Vail Resorts, Inc.

Please stand by. Your program is about to begin. If you need operator assistance today, just press star zero. Good afternoon, and welcome to the Vail Resorts Fiscal Third Quarter 2024 Earnings Call. Today's conference is being recorded. Currently, all callers have been placed in a listen-only mode, and following management's prepared remarks, the call will be opened up for your questions. If you would like to ask a question at that time, please press star 1 on your telephone keypad. If you need to remove yourself from the queue, press star 2. To get as many questions as time permits, we ask that you please limit yourself to one question and one follow-up. At any time, should you need operator assistance, press star 0. I will now turn the call over to Kirsten Lynch, Chief Executive Officer of Vail Resorts. You may begin.

Thank you. Good afternoon, everyone. Welcome to our fiscal 2024 third quarter earnings conference call. Joining me on the call this afternoon is Angela Korch, 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 SEC filings, 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 6, 2024, 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 tables included with our press release, which 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. Let's turn now to our fiscal 2024 third quarter results. Given the unfavorable conditions across our North American resorts for a large portion of the 2023-2024 North American ski season, we are pleased to see improved results in March and April, with visitation across our Western North American resorts in particular benefiting from improved conditions. While past products visitation returned as expected, as we communicated in April, lift ticket visitation did not return to typical historical guest behavior for the spring, primarily at Whistler Black Home, which was down significantly relative to the prior year period. Despite these challenges, the company grew resort net revenue and resort reported EBITDA to record levels in the third quarter, supported by the stability created from our advanced commitment strategy, operations, executional excellence, and continued strong growth in ancillary spending per skier visit across our ski school, dining, and rental businesses at our resorts. Our results through the 2023-2024 North American ski season highlight both the stability provided by our season pass program and the investments we have made in our resorts and employees, The winter season included significant weather-related challenges, with approximately 28% lower snowfall for the full winter season across our western North American resorts compared to the same period in the prior year, and limited natural snow and variable temperatures at our eastern U.S. resorts, which comprise our Midwest, Mid-Atlantic, and Northeast resorts. For the 2023-2024 North American and European ski season, total skier visits declined 7.7% as compared to the prior year period, which we believe was driven by a combination of unfavorable conditions and broader industry normalization post-COVID following record visitation in the U.S. during the 2022-2023 ski season. Skier visitation from lift ticket guests which is refundable and not committed in advance of the season, was particularly impacted, declining 17% compared to the prior year period. Despite the decline in visitation, ancillary spending was strong across our ski school, dining, and rental businesses at our resorts. Resort net revenue for the second and third quarter combined period increased 1%, and resort reported EBITDA increased 6% over the prior year. supported by our advanced commitment strategy, strong growth in guest ancillary spending per visit, and continued cost discipline.

Now I would like to turn the call over to Angela to further... 2024 outlook. Thanks, Kirsten, and good afternoon, everyone.

As Kirsten mentioned, we were pleased to see improved results in March and April. Net income attributable to Vail Resorts was $362 million, or $9.54 per diluted share for the third quarter of fiscal 2024, compared to net income attributable to Vail Resorts of $325 million, or $8.18 per diluted share in the prior year. Net income for the third quarter of fiscal 2024 includes approximately $37 million of pre-tax expense associated with the change in the estimated fair value of the contingent consideration liability related to our Park City resort lease. compared to approximately $46 million of pre-tax expense in the third quarter of the prior year. Additionally, net income for the third quarter of fiscal 2024 and fiscal 2023 includes the after-tax effective acquisition and integration-related expenses of approximately $1 million and $100,000, respectively. Now turning to our outlook for fiscal 2024. While late-season results improved, we now expect reported EBITDA be between $833 million and $851 million on a comparable basis with our prior guidance issued March 11th, 2024, which included $4 million of acquisition-related expenses specific to Crown Montana, but excluded the closing costs, operating results, and integration expenses associated with Crown Montana. The reduction relative to the guidance provided on March 11th, 2024 It's primarily from lift ticket visitation, not returning to typical historical spring behavior as expected in March and April period. Primarily it was a black hole. Along with lowered expectations for the fourth quarter of $9 million, primarily related to the demand outlook for our Australian resorts. In addition, with the closing of the acquisition, we now expect Crown Montana to contribute negative $12 million of resort reported EBITDA for fiscal 2024. including negative $9 million from the acquisition, closing, and integration expenses, and negative $3 million from operating results in the fourth quarter. Including the full impact of Crown Montana, the company now expects net income attributable to Vail Resorts to be between $224 million and $256 million, and Resort Reported EBITDA to be between $825 million and $843 million. Resort EBITDA margin is expected to be approximately 28.9% at the midpoint of the guidance range, and excluding the impact of Crown Montana, resort EBITDA margin would be 29.2% in fiscal 2024 at the midpoint of the guidance range. The updated outlook for fiscal 2024 assumes a continuation of the current economic environment and normal weather conditions and operations throughout the Australian ski season and North American summer season, both of which begin in our fourth quarter. The guidance assumes an exchange rate of 73 cents between the Canadian dollar and the U.S. dollar related to the operations of Whistler Blackcomb in Canada, and an exchange rate of 66 cents between the Australian dollar and the U.S. dollar related to the operations of Parisher, Bald's Creek, and Hotham in Australia. And an exchange rate of $1.10 between the Swiss franc and U.S. dollar related to the operations of Andermatt Cedroon in Crown Montana in Switzerland. Our balance sheet remains strong, including total cash and revolver availability as of April 30, 2024, of approximately $1.3 billion, with $705 million of cash on hand and $625 million of combined revolver availability across our credit agreements. As of April 30, 2024, our net debt was 2.4 times trailing 12 months total reported EBITDA. In addition, we opportunistically extended the maturity dates on a substantial amount of our debt subsequent to quarter end. On May 8th, 2024, the company completed an offering of $600 million aggregate principal amount of 6.5% senior notes due 2032. We used the net proceeds from these notes to fund the redemption of the entire amount of $600 million, the 6.25% senior notes due 2025 on May 15th, 2024. Additionally, the company completed an amendment of its failed holdings credit agreement to extend the maturity of the $969 million term loan and $500 million revolver from 2026 to 2029. The company also repurchased approximately 0.3 million shares and an average price of approximately $217 for a total of $75 million during the quarter. For the nine months ended April 30th, 2024, The company repurchased 0.6 million shares for approximately $125 million. We have approximately 0.8 million shares remaining under our authorization for share repurchases and remain focused on returning capital to shareholders while always prioritizing long-term value of our shares. Additionally, the company declared a quarterly cash dividend on Vail Resorts' common stock of $2.22 per share. The dividend will be payable on July 10th, 2024 to shareholders of record as of June 25th, 2024. We will continue to be disciplined stewards of our capital and remain committed to prioritizing investments in our guest and employee experience, high return capital projects, strategic acquisition opportunities, and returning capital to our shareholders through our quarterly dividend and share repurchase program. As previously announced on May 2nd, 2024, the company closed on the purchase of its second European resort, Crown Montana, for a purchase price of 97.2 million Swiss francs, or 106.8 million US dollars, after adjustments for certain agreed upon items, including a four million Swiss franc reduction in the purchase price to account for the timing of closing after the winter season. The company acquired an 84% ownership stake in the entity that controls and operates all the resort's lifts and supporting mountain operations, including four retail and rental locations The company also acquired full ownership of Sport Life AG, increasing from the previously announced 80% ownership stake, which operates one of the ski schools located at the resort, and full ownership of 11 restaurants located on and around the mountain. This world-class resort spans over 1,400 meters, or approximately 4,600 feet, of skiable vertical terrain, and 140 kilometers, or approximately 87 miles, of trails. Located in the Lake of Switzerland, Cremontana is approximately two and a half hours from Geneva and less than four hours from Milan and Zurich. The valuation for the entirety of the resort operations was 118.5 million Swiss francs, including approximately 7 million Swiss francs of debt that will remain in place, and adjusted for purchase price adjustments to account for seasonality and closing timings. Vail Resorts anticipates that the resort will generate approximately 5 million Swiss francs of resort-reported EBITDA in the fiscal year ending July 31, 2025, the first full year of operations under the company's ownership. We expect significant EBITDA growth over time from the inclusion of the resort on the Epic Pass products, network synergy, and investments in the guest experience. Subject to the timing of capital project approvals and completion, Bail Resource is planning to invest approximately 30 million Swiss francs over the next five years in one-time capital spending to elevate the guest experience. Normal annual maintenance capital spending is expected to be approximately 3 million Swiss francs. Now I'll turn the call back over to Kirsten.

Thank you, Angela. Past product sales through May 28, 2024 for the upcoming 2024-2025 North American ski season decreased approximately 5% in units and increased 1% in sales dollars as compared to the period in the prior year through May 30, 2023. Past sales dollars are benefiting from the 8% price increase relative to the 2023-2024 season, partially offset by the mixed impact from the growth of Epic Day past products. Past product sales are adjusted to eliminate the impact of foreign currency by applying an exchange rate of 73 cents between the Canadian dollar and U.S. dollar in both periods per Whistler Black Home Past Sales. Past product sales for this past season, the 2023-2024 North American ski season, had grown 62% in units and 43% in sales dollars over the past three years. Past product pricing has increased 25% from spring 2021 to spring 2024. We believe the spring pass sales results for guests committing for winter 2024-2025 were impacted by the industry decline in visitation following a record 2022-2023 U.S. ski season. The decline in units relative to the prior year season-to-date results was primarily driven by a decline in new pass holders. The primary source of new pass holders in the spring are lift ticket guests that visited in the prior winter season. This past season, lift ticket visitation declined due to weather and did not fully return to typical behavior after conditions improved, creating a smaller audience as the primary source of new pass holders in the spring. For renewing pass holders, the company achieved strong unit growth among the company's most loyal tenured renewing pass holders, guests who have had a pass for three years or more. Spring renewals for lower tenured pass holders, including first-time and second-year pass holders, demonstrated lower renewal rates in the spring, which may reflect delayed decision-making, to the fall. Overall, renewing pass holder product net migration was positive. An epic day pass product experienced modest unit growth driven by the strength in renewing pass holders. The majority of our pass selling season is ahead of us, and we believe the full year pass unit and sales dollar trends will be relatively stable as compared to the spring results. We will provide more information about our pass sales results in our September 2024 earnings release. Epic Australia pass sales end on June 12, 2024. and are down approximately 22% in units through May 29, 2024, which we believe is primarily a result of the historically poor conditions during the 2023 ski season in Australia. The Epic Australia Pass has grown 43% in units over the past three years. Our commitment to reinvesting in our resorts and the guest experience remains one of our highest priorities. As previously announced, we expect our capital plan for calendar year 2024 to be approximately $189 million to $194 million, excluding $13 million of incremental capital investments in premium fleet and fulfillment infrastructure to support the official launch of MyEpicGear for the 2024-2025 winter season at 12 destination and regional resorts across North America, $11 million of growth capital investments at Andermatt-Sedroon $1 million of reimbursable capital, and investments at Crown Montana, which we expect will include $3 million of maintenance capital expenditures and $2 million associated with integration activities. Including MyEpicGear premium fleet, fulfillment infrastructure capital, one-time investments, and investments at Crown Montana, our total capital plan for calendar year 2024 is now expected to be approximately $219 million to $224 million. In closing, we greatly appreciate the loyalty of our guests that visited across all of our mountain resorts this past season and the continued loyalty of our pass holders that have already committed to next season. With the North American and European ski season coming to an end, I would like to especially thank our frontline employees for their passion and dedication to delivering an experience of a lifetime to our guests. Our employees are the core of Vail Resort's mission to create an experience of a lifetime. And we are all looking forward to the ski and ride season at our three mountain resorts in Australia. At this time, Angela and I will be happy to answer your questions. Operator, we are ready for questions.

Thank you. At this time, if you wish to ask a question, please press star 1 on your telephone keypad. You may remove yourself from the queue by pressing star 2. Again, please limit yourself to one question and one follow-up. And we'll take our first question from Sean Kelly with Bank of America.

Hi, good morning, everyone, or good evening, everyone. Thank you for taking my question. Kirsten, Angela, just wondering if we could, you know, dig a little deeper on the past behavior that you saw. You know, specifically wondering if you could just give us a little bit of insight on, you know, what feedback are you hearing from the guests that are in that kind of new Passover cohort and in the sort of, you know, that, I guess, younger cohort that didn't renew this period? Because historically, you know, you've done pretty well on pulling forward and incentivizing activity earlier in this past L season. So we're getting some concerns that, you know, whatever trend you're seeing now could actually deteriorate a little bit. So maybe some behavior could give us some sense as to why maybe they, they waited a little bit. Just what do you kind of, what are you hearing back from, you know, maybe some, you know, some feedback from people as you've, as you've dug into the behavior that you saw in the early, in the early past period here.

Yeah, thank you, Sean. I think what we see with our renewing pass holders is, you know, different behavior depending on their tenure. Very pleased to see that our most loyal and tenured renewing pass holders, those that are three years or more, had strong unit growth. When we look at the renewals for those lower tenured pass holders, first-time pass holders or second-year pass holders, as I mentioned, they did demonstrate lower renewal rates. This particular audience we tend to see can be impacted by conditions in their decision-making and the timing of when they renew because they had been, in many cases, accustomed to making their decision about their ski vacations closer to this season. When we look at this group, we tend to see that there is still a strong volume of them that make decisions in the fall. The guest experience scores that we have among this audience are quite strong. So I can't tell you with certainty what decision making they're going to have. What I would say is that it is possible that there is a delayed decision making because we have seen that behavior with this audience in the past.

That's helpful. And thank you for the extra color there. And then my second, my follow-up would just be, you mentioned in the release a little bit around, you know, post COVID normalization, right? And so a lot of the activity here feels like it was connected to, you know, especially with the new pass holders, you know, around visitation. You didn't have that base of customers to sell to. And obviously a lot of that traces back to weather, but the post COVID normalization pieces is, you know, a different factor. So could you just elaborate on what you meant by that and, you know, kind of, Again, there's a lot of cross currents here. So just how do you kind of, you know, separate the two if both of those are factors?

Yes. Thanks for the question, Sean. We do believe this past season overall that conditions and a post COVID normalization are both material factors impacting this season. And we can see that when we look at the, um, conditions and the guest behavior when conditions were challenging versus when conditions improved and where results improved or did not improve or the behavior was there. And we mentioned this before when it came up in March that very hard to say if there's a normalization given the season's not over. With the season being over, it's easier for us to look back and be able to see where the behavior recovered and where it did not with conditions to say that normalization is a component of that. When we look at the impact on spring pass sales, as I mentioned, the single biggest impact on our spring pass sales is new pass holders, and that is driven by lift ticket guests, and that behavior or that size of that audience is down significantly, which is impacting then our ability to convert them into new pass holders. I would also highlight though, in this context, that that is not the only source of new pass holders. It is the primary source of new pass holders in the spring coming off of the season. Conversion from lift ticket guests is the primary source. As we head into fall though, we also see new pass holders being driven by prospects as well as lapsed pass holders and lapsed lift ticket guests. But for this spring time period, we do believe that the industry normalization is impacting pass sales because it's impacting the size of that audience. We also look at, well, pass holders who visited during good conditions and during poor conditions and what is their conversion rate to a pass and can see that conditions are a factor, but they are not the primary factor.

Thank you. Our next question comes from Jeff Stantial with Stiefel.

Hey, great. Good afternoon. Kirsten, Angela, thanks for taking our questions. Maybe starting off, I'll just try to ask Sean's first question in a slightly different way. So, Kirsten, you talked a lot about soft lift ticket demand this past season impacting your conversion from lift to epic passes during the spring selling season. To me, that seems like – more of a spring headwind and going to ease up as the selling season progresses. You also talked about potential for some conversions of less tenured pass holders to accelerate in the summer and in the fall selling seasons. Can you just help us reconcile those two comments with the expectation for trends to remain stable to the levels you just reported through the remainder? In other words, is it fair to conclude you're being a bit conservative with that comment? Just Any color there would be helpful. Thanks.

Thanks, Jeff.

Yeah, I think there are a lot of different moving factors that happen, as you highlighted, in the spring versus the fall in terms of behavior. And I did highlight, and it is possible that some of the early tenure pass holders, those first-time pass holders or second-year pass holders, shift their decision-making later in the season, as we have seen that in the past. I think it is important for us to highlight that the U.S. ski industry decline of 8%, our decline in visits of 8%, which was consistent with that, does reduce the pool of guests to transition into a pass. And we do believe that it is having an impact and will have an impact through the rest of the selling cycle, which is why we said that we believe that it would remain consistent. There are ebbs and flows. We are seeing a negative impact from lift tickets here in the spring. It's possible we will actually be successful with lapsed and prospect in the fall, but But overall, right now, we are not projecting a material improvement for the remainder of the selling cycle.

Okay, perfect. That's very helpful commentary. Thank you for that, Kirsten. And for my follow-up, I wanted to double-click on some of the softness in the lift ticket visitation later in the season this year. You called out specifically Whistler Blackcomb as showing the most the most headwinds here. I guess, can you expand on that a little bit more? Is there anything in terms of nuances to that resort that might explain it? Is it higher fly-to traffic? Just anything that sort of explains the nuances that you're seeing with that resort versus more of your U.S. resorts.

Yes. When we were looking at conditions, we saw conditions improve in our U.S. Rockies resorts earlier than we did in Whistler-Blackcomb, those results stayed very challenged for longer. So that's number one. Number two, destination visitation is very important to the success of that resort. And three, lift ticket visitation is very susceptible to weather conditions. When we started heading into spring, we had noted that conditions were improving and we expected past visitation because we have the data and we can tell who's pre-committed that we believe that then those guests will use their pass. And we saw that actually happen, Jess, that the pre-committed guests returned as we expected them to. On lift tickets, we didn't expect that we were recouping what had been lost earlier in the season. We had expected typical spring historical guest behavior. And we did not see that with the improved conditions. And in particular at Whistler where the conditions dragged on longer, um, and the lift ticket visitation is highly susceptible to conditions and variable, which is why we're very oriented to pass. We see the impact. I think, you know, there is also border restrictions that impacted Whistler Black Home during that post COVID era. and could be potentially some normalization impacts happening there as well.

Thank you. Our next question comes from Ben Chaiken with MISU.

Hey, how's it going? You noted the decline in passes was largely driven by lower new pass holders, with that pool being primarily window ticket guests. It's very reasonable that the pool is smaller given the poor weather, but when you look at the penetration of that pool of single-day window guests who subsequently decided to purchase a pass, was it consistent with what you would have expected just at a smaller scale, better or worse? Thanks.

I'm sorry, Ben. Can you reframe your question just to make sure I'm understanding exactly what you're asking me?

Sure. Sure. You were saying that one of the larger reasons of the decrease in the pass was lower new pass owners. Yes. And that the major pool for that was window guests from the previous season. I'm saying it's very reasonable that that pool is smaller given the poor weather. But of the people who did purchase, of the window guests who did subsequently purchase a season pass, is the penetration in line with what you would have expected? Yes. Better or worse? And if that didn't make sense, we can catch up later.

No, I got it. So it is both impacts. The biggest and largest impact on our year-over-year pass sales in the spring for new is the size of the audience in the lift ticket guess that there was a decrease. We do also see an impact in conversions. relative to what we would have expected, but that is not the primary driver. It is the size of the audience that is the primary driver of the decline year over year.

Got it. Okay, that's helpful. And then as you think about the evolution of the PASS, I would assume there's been a lot of destination customers who are now part of the PASS program who were not there three or four years ago. You mentioned some lower-tenure guests who tend to renew closer to the season. Do you think the past needs to evolve in any way to extend or smooth the seasonality of the past? In other words, would it make sense to add partnerships, retail or otherwise, that add demand for the past outside of the core season? In essence, extending the demand and utility of the past outside of the core season? Just would love your thoughts there. Thanks.

Yeah, I think to the extent that the company could have advanced commitment for the ski season and other experiences or utilization of the past beyond the ski season, that would be a real benefit to our company. We do provide access to... summer experience on the pass, but I'd say we're constantly always looking, Ben, at new ideas and opportunities to make that proposition even more valuable and compelling to our guests. I do think the dynamics between spring and fall have shifted and changed over time as the composition of our pass holders has changed over time between destination local decision-making, the behavior is different, and whether you're long-tenured and very loyal versus you're a newer pass holder coming in. And that has caused shifts between spring and fall decision-making.

Thank you. Our next question comes from Laurent Vasilescu with BNP Paribas.

Oh, good afternoon. Thank you very much for taking my question. It's noted in the press release that the Epic Australia Pass sales are down 22% in units, primarily due to weather. Kirsten, can you provide some context for the audience as to how bad the weather was in Australia this season so far? Could this be a leading indicator on how the U.S. might react if bad weather could continue for the next few seasons? And are there any learnings from Australia that you could apply when you will guide for FY25 next quarter?

Yeah, Australia has had highly variable seasons. Two years ago, a record high season of amazing conditions. And then, unfortunately, the next year, very, very, like, worst season in decades. So tale of two extremes over the course of two years. I think that, so yes, I do think that is impacting condition or decision making about a pass in Australia. There's a lot of other unique dynamics happening in Australia related to the economy. I think the unique factor about our business there versus our North American resorts is, you know, a lot of our Epic Australia pass holders are visiting our local resorts. And what you see in North America is a lot of optionality. And one of the benefits of the past is if you live in San Francisco and conditions are challenging in Tahoe, you have a lot of good options to go to Park City or go to Whistler or go to Colorado. That level of optionality in Australia when there's a poor winter is just more limited. So it's a different, more unique dynamic when it is more oriented to local visitation versus, you know, destination guests are not flying, unfortunately, to Australia to ski at our resorts there. And the options in North America are a little bit more dynamic. They give us a little bit – more sort of geographic diversity to help with the stability around that.

Very helpful.

And in terms of my second question, Kirsten, Angela, your dividend payout ratio is at 100% on a trailing 12-month basis. Can you discuss what's the ideal payout ratio going forward? Or ask another way, how do you prioritize your capital allocation strategy across the different avenues for shareholder returns.

Yeah, thanks, Loren. We do look at, like consistently have looked at, right, our priority for capital allocation. And the dividend's been our primary route for that. And, you know, we're not looking at a specific payout ratio per se. We've been looking at where do we see the free cash flow generation of the business and the underlying fundamentals have allowed us over time, right, to do all of our capital allocation priorities of reinvesting in our resort experience and the employee experience. We think our balance sheet's in a very strong place to be able to do M&A, like what we just did with Crown Montana. But we always look at the return to capital to shareholders, and we've prioritized the dividend, and we've been opportunistic in how we return capital through share representation, like we did this quarter.

Okay, very helpful. Thank you very much.

Thank you. Our next question comes from Megan Alexander with Morgan Stanley.

Hi, good afternoon. Thanks so much for taking our questions. Maybe a follow-up just on the lift ticket visitation again. I think you said it was down 17% from that window lift ticket. It's obviously clear weather was a big headwind to that customer, but I'm just curious your thoughts on whether price is having any impact and The reason I ask is your largest competitor did recently say something to the tune of, you won't see us taking prices on lift tickets anymore. So just bigger picture would love to kind of get, you know, your thoughts on your pricing strategy more broadly and whether you think potentially there could be some room for some changes, maybe something like dynamic pricing. You know, I understand the goal is to push people to the advanced commitment, but at the same time, you know, you're talking about the lift ticket guests being the funnel for that. So I'm just trying to understand how you think about the pricing strategy and the ability to kind of retain and inquire more guests.

Thanks, Megan. The source for our new pass holders, as I noted in spring, is primarily the prior season list ticket guests. But when we look on a full pass selling cycle basis, It is the source of new pass holders comes from lift ticket guests, but it also comes from our lapsed lift ticket guests, our lapsed pass holders and prospects. And we have, as you know, an extensive database to know those guests and know where they skied, when they skied, how often they skied to be able to connect with them one-to-one. Related to lift ticket price, you know, our pricing strategy is set very deliberately to to move people into advanced commitment because that is what creates stability for us versus the variable decision making that comes from a refundable product like a lift ticket. We have a product line that enables us to have a very strong transition from lift tickets into a pass called Epic Day Pass that allows people to move into one through seven days. And we've launched this, I believe it was an FY19, if I'm remembering that correctly. We launched that in order to actually capture those guests that are skiing at a lower frequency and have had enormous success in doing that. As I mentioned during the script, we've grown our past product sales 62% in units and 43% in sales dollars over the past three years. And Epic Day Pass has been a huge portion of that. But the other part of our strategy is that we have a diverse portfolio of resorts and some of those are local, some of those are regional, and some of those are destination. And when you look at ticket price for a local resort versus a regional resort versus a destination resort, meaning For people who are starting the sport or taking up the sport, we don't often see them buying a plane ticket and traveling to one of the destination resorts. We have a network that allows a lift ticket purchase at a very reasonable price with first-time programs to support them as they start the sport at low prices at those local resorts and then as they move to regional and destination resorts. So I think right now, you know, the lift ticket decline, what we see in our data when we look at the lift ticket decline is relative to when the conditions were good versus when the conditions were bad, and yet there is a conditions impact, but there is also an industry normalization impact based on that behavior. I do not at this point believe that the 17% decline is related to the price of lift tickets because we tend to move those people into Epic Day Pass versus it just being direct, I'm leaving the sport.

That's really helpful. Appreciate the color. And then maybe just a follow-up to what you just said at the end there. How should we think about visitation for 2025? I guess both from an industry perspective and from a Vail perspective, I guess from the industry, you're going to be lapping a pretty challenging weather season, but perhaps there was some normalization so you don't necessarily get a full recovery. And then from, you know, Vail's perspective, at this point, you know, past units down 5%, you've, you know, just less people on the mountain skiing just as a result of that. I guess just any way to think about how kind of the net of all of these factors should impact next year. Does any one factor kind of have more weight over the others?

Yes. You know, we think both are meaningful factors on visitation, the weather conditions, and the normalization factors. We're not quantifying those yet. We will provide more information about that as we share guidance in September on the volume and our visitation expectations. On the industry normalization, you know, it's hard to say completely whether or not that is you know, fully done or that continues into next year. When I look at what's happening in the travel and leisure industry and the commentary about normalization, or I look at the ski industry results, it does look like, at least in the ski industry, similar to what you're hearing in travel and leisure, that it is mostly returning back or close to sort of a normalized trend.

Got it. Thank you.

Thank you. Our next question comes from Patrick Scholes with Truist.

Hi. Good evening, everyone. One thing I've been hearing in the industry the last couple weeks is how ICON unit sales at least are up or tracking up at least mid-single digits year over year. I'm curious as to your opinion, you know, why – you know, what might account for the difference between where you are and they are. You know, certainly part of that is, you know, they will have a basin. I think Blue and Camelback were added. And then I think Crystal is going back to the unlimited full icon. Anything else, you know, to think about? between the difference between the two. Thank you. Thanks, Patrick.

Yeah, I can't really comment on anyone else's past results or ICON's past results since they don't have public disclosures of their results and the drivers. What I can do is share, I think, some context that is always helpful reminder, which is, you know, life cycle of a business or a product and where our business was you know, in its early days. And the types of guests that we were converting were the high frequency, high committed guests. And now our path has been in existence for significantly longer than their passes. So I think it would make sense, as you've seen us evolve and launch new products to go after new addressable markets, not just the high frequency, most committed skiers, we have expanded dramatically the growth of our past business going into less committed or lower frequency skiers and riders. For context, if you think about when their past started versus when ours did, I'd say it's hard to compare the two because where we are in the stage of the product lifecycle is dramatically different, and the types of guests and the products that we offer are dramatically different. But mostly I'd say it's that life stage piece that I think is likely a key difference.

Okay. Thank you. And then my follow-up question, also this one's a bit more of a high-level question. You know, there's certainly debate in the ski community and subsequently with investors. regarding what is the better operating strategy to go with? You folks seem to have more of a centralized out-of-Broomfield, you know, as it relates to mountain operations and HR, whereas your main competitor leaves it up more to the local resort to make decisions. I guess, in your opinion, why is your methodology the superior one? Thank you.

Thanks, Patrick. Well, if we're talking about centralized versus decentralized, I think there's something important to clarify about this because I think there's a misunderstanding or a misperception about this. What we have centralized as a company are support functions to our mountain operations. Support functions. That would be things like HR, finance, marketing, procurement, accounting. What's not centralized is operations. Operations decisions are decentralized into the resorts. Our operators are responsible for decisions about terrain, about labor, about safety, about the running of the resorts. That is not centralized for us. And I can't really comment on how that compares to Altera, but I think it's important to qualify that operations is not centralized for our company. That said, why do I think it's good that we have centralized HR, finance, marketing, those functions? Because we can have better cost efficiency and provide more support and have consistency in the support that we provide. We don't need every mountain resort to have their own procurement team or accounting team or HR or finance team when we can have a team that really is centralized and is providing the support for every one of our mountain resorts in order to enable the success of our mountain operations. So I do think that that strategy is very successful. And I also think and believe that having our decision-making in mountain operations reside in the resorts in mountain operations is also the right approach, and I don't anticipate that changing.

Thank you. Our next question comes from David Katz with Jefferies.

Afternoon, everyone. Thanks for taking my question. I appreciate it. Can we just drill down a little bit on Switzerland and how we think about expectations for past sales there? Obviously, it's a ramp, but my sense is that you've included some of that in your underwriting and would just love to hear your thoughts there.

Hi, David. Yeah, thank you for the question. I do believe that Switzerland, but all of Europe, is a significant opportunity for us. And I think it is a ramp, as you highlighted. We feel incredibly positive that over the last couple of years, we've got two owned and operated resorts there now. And I think important for us to continue to build a strong network in order to fully unlock the potential, not unlike what happened for us in North America where we started with a few resorts and built out the network and then really started to see the unlock on past sales. Do I think that we will see some growth from Europe in owning Cron and Andermatt Cedroon and having some incredible partnerships in Europe? I do. I don't think that that is the trajectory change. I think it will be gradual over time just like you saw if you go back to the early days of Epic Pass when we only had six or seven resorts and we built it out over time. That is what I would anticipate would happen and that's the vision that we have and the growth potential that we see because as you know, the skier market in Europe is significant and there are not a lot of network, resort networks, and there are not a lot of multi-resort passes that offer the type of access, value, and stability that we are capable of offering. But it is definitely a long-term growth strategy that will take time.

Understood. And as my follow-up, I wanted to ask about the new app and any data points, any learnings, any benefits, anything that's knowable there would be great.

Thanks. Yeah, the new app is on track with our expectations. I'm really pleased with, in particular, one of the most critical innovations that we have in the app is, as you know, mobile pass and mobile lift ticket, which we believe is important because it actually improves the guest experience and moves guests out of the ticket lines, or waiting for their pass or ticket to arrive in the mail. It also reduces plastic and RFID waste and cost. And all of that delivered on track with our expectations in year one. Most importantly, the experience at the baselift delivered what we expected for the guest. We're expanding that into Whistler Black Home. And my hope and my goal is for next season that we increase adoption among our guests. and start to move more and more of our guests into using their phone for mobile pass and mobile lift tickets, David, but also as a key source for information, including My Epic Assistant, which we will be piloting, which will also create cost efficiency for us in the future. So all of the, I would say all of those things are on track with our expectations and I'm excited to see what the second year holds in terms of guest adoption given that people are using their phones for everything now.

Thank you. Our next question comes from Chris Roenke with Deutsche Bank.

Hey, thanks. Good afternoon, everyone. So First question is kind of on the hotel side. I know when you guys initially talk about guidance in September, you typically look at what you've got on the books on the hotel side, and I know it's really for peak periods. But as you look back now at the end of the ski season, were those hotel bookings, do they offer the same level of predictive value that they used to or that you expect, or do we just have to say that the weather is impacting things more than the initial hotel bookings?

Yeah, thanks, Chris, for the question. We do, you know, when we go into the season, right, we're always looking at our best indicator being past sales, but also always, you know, comment on what we're seeing really kind of more close in, right, for those holiday period lodging bookings. And so it is a factor that we look at, and we do kind of keep continuing monitoring that. And I think what you saw for this year is you did see a lot of the resort markets actually not fill in as expected as you went through with the season for both the same factors that we're talking about in terms of some of this normalization and I think travel behavior, but also from the conditions likely impacting the lodging fill-in, if you will, from there as well. And for the resort communities, we saw really occupancy declines around four points for the winter season.

Okay. Thanks, Angela. And then follow-up is kind of, as we look out to next year and we think about the Epic Year launch, right, being more fully available, and taking into context your comments about renewal rates and the fact that you're doing better with folks who have been with you for a while, would that change any of your very preliminary views on what you think about Epic Year uptake and participation rates or Do you think you have a lot of confidence in that, given that you're doing well with your renewing pass holders? Thanks.

Thanks, Chris. I feel pretty good about our assumptions on My Epic Year, but of course, you know, we will revisit those and refine those as we get our budget in place for providing guidance for next year. But I I think that the beauty of the My Epic Gear business is that everyone needs gear, right? It's not discretionary, everyone needs gear, so it's really incumbent on us to convince our guests that they actually that this is a better option for either owning or renting gear because it's a subscription and we have it ready there for you it's more convenient and you can get the best and latest gear so i i feel that as that is a very compelling idea because everyone needs gear and so when you think about the addressable market for it the addressable market is large, very large. And that's why I see the potential there. So regardless of high tenured or low tenured, I think it's a very compelling proposition. And it's on us to prove that to our guests.

Thank you. Our next question comes from Brant Montour with Barclays.

Hey, good evening, everybody. Thanks for squeezing me in here. So on the COVID normalization comments, Kirsten, and apologies if you already touched on this, but I'm assuming that obviously included sort of a comment on total travel demand, which you definitely alluded to, but does that also include a shift of consumer behavior back to peak travel periods, i.e. weekends and holidays? That was something that was a nice tailwind for you early in COVID. Is that something that it could be a Is it already a headwind? Is it something that could be an additional headwind creating more load pressure on your business operations?

We did not see that this past season, Brant, that there was a big shift back into, you know, if you'll recall in the years post-COVID, we really, as we grew past sales, we saw shifting people into off-peak periods and we still see a the dynamic of strength in those periods versus the peak periods. And, you know, there's some natural limiters on those peak periods anyway, including price of coming during those peak times. I don't really see that, at least I'm not seeing signs of that in our data right now. What I do see is overall, you know, the ski, well, I'd say overall consumer travel behavior has changed significantly and shifted year over year pretty dramatically since COVID, as you've seen. You've heard a lot of travel and leisure companies talking about seeing signs of normalization, and some of them overtly saying off of a peak from last year as a headwind to them. And when I look at the ski industry, you know, the ski industry had peak visitation last year, and when we look at the behavior this past season, laughing that, even when conditions were outstanding, it does, we do believe that the past season, the down 8%, our down 8%, that's consistent with that, but the ski industry, you know, those numbers look, for this past year, look more in line with what you would considered to be more normalized trend, I would say. At least right now, I'm not seeing that being big shifts between peak and off-peak.

Okay, that's super helpful. And then another question on the competitive landscape, based on publicly available data from your peer, Elterra, you know, it does look like their initial and sort of mid-season past prices are widening out versus yours. It's the widest level, I think, since they launched. And I guess I'm curious how you think about that from a strategic positioning standpoint. And if there's any concern that they might be trying to position themselves as a higher tiered product than yours, And the reason I ask is maybe, you know, obviously not every skier is created equal in terms of profitability. And so how do you think about that competitive positioning?

I feel good about our competitive positioning based on our guest research and the perceptions that our guests have about Epic Pass, which we monitor very closely. I also feel very good about the growth. We... grew a very mature business in past 62% in units and 43% in dollars over the past three years to get to over 70% of our visits committed in advance. And that is our strategy and that is our focus. And I think that is likely different for them. They don't have the same goal in mind for a variety of reasons. But for us, It is really important because of the weather impacts to create that stability and move people into a pass. We have a lot of very loyal, long-tenured pass holders. We have acquired a lot of new pass holders. And our goal, it doesn't change to keep doing that. Related to pass, we know that pass is price sensitive. And the decision-making between a lift ticket and purchasing a pass We have a lot of data on what the price sensitivity is to move them over. What you've seen us do since the price reset is take price up, and Epic Pass price is up about 25% since we did that pass reset, and we will keep doing that, but we are always monitoring what that price elasticity is because the goal is not to move people out of pass and back into lift tickets because that creates a highly variable effect business dynamic for us when we need that revenue stability in a high fixed cost business to deliver the results that you saw this year. 28% less snowfall for the winter and visits down 8%, but still having revenue be able to be up 1% and EBITDA up 6%. So yes, we obviously pay attention to what they're doing, but I think our business strategies and goals are different than what they're trying to accomplish.

Thank you. And this concludes the Q&A portion of today's call. I would now like to turn the call back over to Kirsten Lynch for closing remarks.

Thank you, Operator. This concludes our fiscal 2024 third quarter earnings call. Thanks to everyone who joined us today. Please feel free to contact me or Angela directly should you have any further questions. Thank you for your time this afternoon. Goodbye.

This concludes today's Vail Resorts Fiscal Third Quarter 2024 Earnings Call and Webcast. You may disconnect your lines at any time and have a wonderful day.

© transcript Emily Beynon you Thank you. Thank you. Thank you.

Good afternoon, and welcome to the Vail Resorts Fiscal Third Quarter 2024 Earnings Call. Today's conference is being recorded. Currently, all callers have been placed in a listen-only mode, and following management's prepared remarks, the call will be opened up for your questions. If you would like to ask a question at that time, please press star 1 on your telephone keypad. If you need to remove yourself from the queue, press star 2. To get as many questions as time permits, we ask that you please limit yourself to one question and one follow-up. At any time, should you need operator assistance, press star zero. I will now turn the call over to Kirsten Lynch, Chief Executive Officer of Vail Resorts. You may begin.

Thank you. Good afternoon, everyone. Welcome to our fiscal 2024 third quarter earnings conference call. Joining me on the call this afternoon is Angela Korch, 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 SEC filings, 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 6, 2024, 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 tables included with our press release, which 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. Let's turn now to our fiscal 2024 third quarter results. Given the unfavorable conditions across our North American resorts for a large portion of the 2023-2024 North American ski season, we are pleased to see improved results in March and April, with visitation across our Western North American resorts in particular benefiting from improved conditions. While past products visitation returned as expected, As we communicated in April, lift ticket visitation did not return to typical historical guest behavior for the spring, primarily at Whistler Black Home, which was down significantly relative to the prior year period. Despite these challenges, the company grew resort net revenue and resort reported EBITDA to record levels in the third quarter, supported by the stability created from our advanced commitment strategy, operations, executional excellence, and continued strong growth in ancillary spending per skier visit across our ski school, dining, and rental businesses at our resorts. Our results through the 2023-2024 North American ski season highlight both the stability provided by our season pass program and the investments we have made in our resorts and employees. The winter season included significant weather-related challenges. with approximately 28% lower snowfall for the full winter season across our Western North American resorts compared to the same period in the prior year, and limited natural snow and variable temperatures at our Eastern U.S. resorts, which comprise our Midwest, Mid-Atlantic, and Northeast resorts. For the 2023-2024 North American and European ski season, total skier visits declined 7.7% as compared to the prior year period, which we believe was driven by a combination of unfavorable conditions and broader industry normalization post-COVID following record visitation in the U.S. during the 2022-2023 ski season. Skier visitation from lift ticket guests, which is refundable and not committed in advance of the season, was particularly impacted, declining 17% compared to the prior year period. Despite the decline in visitation, Ancillary spending was strong across our ski school, dining, and rental businesses at our resorts. Resort net revenue for the second and third quarter combined period increased 1%, and resort reported EBITDA increased 6% over the prior year, supported by our advanced commitment strategy, strong growth in guest ancillary spending per visit, and continued cost discipline.

Now I would like to turn the call over to Angela to further discuss Thanks, Kirsten, and good afternoon, everyone.

As Kirsten mentioned, we were pleased to see improved results in March and April. Net income attributable to Vail Resorts was $362 million, or $9.54 per diluted share, for the third quarter of fiscal 2024, compared to net income attributable to Vail Resorts of $325 million, or $8.18 per diluted share, in the prior year. Net income for the third quarter of fiscal 2024 includes approximately $37 million of pre-tax expense associated with the change in the estimated fair value of the contingent consideration liability related to our Park City resort lease, compared to approximately $46 million of pre-tax expense in the third quarter of the prior year. Additionally, net income for the third quarter of fiscal 2024 and fiscal 2023 includes the after-tax effective acquisition and integration related expenses of approximately $1 million and $100,000 respectively. Now turning to our outlook for fiscal 2024. While late season results improved, we now expect reported EBITDA to be between $833 million and $851 million on a comparable basis with our prior guidance issued March 11, 2024, which included $4 million in acquisition related expenses specific to Crown Montana, but excluded the closing costs, operating results, and integration expenses associated with Crown Montana. The reduction relative to the guidance provided on March 11, 2024, is primarily from lift ticket visitation not returning to typical historical spring behavior as expected in March and April period. Primarily it was a black hole. along with lowered expectations for the fourth quarter of $9 million, primarily related to the demand outlook for our Australian resorts. In addition, with the closing of the acquisition, we now expect Crown Montana to contribute negative $12 million of resort reported EBITDA for fiscal 2024, including negative $9 million from the acquisition, closing, and integration expenses, and negative $3 million from operating results in the fourth quarter. Including the full impact of Crown Montana, the company now expects net income attributable to Vail Resorts to be between $224 million and $256 million, and Resort reported EBITDA to be between $825 million and $843 million. Resort EBITDA margin is expected to be approximately 28.9% at the midpoint of the guidance range, and excluding the impact of Crown Montana, Resort EBITDA margin would be 29.2% in fiscal 2024 at the midpoint of the guidance range. The updated outlook for fiscal 2024 assumes a continuation of the current economic environment and normal weather conditions and operations throughout the Australian ski season and North American summer season, both of which begin in our fourth quarter. The guidance assumes an exchange rate of 73 cents between the Canadian dollar and US dollar related to the operations of Whistler Blackcomb in Canada, and an exchange rate of 66 cents between the Australian dollar and the U.S. dollar related to the operations of Parisher, Bald Creek, and Hotham in Australia, and an exchange rate of $1.10 between the Swiss franc and U.S. dollar related to the operations of Andermatt Cedroon and Crown Montana in Switzerland. Our balance sheet remains strong, including total cash and revolver availability as of April 30th, 2024, of approximately $1.3 billion. with $705 million of cash on hand and $625 million of combined revolver availability across our credit agreements. As of April 30th, 2024, our net debt was 2.4 times trailing 12 months total reported EBITDA. In addition, we opportunistically extended the maturity dates on a substantial amount of our debt subsequent to quarter end. On May 8th, 2024, the company completed an offering of $600 million aggregate principal amount of 6.5% senior notes due 2032. We use the net proceeds from these notes to fund the redemption of the entire amount of $600 million, the 6.25% senior notes due 2025 on May 15th, 2024. Additionally, the company completed an amendment of its failed holdings credit agreement to extend the maturity of the $969 million term loan and $500 million revolver from 2026 to 2029. The company also repurchased approximately 0.3 million shares and an average price of approximately $217 for a total of $75 million during the quarter. For the nine months ended April 30th, 2024, the company repurchased 0.6 million shares for approximately $125 million. We have approximately 0.8 million shares remaining under our authorization for share repurchases and remain focused on returning capital to shareholders while always prioritizing long-term value of our shares. Additionally, the company declared a quarterly cash dividend on Vail Resorts' common stock of $2.22 per share. The dividend will be payable on July 10th, 2024 to shareholders of record as of June 25th, 2024. We will continue to be disciplined stewards of our capital and remain committed to prioritizing investments in our guest and employee experience, high return capital projects, strategic acquisition opportunities, and returning capital to our shareholders through our quarterly dividend and share repurchase program. As previously announced on May 2nd, 2024, the company closed on the purchase of its second European resort, Cron Montana, for a purchase price of 97.2 million Swiss francs or 106.8 million US dollars after adjustments for certain agreed upon items, including a four million Swiss franc reduction in the purchase price to account for the timing of closing after the winter season. The company acquired an 84% ownership stake in the entity that controls and operates all the resort's lifts and supporting mountain operations, including four retail and rental locations. The company also acquired full ownership of Sportlife AG, increasing from the previously announced 80% ownership stake, which operates one of the ski schools located at the resort, and full ownership of 11 restaurants located on and around the mountain. This world-class resort spans over 1,400 meters, or approximately 4,600 feet, of skiable vertical terrain, and 140 kilometers, or approximately 87 miles, of trails. Located in the Royal Canton of Switzerland, Cremontana is approximately two and a half hours from Geneva, in less than four hours from Milan and Zurich. The valuation for the entirety of the resort operations was 118.5 million Swiss francs, including approximately seven million Swiss francs of debt that will remain in place, and adjusted for purchase price adjustments to account for seasonality and closing timing. Vail Resorts anticipates that the resort will generate approximately five million Swiss francs. The resort reported EBITDA in the fiscal year ending July 31st, 2025. the first full year of operations under the company's ownership. We expect significant EBITDA growth over time from the inclusion of the resort on the Epic Pass products, network synergy, and investments in the guest experience. Subject to the timing of capital project approvals and completion, Vail Resorts is planning to invest approximately 30 million Swiss francs over the next five years in one-time capital spending to elevate the guest experience. Normal annual maintenance capital spending is expected to be approximately 3 million Swiss francs. Now I'll turn the call back over to Kirsten.

Thank you, Angela. Past product sales through May 28, 2024 for the upcoming 2024-2025 North American ski season decreased approximately 5% in units and increased 1% in sales dollars as compared to the period in the prior year through May 30, 2023. Past sales dollars are benefiting from the 8% price increase relative to the 2023-2024 season, partially offset by the mixed impact from the growth of Epic Day past products. Past product sales are adjusted to eliminate the impact of foreign currency by applying an exchange rate of 73 cents between the Canadian dollar and U.S. dollar in both periods per Whistler Black Home past sales. Past product sales for this past season, the 2023-2024 North American ski season, have grown 62% in units and 43% in sales dollars over the past three years. Past product pricing has increased 25% from spring 2021 to spring 2024. We believe the spring past sales results for guests committing for winter 2024-2025 were impacted by the industry decline in visitation following a record 2022-2023 U.S. ski season. The decline in units relative to the prior year season to date results was primarily driven by a decline in new pass holders. The primary source of new pass holders in the spring are lift ticket guests that visited in the prior winter season. This past season, lift ticket visitation declined due to weather, and did not fully return to typical behavior after conditions improved, creating a smaller audience as the primary source of new pass holders in the spring. For renewing pass holders, the company achieved strong unit growth among the company's most loyal tenured renewing pass holders, guests who have had a pass for three years or more. Spring renewals for lower tenured pass holders, including first-time and second-year pass holders, demonstrated lower renewal rates in the spring, which may reflect delayed decision-making to the fall. Overall, renewing passholder product net migration was positive. An epic day pass product experienced modest unit growth driven by the strength in renewing passholders. The majority of our pass selling season is ahead of us, and we believe the full-year pass unit and sales dollar trends will be relatively stable as compared to the spring results. We will provide more information about our past sales results in our September 2024 earnings release. Epic Australia past sales end on June 12, 2024 and are down approximately 22% in units through May 29, 2024, which we believe is primarily a result of the historically poor conditions during the 2023 ski season in Australia. The Epic Australia Pass has grown 43% in units over the past three years. Our commitment to reinvesting in our resorts and the guest experience remains one of our highest priorities. As previously announced, we expect our capital plan for calendar year 2024 to be approximately $189 million to $194 million, excluding $13 million of incremental capital investments in premium fleet and fulfillment infrastructure to support the official launch of MyEpicGear for the 2024-2025 winter season at 12 destination and regional resorts across North America, $11 million of growth capital investments at Andermatt-Sedroon, $1 million of reimbursable capital and investments at Crown Montana, which we expect will include $3 million of maintenance capital expenditures and $2 million associated with integration activities, including MyEpicGear Premium Fleet, fulfillment infrastructure capital, one-time investments, and investments at Crown and Montana, our total capital plan for calendar year 2024 is now expected to be approximately $219 million to $224 million. In closing, we greatly appreciate the loyalty of our guests that visited across all of our mountain resorts this past season and the continued loyalty of our pass holders that have already committed to next season. With the North American and European ski season coming to an end, I would like to especially thank our frontline employees for their passion and dedication to delivering an experience of a lifetime to our guests. Our employees are the core of Vail Resort's mission to create an experience of a lifetime, and we are all looking forward to the ski and ride season at our three mountain resorts in Australia. At this time, Angela and I will be happy to answer your questions. Operators, we are ready for questions.

Thank you. At this time, if you wish to ask a question, please press star 1 on your telephone keypad. You may remove yourself from the queue by pressing star 2. Again, please limit yourself to one question and one follow-up. And we'll take our first question from Sean Kelly with Bank of America.

Hi, good morning, everyone, or good evening, everyone. Thank you for taking my question. Kirsten, Angela, just wondering if we could dig a little deeper on the past behavior that you saw you know, specifically wondering if you could just give us a little bit of insight on, you know, what, what, what feedback are you hearing from the guests that are in that kind of new password cohort and in the sort of, you know, the, that I guess younger cohort that, that didn't renew this period because historically you've done pretty well on pulling forward and incentivizing activity earlier in this past sale season. So we're getting some concerns that, you know, whatever trend you're seeing now could actually deteriorate a little bit. So maybe some behavior changes, could give us some sense as to why maybe they waited a little bit. Just what are you hearing back from maybe some feedback from people as you've dug into the behavior that you saw in the early past period here?

Yeah. Thank you, Sean. I think what we see with our renewing pass holders is different behavior depending on their tenure. Very pleased to see that our most loyal and tenured renewing pass holders those that are three years or more, had strong unit growth. When we look at the renewals for those lower tenured pass holders, first-time pass holders, or second-year pass holders, as I mentioned, they did demonstrate lower renewal rates. This particular audience we tend to see can be impacted by conditions in their decision-making and the timing of when they renew because They had been, in many cases, accustomed to making their decision about their ski vacations closer to this season. When we look at this group, we tend to see that there is still a strong volume of them that make decisions in the fall. The guest experience scores that we have among this audience are quite strong. So I can't tell you with certainty what decision making they're going to have. What I would say is that it is possible that there is a delayed decision making because we have seen that behavior with this audience in the past.

That's helpful. And thank you for the extra color there. And then my second, my follow-up would just be, you mentioned in the release a little bit around post-COVID normalization, right? And so a lot of the activity here feels like it was connected to, you know, especially with the new path holders, you know, around visitation, you didn't have that base of customers to sell to. And obviously, a lot of that traces back to weather. But the post COVID normalization pieces is, you know, a different factor. So could you just elaborate on what you meant by that? And, you know, kind of, again, there's a lot of cross currents here. So just how do you kind of, you know, separate the two if both of those are factors?

Yes, thanks for the question, Sean. We do believe this past season overall that conditions and a post-COVID normalization are both material factors impacting this season. And we can see that when we look at the conditions and the guest behavior when conditions were challenging versus when conditions improved, and where results improved or did not improve or the behavior was there. And we mentioned this before when it came up in March that very hard to say if there's a normalization given the season's not over. With the season being over, it's easier for us to look back and be able to see where the behavior recovered and where it did not with conditions to say that normalization is a component of that. When we look at the impact on spring pass sales, as I mentioned, the single biggest impact on our spring pass sales is new pass holders, and that is driven by lift ticket guests. And that behavior or that size of that audience is down significantly, which is impacting then our ability to convert them into new pass holders. I would also highlight, though, in this context that that is not the only source of new pass holders. It is the primary source of new pass holders in the spring coming off of the season. Conversion from lift ticket guests is the primary source. As we head into fall, though, we also see new pass holders being driven by prospects as well as lapsed pass holders and lapsed lift ticket guests. But for this springtime period, we do believe that the industry normalization is impacting past sales because it's impacting the size of that audience. We also look at, well, past holders who visited during good conditions and during poor conditions and what is their conversion rate to a past and can see that conditions are a factor, but they are not the primary factor.

Thank you. Our next question comes from Jeff Stantial with Stifel.

Hey, great. Good afternoon. Kirsten, Angela, thanks for taking our questions. Maybe starting off, I'll just try to ask Sean's first question in a slightly different way. So, Kirsten, you talked a lot about soft lift ticket demand this past season impacting your conversion from lift to epic passes during the spring selling season. To me, that seems like... more of a spring headwind and going to ease up as the selling season progresses. You also talked about potential for some conversions of less tenured pass holders to accelerate in the summer and in the fall selling seasons. Can you just help us reconcile those two comments with the expectation for trends to remain stable to the levels you just reported through the remainder? In other words, is it fair to conclude you're being a bit conservative with that comment? Just Any color there would be helpful. Thanks.

Thanks, Jeff.

Yeah, I think there are a lot of different moving factors that happen, as you highlighted, in the spring versus the fall in terms of behavior. And I did highlight, and it is possible that some of the early tenure pass holders, those first-time pass holders or second-year pass holders, shift their decision-making later in the season, as we have seen that in the past. I think it is important for us to highlight that the U.S. ski industry decline of 8%, our decline in visits of 8%, which was consistent with that, does reduce the pool of guests to transition into a path And we do believe that it is having an impact and will have an impact through the rest of the selling cycle, which is why we said that we believe that it would remain consistent. There are ebbs and flows. We are seeing a negative impact from lift tickets here in the spring. It's possible we will actually be successful with lapsed and prospect in the fall, but But overall, right now, we are not projecting a material improvement for the remainder of the selling cycle.

Okay, perfect. That's very helpful commentary. Thank you for that, Kirsten. And for my follow-up, I wanted to double-click on some of the softness in the lift ticket visitation later in the season this year. You called out specifically Whistler Blackcomb as showing the most the most headwinds here. I guess, can you expand on that a little bit more? Is there anything in terms of, you know, nuances to that resort that that might explain it? Is it higher fly-to traffic? Just anything that sort of explains, you know, the nuances that you're seeing with that resort versus more of your U.S. resorts.

Yes. When we were looking at conditions, we saw, you know, conditions improve in our U.S. Rockies resorts. earlier than we did in Whistler-Blackcomb, those results stayed very challenged for longer. So that's number one. Number two, destination visitation is very important to the success of that resort. And three, lift ticket visitation is very susceptible to weather conditions. When we started heading into spring, we had noted that conditions were improving and we expected past visitation because we have the data and we can tell who's pre-committed that we believe that then those guests will use their pass. And we saw that actually happen, Jess, that the pre-committed guests returned as we expected them to. On lift tickets, we didn't expect that we were recouping what had been lost earlier in the season. We had expected typical spring historical guest behavior and And we did not see that with the improved conditions. And in particular at Whistler where the conditions dragged on longer, um, and the lift ticket visitation is highly susceptible to conditions and variable, which is why we're very oriented to pass. We see the impact. I think, you know, there is also border restrictions that impacted Whistler Black Home during that post COVID era. and could be potentially some normalization impacts happening there as well.

Thank you. Our next question comes from Ben Chaiken with MISU.

Hey, how's it going? You noted the decline in passes was largely driven by lower new pass holders, with that pool being primarily window ticket guests. It's very reasonable that the pool is smaller given the poor weather, but when you look at the penetration of that pool of single-day window guests who subsequently decided to purchase a pass, was it consistent with what you would have expected just at a smaller scale, better or worse? Thanks.

I'm sorry, Ben. Can you reframe your question just to make sure I'm understanding exactly what you're asking me?

Sure. Sure. You were saying that one of the larger reasons of the decrease in the pass was lower new pass owners. Yes. And that the major pool for that was window guests from the previous season. I'm saying it's very reasonable that that pool is smaller given the poor weather. But of the people who did purchase, of the window guests who did subsequently purchase a season pass, is the penetration in line with what you would have expected? Yes. Better or worse? And if that didn't make sense, we can catch up later.

No, I got it. So it is both impacts. The biggest and largest impact on our year-over-year past sales in the spring for new is the size of the audience in the lift ticket guess that there was a decrease. We do also see an impact in conversions. relative to what we would have expected, but that is not the primary driver. It is the size of the audience that is the primary driver of the decline year over year.

Got it. Okay, that's helpful. And then, as you think about the evolution of the PASS, I would assume there's been a lot of destination customers who are now part of the PASS program who were not there three or four years ago. You mentioned some lower-tenure guests who tend to renew closer to the season. Do you think the past needs to evolve in any way to extend or smooth the seasonality of the past? In other words, would it make sense to add partnerships, retail or otherwise, that add demand for the past outside of the core season, in essence, extending the demand and utility of the past outside of the core season? Just would love your thoughts there. Thanks.

Yeah, I think to the extent that the company could have advanced commitment for the ski season and other experiences or utilization of the past beyond the ski season, that would be a real benefit to our company. We do provide access to... summer experience on the past, but I'd say we're constantly always looking, Ben, at new ideas and opportunities to make that proposition even more valuable and compelling to our guests. I do think the dynamics between spring and fall have, you know, shifted and changed over time as the composition of our pass holders has changed over time between destination and local decision-making, the behavior is different, and whether you're long-tenured and very loyal versus you're a newer pass holder coming in. And that has caused shifts between spring and fall decision-making.

Thank you.

Our next question comes from Laurent Vasilescu with BNP Paribas.

Oh, good afternoon. Thank you very much for taking my question. It's noted in the press release that the Epic Australia Pass sales are down 22% in units, primarily due to weather. Kirsten, can you provide some context for the audience as to how bad the weather was in Australia this season so far? Could this be a leading indicator on how the U.S. might react if bad weather could continue for the next few seasons? And are there any learnings from Australia that you could apply when you will guide for FY25 next quarter?

Yeah, Australia has had highly variable seasons. Two years ago, a record high season of amazing conditions. And then, unfortunately, the next year, very, very, like, worst season in decades. So tale of two extremes over the course of two years. I think that, so yes, I do think that is impacting condition or decision making about a pass in Australia. There's a little other unique dynamics happening in Australia related to the economy. I think the unique factor about our business there versus our North American resorts is, you know, a lot of our Epic Australia pass holders are visiting our local resorts. And what you see in North America is a lot of optionality. And one of the benefits of the past is if you live in San Francisco and conditions are challenging in Tahoe, you have a lot of good options to go to Park City or go to Whistler or go to Colorado. That level of optionality in Australia when there's a poor winter is just more limited. So it's a different, more unique dynamic when it is more oriented to local visitation versus, you know, destination guests are not flying, unfortunately, to Australia to see at our resorts there. And the options in North America are a little bit more dynamic. They give us a little bit more more sort of geographic diversity to help with the stability around that.

Very helpful.

And in terms of my second question, Kirsten, Angela, your dividend payout ratio is at 100% on a trailing 12-month basis. Can you discuss what's the ideal payout ratio going forward? Or ask another way, how do you prioritize your capital allocation strategy across the different avenues for shareholder returns.

Yeah, thanks, Loren. We do look at, like consistently have looked at, right, our priority for capital allocation. And the dividend's been our primary route for that. And, you know, we're not looking at a specific payout ratio per se. We've been looking at where do we see the free cash flow generation of the business and the underlying fundamentals have allowed us over time, right, to do all of our capital allocation priorities of, reinvesting in our resort experience and the employee experience. We think our balance sheet's in a very strong place to be able to do M&A, like what we just did with Crown Montana. But we always look at the return to capital to shareholders, and we've prioritized the dividend, and we've been opportunistic in how we return capital through share representation, like we did this quarter.

Okay, very helpful. Thank you very much.

Thank you.

Our next question comes from Megan Alexander with Morgan Stanley.

Hi, good afternoon. Thanks so much for taking our questions. Maybe a follow-up just on the lift ticket visitation again. I know I think you said it was down 17% from that window lift ticket. It's obviously clear weather was a big headwind to that customer, but I'm just curious your thoughts on whether price is having any impact and The reason I ask is your largest competitor did recently say something to the tune of, you won't see us taking prices on lift tickets anymore. So just bigger picture would love to kind of get, you know, your thoughts on your pricing strategy more broadly and whether you think potentially there could be some room for some changes, maybe something like dynamic pricing. You know, I understand the goal is to push people to the advanced commitment, but at the same time, you know, you're talking about the lift ticket guests being the funnel for that. So I'm just trying to understand how you think about the pricing strategy and the ability to kind of retain and inquire more guests.

Thanks, Megan. The source for our new pass holders, as I noted in spring, is primarily the prior season list ticket guests. But when we look on a full pass selling cycle basis, It is the source of new pass holders comes from lift ticket guests, but it also comes from our lapsed lift ticket guests, our lapsed pass holders and prospects. And we have, as you know, an extensive database to know those guests and know where they skied, when they skied, how often they skied to be able to connect with them one-to-one. Related to lift ticket price, you know, our pricing strategy is set very deliberately to to move people into advanced commitment because that is what creates stability for us versus the variable decision making that comes from a refundable product like a lift ticket. When we have a product line that enables us to have a very strong transition from lift tickets into a pass called Epic Day Pass that allows people to move into one through seven days. And we've launched this, I believe it was an FY19, if I'm remembering that correctly. We launched that in order to actually capture those guests that are skiing at a lower frequency and have had enormous success in doing that. As I mentioned during the script, we've grown our past product sales 62% in units and 43% in sales dollars over the past three years. And Epic Day Pass has been a huge portion of that. But the other part of our strategy is that we have a diverse portfolio of resorts and some of those are local, some of those are regional, and some of those are destination. And when you look at ticket price for a local resort versus a regional resort versus a destination resort, meaning For people who are starting the sport or taking up the sport, we don't often see them buying a plane ticket and traveling to one of the destination resorts. We have a network that allows a lift ticket purchase at a very reasonable price with first-time programs to support them as they start the sport at low prices at those local resorts and then as they move to regional and destination resorts. So I think right now, you know, the lift ticket decline, what we see in our data when we look at the lift ticket decline is relative to when the conditions were good versus when the conditions were bad. And there is a conditions impact, but there is also an industry normalization impact based on that behavior. I do not at this point believe that the 17% decline is related to the price of lift tickets because we tend to move those people into Epic Day Pass versus it just being direct, I'm leaving the sport.

That's really helpful. Appreciate the color. And then maybe just a follow-up to what you just said at the end there. How should we think about visitation for 2025? I guess both from an industry perspective and from a Vail perspective, I guess from the industry, you're going to be lapping a pretty challenging weather season, but perhaps there was some normalization so you don't necessarily get a full recovery. And then from, you know, Vail's perspective, at this point, you know, past units down 5%, you've, you know, just less people on the mountain skiing just as a result of that. So, I guess just any way to think about how kind of the net of all of these factors should impact next year. Does any one factor kind of have more weight over the others?

Yes. We think both are meaningful factors on visitation, the weather conditions, and the normalization. We're not quantifying those yet. We will provide more information about that as we share guidance in September on the volume and our visitation expectations. On the industry normalization, you know, it's hard to say completely whether or not that is you know, fully done or that continues into next year. When I look at what's happening in the travel and leisure industry and the commentary about normalization, or I look at the ski industry results, it does look like, at least in the ski industry, similar to what you're hearing in travel and leisure, that it is mostly returning back or close to sort of a normalized trend.

Got it. Thank you.

Thank you. Our next question comes from Patrick Scholes with Truist.

Hi. Good evening, everyone. One thing I've been hearing in the industry the last couple weeks is how ICON unit sales at least are tracking up at least mid-single digits year over year. I'm curious as to your opinion, you know, why – you know, what might account for the difference between where you are and they are. You know, certainly part of that is, you know, they will have a basin. I think Blue and Camelback were added. And then I think Crystal is going back to the unlimited full icon. Anything else, you know, to think about? between the difference between the two. Thank you. Thanks, Patrick.

Yeah, I can't really comment on anyone else's past results or ICON's past results since they don't have public disclosures of their results and the drivers. What I can do is share, I think, some context that is always helpful reminder, which is, you know, life cycle of a business or a product and where our business was you know, in its early days. And the types of guests that we were converting were the high-frequency, high-committed guests. And now our pass has been in existence for significantly longer than their passes. So I think it would make sense, as you've seen us evolve and launch new products to go after new addressable markets, not just the high-frequency customers most committed skiers, we have expanded dramatically the growth of our past business going into less committed or lower frequency skiers and riders. For context, if you think about when their past started versus when ours did, I'd say it's hard to compare the two because where we are in the stage of the product lifecycle is dramatically different, and the types of guests and the products that we offer are dramatically different. But mostly I'd say it's that life stage piece that I think is likely a key difference.

Okay. Thank you. And then my follow-up question, also this one's a bit more of a high-level question. You know, there's certainly debate in the ski community and subsequently with investors. regarding what is the better operating strategy to go with? You folks seem to have more of a centralized, out-of-Broomfield, you know, as it relates to mountain operations and HR, whereas your main competitor leaves it up more to the local resort to make decisions. I guess, in your opinion, why is your methodology the superior one? Thank you.

Thanks, Patrick. Well, if we're talking about centralized versus decentralized, I think there's something important to clarify about this because I think there's a misunderstanding or a misperception about this. What we have centralized as a company are support functions to our mountain operations. Support functions. That would be things like HR, finance, marketing, procurement, accounting. What's not centralized is operations. Operations decisions are decentralized into the resorts. Our operators are responsible for decisions about terrain, about labor, about safety, about the running of the resorts. That is not centralized for us. And I can't really comment on how that compares to Altera, but I think it's important to qualify that operations is not centralized for our company. That said, why do I think it's good that we have centralized HR, finance, marketing, those functions? Because we can have better cost efficiency and provide more support and have consistency in the support that we provide. We don't need every mountain resort to have their own procurement team or accounting team or HR or finance team when we can have a team that really is centralized and is providing the support for every one of our mountain resorts in order to enable the success of our mountain operations. So I do think that that strategy is very successful. And I also think and believe that having our decision-making in mountain operations reside in the resorts in mountain operations is also the right approach, and I don't anticipate that changing.

Thank you.

Our next question comes from David Katz with Jefferies.

Afternoon, everyone. Thanks for taking my question. I appreciate it. Can we just drill down a little bit on Switzerland and how we think about expectations for past sales there? Obviously, it's a ramp, but my sense is that you've included some of that in your underwriting and would just love to hear your thoughts there.

Hi, David. Yeah, thank you for the question. I do believe that Switzerland, but all of Europe, is a significant opportunity for us. And I think it is a ramp, as you highlighted. We feel incredibly positive that over the last couple of years, we've got two owned and operated resorts there now. And I think important for us to continue to build a strong network in order to fully unlock the potential, not unlike what happened for us in North America, where we started with a few resorts and built out the network and then really started to see the unlock on pass sales. Do I think that we will see some growth from Europe in owning Cron and under Matt Cedroon and having some incredible partnerships in Europe? I do. I don't think that that is the trajectory change. I think it will be gradual over time just like you saw if you go back to the early days of Epic Pass when we only had six or seven resorts and we built it out over time. That is what I would anticipate would happen and that's the vision that we have and the growth potential that we see because as you know, the skier market in Europe is significant and there are not a lot of network, resort networks, and there are not a lot of multi-resort passes that offer the type of access, value, and stability that we are capable of offering. But it is definitely a long-term growth strategy that will take time.

Understood. And as my follow-up, I wanted to ask about the new app and any data points, any learnings, any benefits, anything that's knowable there would be great.

Thanks. Yeah, the new app is on track with our expectations. I'm really pleased with, in particular, one of the most critical innovations that we have in the app is, as you know, mobile pass and mobile lift ticket, which we believe is important because it actually improves the guest experience and moves guests out of the ticket lines, or waiting for their pass or ticket to arrive in the mail. It also reduces plastic and RFID waste and cost. And all of that delivered on track with our expectations in year one. Most importantly, the experience at the baselift delivered what we expected for the guest. We're expanding that into Whistler Black Home. And my hope and my goal is for next season that we increase adoption among our guests. and start to move more and more of our guests into using their phone for mobile pass and mobile lift tickets, David, but also as a key source for information, including My Epic Assistant, which we will be piloting, which will also create cost efficiency for us in the future. So all of the, I would say all of those things are on track with our expectations and I'm excited to see what the second year holds in terms of guest adoption given that people are using their phones for everything now.

Thank you. Our next question comes from Chris Roenke with Deutsche Bank.

Hey, thanks. Good afternoon, everyone. So First question is kind of on the hotel side. I know when you guys initially talk about guidance in September, you typically look at what you've got on the books on the hotel side, and I know it's really for peak periods. But as you look back now at the end of the ski season, were those hotel bookings, do they offer the same level of predictive value that they used to or that you expect, or do we just have to say that the weather is impacting things more than the initial hotel bookings?

Yeah, thanks, Chris, for the question. We do, you know, when we go into the season, right, we're always looking at our best indicator being past sales, but also always, you know, comment on what we're seeing really kind of more close in, right, for those holiday period lodging bookings. And so it is a factor that we look at, and we do kind of keep continuing monitoring that. And I think what you saw for this year is you did see a lot of the resort markets actually not fill in as expected as you went through with the season for both the same factors that we're talking about in terms of some of this normalization and I think travel behavior, but also from the conditions likely impacting the lodging fill-in, if you will, from there as well. And for the resort communities, we saw really occupancy declines around four points for the winter season.

Okay. Thanks, Angela. And then follow-up is kind of, as we look out to next year and we think about the Epic Year launch, right, being more fully available, and taking into context your comments about renewal rates and the fact that you're doing better with folks who have been with you for a while, would that change any of your very preliminary views on what you think about Epic Year uptake and participation rates or Do you think you have a lot of confidence in that, given that you're doing well with your renewing pass holders? Thanks.

Thanks, Chris. I feel pretty good about our assumptions on My Epic Year, but of course, you know, we will revisit those and refine those as we get our budget in place for providing guidance for next year. But I I think that the beauty of the My Epic Gear business is that everyone needs gear, right? It's not discretionary. Everyone needs gear. So it's really incumbent on us to convince people our guests that they actually that this is a better option for either owning or renting gear because it's a subscription and we have it ready there for you it's more convenient and you can get the best and latest gear so i i feel that as that is a very compelling idea because everyone needs gear and so when you think about the addressable market for it the addressable market is large, very large. And that's why I see the potential there. So regardless of, you know, high tenured or low tenured, I think he's a very compelling proposition. And it's on us to prove that to our guests.

Thank you. Our next question comes from Brant Montour with Barclays.

Hey, good evening, everybody. Thanks for squeezing me in here. So on the COVID normalization comments, Kirsten, and apologies if you already touched on this, but I'm assuming that obviously included sort of a comment on total travel demand, which you definitely alluded to, but does that also include a shift of consumer behavior back to peak travel periods, i.e. weekends and holidays? That was something that was a nice tailwind for you early in COVID. Is that something that it could be a Is it already a headwind? Is it something that could be an additional headwind, creating more load pressure on your business operations?

We did not see that this past season, Brant, that there was a big shift back into, you know, and if you'll recall in the years post-COVID, we really, as we grew past sales, we saw shifting people into off-peak periods, and we still see the dynamic of strength in those periods versus the peak periods. And, you know, there's some natural limiters on those peak periods anyway, including price of coming during those peak times. I don't really see that, at least I'm not seeing signs of that in our data right now. What I do see is overall, you know, the ski, well, I'd say overall consumer travel behavior has changed significantly and shifted year over year pretty dramatically since COVID, as you've seen. You've heard a lot of travel and leisure companies talking about seeing signs of normalization, and some of them overtly saying off of a peak from last year as a headwind to them. And when I look at the ski industry, you know, the ski industry had – peak visitation last year, and when we look at the behavior this past season, laughing that, even when conditions were outstanding, it does, we do believe that the past season, the down 8%, our down 8%, that's consistent with that, but the ski industry, you know, those numbers look, for this past year, look more in line with what you would considered to be more normalized trend, I would say. At least right now, I'm not seeing that being big shifts between peak and off-peak.

Okay, that's super helpful. And then another question on the competitive landscape, based on publicly available data from your peer, Elterra, you know, it does look like their initial and sort of mid-season past prices are widening out versus yours. It's the widest level, I think, since they launched. And I guess I'm curious how you think about that from a strategic positioning standpoint. And if there's any concern that they might be trying to position themselves as a higher tiered product than yours. And the reason I ask is maybe, you know, Obviously, not every skier is created equal in terms of profitability. So how do you think about that competitive positioning?

I feel good about our competitive positioning based on our guest research and the perceptions that our guests have about Epic Pass, which we monitor very closely. I also feel very good about the growth. We grew a very mature business in past 62% in units and 43% in dollars over the past three years to get to over 70% of our visits committed in advance. And that is our strategy and that is our focus. And I think that is likely different for them. You know, they don't have the same goal in mind for a variety of reasons. But for us, It is really important because of the weather impacts to create that stability and move people into a pass. We have a lot of very loyal, long-tenured pass holders. We have acquired a lot of new pass holders. And our goal, it doesn't change to keep doing that. Related to pass, we know that pass is price sensitive. And the decision-making between a lift ticket and purchasing a pass that we have a lot of data on what the price sensitivity is to move them over. What you've seen us do since the price reset is take price up and Epic Pass price is up about 25% since we did that pass reset. And we will keep doing that, but we are always monitoring what that price elasticity is because the goal is not to move people out of pass and back into lift tickets because that creates a highly variable business dynamics for us when we need that revenue stability in a high fixed cost business to deliver the results that you saw this year, 28% less snowfall for the winter and visits down 8%, but still having revenue be able to be up 1% and EBITDA up 6%. So yes, we obviously pay attention to what they're doing, but I think our business strategies and goals are different than what they're trying to accomplish.

Thank you. And this concludes the Q&A portion of today's call. I would now like to turn the call back over to Kirsten Lynch for closing remarks.

Thank you, Operator. This concludes our fiscal 2024 third quarter earnings call. Thanks to everyone who joined us today. Please feel free to contact me or Angela directly should you have any further questions. Thank you for your time this afternoon. Goodbye.

This concludes today's Vail Resorts Fiscal Third Quarter 2024 Earnings Call and Webcast. You may disconnect your lines at any time and have a wonderful day.