been able to show in spades.

Okay. Thank you. One final question that, once again, you may have addressed. Update on efforts to replace the irreplaceable Jeff?

That is -- without question, right, the toughest challenge for me this upcoming year. No, I think we have launched a comprehensive search, and we've actually seen tremendous interest and are quite confident that we will find somebody who clearly can't replace Jeff, but will do a pretty good job nonetheless.

Excellent. All right, thank you all.

Andrew Didora, Bank of America.

Good morning, Rob. Good morning, Jeff. We've been looking at some of the MTRiP data that's out there about some slower bookings thus far this year, and so the fact that your bookings are up is clearly encouraging. Can you give us a bit of a sense in terms of the magnitude around those bookings or the major geographical drivers of them?

We are not going to give more detail on that at this point, especially because we are so early in the booking cycle. What I can say obviously is that we look at those booking results when we decide on how to set guidance for the year. And so I think we looked at it and felt like it's early and obviously the booking window shrank probably five to seven years ago, right, where you really -- the September time period is probably too early to draw a huge conclusion. But certainly from what we are seeing to date, we feel pretty good about the upcoming season and that's reflected in how we set our guidance.

Got it. And then a question just regards to the share repurchase, what you bought back in the quarter. It seems like it's the most you've bought back in the quarter in quite a number of years. And the balance sheet is in good shape, net leverage a little over 2 times and getting better this year. How do you think about capital allocation going forward?

I think we are absolutely committed to, one, to use our cash to reinvest in our resorts, to use our cash to look for new acquisitions or strategic opportunities, and also to return capital to shareholders through both dividends and repurchases. And I think we currently think about past results, future results, state of the economy, where we are as a company, where the share price is, and we sit with our Board and decide how we want to approach repurchases and we do that quarter by quarter. I think our decisions this past quarter reflect our assessment of all of those things.

I guess one final question, just where do you view kind of your optimal leverage?

I think -- I'm not sure where we view the optimal leverage. What I would say is I think we really feel like we want an amount of leverage which provides us some real flexibility. We feel like we are in a very good position right now where we can continue to reinvest in our business and look for additional acquisition opportunities even in very challenging years for the industry, so we want to make sure we maintain that flexibility. But on the other hand, we believe that the business has enough stability that it's certainly appropriate that we have a reasonable amount of leverage on the books as well. So, I think we really look at that quarter by quarter more year by year in thinking about how to set the long-term capital structure.

Okay, great. That's it for me. Thank you.

Smedes Rose, KBW.

Hi, thanks. I just wanted to ask you, on your Real Estate sales, just is there any kind of change in the pricing or what you think about the pricing on the remaining units? It looks like the per square foot pricing was a little down, but I know that maybe could be because of the change in mix maybe year-over-year.

I think there's no anticipated change. Our list prices have remained constant now for several years and as far as what we anticipate happening, we are anticipating no real change going forward. I think mix on any types of units within the building can definitely impact that average price, especially at the Ritz which has quite a few different types of units as opposed to what's a little more consistent as far as the pricing per unit. But no, we are not anticipating any real change there.

And then with the three -- including the three under contract, assuming they are sold, is there about 31 units left at the Ritz now?

Yes. It would put us -- we have 32 remaining that we closed on or that we haven't closed on, so obviously the three would come out of that.

Okay.

As those close, they may be down under 30. And again, we are just very pleased with the overall momentum in the environment over the last couple years that we've really seen from that project vis-a-vis what else is really out there in resort real estate sales. I think it's been really one of the leaders in successful number of units selling and we are continuing to see that.

And how many are left at One Ski Hill Place?

One Ski Hill Place, we have 41 units remaining out of the 88 that we started with.

Great. Okay, thank you.

(Operator Instructions) Fred Lowrance, Avondale Partners.

Thank you, good morning, guys. A couple of quick ones. Can you just maybe give us a little bit of color on how the skier visit mix between pass holders and I guess what I would call destination skiers to include international and non-Colorado, non-Bay Area people, how that visit mix changed last year with bad snow and what, if any, impact that had on your non-lift ticket unit revenues?

It actually -- the mix actually remained relatively consistent year-over-year as far as how that came out. So we really didn't see a big change in that at all despite the differences. We still have for both years actually what we call destination guests and the way we define it was 57% of our skier visits, so consistent year-over-year.

Okay, and then you may have covered it, I could have missed it, but where are you right now in the Lodging reorg that you introduced to us a year or so ago?

Yes, I think we are very far along as far as the execution on the infrastructure side and what infrastructure is needed going forward to support what we have from a lodging perspective. And I would say, as part of that, there definitely was a couple of the management agreements that you can see in the 10-K fell out, which was anticipated as part of all of this. So I think, going forward, we would anticipate the full impact of what we had talked about earlier, which is a $2 million plus kind of impact to the reorganization. We anticipate the full impact of that in 2013.

Thank you.

Tim Hamby, Janco Partners.

Good morning, guys. Thanks for taking my question. With past sales up 70% in units and 20% in sales here at the end of the year, they are basically where they stood at the end of May. And on that third-quarter call, you indicated that there might be a little bit of a pull-forward effect there in pass sales with more people purchasing passes earlier. I want to see what your outlook is here with pass sales and kind of the momentum here as far as sales keeping up their pace throughout the end of the selling season here? Thank you.

Sure. I think we do feel that there is a portion of the increase that we are looking at right now that's probably pulled forward some folks from later in the fall into earlier, and obviously we're going to continue to try and drive that. And -- but we think that there are some other trends going the other way which is a lot of the strong momentum we are seeing in Tahoe and strong momentum we are seeing from international markets. And so I think we feel like, between now and the end of the year, we have a balance of those two trends.

Okay, so they offset each other somewhat there?

Again, obviously I don't know whether they will exactly offset, but that's -- I think our goal right now is to drive -- try and really keep the vast majority of the absolute unit gains that we have to date.

All right. Thank you very much.

I'm showing there are no further questions. I'll turn the call back to Rob for closing remarks.

Thank you, operator. This concludes our fiscal 2012 year-end earnings call. Thanks to everyone who joined us on the conference call today. Please feel free to contact me or Jeff directly should you have any further questions. Thank you for your time this morning and good-bye.

Ladies and gentlemen, this concludes the Vail Resorts fiscal 2012 fourth-quarter results conference call. If you would like to listen to a replay of today's call, you can dial 303-590-3030 or 1-800-406-7325 with the access code of 4563926. We thank you for your participation. You may now disconnect.