Vail Resorts, Inc. · NYSE:MTN
Vail Resorts — Investor Day (July 2014)
33 slides from Vail Resorts's investor day presentation, July 2014
Slide 1: Vail Resorts Investor Meeting
Vail Resorts Investor Meeting July 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, Net Debt, 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 operating expe
Slide 4: Leading Mountain Resort Operator
LEADING MOUNTAIN RESORT OPERATOR 4
Slide 5: Industry Overview
INDUSTRY OVERVIEW • Supply Constrained • Proximity and Service Drive High Volume Destinations • Significant Benefits of Scale • Fragmented Market 5
Slide 6: Vail Resorts' Leading Position
VAIL RESORTS’ LEADING POSITION • Multiple resorts in premier markets • Eagle County and Summit County • Park City • Tahoe • Five of top six most visited resorts in US • Full vacation destinations • High-end guests • Historical investment -> industry-leading guest experience and pricing 6
Slide 7: Industry Leading Marketing
INDUSTRY LEADING MARKETING • Season pass program • Investment in analytics • RFID Scanning – Data Collection • Epic Mix • Database tools • Customized and targeted marketing efforts • Maximize yield during peak periods and fill off-peak periods • Urban ski area strategy 7
Slide 8: Season Passes
SEASON PASSES • Industry leading program • Drives loyalty • Reduces weather impacts • Acquisitions add value • New resorts want to join • More competition helps 8
Slide 9: Season Pass – Consistent Growth
SEASON PASS – CONSISTENT GROWTH Annual Season Pass Sales $180M $150M +14% $120M ($ Millions) $90M $60M $30M $0M FY’06 FY’07 FY’08 FY’09 FY’10 FY’11 FY’12 FY’13 FY’14 9
Slide 10: 2014/2015 Season Pass Program
2014/2015 SEASON PASS PROGRAM • Price increases from 3% to 6% • First full selling season in Utah • New partnership with Niseko • Partnerships with Verbier and Les 3 Vallees • Urban Epic 4 promotion • Enhanced college passes • More targeting • Spring pass sales generated 14% unit and 20% sales growt
Slide 11: Urban Ski Areas
URBAN SKI AREAS • Markets with large destination skier populations - Drive season pass growth - Opportunity to collect data for in-season marketing • Preferred Program • Potential new cities 11
Slide 12: Urban Transformation
URBAN TRANSFORMATION BEFORE AFTER Facilities BEFORE AFTER Mountain Experience 12
Slide 13: Best-in-Class Operations
BEST-IN-CLASS OPERATIONS Continuous Safety Guest Feedback Company-Wide Centralized Guest Service Procurement Standards 13
Slide 14: Weather
WEATHER • Typical fluctuations are not material • Dramatic weather events • Challenges growth targets • High stability and free cash flow • Geographic diversity • Weather risk mitigated by: • Season pass program • Advanced lift ticket purchase • Resort amenities 14
Slide 15: Canyons Resort
CANYONS RESORT World Class Destination Resort • 4,000 skiable acres • Top 10 ranking in Ski and Outside magazines • Attractive Park City location • Significant recent improvements • Close proximity to Salt Lake City International Airport Extensive Growth Opportunities • Only 450,000 skier visits in
Slide 16: Canyons FY2014 Season
CANYONS FY2014 SEASON • Introduced Epic Pass program in Utah • Transitioned advanced ticket sales to proprietary online platform • Integrated Canyons onto Vail Resorts systems • RFID ticket media • Epic Mix • Lodging platform • Full back-office integration • Performance in line with expectations 16
Slide 17: Epic Discovery
EPIC DISCOVERY • Capture existing summer tourism • Leverage resort infrastructure • Create unique high-alpine family adventure • Current Status • New activities, including zip lines and rope challenge courses, open in Vail, Breckenridge and Heavenly • Final USFS policy issued in April 2014 • Complet
Slide 18: Disciplined Capital Allocation
DISCIPLINED CAPITAL ALLOCATION • Focus on long-term capital returns • Targeted and disciplined reinvestment to sustain and enhance operating results • Commitment to returning capital to shareholders from strong free cash flow • Debt paydown to reduce interest expense • Maintain sufficient flexibilit
Slide 19: Long-Term Capital Plan
LONG-TERM CAPITAL PLAN • Target capital spending of $85M/year • Includes maintenance spend of ~$50M/year • Adjusted for inflation and growth • Epic Discovery/Summer • ~$85M total investment over future years • One-time acquisition investments 19
Slide 20: 2014 Calendar Year Capital Plan
2014 CALENDAR YEAR CAPITAL PLAN CY14 Capital Expenditure • Two high impact lift upgrades $90M • New combination lift at Beaver $5M Creek to replace Centennial Chair $35M Summer • Upgraded 6-person Colorado Growth Maintenance Chair at Breckenridge • Beaver Creek snowmaking • Lodge at Vail room renova
Slide 21: Shareholder Return
SHAREHOLDER RETURN Declared Quarterly Dividend • Committed to capital return $ / share from free cash flow $0.45 +100% $0.40 • 100% Dividend Increase $0.35 • 2.1% Yield(1) $0.30 $0.25 • Future internal and external +11% +25% $0.20 growth $0.15 • Future increases in return of $0.10 $0.05 capital $0.0
Slide 22: Financial Overview
FINANCIAL OVERVIEW 22
Slide 23: 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 24: FY14 YTD Summary
FY14 YTD SUMMARY • Total skier visitation grew 10.2% compared to prior year Strong Mountain and • Strong ancillary spending with total ski school revenue up 14.9% and total dining Lodging Growth revenue up 11.2% • Total Lodging net revenue increased 17.5%, with RevPar growth of 12.3% • California dr
Slide 25: FY2014 YTD Through Q3 Results
FY2014 YTD THROUGH Q3 RESULTS (in millions, except Skier Visits and ETP) Nine Months Ending: April 30, 2014 April 30, 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% Din
Slide 26: Real Estate Momentum
REAL ESTATE MOMENTUM Ritz-Carlton Residences, Vail One Ski Hill Place Units Sold through FY13 94 59 Units Sold, Year-To-Date (1) 5 9 Units Remaining (1) 17 20 Selling Price / SF - YTD Avg (1) $1,213 $970 Cost / SF - YTD Avg (1) $996 $816 Net Cash Proceeds - YTD ($M)(1) $17 $10 Total Cash Proceeds of
Slide 27: Strong Balance Sheet
STRONG BALANCE SHEET • Q3 Fiscal 2014 cash totaled $307.4 million (1) • No borrowings under our credit facility • Net debt at only 1.8x trailing twelve month EBITDA (1) • Announced notice of redemption for $175M of Senior Subordinated Notes resulting in $11.4 million annual pre-tax interest savings
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Slide 29: Reconciliation of Non-GAAP Financial Measures
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES Reported EBITDA, Net Debt, and Net Real Estate Cash Flow are not measures of financial performance under GAAP, and they might not be comparable to similarly titled measures of other companies. Reported EBITDA, Net Debt, and Net Real Estate Cash Flow shou
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 nine months ended April 30, 2014 and 2013. (In thousands) (Unaudited) Nine Months Ended April 30, 201
Slide 31: 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 April 30, 2014. (In thousands) (Unaudited) Twelve Months Ended April 30, 2014 Mou
Slide 32: Reconciliation of Non-GAAP Financial Measures
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES The following table reconciles Net Debt to long-term debt and the calculation of Net Debt to Total Reported EBITDA for the twelve months ended April 30, 2014. (In thousands) (Unaudited) As of April 30, 2014 Long-term debt $ 799,223 Long-term debt due wit
Slide 33: 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 nine months ended April 30, 2014. (In thousands) (Unaudited) Nine Months Ended April 30, 2014 Real Estate Reported EBITDA $ (5,792) Non-cash Real Estate cost