Vail Resorts, today announced its calendar 2013 capital expenditure plan. The Company’s 2013 capital plan features a high-impact new lift, significant terrain expansion, a brand new restaurant and the fourth generation of EpicMix, in addition to $25 million in spending for the primary phase of its new summer operations and nearly $10 million in upgrades for every of the recently acquired Afton Alps and Mt. Brighton, leading to the biggest collection of planned improvements within the Company’s history. The corporate currently anticipates it should spend approximately $130 million to $140 million in resort capital expenditures in calendar year 2013, including approximately $47 million to $52 million in maintenance capital, that’s essential to maintain the advent and level of service appropriate to resort operations, including routine replacement of snow grooming equipment and rental fleet equipment. All the proposed capital projects are subject to applicable regulatory approvals, including U.S. Forest Service approval.
Highlights of the calendar year 2013 capital expenditure plan include:
Epic Discovery – This primary phase of Epic Discovery, the Company’s summer mountain activity plan, includes approximately $25 million to remodel the summer experience at six of its mountain resorts (Vail, Beaver Creek, Breckenridge, Keystone, Heavenly and Northstar). Plans for every mountain, include a range of zip lines, ropes courses, signature climbing walls, Forest FlyersTM, summer tubing, expanded hiking and mountain biking trails and education centers. Each of those new activities will capitalize at the existing summer visitation at each resort and leverage existing infrastructure, creating the chance for top-impact and high-return projects. The corporate expects these activities, in total, to generate approximately $7 million of incremental Mountain Reported EBITDA of their first full summer of operation.
Improvements at Afton Alps & Mt Brighton – The corporate is planning major enhancements and upgrades to the newly acquired Afton Alps near Minneapolis, Minn., and Mt. Brighton near Detroit, Mich. The corporate plans to speculate nearly $10 million at each resort to bring an entirely new ski experience to those markets, that are home to greater than 450,000 skiers and riders. The Company’s plans include dramatic improvements in snowmaking to increase the season and supply a more consistent and top quality snow surface, the creation of state-of-the-art terrain parks with extensive new features, animation and dedicated lifts; upgrades to base area facilities; the addition of EpicMix, EpicMix Racing and raise ticket scanning to personalize the guest experience and higher promote the Company’s western resorts to those skiers; and enhancements to guest safety and quality around the ski areas. These improvements are being announced together with new season pass plans for the resorts and a more dedicated sales effort in those markets to drive a higher connection between those guests and the Company’s Colorado and Tahoe resorts. The corporate believes that following these plans, future capital spending at each resort might be more limited in scope.
Peak 6 terrain expansion at Breckenridge – The height 6 terrain expansion includes two new chairlifts and 543 acres of latest terrain, a 23 percent expansion to the resorts skiable acreage. Peak 6 will offer an intermediate “bowl” skiing experience, with the chance for a wide selection of guests to ski this new high alpine area that sits above tree line. Peak 6 becomes another iconic feature of Breckenridge, and can better disperse skiers and improve the guest experience around the resort, that is perennially the #1 or #2 most visited mountain resort inside the Us of a.
New Red Tail Camp restaurant at Beaver Creek – Ahead of the 2015 World Alpine Ski Championships, the corporate is building a brand new 500 seat restaurant at Red Tail Camp, located on the finish of the men’s and women’s downhill courses, which greater than doubles the prevailing restaurant’s capacity. Red Tail Camp will offer gourmet dining options in an upscale cafeteria setting and could add a second good quality and high capacity dining venue for Beaver Creek, better positioning the resort for continued growth in visitation. The hot restaurant will follow at the success the corporate has had with the Tamarack Lodge at Heavenly, the Zephyr Lodge at Northstar and The 10th at Vail.
Replacing Vail’s Chair 4 (Mountain Top Express) with a high speed, six-person chairlift – Vail’s Mountain Top Express (#4) is without doubt one of the most recognized and highly utilized chairlifts in North America- serving both a critical skiing pod for the mountain and an excellent transportation lift from Lionshead and Vail Village to the Back Bowls and Blue Sky Basin. The hot six-person chairlift increases capacity by 33 percent, dramatically reducing lift lines and building in this year’s success of the newly built Gondola One. The recent chair will continue to construct upon Vail’s preeminent position in delivering the correct experience within the ski industry worldwide.
EpicMix Academy – EpicMix Academy often is the fourth generation of the groundbreaking and award-winning EpicMix application, following the introductions of EpicMix Photo and EpicMix Racing. With EpicMix Academy, the Company’s ski school instructors can be ready to certify the attainment of certain skills and ski levels for any of the scholars of their classes. Children and adults in both group and personal ski lessons would be ready to earn permanent recognition and review their accomplishments online. Parents could be capable of track the progress in their kids and the Company’s ski schools will immediately know the flexibility level of each student before the beginning of every lesson. EpicMix Academy will offer special certified digital pins, that are easily shared through Facebook and Twitter at the side of pins for vertical feet, photos and racing medals.
The Company has historically invested significant profit capital expenditures for resort operations and believes the calendar 2013 capital plan maintains the high-quality standards for which Vail Resorts is legendary and invests in improvements around the Company’s resorts and new growth opportunities. All discretionary capital improvements are evaluated in line with an expected level of return on investment. The corporate plans to make use of cash available, borrowings available under its Credit Agreement and/or cash flow generated from future operations to supply the money essential to execute its capital plans.
Commenting at the resort capital expenditure announcement, Rob Katz , chief executive officer, said, “The 2013 capital plan is unprecedented in its size and underscores our operating philosophy of regularly reinvesting in our resorts to supply absolutely the finest experience to our guests and highlights several of our unique growth opportunities in Epic Discovery and newly acquired resorts. Our commitment to repeatedly investing in our resorts to improve the guest experience grows our season pass programs that create customer loyalty, supports our premium pricing strategy, drives new visitation, and increases guest spending. This year’s plan represents the culmination of a long time of labor with recent regulatory approvals taking into account projects which include Epic Discovery and the height 6 terrain expansion at Breckenridge, in addition to a focused acquisition strategy that enables for a higher connection to skiers and riders in Minneapolis and Detroit.”
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