Vail Resorts Inc (MTN) 2013 Q3 法說會逐字稿

Good afternoon, ladies and gentlemen. Thank you for standing by. Welcome to the Vail Resorts fiscal 2013 third quarter results conference call. During today's presentation all parties will be in a listen only-mode. Following the presentation the conference will be open for questions.

(Operator Instructions)

This conference is being recorded today, June 6, 2013. And I would now like to turn the conference over to Rob Katz, CEO. Please go ahead, sir.

Thank you. Good afternoon, everyone. Welcome to our fiscal third quarter 2013 earnings conference call. Joining me on the call this afternoon is Michael Barkin, our Chief Financial Officer.

Before we start, let me remind you that some information provided during this call may include forward-looking statements that are based on certain assumptions and are subject to a number of risks and uncertainties as described in our SEC filings and actual future results may vary materially. Forward-looking statements in the press release that we issued this afternoon, along with our remarks today, are made as of today, June 6, 2013, 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 quarterly report on Form 10-Q filed this afternoon with the Securities and Exchange Commission, and is also available on the Investor Relations section of our website at www.VailResorts.com. In addition, during this call at times we will discuss results that exclude certain acquisitions we made in fiscal 2013 and fiscal 2012 including Kirkwood, Afton Alps and Mt. Brighton, and which we refer to collectively as the Acquisitions.

So with that said let's turn to our third quarter fiscal 2013 results. We are very pleased with our performance in the third quarter of fiscal 2013. We delivered record revenue and EBITDA, had a solid recovery in skier visits, and achieved robust increases in spending per guest. Skier visits at our Colorado resorts for the quarter were up 11.8% over the prior year, offset in part by a decline in skier visits of 0.4% at Heavenly and North Star where unusually warm and dry temperatures this spring negatively impacted results. For the three months ended April 30, 2013 excluding the acquisitions, lift revenue excluding season pass revenue was up 13.4% compared with the same period in the prior year.

We also saw continued growth in ancillary revenue driven by increased guest spend with dining revenue up 13.9%, ski school revenue up 11.8%, and retail rental revenue up 7.4%, excluding the acquisitions. Retail rental results were modestly tempered by results in our city store locations. Mountain reported EBITDA, excluding the acquisitions, increased $19.2 million or 11.2% for the quarter compared to the same period in the prior year. Our Lodging segment benefited from increased visitation, especially during peak holiday periods with total occupancy increasing by 2.3 percentage points along with rate increases as Average Daily Rate, ADR, increased 2.9% at our owned hotels and managed condominiums. As a result of improved operating efficiency we increased Lodging EBITDA margins by 2.9 percentage points contributing to a 22.1% increase in Lodging reported EBITDA as compared to the same period in the prior year.

Our Real Estate segment continues to see increased demand and we are encouraged by the level of interest and rate of sales we are seeing at both of our development projects. During the quarter we closed on sales of seven One Ski Hill Place units and two Ritz-Carlton Residence Vail units. Net Real Estate cash flow for the third quarter was $6 million and was $20.4 million year-to-date. Additionally, subsequent to the quarter -- to the end of the quarter, we closed on the sale of 2.1-acres of land at the base of Breckenridge Ski Resort's Peak 8 for $11.1 million and one additional One Ski Hill Place unit.

Finally, net income attributable to Vail Resorts increased 22.7% to $97.6 million and we reported earnings per share of $2.66 per diluted share in the third quarter of fiscal 2013. Our balance sheet remains in a very strong position. We ended the quarter with $237.7 million of cash on hand, no borrowings under the revolver in our senior credit facility, and our net debt was 1.1 times trailing 12 months total reported EBITDA. I'm also very pleased to announce that our Board of Directors has declared a quarterly cash dividend on Vail Resorts common stock, the quarterly dividend will be $0.2075 per share of common stock and will be payable on July 9, 2013 to shareholders of record on June 24, 2013.

Now turning to spring pass sales. We are extremely pleased that our spring pass sales through May 28, 2013 for the upcoming 2013-2014 ski season increased approximately 18% in units and approximately 24% in sales dollars as compared to the prior year period through May 29, 2012. These very strong results relative to record sales last spring are due to more intensive efforts to move fall purchasers to the spring, increasing our overall renewal rate, and the introduction of new products and access to new resorts. We also saw very strong growth from the Minneapolis and Detroit metro areas that surround our recently acquired Afton Alps and Mt. Brighton resorts. With pass sales in those markets representing a significant portion of the growth of this spring pass sales outside of Colorado and Tahoe.

Our effort to drive spring pass sales over the years has dramatically changed the nature of how and when our guests purchase their passes for skiing and riding. The 138,000 passes we sold this spring is more than double the number of passes we sold in the spring of 2008. As always, it is important to note that we do not believe that the growth rates from this spring will be maintained through the fall as our spring growth includes pass holders who purchased last fall. However, we believe the earlier we can move our guest purchase decision in the year, the more opportunity it provides us for more stable and consistent growth. It is also important to remember that nearly all of the 2013 spring pass sales will be recorded as revenue in fiscal 2014 over the course of the 2013-2014 ski season.

Our strong results from this spring do not include the impact we may see from recently adding Canyons Resort in Park City, Utah to our pass products. The addition of Canyons to the Epic Pass comes on top of dramatically improving the benefits of the Epic Pass this year by adding full access, full season access to Eldora Mountain Resort in Colorado, five days at five resorts in the Arlberg region in Austria including St. Anton, Lech and Zurs, and expanding access to Verbier in Switzerland from three days to five days. We are pleased we will enter our fall pass selling season with strong momentum.

Regarding our recent announcement of Canyons. We are incredibly excited to be expanding our portfolio of world class resorts with the recent announcement of the long term lease for Canyons Resort in Park City, Utah. With 4,000 skiable acres, $75 million of recent improvements and 4 million square feet of third party land to be developed, Canyons is truly a perfect complement to our existing portfolio of world class resorts. In North America, there are only a handful of resorts that have the right combination of ski terrain, air access, town experience, developable land and upscale real estate markets to drive significant destination visitation from around the world. We are confident that Canyons offers that potential as the resort matures over the coming years. The Canyons transaction incorporates the potential for the lease to include the land that serves as the majority of the ski terrain of Park City Mountain Resort adjacent to the canyons. This land is subject to litigation regarding whether the current operator of PCMR renewed its existing lease for the land in April 2011. There are many different potential outcomes from this situation and we are hopeful that the ultimate resolution provides a benefit to the guests of both resorts.

We believe Canyons presents a significant growth opportunity for our Company for a number of reasons. First, we will include Canyons in our industry leading season pass programs. We believe the addition of a Utah destination will be incredibly well received by our existing pass holders and make our pass products even more appealing to skiers and riders in the US, and around the world, and particularly in the Los Angeles and Southern California areas. We also expect to be able to drive growth by leveraging our extensive marketing efforts to benefit Canyons through our sizeable guest database and our CRM processes that personalize our messages, and through Epic Mix, which creates an interactive experience with engaging statistics and photos for our guests on the mountain. We believe the transaction will add incremental resort EBITDA in fiscal 2014 of approximately $15 million, excluding transition and integration expenses.

Further, we expect the transaction to be cash flow positive in fiscal 2014 with the $25 million in cash lease payments and $3 million of anticipated maintenance capital, more than offset by resort EBITDA, and the favorable cash tax benefits we expect from the transaction. These projections do not include any impact from our potential lease of the land under PCMR which we believe presents further opportunity for EBITDA and cash flow growth. Now I would like to turn the call over to Michael to discuss our outlook for fiscal 2013.

Thanks, Rob and good afternoon, everyone. Before discussing our updated guidance, I want to remind you that you can find a full discussion of our financial results for our third quarter of fiscal 2013, ended April 30, 2013, on our quarterly report on Form 10-Q which we filed today with the Securities and Exchange Commission. Our Form 10-Q and our earnings announcement can be found on our website at www.VailResorts.com. Now let's turn to our updated guidance for fiscal 2013.

With the addition of Canyons Resort operations beginning on May 29, 2013, we estimate resort reported EBITDA for the full year fiscal 2013 to be between $236 million and $242 million. This full year guidance includes $8.7 million of estimated losses relating to Canyons comprised of approximately $2.2 million of estimated Canyons operating losses in the fourth quarter and approximately $6.5 million of one-time Canyons related transaction and transition costs in fiscal 2013. The mid point of our new guidance range excluding the impact of Canyons is modestly lower than the mid point of the guidance we issued in early January, primarily resulting from Tahoe and retail results that were slightly below expectations. Excluding the impact of Canyons results, resort reported EBITDA is forecast to grow between 19% and 22% in fiscal 2013.

The addition of Canyons related depreciation and amortization and interest expense is expected to result in total depreciation and amortization of between $133 million to $135 million and total interest expense of $37 million to $41 million. We are raising our fiscal 2013 Real Estate reported EBITDA guidance to negative $7 million to negative $11 million, including approximately $2 million of non-cash stock based compensation expense. We estimate that net Real Estate cash flow for fiscal 2013 will be $23 million to $27 million. Now I'd like to turn the call back over to Rob.

Thanks, Michael. We are busy implementing our capital plan now that the lifts have closed for the season and are excited about the new initiatives that are taking place over the summer. Construction on projects for Epic Discovery, our summer mountain activity plan, is underway at several of our mountains. We look forward to welcoming guests who enjoy our new activities at Vail this summer. Significant upgrades are also under way at Afton Alps and Mt. Brighton. These two resorts have already made a significant impact on our pass sales efforts this spring and we are confident that their momentum will build in the fall, particularly as guests in those markets get a better sense of the dramatic improvement that are in store for both ski areas.

Other Mountain improvements include a new 500 seat restaurant at Red Tail Camp at Beaver Creek, a new six person high speed lift replacing Vail's Chair 4, and Epic Mix Academy, the fourth generation of the groundbreaking and award winning Epic Mix application. But maybe more than any other project, we are incredibly excited by the opportunity to open Peak 6 at Breckenridge next season, a 543-acre or 23% expansion of ski terrain at one of the most popular resorts in North America. Terrain expansions of this size are hard to come by and take years to bring to fruition. Peak 6 will add a completely new type of skiing at Breckenridge and is expected to dramatically reduce trail density. All of these projects reinforce our philosophy of continually reinvesting in our resorts to offer and enhance the highest quality experience for our guests.

I want to take the time to thank all of our employees and guests for making the 2012-2013 ski season such a success. The passion and commitment to service of our employees at all levels and in all areas is truly a hallmark of our business and an integral part of our performance this past season. At this time we are happy to answer your questions. Operator? We are ready for questions.

(Operator Instructions)

Shaun Kelley with Bank of America Merrill Lynch.

Hi, good afternoon, guys. I just wanted to start with the season pass metrics. Obviously, they were pretty fantastic to start off the next year's views, so could you just give us a little bit more color? I know basically you closed on -- or announced Canyons the day after you closed your period down for this period's reporting. I mean, any kind of initial view or read about maybe customer reaction or what you're seeing in the pass sales line since the Canyons has been announced?

Yes, we actually -- so, during the Spring we have a special benefits package that we offer to people who buy in the Spring, and that ended actually before we announced the Canyons transaction. So we really have not had any kind of marketing effort or call to action or deadline since the Canyons transaction, and we don't anticipate having one until we get to Labor Day. What I would say is -- so, all of the results that you're seeing today, as you mentioned, do not include the impact of having Canyons in our resort portfolio. I'd say consumer reaction has been wildly positive; obviously that's anecdotal, but certainly social media messages that we've received, news releases, everything else -- I think people feel, as we would expect, that adding a Utah resort to the rest of our portfolio, so you now essentially have four resorts in Colorado, three in Tahoe, one in Park City, Utah, and then obviously five days at five different resorts in Austria and one in Switzerland, I think we feel like we are really building on that momentum.

I should mention that we saw very strong growth. I mean, the highest growth rate we saw by far was in the Minneapolis and Detroit markets, and they were a very significant contributor to our out-of-state growth in our pass sales program. And I think we do feel, certainly coming into, as we head into the Fall and as we'll see the effect of Canyons on our results, we certainly so far can easily point to improvements that we see in our results by adding resorts and resort access, and we think that formula is working in many ways better than we expected.

That's really helpful, Rob. And then I guess my second question is -- just digging in, you gave some additional disclosures on Park City from what you guys had given I think 1.5 weeks ago or what not, so specifically the language around the cash impact. Without going into too much detail, could you just give us a little bit more color on exactly what is driving kind of the additional kind of tax benefit from a cash flow perspective?

Sure. I think -- I'm not going to go into a ton of detail. Obviously, you can talk to Michael about that offline if you'd like, but even though the transaction is structured as a lease, from a tax perspective we anticipate being able to write up the assets in the -- that we are leasing. And when you incorporate the accelerated depreciation, and the fact that our Company is now becoming a cash taxpayer, this transaction had a fairly significant beneficial impact by reducing cash taxes that we would otherwise be paying next year from the rest of our Business. So we did -- obviously, that's something that was important to us in the transaction; we felt it was relevant to let everybody know about that. In this case, because, again, obviously the cash, the depreciation benefits from a tax perspective are fairly outsized vis-a-vis the transaction itself.

Great, and then the third thing would just be -- overall, if we just kind of break down and look at the mountain business, flow through from kind of revenue to EBITDA in the quarter was lower than it's been historically in the third quarter, although it was fairly similar to last year. So I guess just trying to kind of -- as we dig in a little bit trying to understand, a piece of that may have been kind of mix between Colorado and Tahoe, but we're also just wondering -- anything that you guys saw possibly mix between destination and season passes that might have also dragged down that flow through? Was there anything to call out there?

Yes, I think one of the things -- one of the contributors I think to our results this year certainly was results from the urban ski areas. They have lower margin. Obviously, our retail business and the pick up that we saw there in that quarter also comes with lower margins. What I would say is, if you did an apples-to-apples comparison resort to resort, we're not seeing a deterioration. It is a mix of the businesses that we have.

And what I would say is, I think, obviously our primary business, the first businesses that we had in the Company is Vail, which is one of the highest flow through mountains that we may ever own, and as we expand and grow, and expand our other lines of business, we are absolutely adding incremental resort EBITDA at good returns on investment. But that additional incremental resort EBITDA may be at lower margin, and our focus really is that that's not something we can change. I think our goal is the fact that we started with such high flow through properties isn't going to be -- prevent us from trying to expand in a way that we think ultimately drives shareholder value.

Great. That's it for me, thank you.

Thanks.

Felicia Hendrix with Barclays Capital.

Hi, thank you. Good afternoon. Rob, just getting back to the season pass sales, which are obviously very strong -- there was some more activity, as you mentioned, to pull those forward. Just wondering if there's a way you could help us think about them on more of an apples-to-apples basis comparatively year over year?

What I would say is, it's obviously challenging to do that because every Spring we pull some people forward, and we have people that don't buy in the Spring that we then see buy in the Fall, and so it is tough for us to isolate that out. What I would tell you is that almost any analysis that you do on our results from this Spring show very strong growth. And so what I'd say is, I think we're highlighting the fact that we do feel -- we expect that we have pulled forward some of our pass sales from the Fall to the Spring, but that does not account for all of our growth by any measure. We have very healthy growth even independent of that, and we also saw strong growth in Colorado, in Tahoe, in out-of-state, very strong growth in Minneapolis and Detroit, so to us, actually, it was very broad, widespread across almost all of our products.

Great, and actually that might touch upon my next question because I was going to ask you what the season pass sales looked like at your legacy resorts?

Meaning what?

Like ex the recent acquisitions, so if you just think about the four resorts in Colorado, for example, and maybe Heavenly and Tahoe.

So what I would say is, actually the growth rate was fairly comparable in terms of Colorado, Tahoe, and out-of-state obviously, so that was fairly comparable to our total numbers. So it was not a -- my point is, it was actually fairly pervasive, and I think maybe the -- typically in the Spring, our out-of-state growth is not as significant because destination skiers typically don't buy Spring passes as much as people in Colorado and Tahoe or San Francisco. This year I think we actually -- the growth rate out-of-state matched our growth rate in-state because we saw huge growth -- multiple type growth in the Detroit and Minneapolis market.

Now what I'd say is most of the passes that are being purchased in the Detroit and Minneapolis markets are Epic Passes and Epic Local Passes, and we did sell passes in those markets before, and we have included the historical pass sales of those small resorts as we're providing this comparability. So to me actually, what I would say is that this is not really like an acquisition story. It's that we have enhanced the benefit to the program, and are now getting people -- more people to consider a purchase.

Great. That's helpful.

You sold some land in Breckenridge. I'm wondering if there's any opportunities to sell other land parcels?

I guess what I'd say is, I think that was certainly a unique transaction because it's a -- the buyer of that land was the same developer who developed the project on Peak 7 -- and Crystal Peak at Breckenridge right next to our project, Crystal Peak at Breckenridge. With that said, I would say I think one of the things that we are definitely seeing certainly in Colorado is a lot of strength in the real estate market. I'd say that has changed I think markedly even since our last conference call. I think the biggest strength right now is certainly in Denver and in Boulder, but we're starting to see that move statewide. Obviously, we saw a lot of strength in our sales in One Ski Hill Place, and if anything now, the issue that we're running into is inventory is starting to shrink. So even inventory in our own projects are starting to shrink, inventory that's out there, and so I think we may be heading into -- again, the first time I'd say this probably in five or six years, is the potential for a pick up. With that said, a sale like that becomes more unique and one off, and so it's hard to say when the next time we would have the opportunity to announce that.

Okay, thank you. And then finally, a balance sheet question. Just wondering, with your debt-to-EBITDA ratio so low, if you could talk about your thoughts about what the appropriate debt levels are for your Company? And if you did raise leverage, what would the optimal level be?

So I would say the number we announced of 1.1 is before the Canyons transaction, so certainly the Canyons transaction will increase our leverage a bit. But we feel that even taking into account the Canyons transaction, that we will be still well below many of the comps that are out there in the travel industry. I think our approach will remain consistent, which is that we certainly want to reinvest in our assets. We also will look for unique acquisition opportunities like we think the Canyons offers, but we're going to be returning capital to shareholders both in dividends and in repurchases where it makes sense. I'd say, so, we're going to do all of that, and yes, we aren't going to push too far in any one that it would push our leverage to a point where we think it could in any way harm our operations.

Okay. Thank you very much.

Thanks.

Will Marks with JMP Securities.

Thank you. Good afternoon, Rob and Michael, [and Mike]. I guess I first wanted to ask about the $11.1 million sale of land -- can you give us an idea of what that was on the books for?

We're not specifically disclosing that at this time, but obviously that was a contributor to increasing the Real Estate guidance that we spoke of in the release.

Okay. On pass sales, or rather pricing, have you raised your -- I haven't looked on the web -- have you raised your prices since the early pricing?

We have not. We have taken off the benefits that you would get by buying in the Spring, which largely are the, what we call buddy passes. So those -- you got six buddy passes if you purchased before April 15, two if you purchased between April 15 and Memorial Day. Now you don't get any. Again, no commitments at this point, of course, but historically we have typically held price until we get to Labor Day, and then start to take price up in ratchets during the Fall.

Okay, thank you. Any further Canyons costs that you would be taking -- one-time costs in fiscal '14 or -- yes, I guess in fiscal '14?

Yes, Will, I think what we've given guidance on is obviously the remainder of this fiscal year. We will be continuing the integration work next year as we get through the Summer and into the start of next season, and so the $15 million guidance is before any one-time integration expenses that we may incur next year.

The only thing I think I'd add is I don't see those being material to our overall resort EBITDA guidance, when we get to that in September.

Okay. And on the guidance for '14, I know you are not going to give it now, but can you maybe just qualitatively or quantitatively give a sense of the positives and any negatives on what's better about '14 than '13? There's certainly some obvious ones, but maybe if there's some less obvious ones.

I think what I would say going into 2014 is that I think we believe we can continue a lot of the momentum that we saw this year in terms of guest spend. If anything, the economy appears to be getting better, particularly at the higher end. We think there's no question that Peak 6 at Breckenridge will have a nice impact. We think our pass sales are starting off even stronger than last year, which I think, again, bodes well. Even though we can't be certain where they will wind up, it's hard not to feel good about this kind of growth heading into next year. And we do believe that having Canyons in the mix may ultimately drive pass sales, visitation and business to our other resorts, just because we do have that property on the pass.

We think the strength we saw in Minneapolis and Detroit, we think, will help again translate to even more pass sales in those markets over the Fall. And again, those -- what's nice about some of this out-of-state business, which I think Canyons provides as well, is that these are folks who will come and obviously not just buy a pass, but ultimately spend money on food, and lodging, ski school. So we feel like that strategy, again, so far from what we see, obviously hard to tell exactly how it plays out in the Fall, but so far from what we see, looks to be playing out better than we expected.

I also think that we intend to be -- every year we improve on our targeted marketing opportunities -- how we communicate with guests, the data that we have on guests and how we use it, being more thoughtful about promotions in the off-peak time periods, and trying to fill in some of those gaps. And we think we have a number of things in the works which we feel will actually, again, help us next year. There aren't candidly that many downsides or negatives that we see to next year. Of course, you always have economic issues that could come up; you have weather issues that could come up. Certainly those things are present, but right now we feel like we're going into next year with about as strong a hand as we could want right now.

And to add to that, I would think Summer should be better, given Summer is included in fiscal '14 versus fiscal '13 should be better?

It is. I think ultimately Summer will be -- I think there is two pieces to that. Some of that is the projects that we are doing this year -- some of which will be completed this year, some of which will be completed next year ultimately. I think we're talking more about just between June 15 and July 31 in terms of the Summer. The other piece is the broader plans that we have, and so, you know what I would say is, I think, yes, it will definitely help and be a boost to fiscal '14. It's probably fiscal '15 where you're going to see the even bigger impact ultimately from our Summer business.

Okay. And lastly, along the same lines -- so, you didn't mention but can we assume that Tahoe is a fairly easy comp, or at least it wasn't at a normalized level this year?

I think it absolutely is for the Spring. I think for the early season, I think Tahoe actually did well this year and then petered out quite a bit as we headed into February and March. I think -- and obviously, the early season this year in Colorado is another very easy comp. I guess what I'll say is that I am focused on how we drive the Business independent of weather. The weather will play out the way it does, but yes, you're right. Obviously, early season in Colorado, late season in Tahoe; the bigger one of those two by far being early season in Colorado, again, should provide good opportunity.

Okay, that's all for me. Thanks, guys.

Thanks, Will.

(Operator Instructions)

Chris Agnew with MKM Partners.

Thanks very much. Good afternoon. Couple of questions on Epic Discovery, and I know you're early in the investment program, but what benchmarks are you looking for in 2013, and do you have an ability to accelerate any investments if you're seeing things you like? And then also, do you see opportunities for expanding Epic Discovery to Canyons, and what sort of time frame would you place on that? Thanks.

Sure. So what I would say is, I think we feel very, very good about all of the opportunities we have in the Summer. So far, all of the projects that we've implemented historically have all been very high ROI, great performers. It will -- we talked about this when we first mentioned our Summer expansion plans. We do have approval processes that we have to go through, some of which are with local counties, some of which are with the forest service, and so it is difficult for us to accelerate. I think in some respects we are accelerating our efforts there as much as we possibly can, but we need to make sure we're going through the proper approval processes and channels. So it will be what I would say is it's the approval processes themselves that will dictate the ultimate timing of when many of these things go in. So that's first.

In terms of Summer at Canyons, it has not been -- we have not really analyzed Summer on a major way yet in the Canyons. I think we will be first focusing quite a bit on the Winter, on pass sales, on orienting ourself there. But I do -- Canyons is on private land, so the approval processes there would be with the county, not with the forest service. Typically that would give us more latitude, and it's absolutely something that we will be focused on for the long term. And given the kind of visitation that Park City receives in the Summer, we think it's a great opportunity, but it's not going to be something that's top priority for this upcoming year.

Great. Thanks. And one more question, if I can. We've seen a strong recovery in the home building, and I'm sure resort home market follows along after, but just wondering if you can give any historical perspective from previous cycles, what you've seen in terms of the length of the recovery and second-home market following on from a broader recovery in home building?

I don't have enough specificity on that kind of timing. I would say typically the two follow each other, for sure. I think resort markets also tend to follow the stock market. I think particularly many of our guests that are purchasing a second home have a big chunk of their wealth in the stock market, and so as those values go up, they are tending to be more confident and aggressive in purchasing a resort home. And so it does feel to us like we are seeing many of the signs of kind of the beginnings of maybe a more significant recovery.

Now, with all of that said, I think the downturn in resort markets this past cycle was much more severe and significant than we had seen certainly obviously for many, many, many years. So I think it's hard to know how that downturn -- kind of those shift in values and maybe that memory, how long that will take to overcome. And I think that's kind of what we've been sitting with over the last year, but we're seeing signs. We're seeing those -- being able to make a more significant land sale that somebody is going to develop, starting to sell One Ski Hill Place, starting to again have an inventory shortage, so to speak, at Ritz. Obviously, we still have units to sell, but we don't have every type. We don't have as much south facing, we have more north facing, which means you're looking at the highway, those types of things. So I would say that again the environment is [ripe] for it, but hard to know how long it may take for it to fully come back.

Great, thank you.

Tim Hamby with Janco Partners.

Good afternoon. Thanks for taking my questions. So you've been able to successfully implement year-over-year price increases for most of your pass products, and you've supported those through increasing the value of those products. But I wanted to see if you are expecting these other resorts to step up their competition a little bit more now, as far as the pricing of their products go, on either a standalone basis or through a partnership of combining multiple resorts? And if you think that's going to have any effect on the elasticity of your pricing?

What I would say is, I think, two pieces. One is, I think we would welcome more competition. Candidly, I think one of the things that we struggle with on our pass sales effort is that we are the only ones really pushing this very attractive, valued-priced pass with all of the different benefits that we offer. And I think one of the things that we face in the destination markets is convincing people that they should buy off-season pass, and actually I think it's -- the more competition we would have, the better, and I feel quite good about our ability to compete in a more robust expanded market.

With all of that said, particularly in Tahoe and Colorado, there are many resorts that are offering very price-competitive products, and so we are not the only ones offering that. So I would say when you look at our results over the last few years, we have many people within, again, both of those areas that are lowering price and offering more benefits, and so I think the results we are showing are despite a lot of efforts that are already out there. So we are not anticipating a new dynamic where more price competition would necessarily hurt us because in the most competitive markets we already have it.

Thank you very much.

Okay.

At this time there are no further questions in queue. I'd like to turn the call back over to management for closing remarks.

Thank you, operator. This concludes our fiscal 2013 third-quarter earnings call. Thanks to everyone who joined us on the conference call today. Please feel free to contact me or Michael directly should you have any further questions. Thank you for your time this afternoon, and goodbye.

Ladies and gentlemen, that does conclude our conference for today. We would like to thank you for your participation, and you may now disconnect.