Vail Resorts Inc (MTN) 2015 Q4 法說會逐字稿

Good day and welcome to the Vail Resorts fourth-quarter and fiscal 2015 earnings results conference call. Today's conference is being recorded. At this time I'd like to turn the conference over to Rob Katz, Chief Executive Officer. Please go ahead, sir.

Thank you. Good morning, everyone. Welcome to our fiscal 2015 year-end earnings conference call. Joining me on today's call 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 and the press release that we issued this morning, along with our remarks today, are made as of today, September 28, 2015 and we undertake no duty to update them as actual events unfold.

Today's remarks also include certain non-GAAP financial measures. A reconciliation of these measures is provided in the tables included with our press release and in our 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 2015 results. We achieved another year of strong resort revenue and resort reported EBITDA growth, as we continued to leverage our network of world-class resorts and the connection they create with our guests. We are very pleased to complete the year with resort-reported EBITDA, excluding Perisher results, and the non-cash gain on the Park City litigation settlement of $342 million, which was within our original guidance range, and in line with our updated guidance for March.

The results reflect the benefit of our geographic diversification, and our season pass products that allowed us to deliver these results, despite the challenging conditions throughout the season at our resorts in Tahoe, and in Utah this Spring. Our season pass revenue growth of 20.9%, excluding Perisher, continues to be at the core of our strategy, providing considerable financial stability, while driving customer loyalty. Our results also benefited from another outstanding year in Colorado, with significant growth in effective ticket price, and spending in our ancillary businesses.

Our summer business continues to grow as we build out our Epic Discovery activities at Vail, Breckenridge and Heavenly, and tap into the strong existing summer tourism in those resort communities. Finally, disciplined cost control helped us achieve fiscal 2015's strong results, and we increased resort EBITDA margin by 330 basis points to 25.6% in fiscal 2015, excluding Perisher results, and the non-cash gain on the Park City litigation settlement.

While we are proud of our fiscal 2015 results, we are even more excited as we head into fiscal 2016, with a more powerful network of world-class resorts, more sophisticated and more robust data driven marketing efforts and numerous growth opportunities. In September 2014, we announced the acquisition of Park City, and subsequently integrated the resort for the 2014-2015 ski season. We also outlined a $50 million transformational capital plan, to connect Park City and Canyons for the upcoming 2015-2016 ski season. This effort, one of the most ambitious and impactful investments in the US ski industry history, is on schedule and on budget, and we are incredibly excited to welcome guests to the new Park City, now the largest ski resort in the United States.

On June 30, 2015, we closed on the acquisition of Perisher in Australia, our first international mountain resort, which created a much deeper connection between our US resorts and Australian skiers and riders. We have so far been very pleased with the integration of the resort, its management team, its operations, and its financial results. As we noted on our last earnings call, we saw very strong season pass growth of 68% heading into the Australian ski season at Perisher, and results at Perisher in July and August have exceeded our expectations, despite a very soft start to their season, in terms of snowfall.

In late August, we reintroduced the Perisher Freedom Pass as the Epic Australia Pass, and began sales for the 2016 Australian ski season, and are already seeing very good growth in pass sales over last year's results. While the strong US dollar certainly creates headwinds for the entire US ski industry to attract Australian guests, we believe that our acquisition of Perisher, and the introduction of a combined season pass, offers us a unique opportunity to continue to drive growth from this critical region, despite some of the currency challenges.

Turning now to our 2015-2016 season pass sales for our US ski resorts. We are extremely pleased with our season pass sales to date. Through September 20, 2015, season pass sales increased approximately 16% in units and 22% in sales dollars, compared to the prior-year period ended September 21, 2014. These results exclude Perisher Freedom Pass and Epic Australia Pass sales in both periods. It is very encouraging that we have been able to maintain our growth rates from what we reported in June, reflecting continued strong enthusiasm from our guests, for our pass products, which we believe offer the best value in the ski industry.

Our growth continues to be driven in large part from our more sophisticated and targeted efforts to move destination guests into our season pass products, with this segment representing more than three-quarters of this year's growth to date. In addition, we have been very pleased with the solid growth we are seeing in Colorado, which is our most mature region, and strong growth in Utah, with the addition of Park City to our pass offering there.

Finally, while we have seen modest declines in Tahoe, that region is also surpassing our expectations. As always, we do expect our season pass growth rates to decline through the end of our selling season, given that some of our increase is driven by our efforts to encourage guests to purchase their passes earlier in the year. Typically at this point in the year, we have sold approximately 55% to 60% of our season passes for the upcoming ski season.

Finally, I'm 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 $0.6225 per share of common stock, and will be payable on October 26, 2015 to shareholders of record on October 9, 2015.

Now I would like to turn the call over to Michael to further discuss our financial results and our fiscal 2016 outlook.

Thanks, Rob, and good morning. As Rob mentioned, we are very pleased with the results from fiscal 2015, and we are excited about the opportunities for Vail Resorts in fiscal 2016. For fiscal 2015, resort net revenue was $1.4 billion, an increase of 12.7% compared to the prior fiscal year. Resort reported EBITDA, excluding the non-cash gain on the Park City litigation settlement, increased to $349.4 million for fiscal 2015, a 30% increase compared to the prior fiscal year.

Perisher contributed $7.4 million of resort reported EBITDA in the period from the acquisitions closing on June 30 to the end of fiscal 2015, which includes $5.7 million of transaction, duty and transition costs. Mountain reported EBITDA, excluding Perisher results and the non-cash gain on the Park City litigation settlement, increased $68.2 million or 27.1% to $320.3 million, compared to the prior fiscal year. Our Mountain results benefited from the acquisition of Park City, strong guest spending on ancillary services, and the continued success of our targeted marketing efforts in driving increased destination visitation, particularly to our Colorado resorts, and in season pass sales growth.

The growth was offset by the challenging conditions we faced throughout the season at our Tahoe resorts, and this Spring in Utah. Lodging reported EBITDA increased 29.6% to $21.7 million for fiscal 2015 compared to the prior fiscal year. Lodging segment net revenue increased $12.3 million, driven by a 250 basis point improvement in occupancy, and a 5.3% increase in average daily rate, resulting in a 12% improvement in revenue per available room at our owned and managed properties.

Real estate reported EBITDA improved $0.1 million to a loss of $6.9 million for fiscal 2015, compared to the prior fiscal year. We continue to see positive momentum and strong demand in the resort real estate markets where we operate. During fiscal 2015, we generated $28.9 million of net real estate cash flow, as we closed on 14 One Ski Hill Place units, 5 Ritz-Carlton Residences Vail units, and a property in Breckenridge that will be developed into a Marriott Residence Inn, as well as a development land parcel in Vail.

Subsequent to the fiscal year end, we closed on two Ritz-Carlton Residence Vail units, and one land parcel. As of September 25, 2015, we have seven Ritz-Carlton Residences Vail, and four One Ski Hill Place units, including two units that are under contract, remaining to be sold, and approximately $97 million of real estate held for sale, and investment associated with land parcels at our resorts. Finally, net income attributable to Vail Resorts was $114.8 million, or $3.07 per diluted share for fiscal 2015, compared to net income attributable to Vail Resorts of $28.5 million or $0.77 per diluted share in the prior fiscal year.

Net income was impacted by a loss on extinguishment of debt of $11 million for the early redemption of our senior notes and Eagle County bonds. Our balance sheet continues to be very strong. We ended the year with $35.5 million of cash on hand, and $185 million of borrowings under the revolver of our senior credit facility, primarily as a result of funding the Perisher acquisition on June 30, 2015.

Our net debt was 2.2 times trailing 12-months total reported EBITDA. This net debt calculation includes $317.5 million of capitalized long-term obligations associated with the Canyons transaction. As previously announced during the fourth quarter, we completed the redemption of $215 million of 6.5% senior notes, and $41.2 million of 6.95% Eagle County industrial development bonds, which was funded by a $250 million term loan under our senior credit facility and cash on hand, resulting in an estimated $13 million in annual interest savings at current interest rates.

Now, turning to our outlook for fiscal 2016. We are pleased to enter fiscal 2016 with an expectation for significant growth across our business. We expect resort reported EBITDA of $405 million to $430 million, representing 15.9% to 23.1% growth from fiscal 2015, excluding the non-cash gain on Park City litigation in fiscal 2015. We expect our growth will be driven by the continued success of our strategy of increasing guest loyalty by moving skiers and riders into our season pass products, creating a more personalized and relevant conversation with each of our guests, and using sophisticated approaches to drive yield increases. We also benefit from a lack of new supply across the mountain resort industry.

The US economy remains robust, particularly for domestic upper income vacation travelers, who produce over 85% of our destination visitation. We have seen strong demand for the upcoming season with the successful season pass sales to date and from lodging bookings, which have been strong across our resorts. These factors combine to create an environment where we expect to drive visitation, pricing, and yield growth across our business.

Our guidance anticipates normal weather conditions across our resorts, and a continuation of the current economic environment. It also assumes a continuation of existing exchange rates with the strong US dollar, which has impacted bookings from certain of our international markets, particularly Canada and the UK, though that has been more than offset through strength in the US and other international markets, such as Mexico.

We expect significant growth this year in Park City, with the excitement around the combination of Park City and Canyons into the largest resort in the United States. Our expectations for Park City remain in line with our previous guidance of $70 million in resort reported EBITDA from the two acquisitions, as the resort benefits from increased visitation and improved yields, resulting from the $50 million transformational capital plan that will be completed for the upcoming season, along with driving significant destination pass growth to the resort.

We expect that Perisher's Australian dollar results in fiscal 2016 will be modestly above our previously-issued guidance. The US dollar impact from Perisher will, of course, be subject to any changes in exchange rates throughout the year. It is important to note that our fiscal 2015 results included approximately $11.2 million of transaction and transition-related costs for Park City and Perisher that we do not expect to recur in fiscal 2016.

Fiscal 2016 will also include the official launch of Epic Discovery, our summer activity initiative. The construction of new activities outlined in our calendar year 2015 capital plan, primarily at Vail and Heavenly, will be completed for the fourth quarter of fiscal 2016. In line with our prior guidance, we anticipate that these new activities will generate incremental EBITDA for calendar year 2016 of between $6 million and $8 million, and expect approximately half of that will fall within fiscal 2016. We will continue to operate with strong financial discipline, to continue to drive margin expansion.

We expect our resort reported EBITDA margin to be approximately 27.5% in fiscal 2016, using the midpoint of our guidance range. This is approximately 190 basis points above our fiscal 2015 resort reported EBITDA margin, excluding the non-cash gain on the Park City litigation settlement and Perisher results, and is approximately 520 basis points above our fiscal 2014 resort reported EBITDA margin.

Moving on to our real estate segment, it's important to remember that results in the real estate segment are impacted in any given year by the timing and mix of real estate sold and closed. For fiscal 2016, we are estimating real estate reported EBITDA of negative $4 million to positive $2 million. We expect net real estate cash flow of $13 million to $28 million, with certain development land sales that could bring us to the upper end of that range. Net income attributable to Vail Resorts, Inc is expected to be in a range of $118 million to $144 million for fiscal 2016.

I'll now turn the call back to Rob.

Thanks, Michael. We are proud of our fiscal 2015 results, and the transformational changes that took place for our Company this year, and I'd like to thank everyone at Vail Resorts for making that possible. The passion of our employees is what lies at the core of our success, and all of our efforts to reimagine the mountain resort experience. Our commitment to continuing to deliver an experience of a lifetime to our guests remains unwavering, and over the past few months, we have made significant capital improvements across our network of resorts, including significant investments in Utah, as well as lift and snow-making improvements at our other resorts, along with technology investments that will benefit our entire Company.

We believe investments of this nature are a true differentiator for our guests, a key driver of our growth, and critical to our long-term success. We are very excited about the upcoming ski season, and welcoming guests to all of our resorts.

At this time, Michael and I would be happy to answer your questions. Operator, we are now ready for questions.

(Operator Instructions)

We'll go first to Joel Simkins at Credit Suisse.

It's Ben on for Joel. Can you talk about what you're doing to actively incent consumers in Australia to come to the US this year?

Sure. So obviously, we've had an effort, obviously, over many years of course, to reach out to consumers across Australia. Australia is one of our top markets before we did the Perisher acquisition. But what we now have is obviously a significant number of season pass holders, and so we have data on them, we know how to contact them, we can have a more thoughtful dialogue with them, and right now, obviously many of these pass holders are going to get an incredible deal, by essentially skiing in the United States for free.

And so now, our job is to basically go out and convince them to come here this season, and doing that through both obviously reminding them of the great offer that they now have through their season pass, and then also as we always do, using packages and special offers to try and bring them here. I think that we've really had a quantum improvement in the way that we can approach Australian guests, and while there's no doubt the currency headwinds will be something we have to get over, we think it puts us way ahead of where we would be, had we not done this acquisition.

Got it. That's helpful, and then one more. We've seen a few head-ons recently regarding a softening in consumer, especially in lodging. Your forward guidance in pass sales clearly do not reflect this. I was curious if you had any comments on this front, and just how you would describe the strength of your consumer, your customer.

Again at this point we are not seeing any softening in consumer interest. I think we had a fairly strong summer season as well, it did not see that. We aren't seeing that in our bookings or in our pass sales. One of the benefits that we have, obviously, is other parts of the travel industry, one of the things they're struggling with is not just the demand side, but the supply side.

So as people build new rooms, obviously that starts to bring down some of their metrics, and one of the benefits we have right now is that there has not been any new supply added to the mountain resort industry, and so that -- we get to -- and the fact that we continue to improve the experience at our resorts, the fact that we've continued to improve all of our marketing efforts, our season pass is that much more attractive to people this year versus last year, I think all of that leads into some of the numbers you're seeing, and some of our expectations for this upcoming season.

Got it. That's really helpful. That's all for me. Thanks a lot.

We'll move next to Joe Edelstein with Stephens Inc.

Was curious just about the mix from your destination guests. Just, what did that look like as a percentage for your overall year as you look back, and then also curious if you've broken that down ever by country and where you're seeing the biggest gains?

So what I'd say is our destination guest last year were very strong, and we saw that particularly in Utah and in Colorado, obviously in Tahoe was a very tough year, so destination visitation there was down, as we've already reported. When you look in our international visitation, that's ranged anywhere from 12% to 15% of our total skier visits.

Total destination.

Sorry, total destination visits, and we saw -- I'd say last year, we saw growth in almost every market. I think with the currency changes that we're seeing for this year, the strong US dollar, I think that puts a lot more pressure on the Canadian and on the UK market for us. I think we still are seeing good growth and good strength in the Mexican market, and obviously with our acquisition of Perisher and the season passes that are out there, we still have high expectations from the Australian market. I think the Brazilian market, in addition to the currency issue, obviously they're having their own economic issues, so I think that will present a challenge, but when you add all that up with our US destination business, we still feel very positive about the upcoming season.

Appreciate that comments there. And Michael, I believe you said that Perisher is likely to come in a little bit better than what you had previously thought, at least in terms of Australian dollars. Did you give that amount, and we can obviously watch the FX rates going forward off of that number then?

Yes, so nothing specific on that, but certainly given the success of season pass sales and the results that we've seen from Perisher during their ski season this year, we certainly feel optimistic relative to the previous guidance we provided.

Thanks, and if I could just ask one more, maybe come back to the lodging segment. It did perform better than what we were looking for this quarter, and the guidance does look like it's going to come in a bit above where we were modeled as well. So can you maybe just even break down some of the key assumptions there, the ADR, RevPAR? You spoke to some of the strengths, at least this past quarter, past year, but anything going forward would be helpful there.

Yes, so we don't give specific guidance on that, but I would say that our expectations is that we will outperform many of the industry benchmarks that we're seeing, and again, that's based on the bookings we're seeing today. Again, I think that's based on the supply/demand equation that we see not only in the mountain resort industry, but obviously even in our lodging business as well. There's not been anywhere near the supply added to the lodging business in mountain resorts as there has been in other parts of the hotel industry. So at this point, again with the economy staying where it is, we feel like we would outperform the other benchmarks out there, both for upper and luxury.

Sounds great. Good luck this next year.

We'll take our next question from Shaun Kelley at Bank of America Merrill Lynch.

I just wanted to see if I could touch briefly on, I think Rob, in the prepared remarks, you gave some good detail about growth from some of your regional guests. And I know you said to lead off the destination guests for season pass was really the driver. But if I go back to what you said, I think I caught it, and you said strong in Utah, solid in Colorado, and modest in Tahoe, but -- modest declines in Tahoe, but better than expected. Is that the right characterization of each of those three regions?

Yes, I'd say, I think we were really pleased with all of our segments, candidly, but I think Colorado's obviously a part with destination, the largest market. But obviously the most mature market, and so we saw pretty strong growth from the Colorado market, which I think reflects the offering we have here. The marketing efforts, and also the fact that the economy in Denver and in Colorado is very strong. I think the addition of Park City has been incredibly well received in Utah, so we're seeing very strong growth there.

And in Tahoe, where I think obviously we had more modest expectations because of the snowfall last year, I think, even though we are seeing declines, they're less than what we would have expected, which I think reflects the commitment and the loyalty that people have there. I'm sure, reflects in part the fact that there's an expectation at this point that the season could be relatively strong. But I think skiers and riders out in that market, Bay Area, the economy there is still strong. I think they know that in a huge season they want to have that pass and they want to have that connection, and I think we're seeing that play out right now.

Great, and then just sort of to follow-up on this topic, then. Could you talk a little bit about penetration rates for season pass in Utah versus Colorado? I mean, Colorado obviously has had a strong season pass culture that's been adopted over probably 15-plus years at this point, but where do you think Utah sits in that, and is there meaningful room to increase penetration of the pass even from here, at least to the kind of the local and Salt Lake City community?

Yes, so I would say yes, the penetration within the Utah market is much, much lower than it is in Colorado, and the skier perspective is much smaller than the Colorado market. So what I'd say is that we do believe that there is upside, continued upside in the Utah market, though I would say, if I was ranking the different markets, I'd say the destination market is by far our top priority, where we have even more penetration opportunity, and obviously it's a much larger market. So I would say the Utah market I think provides more opportunity, but it doesn't compare to, I think, the opportunity that we have throughout the rest of the markets around the world. And even within Colorado, the Colorado market is so much bigger that the gains that we can drive just with the strong economy there, can actually even outweigh increasing penetration in Utah.

Great, that's it for me, guys. Thank you very much.

We'll move next to Anthony Powell at Barclays.

On the real estate segment, you've done very well this year to close a lot of the Ritz units and One Ski Hill Place units, and you are almost done there. What's that business look like going forward? Would you do Ever Vail or at least restarting that, you're selling parcels, how do you expect that business to evolve over the next few years?

Well, I think we have a handful of units in both of the existing projects that obviously we still have to sell. I'd say we have some other real estate inventory at various resorts, which are now starting to move. We've even seen sales at Red Sky Ranch, the golf course just outside of Beaver Creek. But then we have development land parcels, so you have started to see us sell some of these development parcels again, and we have conversations ongoing in almost every one of our markets on these parcels.

So what I think you'll start to see is a little bit more lumpy sales of these parcels, but the big benefit from these sales, not only is obviously the cash we may get in, but is the upgrade that we can make to the resorts. So typically with these sales and with these projects, we get new restaurants, new retail stores, new guest-facing ticket windows or ski school areas for people to check in and book. And so really, what we see is, we don't see our real estate business ever returning to where it was in the last cycle, we will -- we feel like it continues to generate cash, but be much more modest. But the big benefit comes with the improvements that get driven at the resorts.

Thank you, that's it for me. Good results.

We'll go next to Afua Ahwoi at Goldman Sachs.

Just a few questions from me. First, on the costs that you continue to take on, maybe can you give us some buckets on where those are coming from, and what do you think that looks like in the next few years, how much can you continue to take out? And then on your growing cash balance over the next few years, if you were to prioritize or at least give us a view on what you're prioritizing in terms of use of cash, whether it's share buyback, dividend increases, acquisitions, where would that bucket fall?

Yes, I think on the cost side, I think what we've been very focused on is the financial discipline of growing our business while keeping our cost structure in check, and appropriate for the size of the business. And so our margin expansion over the last two years, as we mentioned, has been over what we expect will be over, for fiscal 2016, over 500 basis points of improvement in two years. And so it's really a focus on growing the business and then keeping our cost structure as in check and as disciplined as possible, to ensure that we're driving as much flow through as we can, appropriate for the businesses' growth.

And I would say on the capital allocation piece, I think the Board continuously looks at that, and there's no doubt that as we continue to pay down debt, I think that becomes a higher priority for the Board, and it is something they're looking at very carefully. And we look at all avenues, obviously. We do have a buyback in place. We've obviously continued to increase our dividend pretty significantly over the last number of years. I think we've made a commitment to returning capital to shareholders, and not letting our leverage get too low for the kind of business that we're in. At the same time, obviously, we're going to preserve flexibility for potential acquisitions or potential investments, though obviously with the size of our Company and the cash flow that we're generating, I think that balance is definitely shifting, where the return of capital piece can become a bigger part of what we're doing.

Got it and actually just a follow-up. On the Tahoe and Utah, given that your guidance you've said you expect normal conditions, if you were to quantify, what would that mean for recovery in those markets? Is it sort of in line with typical recovery, a little more conservative? Just trying to get a sense of maybe what's embedded in your guidance from a recovery point from those two markets.

I would say for Tahoe, we did put out information for fiscal 2015 as to what the revenue miss was versus expectation and I would say that we are expecting to make up a chunk of that, but not all of it in fiscal 2016. So I would say our expectations for Tahoe going into this year are certainly an increase over last year, but the expectations are lower than the expectations that we had last year, and that's just to reflect whatever potential overhang may exist in the market. I'd say for Utah, the shift there is probably a smaller portion versus the benefit that we see coming to Utah from combining the two resorts, and the guest impact that can make. So I'd say that it is hard to quantify that, certainly a piece of the growth that we expect for fiscal 2016, but it's not, but I'd say the bigger story in Tahoe is definitely the combination.

In Utah.

Sorry, the bigger story in Utah is definitely the combination of the two resorts, and the impact that will have.

And we are, as we said in our prepared remarks, maintaining the level of guidance that we had put out before last season for the combined resort, so we're essentially sticking with what we thought we would be able to achieve from the combination originally.

And that's for Utah?

Correct.

Yes, got it. All right, thank you.

We'll take our next question from Matthew Brooks at Macquarie.

You've mentioned in your comments a few times, I think, that Canada and UK was weaker, but Mexico is stronger. Can you elaborate a little bit more on that? What were the sources of weakness and strength in those markets, relative to the currency?

Well I guess what I'd say is obviously the US dollar is strong versus almost every market, so I think it impacts every market. But how that translates into advanced bookings has been, we've seen differences. So with Canada and the UK, obviously a little bit more price sensitive guest, and I would say that we are seeing more sluggish bookings from those two markets, some more sluggish pass sales in those two markets, and yet we're seeing strength in the Mexican market.

So I can't really quantify that because we don't give specific details on individual markets, but I'd say it's not that surprising to us. I think when we talked about currency in the past, I think we've said that we felt broadly, the Latin American market was more resilient, a little bit more protected I think, from some of those gyrations, where I think certainly Canada and the UK, and even Australia is more impacted by them. But obviously with the Perisher acquisition, we have a unique opportunity to drive growth there, that doesn't exist in the UK and Canada.

Okay, and just sort of as a follow-up. Your forward bookings for Australia to the US, are they better or worse than what you first thought? You would have had some expectation of what they would be, and now you can see what they are at this point.

So what I would say is they are definitely outperforming what we would expect given the currency, but I would say there's no doubt that the currency is still impacting the Australian market, but I think we are definitely seeing the strength of this acquisition, and it is outperforming, very clearly I think, markets like the UK and Canada. And candidly, we do ultimately have expectations of growth from that market. I don't know that we could say the same from the UK and Canada at this point.

And has your team down in Australia given any guidance of whether they think visits there are impacted by the weak economy, the Australian economy is not doing so well? Has that impacted the high end leisure traveler down there?

So at this point I think the currency impact is probably the bigger one. Candidly, we are not seeing, yet, we're not seeing, or can't pick out, I'd say, the impact of the Australian economy in the numbers that we're seeing. I would also say that, obviously, the economy over the winter in Australia, which was July and August, we saw pretty strong results at Perisher, and did not see any impact from any kind of economic sluggishness in Australia. So we are pretty, I think we have walked away from July and August feeling like that Perisher customer is still wanting to travel, and so that certainly bodes well for the US.

And I think it makes, one, it's important to point out, and it may seem obvious, but we are selling a pass in Australia, the Epic Australia Pass before that the Perisher Freedom Pass that is priced in Australian dollars, and so not only is the Australian guest getting the opportunity to ski in the US and in Australia on one pass, but it's a pass that's priced in Australian dollars. So we do feel like that really adds to the opportunity that we have from Australia. Again, really does contrast in all the metric that we're seeing, and in our expectations versus let's say the UK and Canada.

That's really good. Another small question, I know it's not a big part of the business, but your golf business was up about 10%. Is that just because you've had some more visitors playing more golf? Could you add any small bit of color there?

Yes, it's definitely a very small part of the business, but I would say we saw very strong activity and tourism in our mountain resorts over the summer and I would say that the golf business directly flows from that, rather than golf trends on their own. Obviously there is some of that, but I would say really that's a sign that goes along with some of our other numbers, lodging business as well, that highlights the strength of summer tourism into our mountain resorts.

Okay, thank you very much.

We'll go next to Chris Agnew with MKM Partners.

Just wondering, follow-up on international inbound demand. What is the level of visibility you have at this stage of the year, and what's your level of confidence in the international trends that you talked about? Thanks.

I would say that we ultimately we have, I'd say, a relatively small window. We're still relatively early, even though the international guest tends to book in advance. We're still relatively early in that booking cycle, and obviously we can see season pass sales. We can see bookings that come through our central reservation systems, and then we can see bookings into our own lodging properties. But that does not provide a full picture for each one of our resorts, so I would say our window into the international business is limited, just like it is for some of the others.

That said, we believe it's enough that these trends that we're talking about are real and certainly not just anomalies, and make sense, and they actually go -- they very much follow what we would have expected, given these currency dynamics. Now, how that will play out over the rest of the year, obviously -- and season -- really depends upon how currency moves from where we are, and then ultimately, how the economies in these various international destinations play out. But again, I think, if you would just had told us the currency six months ago, I think saying yes, weakness in Canada and the UK, strength in Mexico, and relative strength in Australia, that actually would have been our guess, and so I think we feel like those are probably headed in the right direction. But again, obviously, lots can change between now and as the season unfolds.

Thanks and then final question. Just on Epic Discovery. What are the opportunities to expand that, maybe to other resorts, and what and how will you consider additional investments? Thanks.

Sure. So I'd say our focus right now is on Vail, Heavenly, and Breckenridge. In terms of adding new activities, we've spent a lot of time in the planning for those resorts, and we really feel like there's a huge opportunity over the next couple of years to drive significant EBITDA from those three resorts. And I think what we said a number of years ago we still believe, which is the other resorts, Keystone, Beaver Creek, North Star, we think there's an opportunity to add select new activities, which would be impactful, but nowhere near the same impact as Vail, Breckenridge and Heavenly.

And in Park City, Canyons, I would say there we have -- first of all, Park City is, even before we purchased it, was much further along, because it sits on private land, much further along than any of our other resorts in terms of its summer business, and we do think there's an opportunity to do even more at Park City, but right now, our focus is on the combined resort, and obviously bringing the two brands together and the experience together.

Thank you.

That does conclude today's question and answer session. At this time I'll turn the conference back over to Management for any closing remarks.

Thank you, Operator. This concludes our fiscal 2015 earnings call. Thanks to everyone who joined us on the conference call today. Please feel free to contact myself or Michael directly, should you have any further questions. Thank you for your time this morning, and goodbye.

That does conclude today's conference. Again, thank you for your participation.