Good day, and welcome to the Vail Resorts First Quarter Fiscal 2018 Conference Call. Today’s conference is being recorded. And now at this time, I'll turn the conference over to Rob Katz, Chief Executive Officer. Please go ahead, sir.

Thank you. Good morning, everyone. Welcome to our fiscal first quarter 2018 earnings conference call. Joining me on the call this morning is Michael Barkin, our Chief Financial Officer. Before we begin, let me remind you that some information provided during this call may include forward-looking statements that are based on certain assumptions and are subject to a number of risks and uncertainties as described in our SEC filings and actual future results may vary materially. Forward-looking statements in our press release issued this morning, along with our remarks on this call are made as of today, December 7, 2017 and we undertake no duty to update them as actual events unfold. Today’s remarks also include certain non-GAAP financial measures. Reconciliations of those measures are provided in the tables included with our press release, which along with our quarterly report on Form 10-Q were filed this morning with the SEC and are also available on the Investor Relations section of our website at www.vailresorts.com. So, with that said, let’s turn to our firs quarter fiscal 2018 results. Overall, we were pleased with our results in the first fiscal quarter. Perisher performed very well with outstanding conditions in September that led to strong visitation and revenue growth across the business. Whistler Blackcomb's robust summer business also performed well with strong performance in its world class mountain biking operations, summer activities and sightseeing. Our U.S. summer business was impacted, as expected, by the same operational challenges we noted last quarter, including the closure of the Heavenly Coaster due to damage from last winter and the delayed launch of Epic Discovery at Breckenridge, all of which were included in our fiscal 2018 guidance assumptions. Our lodging results for the first fiscal quarter were encouraging with revenue per available room increasing 8.5% compared to…

Thanks, Rob and good morning everyone. Before discussing our results and fiscal 2018 guidance, I want to remind you that you can find a more complete discussion of our financial results for our first quarter of fiscal 2018 ended October 31, 2017 in our quarterly report on Form 10-Q which was filed this morning with the SEC. Our Form 10-Q and earnings announcement can be found on our website at www.vailresorts.com. For the first quarter of fiscal 2018, net loss attributable to Vail Resorts was $28.4 million, or a loss of $0.71 per diluted share, compared to a net loss attributable to Vail Resorts of $62.6 million, or a loss of $1.70 per diluted share, in the first quarter of the prior year. On the pretax basis, the net loss for the first quarter of fiscal 2018 included a loss of $7.3 million related to foreign exchange movements on the intercompany loan for Whistler Blackcomb. Additionally, the net loss for the first quarter of fiscal 2018 included a tax benefit of approximately $51.8 million, or $1.29 earnings per diluted share related to employee exercises of equity awards, primarily attributable to the CEO's exercise of expiring SARs. With the adoption of revised accounting guidance related to the presentation of x benefit on employee stock compensation this is recorded in net income. For the first fiscal quarter, resort net revenue was $220.2 million, an increase of 23.6% compared to the prior year quarter, primarily attributable to the incremental revenue from Whistler Blackcomb and strong growth at Perisher. Resort Reported EBITDA was a loss of $54.1 million which includes $0.7 million of acquisition and integration related expenses attributable to the acquisitions of Whistler Blackcomb and Stowe and approximately $1.9 million of payroll taxes related to the CEO's exercise of expiring SARs. This compares…

Thanks Michael. We remain committed to reinvesting in our resorts, creating an experience of a lifetime for our guests and generating strong returns for our shareholders. While we will announce our complete capital plan for calendar year 2018 in March 2018, we are pleased to announce several signature investments that we intend to construct in 2018 for the 2018/2019 ski season. We are very excited to announce a transformational investment at Whistler Blackcomb to further enhance the most visited mountain resort in North America and refocus the spirit of the previously announced Renaissance project back to the guest experience on the mountain. We plan to make a discretionary investment of approximately $42 million or C$53 million at Whistler Blackcomb, as part of an approximate $52 million or C$66 million total capital plan at the resort, representing the largest annual capital investment in the resort's history. We believe this plan will dramatically improve the on-mountain experience for our guests with enhanced lift capacity, improved circulation and a significantly elevated experience for skiers, riders and sightseeing guests. The centerpiece of this investment will be a new gondola running from the base to the top of Blackcomb Mountain, replacing the Wizard and Solar four person chairs with a single state-of-the-art gondola, providing an experience protected from the elements, an expected 47% increase in uphill capacity and a mid-station to allow guests to access and circulate around Blackcomb Mountain. At approximately 4,000 people per hour, the gondola will have the highest capacity of any gondola in North America and when combined with Whistler gondola and the Peak 2 Peak gondola would the first three gondola connection in the world. We also plan to upgrade the four-person Emerald express chairlift to a high speed six-person chairlift, providing increased capacity and reduced lift line wait times…

[Operator Instructions] And we will take our first question from Shaun Kelley with Bank of America.

Hey, good morning, guys. Thanks for all the color Rob on both the conditions out there and also the CapEx initiative. Maybe just to start on the conditions that you are seeing on -- two questions here. One would be on Colorado which is by far probably the most important right now. Can you just give your sense on sort of help us maybe things or scenarios here on -- is there still -- is there any risk that I think in the past one of the big risk has been Back Bowls not opened by kind of Christmas New Year. Do you think that's a risk for this season? Is it -- kind of how does that stand? And then could you give us any color on Tahoe would be the second part just on the condition side.

Yes. I guess I'd say I think right it's always a risk right until we for let's say the Back Bowls, until we open Back Bowls, it's always a risk as to whether we can. And that's to every single season certainly in the 11 season I have been here. And I think at the same time plenty of time obviously for us to get more natural snowfall. I'd say where we are in Colorado is that we had a little bit warmer temperatures as we into Thanksgiving but that shifted and we have now colder temperatures to be able to really put forward the best snowmaking product that we can but there is no doubt that certainly about the time we get to Christmas, we would want to have more significant natural snowfall than we've seen and there is a plenty of time between now and then for that. So having been into this few times, yes, we feel very comfortable, been here kind of before and yes no obviously no guarantees that's the one thing we can't control.

Like I said any kind of thoughts Tahoe, wasn't mentioned in the prepared remarks but how is that kind of stacking up versus expectation and any concern there?

I think I would say similarly in terms of better snowmaking temperatures they got some better snow and some of the storms that came too early but are probably sitting at a similar situation in terms of I think you can put forward a reasonable product right now but obviously yes we look for better natural snowfall to have the kind of product we like to put out at Christmas. I think it's a little less we have certainly at a resort like Northstar if we can good snowmaking temps we can actually put out a pretty comprehensive product on the mountain, lots of areas of Heavenly where we can do the same. But again there will be obviously a real shift in the experience when we get the natural snowfall that again is pretty typical between now and Christmas.

Great. And second thing I want to touch on was tax reform, Michael. You also alluded just a little bit in your prepared remarks it's not in any of your guidance. But could you help us think through at least any preliminary view on just overall should this be beneficial to Vail and maybe a little bit color on the split out of kind of the US component versus any of the international earnings just so we kind of think about magnitude for your business specifically?

Sure. I mean I think we'll hold on any definitive comments pending the bill actually progressing through reconciliation and all those pieces but I think clearly the biggest impact should it hold would be the reduction in the corporate tax rate. As you know, we are corporate tax payer and if the US corporate tax rate declines by a significant amount that would accrued our benefit from a cash tax perspective. As it relates to splitting US and foreign earnings, I think given the guidance that we provided on Whistler Blackcomb over the last year I think you can kind of back into that relatively easily.

And any sense or any thought that there could be any impact positive or negative I would assume the more on the risk side to the capital lease treatment that's pretty -- that's little favorable to taxes at Canyons and Park City?

I think we've seen and obviously we are talking about something that's moving around quite a bit as we speak but nothing that we've seen that would raise concerns there. There is another part of some of the tax bills has been about capital expensing which will allow you to fully deduct our capital project if that passed obviously that would be benefit to us as well because we have the wherewithal on the ability obviously to accelerate project if we want to get and obviously with lower the cost improve the ROI on those product. But again so much moving around I think very hard for us to provide any definitive insight into it.

And we will take our next question from Ryan Sundby with William Blair.

Yes, hey, guys. Thanks for taking my question. Just want to dig on Perisher, quite strong lift revenue this quarter. You think two quarters in a row here, good ski school, is it more a function of just great conditions this year or now that we are two plus years end of the acquisition, are you -- is there any kind of hit your stride there with some of your initiative.

I would say I think it's a combination of both. I think actually the last couple of years we've actually struggled with some pretty challenging early season conditions at Perisher. And I think what's been notable is that our season pass program there, the marketing efforts of that team I think have really protected us from having negative surprises despite some of those early season challenges. I think this year we finally got a positive surprise on kind of very strong finish to the season and so we -- yes, we are able to combine that with the stability that our pass program has provided the resort. So I'd say this fall no doubt a big chunk of it is the great weather which was some of the best weather they ever had in September in terms of conditions. But I think what our whole model allows right is to try and provide some smoothness through geographic diversity obviously and through our season pass program to the vagaries of weather but then yes when we have a good season obviously make the most of it.

Yes, got it. And then I guess from season pass year now you are kind of wrapping up selling season any kind of surprises or any kind of color or some broad based strength or any surprises geographically in terms of maybe where new season pass sales popped up here now you had Whistler and Stowe? And I have follow up here.

No. I would say I think as a whole the pass program kind of performed very much in line with our expectations, which candidly we set pretty high. We had some pretty aggressive I mean given the size of the program and the number of years we had double digit growth when in an industry that showing maybe 1% volume growth obviously to be able to keep doing that with the program that's now 740,000 plus passes, when we are down with the year we think that I guess I would say we are expecting to deliver this year given the news on Stowe, given the news on Whistler, given that we get better and better every year on our database marketing, I would say that we've been, yes, very pleasantly surprised that how we were able to meet our expectations. And but I'd say when we look at all the geographies both related to Stowe and Whistler and then all of our initiatives on our data marketing effort, we feel like, yes, we were just able to hit on so many of those.

Okay. Then one last on Whistler here. I guess kind of the decision to go after 43% increase in lift capacity, any color on like what's the implication of that is, is that to improve the customer experience or there do you think the skiers that would come but they fill the mountain too full? I was just trying to get an idea what the kind of the results of doing something like that.

Yes. I think it's multiple, I think on the one hand we do feel that yes that when you have the kind of growth that Whistler seeing, it is important that people see you reinvesting in the mountain because that will make the difference. So when -- we are expecting the strong season this year in Whistler. We are going to have this guest show up by announcing these improvements now we actually get a chance to put signs and marketing around the resort so these guests coming in this year see okay well yes, boy, there is a longer line let say at the Wizard chair but I now see a sign that says if I come back next year I am going to have this high speed gondola, so that is in our mind that's some of the best marketing you can give to people. I think it really reinforces right the value of the brand. So all of the sudden now they feel like, okay, even when I -- even if there is a pinch point because of crowding I realized this is a resort and a community that's reinvesting in that. So it gives me confidence to come back the next year. Also, think it provides we are obviously trying to open up new markets for Whistler both at the high end both in Asia and in the United States, in Europe. And I think we've seen in our other resorts that this kind of a gondola experience very much drives a perception of high quality which we think allows us to attract that kind of high end guest.

And next we will take a question from Brett Andress from KeyBanc Capital Markets.

Hi, good morning. Mike can you help us out the expectation through your guidance now. I guess given the early weather trends you are seeing in Whistler and maybe a slower start elsewhere, have your expectations from mix standpoint I guess change much at this point or maybe said another way I guess if Whistler maybe on track to exceed your already raised expectations that may offset any lack of natural snow by Christmas in Colorado and Tahoe?

Yes. I would say that yes as Whistler I think is already off as we said to a very strong start but it's important to remember that the results to date right are such a small percentage of the overall revenue for the season that it's great news that they are but I think obviously I don't think the results to date have shifted our overall expectation for the season for any of our any of our mountain. So I think we really feel obviously about looking at season pass trends and booking trends that yes we still feel very good about the original guidance. Yes, it's predicated on obviously having good condition once we get to Christmas and beyond but again we kind have been here before on that.

Got it. And I guess on the last call you highlighted you expected I think international business to maybe face some challenges but it seems it maybe that reversed. I think you had strong pass across most of your market. Can you maybe talk a little bit about the outlook there and maybe what's driving that inflection?

Yes. I would say I think its import to separate out the success on season passes to our international markets from the ultimate visitation. One, a lot of those markets now have access to Whistler Blackcomb so obviously the comments we made in September really related to international visitation to our US resort. And so I think what this highlights though is the power of having Whistler Blackcomb on our pass so that people see that they have an option and that we -- yes so we absolutely attributed to that. We also think though that even and this is true across a lot of our markets, even when there were headwinds to overall visitation from international markets to the US, we were still able to our more sophisticated marketing approach right to actually grow the pass program in those markets even if overall visitation from those countries decline. I'd say as we look ahead to this year I think our view is the same. That within the US we still think there are headwinds to total visitation. Now I am pretty confident though that we will outperform the broader trend because of our season pass sales.

And now we will move to a question from Matthew Brooks with Macquarie Capital.

Good morning, guys. Just a few questions I guess on Japan. Do you still think that adding a destination resort in Japan would be the best way to add value to the network in the same way that sort of Whistler enhanced your network?

Yes. I think yes the way I might describe it is I think it remains important priority for us because of the connections that it has to Australia to the rest of Asia and China to Whistler, so we think yes there is a compelling opportunity there. And yes along with the number of other opportunities that we see on whether that's ultimately in Europe or North East part of the United States or I mean other destination resort. So but no doubt that Japan offers some unique opportunity for us.

And I guess sort of as a follow up to that is there any sort of constraints on the kind of deal that you would make in Japan? For instance, would you do a deal where you get full control of the asset and if there is any sort of infrastructure spend that need to be made related to the purchase of resort, could that be a constraint to you making a deal?

I think we would be pretty flexible with any of those opportunities just like we've been in the US. I think we would -- any deal that we would do obviously we would want to make sure that we could make the most of significant database that we have skiers around the world. So if anything we were doing we would want to make sure we can bring to bear, yes, all of the knowledge and connections that we have to the worldwide skiing community. And then I think we would be very open to how we partner or work with any local operator because it's obviously going to be thing especially going to a place like Japan or Europe, there will be things that obviously we don't have the history on. So I think those could be quite -- that kind of a partnership could be quite powerful.

And ladies and gentlemen, this does conclude your question-and-answer session. I'll turn the call back over to Rob Katz for any additional or closing remarks.

Thank you, operator. This concludes our fiscal first quarter 2018 earnings call. Thanks to everyone who joined us on the conference call today. Please feel free to contact me or Michael directly should you have any further questions. Thank you for your time this morning and good bye.

And with that ladies and gentlemen, this does conclude your conference for today. We do thank you for your participation. You may now disconnect.