Vail Resorts, Inc. · NYSE:MTN
Vail Resorts — Investor Presentation (December 2014)
32 slides from Vail Resorts's investor presentation, December 2014
Slide 1: Vail Resorts Investor Meeting
Vail Resorts Investor Meeting December 2014 Rob Katz, Chairman and CEO Michael Barkin, CFO
Slide 2: Caution on Forward-Looking Statements
CAUTION ON FORWARD-LOOKING STATEMENTS Statements in this presentation, other than statements of historical information, are forward-looking statements that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Readers are cautioned not to place undu
Slide 3: Non-GAAP Financial Measures
NON-GAAP FINANCIAL MEASURES We use the terms Reported EBITDA, Free Cash Flow and Net Real Estate Cash Flow, which are not financial measures under accounting principles generally accepted in the United States of America ("GAAP"). We define Reported EBITDA as segment net revenue less segment operatin
Slide 4: Leading Mountain Resort Operator
LEADING MOUNTAIN RESORT OPERATOR 4
Slide 5: Investment Thesis
INVESTMENT THESIS • Upper income vacation spending • Irreplaceable, networked assets • No new supply • Data driven marketing approach • Acquisition track record and opportunities • Summer plan • Strong free cash flow 5
Slide 6: Leisure Travel vs Ski
LEISURE TRAVEL VS SKI • Different Business Drivers • Season Pass for local/weather sensitive guest • Broader economy for high-end vacation traveler • Weather • Limited correlation between snowfall and EBITDA for destination resorts • Stable Demographics • Consistent youth mix (~50% under 35) • Consi
Slide 7: Strong Business Model
STRONG BUSINESS MODEL • Investment creates premium guest experience • Attract high end guests • Sophisticated targeted marketing – Season Pass provides value option – Premium pricing for non-pass holders • Resorts drive high volume (6 of the top 10 in US) • High margins on fixed cost base • Generate
Slide 8: Season Pass
SEASON PASS • Over 400,000 pass holders and $200 million in sales - no comparable program in industry • Sales in all 50 states and 83 countries • Destination Guests represent fastest growing segment and nearly 40% of passholders • Acquisitions and partnerships increase value to guest • Data analytic
Slide 9: Season Pass – Consistent Growth
SEASON PASS – CONSISTENT GROWTH Annual Season Pass Sales $210M $180M +15% $150M ($ Millions) $120M $90M $60M $30M $0M FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 Proj 9
Slide 10: 2014/2015 Season Pass Program
2014/2015 SEASON PASS PROGRAM • 13% unit growth and 16% sales growth • Price increases of 3% to 6% • Significant growth driven by Park City / Canyons, despite short sales cycle • Increasing penetration of US destination and international visitation • Urban markets continue to outperform, doubling pa
Slide 11: Industry Leading Data Analytics / CRM
INDUSTRY LEADING DATA ANALYTICS / CRM • Data Capture – RFID – Mobile / Online Purchase – Express Ticketing – Epic Mix • Increase in segmentation – Season Pass now has 70 segments and messages • State-of-the-art database, email technology • Each acquisition brings new data • Targeting high net worth
Slide 12: High End Demographics
HIGH END DEMOGRAPHICS • Attract high-end leisure travelers • Resilient to economic fluctuations • Average destination guest annual income of ~$295K • 25% of Beaver Creek and Vail destination guests have annual income above $500k 12
Slide 13: Strategic Acquisitions
STRATEGIC ACQUISITIONS • Strong track record of strategic acquisitions • Align with season pass and destination guest opportunity • Actively review opportunities with domestic destination resorts, urban ski areas and international opportunities • Ensure each acquisition drives core strategy April 20
Slide 14: Park City / Canyons
PARK CITY / CANYONS • Town of Park City one of a few premier destination ski towns in North America • Strong real estate, retail and restaurant presence • Close proximity to international airport • Entered Long term lease for Canyons in May 2013 with $305 million capital lease • Acquired Park City M
Slide 15: Park City Capital Plan
PARK CITY CAPITAL PLAN • $50 million capital program to create largest US ski resort Project Impact Interconnect 8 person Gondola connecting Park City and Canyons Park City Restaurant New 500 seat restaurant at Interconnect base Red Pine Restaurant 250 seat expansion of Canyons restaurant King Con &
Slide 16: Canyons Lease
CANYONS LEASE • Lease entered into in May 2013 • $25 million annual cash lease payment + inflation • No increase to base rent for Park City Acquisition • Full control of all resort operations • Contingent payment to Talisker if Adjusted EBITDA exceeds threshold • 42% of Adjusted EBITDA of combined r
Slide 17: Urban Ski Areas
URBAN SKI AREAS • Markets with large destination skier populations • Drive season pass growth • Opportunity to collect data for in- season marketing • Accretive on stand alone basis • Season Pass Sales have doubled in Minneapolis and Detroit • Preferred Program • Potential new cities 17
Slide 18: Epic Discovery
EPIC DISCOVERY • Significant existing summer tourism in Vail, Breckenridge and Heavenly • Create unique high alpine family adventure • Leverage existing resort infrastructure • High incremental flow through with limited variable costs • Significant EBITDA growth opportunity with modest capital inves
Slide 19: Summer Economics
SUMMER ECONOMICS • Existing Summer Overhead Costs • Fixed and unrelated to new summer activities • Overhead, maintenance, taxes, utilities • Current Breckenridge and Park City summer operations • Results before major new investments • $8.3 million of Summer 2014 revenue • $6.0 million of Summer 2014
Slide 20: Significant Free Cash Flow Generation
SIGNIFICANT FREE CASH FLOW GENERATION Cash Flow Summary ($M) FY12 FY13 FY14 FY15 (Projected) Net Cash Provided by Operating Activities $ 185 $ 222 $ 246 $ 316 - Capital Expenditures $ (133) $ (95) $ (118) $ (118) Free Cash Flow $ 52 $ 127 $ 128 $ 198 20
Slide 21: Management Team
MANAGEMENT TEAM • Long tenure for key operating executives • Deep bench with broad industry knowledge and experience • Diversified background in corporate disciplines • Constantly drive change and innovation • Strong commitment and track record in driving shareholder value 21
Slide 22: Focus on Disciplined Reinvestment
FOCUS ON DISCIPLINED REINVESTMENT • CY15 Park City Transformation Plan of $50 million • Create largest US Destination ski resort with 7,300 skiable acres • Upgrade lift infrastructure, snowmaking and terrain, new restaurant and dining capacity • CY15 core resort capital spend of $60-$65 million • In
Slide 23: Financial Overview
FINANCIAL OVERVIEW * © BK fF HO F A BH mM
Slide 24: FY14 Highlights
FY14 HIGHLIGHTS • Mountain segment driven by outstanding pass sales and strong results in Colorado and Utah despite Tahoe’s challenging conditions • Successful integration of Canyons and Urban • Significant lodging growth driven by increases in occupancy and ADR • Key capital investments in our reso
Slide 25: Fiscal Year 2014 Results
FISCAL YEAR 2014 RESULTS (in millions, except Skier Visits and ETP) Fiscal Year Ending: July 31, 2014 July 31, 2013 Variance Total Skier Visits (thousands) 7,688 6,977 10.2% Effective Ticket Price ("ETP") $58.18 $56.02 3.9% Net revenue: Lift $447.3 $390.8 14.4% Ski School 109.4 95.3 14.9% Dining 89.
Slide 26: Real Estate Momentum
REAL ESTATE MOMENTUM Ritz-Carlton As of October 31, 2014 Residences, Vail One Ski Hill Place Units Sold Project-To-Date 104 72 Units Sold, 1Q15 2 2 Units Remaining 12 16 Selling Price / SF - 1Q15 Avg $1,566 $1,090 Cost / SF -1Q15 Avg $1,228 $868 Net Cash Proceeds - 1Q15 ($M) $6 $3 Total Cash Proceed
Slide 27: FY15 Guidance
FY15 GUIDANCE FY15 Guidance Range Low End High End (000's) Range Range Mountain Reported EBITDA (1)(6) 324,000 338,000 (2) Lodging Reported EBITDA 13,000 25,000 (3)(6) Resort Reported EBITDA 340,000 360,000 Real Estate EBITDA (4) (13,000) (6,000) Total EBITDA 327,000 354,000 Depreciation and amortiz
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Slide 29: Non-GAAP Financial Measures
NON-GAAP FINANCIAL MEASURES We use the terms Reported EBITDA, Free Cash Flow and Net Real Estate Cash Flow, which are not financial measures under accounting principles generally accepted in the United States of America ("GAAP"). We define Reported EBITDA as segment net revenue less segment operatin
Slide 30: Reconciliation of Non-GAAP Financial Measures
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES Presented below is a reconciliation of Total Reported EBITDA to net income attributable to Vail Resorts, Inc. calculated in accordance with GAAP for the twelve months ended July 31, 2014 and 2013. (In thousands) (Unaudited) Twelve Months Ended July 31, 2
Slide 31: Reconciliation of Non-GAAP Financial Measures
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES The following table reconciles Real Estate Reported EBITDA to Net Real Estate Cash Flow for the twelve months ended July 31, 2014 and for the three months ended October 31, 2014. (In thousands) (In thousands) (Unaudited) (Unaudited) Twelve Months Three M
Slide 32: Reconciliation of Non-GAAP Financial Measures
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES The following table reconciles Total Free Cash Flow to Net (Decrease) Increase in Cash and Cash Equivalents for the Twelve Months Ended July 31, 2012 through 2014: (In thousands) (Unaudited) Twelve Months Ended July 31, 2012 2013 2014 Total Free Cash Flo