Vail Resorts, Inc.

Good day and welcome to the Vail Resorts Third Quarter 2021 Earnings Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Rob Katz, CEO. Please go ahead.

Thank you. Good afternoon, everyone. Welcome to our fiscal 2021 Third Quarter Earnings Conference Call. Joining me on the call this afternoon is Michael Barkin, our Chief Financial Officer. Before we begin, 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 S&P filing. And actual future results may vary materially. Forward-looking statements in our press release issued this afternoon along with our remarks on this call are made as of today, June 7, 2021, and we undertake no duty to update them as actual events unfold. Today's remarks also include certain non-GAAP financial measures. Reconciliations of these measures are provided in the table. included with our press releases along with our quarterly report on Form 10-Q were filed this afternoon with the SEC and are also available on the investor relations section of our website at www.valeresorts.com. So with that said, let's turn to our fiscal 2021 third quarter results. Given the continued challenging operating environment as a result of COVID-19, we are very pleased with our overall results for the quarter and for the full 2020-2021 North American ski season. Results continue to improve as the season progresses, primarily as a result of stronger destination visitation at our Colorado and Utah resorts, including improved lift ticket purchases relative to fiscal 2021 second quarter results. Excluding peak resorts, total visitation at our U.S. destination mountain resorts and regional ski areas for the third quarter was only down 3% compared to the third quarter of fiscal 2019. Whistler Blackhams' performance continued to be negatively impacted due to the continued closure of the Canadian border to international guests, including guests from the U.S., and was further impacted by the resort closing earlier than expected on March 30th, 2021, following a provincial health order issued by the government of British Columbia. Whistler Block Home's total visitation for the third quarter declined nearly 60% to the third quarter of fiscal 2019. While visitation and lift revenue trends improved throughout the quarter, our ancillary lines of business continue to be more significantly and negatively impacted by COVID-19-related capacity constraints and limitations. particularly in food and beverage and ski school. We maintain disciplined cost controls throughout the quarter and continue to operating our ancillary lines of business at reduced capacity. Now I would like to turn the call over to Michael to further discuss our financial results and fiscal 2021 outlook.

Thanks, Rob, and good afternoon, everyone. As Rob mentioned, we're very pleased with our overall results for the quarter and for the full 2020-2021 North American ski season. As a reminder, in the prior year, we announced the early closure of the 2019-2020 North American ski season for our ski areas, lodging properties, and retail rental stores as a result of the COVID-19 pandemic beginning on March 15, 2020. These actions had a significant adverse impact on our results of operations for the third fiscal quarter of 2020. Additionally, The ongoing COVID-19 pandemic and the resulting limitations and restrictions on our operations continued to have an adverse impact on our results for the third fiscal quarter of 2021. Net income attributable to Vail Resorts was $274.6 million or $6.72 per diluted share for the third quarter of fiscal 2021 compared to net income attributable to Vail Resorts of $152.5 million, or $3.74 per diluted share in the prior year. Resort reported EBITDA was $462.2 million in the third fiscal quarter, which compares to resort reported EBITDA of $304.4 million in the same period in the prior year. The increase was primarily due to strong North American pass sales growth for the 2020-2021 ski season. including the deferral impact of approximately $120.9 million of past product revenue and $2.9 million of related deferral costs from the third fiscal quarter of 2020 to fiscal 2021 as a result of the pastholder credits offered to 2019-2020 North American past product holders, as well as improved non-past visitation to the company operating for the full U.S. ski season in the current year with particularly strong demand at our Colorado and Utah destination resorts. Resort reported EBITDA margin for the third quarter was 52%, exceeding both the prior year period of 43.9% and fiscal 2019 third quarter of 50.2%. These results reflect our rigorous approach to cost management, as well as a higher proportion of lift revenue relative to ancillary lines of business compared to prior periods. Now turning to our outlook for fiscal 2021. Net income attributable to Vail Resorts, Inc. is expected to be between $93 million and $139 million for fiscal 2021. We expect the resort-reported EBITDA for fiscal 2021 will be between $530 million and $570 million, and we expect the resort-reported EBITDA margin for fiscal 2021 will be approximately 28.9% using the midpoint of the guidance range. Our guidance assumes all of our operations are open and aligned with current health and safety protocols and capacity restrictions. Current demand trends continue. We experience normal weather conditions throughout the Australia ski season and North American summer season, and there is no impact from potential COVID-19 related shutdowns or lockdowns. The guidance specifically assumes no impact from potential demand or operational disruptions associated with the current lockdowns in Victoria, Australia. We continue to maintain significant liquidity. Our total cash and revolver availability as of April 30th, 2021 was approximately $2 billion with $1.3 billion of cash on hand, $419 million of U.S. revolver availability under the Vale Holdings Credit Agreement and $203 million of revolver availability under the Whistler Credit Agreement. As of April 30th, 2021, our net debt was 2.8 times trailing 12 months total reported EBITDA We remain confident in the strong cash flow generation and stability of our business model, and we will continue to be disciplined stewards of our capital with a focus on high return capital projects, continuous investment in our people, and strategic acquisition opportunities. While we are not reinstating the dividend this quarter, we remain committed to returning capital to shareholders, and our board of directors will continue to closely monitor the economic and public health outlook on a quarterly basis to assess the appropriate time to reinstate the dividend. I'll now turn the call back over to Rob.