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Vail Resorts Announces Fiscal 2008 Third Quarter Results

BROOMFIELD, Colo., June 5, 2008 /PRNewswire-FirstCall via COMTEX News Network/ -- Vail Resorts, Inc. (NYSE: MTN) announced today financial results for the third quarter of fiscal 2008 ended April 30, 2008.

The Company uses the terms "Reported EBITDA," "Reported EBITDA excluding stock-based compensation," "net income excluding stock-based compensation" and "Net Debt" when reporting financial results in accordance with Securities and Exchange Commission rules regarding the use of non-GAAP financial measures. The Company defines Reported EBITDA as segment net revenue less segment operating expense plus segment equity investment income or loss and for the Real Estate segment plus gain on sale of real property. The Company defines Net Debt as long-term debt plus long-term debt due within one year less cash and cash equivalents.

THIRD QUARTER PERFORMANCE

Mountain Segment

Mountain revenue increased $17.0 million, or 5.5%, in the third quarter of fiscal 2008 to $325.7 million from $308.7 million for the same quarter last fiscal year. Mountain operating expense increased $4.8 million, or 3.1%, to $157.8 million. Mountain equity investment income, net decreased $1.0 million. Mountain Reported EBITDA increased $11.2 million, or 7.1%, to $168.6 million compared to $157.4 million for the same quarter last fiscal year.

Lodging Segment

Lodging revenue of $43.6 million was flat in the third quarter of fiscal 2008. The prior year period included $2.6 million of revenue associated with the termination of the management agreement at The Equinox (pursuant to the terms of the management agreement) as a result of the sale of the hotel by the hotel owner. Excluding the termination fee, Lodging revenue would have increased $2.6 million, or 6.3%. Lodging operating expense increased $4.4 million, or 14.1%, to $35.5 million. Lodging Reported EBITDA decreased $4.4 million, or 35.5%, to $8.1 million compared to $12.5 million for the same quarter last fiscal year.

Resort - Combination of Mountain and Lodging Segments

Resort revenue, the combination of Mountain and Lodging revenue, increased $17.0 million, or 4.8%, in the third quarter of fiscal 2008 to $369.3 million from $352.4 million for the same quarter last fiscal year. Resort operating expense increased $9.2 million, or 5.0%, to $193.3 million. Resort equity investment income, net decreased $1.0 million. Resort Reported EBITDA increased $6.8 million, or 4.0%, to $176.7 million compared to $169.9 million for the same quarter last fiscal year. Resort Reported EBITDA excluding stock-based compensation increased $6.8 million, or 4.0%, to $178.0 million.

Real Estate Segment

Real Estate revenue increased $37.3 million, or 217.9%, in the third quarter of fiscal 2008 to $54.5 million from $17.1 million for the same quarter last fiscal year. Real Estate operating expense increased $28.3 million, or 112.0%, to $53.6 million. Real Estate Reported EBITDA increased $9.0 million, or 111.2%, to $0.9 million compared to a loss of $8.1 million for the same quarter last fiscal year.

Total Performance

Total revenue increased $54.3 million, or 14.7%, in the third quarter of fiscal 2008 to $423.8 million from $369.5 million for the same quarter last fiscal year. Income from operations for the quarter increased $15.3 million, or 11.2%, to $151.5 million.

The Company reported third quarter fiscal 2008 net income of $87.3 million, or $2.24 per diluted share, compared to net income of $78.5 million, or $1.99 per diluted share, for the same quarter last fiscal year. Excluding stock-based compensation expense, the Company's net income for the third quarter of fiscal 2008 would have been $88.7 million, or $2.28 per diluted share, compared to net income of $79.6 million excluding stock-based compensation, or $2.02 per diluted share, for the same quarter last fiscal year. The Company recorded total pre-tax stock-based compensation expense of $2.1 million and $1.7 million in the three months ended April 30, 2008 and April 30, 2007, respectively.

NINE MONTH PERFORMANCE

Mountain Segment

Mountain revenue increased $21.1 million, or 3.4%, for the nine months ended April 30, 2008, to $648.0 million from $626.9 million for the comparable period last fiscal year. Mountain operating expense increased $9.6 million, or 2.4%, to $401.9 million. In the current fiscal year nine month period, Mountain operating expense included approximately $2.0 million in legal fees for litigation related to the Company's attempted acquisition of The Canyons ski resort ("The Canyons"). Mountain equity investment income, net decreased $0.4 million. Mountain Reported EBITDA increased $11.1 million, or 4.7%, to $249.6 million compared to $238.5 million for the comparable period last fiscal year.

Lodging Segment

Lodging revenue increased $4.9 million, or 4.2%, for the nine months ended April 30, 2008, to $121.7 million from $116.8 million for the comparable period last fiscal year. The prior year period included the $2.6 million of revenue associated with the termination of the management agreement at The Equinox (pursuant to the terms of the management agreement) and $2.4 million of revenue associated with the termination of the management agreement at The Lodge at Rancho Mirage (pursuant to the terms of the management agreement), in conjunction with the closing of the hotel as part of a redevelopment plan by the current hotel owner. Excluding the termination fees, Lodging revenue would have increased $9.9 million, or 8.9%. Lodging operating expense increased $15.3 million, or 15.6%, to $113.5 million. Lodging operating expense included approximately $3.1 million of start-up and pre-opening expenses related to The Arrabelle at Vail Square hotel. Lodging Reported EBITDA decreased $10.4 million, or 55.9%, to $8.2 million compared to $18.6 million for the comparable period last fiscal year.

Resort - Combination of Mountain and Lodging Segments

Resort revenue, the combination of Mountain and Lodging revenue, increased $26.0 million, or 3.5%, for the nine months ended April 30, 2008, to $769.7 million from $743.8 million for the comparable period last fiscal year. Excluding the impact of the prior year Equinox and The Lodge at Rancho Mirage termination fees, Resort revenue would have increased $31.0 million, or 4.2%. Resort operating expense increased $24.9 million, or 5.1%, to $515.5 million for the nine months ended April 30, 2008. Excluding the $2.0 million of expense associated with The Canyons litigation and $3.1 million of start-up and pre-opening expenses related to The Arrabelle at Vail Square hotel, Resort expenses would have increased $19.8 million, or 4.0%. Resort equity investment income, net decreased $0.4 million. Resort Reported EBITDA increased $0.7 million, or 0.3%, to $257.8 million compared to $257.2 million for the comparable period last fiscal year. Resort Reported EBITDA excluding stock-based compensation increased $0.6 million, or 0.2%, to $261.6 million.

Real Estate Segment

Real Estate revenue increased $11.7 million, or 11.7%, for the nine months ended April 30, 2008, to $112.0 million from $100.3 million for the comparable period last fiscal year. Real Estate operating expense increased $3.1 million, or 3.1%, to $104.9 million. Gain on sale of real property increased $0.7 million. Real Estate Reported EBITDA increased $9.3 million, or 620.8%, to $7.8 million compared to a loss of $1.5 million for the comparable period last fiscal year.

Total Performance

Total revenue increased $37.7 million, or 4.5%, for the nine months ended April 30, 2008, to $881.7 million from $844.0 million for the comparable period last fiscal year. Income from operations for the nine months increased $8.8 million, or 4.8%, to $191.8 million.

The Company reported net income of $114.0 million, or $2.91 per diluted share, for the first nine months of fiscal 2008, compared to net income of $95.7 million, or $2.44 per diluted share, for the comparable period last fiscal year. Included in the first nine months fiscal 2008 results is the receipt of the final cash settlement from Cheeca Holdings, LLC of which $11.9 million (net of final attorney's fees and on a pre-tax basis) was included in contract dispute credit (charges), net. Excluding stock-based compensation expense, the Company's net income for the nine months ended April 30, 2008, would have been $117.8 million, or $3.01 per diluted share, compared to net income of $99.1 million excluding stock-based compensation, or $2.52 per diluted share, for the comparable period last fiscal year. The Company recorded total pre-tax stock-based compensation expense of $6.0 million and $5.5 million in the nine months ended April 30, 2008 and April 30, 2007, respectively.

Business Commentary and Outlook

Robert Katz, chief executive officer, commented, "I am quite pleased with our results for the fiscal 2008 third quarter and for the nine months ended April 30, 2008, which includes virtually all of the 2007/2008 ski season. Despite the worsened U.S. economy and its impact on the travel sector, as well as the very slow start to the ski season due to difficult weather conditions, our results for the third quarter and first nine months of fiscal year 2008 set new all-time records in Resort revenue, Mountain and Resort Reported EBITDA and net income. Importantly, all of this growth was achieved on an organic basis at our existing resorts. Mountain segment revenue in the third quarter increased 5.5% over the prior year's third quarter with approximately 66% of our incremental revenue growth flowing through to Mountain Reported EBITDA, resulting in Mountain Reported EBITDA margins increasing from 51.0% to 51.8%. For the 2007/2008 season compared to the 2006/2007 season, total skier visits were slightly down by 0.5%. However, excluding the Early Season (defined as the period from the start of the season through December 23, 2007), total skier visits were up 4.1%. Lift revenue for the season (excluding season pass revenue) was up 4.3%, reflecting effective ticket price growth of 7.7% (excluding season pass) and solid visitation during peak periods offsetting softer visitation during the Early Season and other non-peak periods. Season pass revenue was also up 7.6% for the season and season pass holders skied an extra one half day per pass on average. During the quarter, our ski school, dining and retail/rental ancillary Mountain segment businesses grew, outpacing our total skier visit growth, with guests continuing to spend more on these areas per visit. A key driver in our growth for the year was an estimated 26% increase in international guest visitation compared to the prior year, which included an estimated 28% increase over the prior year third quarter. This growth in international visitation mitigated softness in U.S. destination visitation due to U.S. economic weakness."

Katz continued, "As we look ahead to the 2008/2009 ski season, we are very excited with the launch of the Epic Season Pass. It offers unlimited and unrestricted skiing at all five of our resorts for the entire season at an initial price of $579. The pass must be purchased on or before November 15, 2008. With this new product, we expect to build on the success of our Colorado, Heavenly and other season pass products, which currently represent approximately 26% of our total lift ticket revenue, the vast majority of which are purchased prior to start of the ski season, providing greater stability to our results. With the Epic Season Pass, we are hoping to increase that percentage and provide our guests from around the world a true "full season" experience at our resorts. Additionally, we have just concluded our Colorado spring pass sales efforts, which historically have represented approximately 26% of our total Colorado season passes sold in sales dollars, prior to the Epic Season Pass introduction. This year's Colorado spring pass sales, excluding Epic Season Passes sold to new pass holders, were up 2% in sales dollars over the prior year. It is important to note that the comparable Colorado spring pass sales in the prior year were up 59% in sales dollars over spring pass sales for the 2006/2007 ski season, though ultimately flattened out in the fall, so at this point we are satisfied with these results."

Katz added, "Despite the fact that our mountain related lodging properties experienced similar trends that we indicated above, our Lodging segment, on a "same store" basis for the quarter, benefited from a 6.9% average daily rate increase due to strong demand during the peak periods, which also helped drive a 6.3% increase in total Lodging revenue, excluding the impact of the revenue associated with the prior year's termination fee of $2.6 million. In addition, our Real Estate segment benefited from the closings of 17 additional Arrabelle units in the third quarter driving a $9.0 million increase in Real Estate Reported EBITDA."

Commenting on the Company's Breckenridge and Vail real estate development projects, Katz said, "As we lead the way in transforming the Breckenridge real estate landscape, we are very excited with our ski-in/ski-out projects currently under development, including Crystal Peak Lodge at the base of Peak 7 with all 46 units under contract and closings on these units expected to occur in the winter of 2008. In addition, our latest project, the RockResorts branded One Ski Hill Place, which we brought to market in December 2007, will create a unique luxury experience at the base of Peak 8. To date, we have released 70 units of the total 88 units with an average price per square foot of $1,246 (29% in excess of Crystal Peak released just a year ago). Currently, we have 49 units under contract, representing gross sales proceeds of $69.6 million and have commenced construction on this exciting project. We currently expect that income, before provision for income taxes and before allocated corporate or Vail Resorts Development Company overhead, for One Ski Hill Place will range from $15 million to $25 million. Turning to our Vail development projects, one additional Ritz-Carlton Residences, Vail unit was placed under contract in the quarter with currently 47 of the 71 available two- to six- bedroom whole ownership condominium units and all 45 fractional condominium units under contract, representing 67% of total expected revenue. With respect to The Arrabelle at Vail Square project, to date we have closed on 29 of the 67 units, and anticipate closing on 35 of the remaining 38 units in the fiscal fourth quarter. We are shifting the expected closing of three of the remaining Arrabelle units into fiscal 2009 based on the timing of completing construction on those units including one unit, which is no longer under contract but has been relisted for approximately 36% over its previous contract price. Finally, we still anticipate closing on six of the thirteen Lodge at Vail Chalets in the fiscal fourth quarter with the remaining seven Chalets closing in the first half of fiscal 2009."

As an update on the Vail Mountain Club, Katz commented, "We are incredibly excited with the sales at the Vail Mountain Club, as we have nearly sold all of the currently available social and full memberships. To date, we have sold 383, or 96% of the available memberships, including 184 full memberships, which include parking privileges, and an additional 199 social memberships, which exclude parking privileges, representing total sales commitments of $69.0 million of total proceeds when paid in full. This includes the sale of 23 full memberships and 28 social memberships since our March 10, 2008, earnings release. The sales of these memberships, in the midst of this economy and before the club has opened, which will occur next ski season, certainly signal the extraordinary experience that membership in the Vail Mountain Club will offer and provides another exclusive commitment to Vail from many of our guests."

On the Company's lodging development, Katz said, "We are excited with the development occurring at our RockResorts lodging brand with the announcement this quarter of two new properties to the brand, including another new warm weather destination with the management of the Third Turtle Club & Spa in the Turks & Caicos Islands. This property is expected to open in 2011 and will feature approximately 280 total ocean and marina front one-, two-, three- and four-bedroom units. In addition to managing the project's luxury residences and suites, spa facilities and restaurants, RockResorts will also manage the resort's commercial activities, private yacht harbor and beach club. We also announced The Osprey at Beaver Creek will join the RockResorts brand as an owned hotel, formerly known as the Inn at Beaver Creek. The Osprey is undergoing a $7 million transformation this summer and scheduled to be relaunched as RockResorts' newest addition in time for the 2008-2009 ski season. The 41-room hotel is situated in the heart of the village of the world-class Beaver Creek Resort, set against a spectacular mountain backdrop and is the closest hotel to a chairlift in North America. The addition of these properties reflects the tremendous opportunity of the RockResorts brand as we continue to add to our collection of unique upscale resort hotels."

Katz added, "While challenges exist with the U.S. economic climate and outlook, we feel that our business model remains resilient, supported by the results of our third quarter, the strongest quarter of our fiscal year. Furthermore, we continue to maintain a very strong balance sheet position with $304 million of cash and cash equivalents and a net debt position of less than one and a half times trailing twelve months Total Reported EBITDA, which provides us additional flexibility to take advantage of future opportunities. Given our performance to date and with the conclusion of our winter season including a softer April for the Resort business than had been expected, I wanted to take this opportunity to reaffirm our previously announced guidance that we issued in March 2008, although we now estimate falling at the lower end of our Resort and Real Estate guidance ranges and at or slightly below our net income range. We currently expect full year Resort Reported EBITDA, the combination of our Mountain and Lodging segments, to fall at the lower end of the $230 million to $240 million range and Resort Reported EBITDA excluding stock-based compensation expense to fall at the lower end of the $235 million to $245 million range. The Resort guidance includes a range for Mountain Reported EBITDA of $218 million to $228 million and Mountain Reported EBITDA excluding stock-based compensation expense of $222 million to $232 million, while we expect Lodging Reported EBITDA to range from $8 million to $14 million and Lodging Reported EBITDA excluding stock-based compensation expense expected to range from $9 million to $15 million. With respect to Real Estate, given the shifting of three of The Arrabelle units into fiscal 2009, we expect our Real Estate Reported EBITDA to be at the lower end of the previously announced $54 million to $60 million range and Real Estate Reported EBITDA excluding stock-based compensation expense expected to be at the lower end of the $57 million to $63 million range. Based on our current estimates, we expect net income to be at or slightly below the lower end of the $112 million to $122 million range and net income excluding stock-based compensation expense to be at or slightly below the lower end of the $117 million to $127 million range."

Katz concluded, "In addition, during the third quarter, we continued our previously announced share repurchase program, resulting in the repurchase of 321,150 shares at an average price of $46.70 for a total amount of $15.0 million. Since inception of this program in fiscal 2006, the Company has repurchased 1,506,233 shares at an average price of $44.29 for a total amount of approximately $66.7 million, with 1,493,767 shares remaining available under the existing repurchase authorization. Our purchases under this program are reviewed with our Board quarterly and are based on a number of factors as we evaluate the appropriate uses of our excess cash, including but not limited to the share repurchase program."

CONFERENCE CALL

For further discussion of the contents of this press release, please listen to our live webcast today at 11:00 am EDT, available at www.vailresorts.com in the Investor Relations section. In order to access the non-GAAP financial information that will be referenced on the call, click on www.vailresorts.com/investors.

Vail Resorts, Inc. is the leading mountain resort operator in the United States. The Company's subsidiaries operate the mountain resort properties at the Vail, Beaver Creek, Breckenridge and Keystone mountain resorts in Colorado, the Heavenly Ski Resort in the Lake Tahoe area of California and Nevada and the Grand Teton Lodge Company in Jackson Hole, Wyoming. The Company's subsidiary, RockResorts, a luxury resort hotel company, manages casually elegant properties across the United States and the Caribbean. Vail Resorts Development Company is the real estate planning, development and construction subsidiary of Vail Resorts, Inc. Vail Resorts is a publicly held company traded on the New York Stock Exchange (NYSE: MTN). The Vail Resorts company website is www.vailresorts.com and consumer website is www.snow.com.

Statements in this press release, 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. Such forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those projected. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. Such risks and uncertainties include but are not limited to: economic downturns; terrorist acts upon the United States; threat of or actual war; unfavorable weather conditions; our ability to obtain financing on terms acceptable to us to finance our real estate investments, capital expenditures and growth strategy; our ability to continue to grow our resort and real estate operations; competition in our mountain and lodging businesses; our ability to hire and retain a sufficient seasonal workforce; our ability to successfully initiate and/or complete real estate development projects and achieve the anticipated financial benefits from such projects; implications arising from new Financial Accounting Standards Board ("FASB")/governmental legislation, rulings or interpretations; our reliance on government permits or approvals for our use of Federal land or to make operational improvements; our ability to integrate and successfully operate future acquisitions; and adverse consequences of current or future legal claims. All forward-looking statements attributable to us or any persons acting on our behalf are expressly qualified in their entirety by these cautionary statements. All guidance and forward-looking statements in this press release are made as of the date hereof and we do not undertake any obligation to update any forecast or forward-looking statements, except as may be required by law. Investors are also directed to other risks discussed in documents filed by the Company with the Securities and Exchange Commission.


                              Vail Resorts, Inc.
               Consolidated Condensed Statements of Operations
                   (In thousands, except per share amounts)
                                 (Unaudited)

                                                       Three Months Ended
                                                            April 30,
                                                      2008           2007
    Net revenue:
      Mountain                                      $325,726       $308,712
      Lodging                                         43,590         43,643
      Real estate                                     54,474         17,134
        Total net revenue                            423,790        369,489
    Segment operating expense:
      Mountain                                       157,807        152,997
      Lodging                                         35,513         31,126
      Real estate                                     53,562         25,261
        Total segment operating expense              246,882        209,384
    Other operating income (expense):
      Depreciation and amortization                  (25,471)       (23,513)
      Relocation and separation charges                   --           (166)
      Gain (loss) on disposal of fixed assets, net        24           (242)
    Income from operations                           151,461        136,184
      Mountain equity investment income, net             698          1,660
      Investment income                                2,459          4,334
      Interest expense, net                           (8,441)        (8,039)
      Loss on sale of business                            --           (601)
      Contract dispute charges                            --           (184)
      Gain on put options, net                            --            690
      Minority interest in income of consolidated
       subsidiaries, net                              (4,621)        (5,343)
    Income before provision for income taxes         141,556        128,701
      Provision for income taxes                     (54,215)       (50,193)
    Net income                                       $87,341        $78,508
    Per share amounts:
      Basic net income per share                       $2.26          $2.02
      Diluted net income per share                     $2.24          $1.99

    Other Data:
    Mountain Reported EBITDA                        $168,617       $157,375
    Mountain Reported EBITDA excluding stock-based
     compensation                                   $169,572       $158,361
    Lodging Reported EBITDA                           $8,077        $12,517
    Lodging Reported EBITDA excluding stock-based
     compensation                                     $8,418        $12,823
    Resort Reported EBITDA                          $176,694       $169,892
    Resort Reported EBITDA excluding stock-based
     compensation                                   $177,990       $171,184
    Real Estate Reported EBITDA                         $912        $(8,127)
    Real Estate Reported EBITDA excluding stock-
     based compensation                               $1,761        $(7,671)



                              Vail Resorts, Inc.
               Consolidated Condensed Statements of Operations
                   (In thousands, except per share amounts)
                                 (Unaudited)

                                                       Nine Months Ended
                                                           April 30,
                                                      2008           2007
    Net revenue:
      Mountain                                      $647,984       $626,902
      Lodging                                        121,734        116,848
      Real estate                                    111,978        100,272
        Total net revenue                            881,696        844,022
    Segment operating expense:
      Mountain                                       401,942        392,355
      Lodging                                        113,530         98,233
      Real estate                                    104,885        101,770
        Total segment operating expense              620,357        592,358
    Other operating income (expense):
      Gain on sale of real property                      709             --
      Depreciation and amortization                  (69,854)       (66,857)
      Relocation and separation charges                   --         (1,401)
      Loss on disposal of fixed assets, net             (367)          (332)
    Income from operations                           191,827        183,074
      Mountain equity investment income, net           3,592          3,990
      Investment income                                7,697          8,815
      Interest expense, net                          (23,620)       (24,885)
      Loss on sale of business                            --           (601)
      Contract dispute credit (charges), net          11,920         (4,460)
      Gain on put options, net                            --            690
      Minority interest in income of consolidated
       subsidiaries, net                              (7,468)        (9,707)
    Income before provision for income taxes         183,948        156,916
      Provision for income taxes                     (69,901)       (61,197)
    Net income                                      $114,047        $95,719
    Per share amounts:
      Basic net income per share                       $2.94          $2.47
      Diluted net income per share                     $2.91          $2.44

    Other Data:
    Mountain Reported EBITDA                        $249,634       $238,537
    Mountain Reported EBITDA excluding stock-based
     compensation                                   $252,483       $241,601
    Lodging Reported EBITDA                           $8,204        $18,615
    Lodging Reported EBITDA excluding stock-based
     compensation                                     $9,144        $19,474
    Resort Reported EBITDA                          $257,838       $257,152
    Resort Reported EBITDA excluding stock-based
     compensation                                   $261,627       $261,075
    Real Estate Reported EBITDA                       $7,802        $(1,498)
    Real Estate Reported EBITDA excluding stock-
     based compensation                              $10,058            $52


                              Vail Resorts, Inc.
               Resort Revenue by Business Line and Skier Visits
                                (In thousands)
                                 (Unaudited)

                        Three Months               Nine Months
                           Ended     Percentage      Ended       Percentage
                         April 30,    Increase      April 30,     Increase
                       2008     2007 (Decrease)  2008      2007  (Decrease)
    Business Line
    Lift tickets    $167,793  $158,380   5.9%  $301,791  $286,997    5.2%
    Ski school        46,229    44,650   3.5%    81,384    78,848    3.2%
    Dining            30,344    28,624   6.0%    58,002    54,978    5.5%
    Retail/rental     59,533    53,401  11.5%   149,844   141,210    6.1%
    Other             21,827    23,657  (7.7)%   56,963    64,869  (12.2)%
    Total Mountain
     Revenue        $325,726  $308,712   5.5%  $647,984  $626,902    3.4%

    Total Lodging
     Revenue         $43,590   $43,643  (0.1)% $121,734  $116,848    4.2%

    Total Resort
     Revenue        $369,316  $352,355   4.8%  $769,718  $743,750    3.5%


                        Three Months               Nine Months
                           Ended      Percentage      Ended       Percentage
                          April 30,    Increase      April 30,     Increase
                       2008      2007 (Decrease)  2008      2007  (Decrease)
    Skier Visits
    Vail                 890       883   0.8%     1,570     1,608   (2.4)%
    Breckenridge         887       875   1.4%     1,630     1,650   (1.2)%
    Keystone             558       573  (2.6)%    1,129     1,171   (3.6)%
    Heavenly             540       493   9.5%       943       900    4.8%
    Beaver Creek         516       483   6.8%       918       890    3.1%
    Total Skier Visits 3,391     3,307   2.5%     6,190     6,219   (0.5)%

    Effective Ticket
     Price            $49.48    $47.89   3.3%    $48.75    $46.15    5.6%


                            Key Balance Sheet Data
                                (In thousands)
                                 (Unaudited)

                                                         As of April 30,
                                                      2008           2007

    Real estate held for sale and investment        $394,008       $305,085
    Total stockholders' equity                       796,168        743,189

    Long-term debt                                   575,275        575,162
    Long-term debt due within one year                74,192            401
    Total debt                                       649,467        575,563
    Less: cash and cash equivalents                  304,133        316,439
      Net debt                                      $345,334       $259,124


                Reconciliation of Non-GAAP Financial Measures

Resort, Mountain, Lodging and Real Estate Reported EBITDA and Resort, Mountain, Lodging and Real Estate Reported EBITDA excluding stock-based compensation have been presented herein as measures of the Company's financial operating performance. Reported EBITDA, Reported EBITDA excluding stock-based compensation and Net Debt (defined as long-term debt plus long-term debt due within one year less cash and cash equivalents) are not measures of financial performance or liquidity under accounting principles generally accepted in the United States of America ("GAAP"), and they might not be comparable to similarly titled measures of other companies. Reported EBITDA, Reported EBITDA excluding stock-based compensation and Net Debt should not be considered in isolation or as an alternative to, or substitute for, measures of financial performance or liquidity prepared in accordance with GAAP including net income, net change in cash and cash equivalents or other financial statement data. The Company believes that Reported EBITDA and Reported EBITDA excluding stock-based compensation are indicative measures of the Company's operating performance, and each similar to performance metrics generally used by investors to evaluate companies in the resort and lodging industries. The Company primarily uses Reported EBITDA excluding stock-based compensation targets in evaluating performance. The Company believes that Net Debt is an important measurement as it is an indicator of the Company's ability to obtain additional capital resources for its future cash needs.

    Presented below is a reconciliation of Reported EBITDA and Reported EBITDA
excluding stock-based compensation to net income for the Company calculated in
accordance with GAAP for the three and nine months ended April 30, 2008 and
2007.


                                                        (In thousands)
                                                      Three Months Ended
                                                           April 30,
                                                          (Unaudited)
                                                      2008           2007

    Mountain revenue, net                           $325,726       $308,712
    Mountain operating expense excluding stock-
     based compensation                             (156,852)      (152,011)
    Mountain equity investment income, net               698          1,660
      Mountain Reported EBITDA excluding stock-based
       compensation                                  169,572        158,361
    Mountain stock-based compensation                   (955)          (986)
      Mountain Reported EBITDA                       168,617        157,375


    Lodging revenue, net                              43,590         43,643
    Lodging operating expense excluding stock-based
     compensation                                    (35,172)       (30,820)
      Lodging Reported EBITDA excluding stock-based
       compensation                                    8,418         12,823
    Lodging stock-based compensation                    (341)          (306)
      Lodging Reported EBITDA                          8,077         12,517

    Resort Reported EBITDA*                          176,694        169,892
    Resort Reported EBITDA excluding stock-based
     compensation*                                   177,990        171,184

    Real Estate revenue, net                          54,474         17,134
    Real Estate operating expense excluding stock-
     based compensation                              (52,713)       (24,805)
      Real Estate Reported EBITDA excluding stock-
       based compensation                              1,761         (7,671)
    Real Estate stock-based compensation                (849)          (456)
      Real Estate Reported EBITDA                        912         (8,127)
    Total Reported EBITDA                            177,606        161,765
    Depreciation and amortization                    (25,471)       (23,513)
    Relocation and separation charges                     --           (166)
    Gain (loss) on disposal of fixed assets, net          24           (242)
    Investment income                                  2,459          4,334
    Interest expense, net                             (8,441)        (8,039)
    Loss on sale of business                              --           (601)
    Contract dispute charges                              --           (184)
    Gain on put options, net                              --            690
    Minority interest in income of consolidated
     subsidiaries, net                                (4,621)        (5,343)
    Income before provision for income taxes         141,556        128,701
     Provision for income taxes                      (54,215)       (50,193)
    Net income                                       $87,341        $78,508

        * Resort represents the sum of Mountain and Lodging



                                                        (In thousands)
                                                       Nine Months Ended
                                                           April 30,
                                                          (Unaudited)
                                                      2008           2007

    Mountain revenue, net                           $647,984       $626,902
    Mountain operating expense excluding stock-
     based compensation                             (399,093)      (389,291)
    Mountain equity investment income, net             3,592          3,990
      Mountain Reported EBITDA excluding stock-
       based compensation                            252,483        241,601
    Mountain stock-based compensation                 (2,849)        (3,064)
      Mountain Reported EBITDA                       249,634        238,537

    Lodging revenue, net                             121,734        116,848
    Lodging operating expense excluding stock-
     based compensation                             (112,590)       (97,374)
      Lodging Reported EBITDA excluding stock-
       based compensation                              9,144         19,474
    Lodging stock-based compensation                    (940)          (859)
      Lodging Reported EBITDA                          8,204         18,615

    Resort Reported EBITDA*                          257,838        257,152
    Resort Reported EBITDA excluding stock-
     based compensation*                             261,627        261,075

    Real Estate revenue, net                         111,978        100,272
    Real Estate operating expense excluding stock-
     based compensation                             (102,629)      (100,220)
    Gain on sale of real property                        709             --
      Real Estate Reported EBITDA excluding stock-
       based compensation                             10,058             52
    Real Estate stock-based compensation              (2,256)        (1,550)
      Real Estate Reported EBITDA                      7,802         (1,498)
    Total Reported EBITDA                            265,640        255,654
    Depreciation and amortization                    (69,854)       (66,857)
    Relocation and separation charges                     --         (1,401)
    Loss on disposal of fixed assets, net               (367)          (332)
    Investment income                                  7,697          8,815
    Interest expense, net                            (23,620)       (24,885)
    Loss on sale of business                              --           (601)
    Contract dispute credit (charges), net            11,920         (4,460)
    Gain on put options, net                              --            690
    Minority interest in income of consolidated
     subsidiaries, net                                (7,468)        (9,707)
    Income before provision for income taxes         183,948        156,916
      Provision for income taxes                     (69,901)       (61,197)
    Net income                                      $114,047        $95,719

        *  Resort represents the sum of Mountain and Lodging


Presented below is a reconciliation of Total Reported EBITDA to net income for the Company calculated in accordance with GAAP for the twelve months ended April 30, 2008. Also presented is a reconciliation of Net Debt to Long-term Debt and the calculation of Net Debt to Total Reported EBITDA.

                                                 (In thousands)
                                                     Twelve
                                                  Months Ended
                                                    April 30,
                                                      2008

    Mountain Reported EBITDA                        $218,825
    Lodging Reported EBITDA                            7,788
      Resort EBITDA*                                 226,613
    Real Estate Reported EBITDA                        6,820
      Total Reported EBITDA                          233,433
    Depreciation and amortization                    (90,660)
    Relocation and separation charges                    (32)
    Loss on disposal of fixed assets, net             (1,118)
    Investment income                                 11,284
    Interest expense, net                            (31,359)
    Loss on sale of businesses, net                      (38)
    Contract dispute credit, net                      11,739
    Minority interest in income of consolidated
     subsidiaries, net                                (5,565)
    Income before provision for income taxes         127,684
      Provision for income taxes                     (47,956)
    Net income                                       $79,728

        *  Resort represents the sum of Mountain and Lodging



                                                 (In thousands)
                                                     As of
                                                    April 30,
                                                      2008

    Long-term debt                                  $575,275
    Long-term debt due within one year                74,192
    Total debt                                       649,467
    Less: cash and cash equivalents                  304,133
      Net debt                                      $345,334

      Net debt to Total Reported EBITDA                 1.48



Presented below is a reconciliation of net income excluding stock-based compensation, tax effected, to net income of the Company calculated in accordance with GAAP for the three and nine months ended April 30, 2008 and 2007. Also presented is a reconciliation of net income per diluted share excluding stock-based compensation, tax effected, to net income per diluted share of the Company calculated in accordance with GAAP for the three and nine months ended April 30, 2008 and 2007. The Company has presented these non- GAAP measures as it believes that this presentation provides a more comparable measure of the Company's historical results from ongoing operations for the three and nine months ended April 30, 2008 and April 30, 2007 to prior periods.


                                                           Three Months
                                                          Ended April 30,
                                                           (Unaudited)
    (In thousands, except per share amounts)           2008           2007
    Net income excluding stock-based compensation    $88,672        $79,599

      Stock-based compensation expense, before
       benefit from income taxes                      (2,145)        (1,748)
      Adjustment for benefit from income taxes           814            657
    Net income                                       $87,341        $78,508
    Diluted net income per share excluding stock-
     based compensation                                $2.28          $2.02
      Stock-based compensation expense per diluted
       common share, before benefit from income taxes  (0.06)         (0.04)
      Adjustment for benefit from income taxes, per
       diluted common share                             0.02           0.02
    Diluted net income per share                       $2.24          $1.99


                                                          Nine Months
                                                         Ended April 30,
                                                          (Unaudited)
    (In thousands, except per share amounts)          2008            2007
    Net income excluding stock-based compensation   $117,799        $99,136
      Stock-based compensation expense, before
       benefit from income taxes                      (6,045)        (5,473)
      Adjustment for benefit from income taxes         2,293          2,056
    Net income                                      $114,047        $95,719

    Diluted net income per share excluding stock-
     based compensation                                $3.01          $2.52
      Stock-based compensation expense per diluted
       common share, before benefit from income taxes  (0.15)         (0.14)
      Adjustment for benefit from income taxes,
       per diluted common share                         0.06           0.05
    Diluted net income per share                       $2.91          $2.44



    A reconciliation of the low and high ends of the forecasted guidance range
given for Reported EBITDA and Reported EBITDA excluding stock-based
compensation for the Company's fiscal year ending July 31, 2008 is presented
below.


                                                         (In thousands)
                                                       For the Year Ending
                                                         July 31, 2008
                                                     Low End       High End
                                                      Range          Range
    Resort Reported EBITDA excluding stock-
     based compensation(1)                          $235,000       $245,000
      Resort segment stock-based compensation         (5,000)        (5,000)
    Resort Reported EBITDA(1)                        230,000        240,000
    Real Estate Reported EBITDA excluding stock-
     based compensation                               57,000         63,000
      Real Estate segment stock-based compensation    (3,000)        (3,000)
    Real Estate Reported EBITDA                       54,000         60,000
      Total Reported EBITDA                          284,000        300,000
    Depreciation and amortization                    (91,500)       (90,500)
    Loss on disposal of fixed assets, net             (1,000)        (1,000)
    Investment income                                 12,000         12,500
    Interest expense, net                            (31,000)       (30,000)
    Contract dispute credit, net                      11,920         11,920
    Minority interest in income of consolidated
     subsidiaries, net                                (5,000)        (6,000)
    Income before provision for income taxes         179,420        196,920
      Provision for income taxes                     (67,900)       (74,800)
    Net income                                      $111,520       $122,120


    (1)  Resort represents the sum of Mountain and Lodging. The Company
         provides Reported EBITDA ranges for the Mountain and Lodging
         segments, as well as for the two combined.  Readers are cautioned to
         recognize that the low end of the expected ranges provided for the
         Lodging and Mountain segments, while possible, do not sum to the low
         end of the Resort Reported EBITDA range provided because we do not
         necessarily expect or assume that we will actually hit the low end of
         both ranges, as the actual Resort Reported EBITDA will depend on the
         actual mix of the Lodging and Mountain components.  Similarly, the
         high end of the ranges for the Lodging and Mountain segments do not
         sum to the high end of the Resort range.



A reconciliation of the low and high ends of the forecasted guidance range given for net income excluding stock-based compensation for the Company's fiscal year ending July 31, 2008 is presented below.


                                                        (In thousands)
                                                      For the Year Ending
                                                         July 31, 2008
                                                     Low End       High End
                                                      Range         Range
    Net income excluding stock-based
     compensation                                   $116,520       $127,120
      Stock-based compensation expense, before
       benefit from income taxes                      (8,000)        (8,000)
      Adjustment for benefit from income taxes         3,000          3,000
    Net income                                      $111,520       $122,120


SOURCE Vail Resorts, Inc.

 
http://www.snow.com

 

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