UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported): June 24, 2005

Vail Resorts, Inc.
(Exact name of registrant as specified in its charter)
Delaware		1-9614			51-0291762
(State or other jurisdiction of incorporation)		(Commission File Number)			(IRS Employer Identification No.)
137 Benchmark Road Avon, Colorado						81620
(Address of principal executive offices)						(Zip Code)
Registrant's telephone number, including area code:						(970) 845-2500
Not applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act
[ ] Soliciting materials pursuant to Rule 14a-12 under the Exchange Act
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act

 

 

 

 

Item 2.01 Completion of Acquisition or Disposition of Assets.

On June 24, 2005, VAMHC, Inc. ("VAMHC"), a subsidiary of Vail Resorts, Inc. (the "Company"), sold the assets constituting the Vail Marriott Mountain Resort and Spa (the "Vail Marriott") to DiamondRock Hospitality Limited Partnership ("DiamondRock") for $62.0 million plus a $1.0 million working capital adjustment (subject to final true-up), resulting in net cash proceeds to the Company of $63.0 million, pursuant to a purchase and sale agreement between VAMHC and DiamondRock (the "Agreement"). The estimated carrying value of the assets sold (net of liabilities assumed) was $57.8 million. Additionally, the Company is required to complete certain capital projects that were part of the Company's 2005 capital plan as well as fund, in certain circumstances, certain other future improvements, the total of which is not expected to exceed $3.8 million. The Company anticipates recording an estimated $2.0 million pre-tax loss in its fourth fiscal quarter of 2005 after consideration of all costs involved. The Company will continue to manage the Vail Marriott pursuant to a 15-year management agreement with DiamondRock.

Each of the Purchase and Sale Agreement by and between VAHMC, Inc. and DiamondRock Hospitality Limited Partnership, dated May 3, 2005 and the First Amendment to Purchase and Sale Agreement by and between VAHMC, Inc. and DiamondRock Hospitality Limited Partnership, dated May 10, 2005, are attached as exhibits 10.1(a) and 10.1(b), respectively, to this Current Report on Form 8-K and are incorporated by reference herein.

Item 9.01 Financial Statements and Exhibits.

(b) Pro forma financial information

The following unaudited pro forma financial statements give effect to the disposition of the assets constituting the Vail Marriott. The following presents the Company's unaudited pro forma financial information for the nine months ended April 30, 2005 and for the fiscal year ended July 31, 2004. The unaudited pro forma balance sheet as of April 30, 2005 gives effect to the disposition of the assets and liabilities constituting the Vail Marriott as if it had occurred on April 30, 2005. The unaudited pro forma statements of operations for the nine months ended April 30, 2005 and for the year ended July 31, 2004 give effect to the disposition of the assets and liabilities constituting the Vail Marriott as if it had occurred as of the beginning of each respective period.

The unaudited pro forma consolidated financial statements should be read together with the Company's consolidated financial statements as of July 31, 2004, including the notes thereto, included in the Vail Resorts, Inc. Annual Report on Form 10-K for the fiscal year ended July 31, 2004 as well as the unaudited consolidated financial statements as of April 30, 2005, including the notes thereto, included in the Vail Resorts, Inc. Quarterly Report on Form 10-Q for the nine months ended April 30, 2005.

The pro forma financial information is for informational purposes only and does not purport to present what the Company's results would actually have been had these transactions actually occurred on the dates presented or to project the Company's results of operations or financial position for any future period.

 

Vail Resorts, Inc.
Unaudited Pro Forma Consolidated Balance Sheet

As of April 30, 2005
(In thousands, except share and per share amounts)

				April 30,				April 30,
				2005		Pro Forma		2005
				As Reported		Adjustments		Pro Forma
Assets
Current assets:
	Cash and cash equivalents			$     41,068		$   62,859	(a)	$     103,927
	Restricted cash			17,709		-		17,709
	Receivables, net			33,493		(1,960)	(b)	31,533
	Inventories, net			31,098		(70)	(c)	31,028
	Other current assets			27,985		(71)	(d)	27,914
		Total current assets		151,353		60,758		212,111
Property, plant and equipment, net				978,464		(56,861)	(e)	921,603
Real estate held for sale and investment				140,009		-		140,009
Goodwill, net				145,090		-		145,090
Intangible assets, net				81,325		(2,800)	(f)	78,525
Other assets				34,044		-		34,044
	Total assets			$1,530,285		$   1,097		$ 1,531,382
Liabilities and Stockholders' Equity
Current liabilities:
	Accounts payable and accrued expenses			$   188,349		$   2,048	(g)	$    190,397
	Long-term debt due within one year			2,178		-		2,178
		Total current liabilities		190,527		2,048		192,575
Long-term debt				520,349		-		520,349
Other long-term liabilities				102,016		1,132	(h)	103,148
Deferred income taxes				116,638		(792)	(i)	115,846
Commitments and contingencies				-		-		-
Put option liabilities				451		-		451
Minority interest in net assets of consolidated subsidiaries				39,142		-		39,142
Stockholders' equity:						-
	Preferred stock, $0.01 par value, 25,000,000 shares authorized, zero shares issued and outstanding			-		-		-
	Common stock:
		Class A common stock, convertible to common stock, $0.01 par value, 20,000,000 shares authorized, zero shares issued and outstanding		-		-		-
		Common stock, $0.01 par value, 80,000,000 shares authorized, 35,946,776 shares issued and outstanding		359		-		359
	Additional paid-in capital			426,819		-		426,819
	Deferred compensation			(415)		-		(415)
	Retained earnings			134,399		(1,291)	(j)	133,108
		Total stockholders' equity		561,162		(1,291)		559,871
	Total liabilities and stockholders' equity			$ 1,530,285		$     1,097		$ 1,531,382

The accompanying Notes to Unaudited Pro Forma Consolidated Financial Statements are an integral part of these financial statements.

Vail Resorts, Inc.
Unaudited Pro Forma Consolidated Statement of Operations

For the Nine Months Ended April 30, 2005
(In thousands, except per share amounts)

		Nine Months				Nine Months
		Ended				Ended
		April 30, 2005		Pro Forma		April 30, 2005
		As Reported		Adjustments		Pro Forma
Net revenue:
	Mountain	$   505,484		$              -		$   505,484
	Lodging	145,148		(17,539)	(k)	127,609
	Real estate	39,329		-		39,329
Total net revenue		689,961		(17,539)		672,422
Segment operating expense:
	Mountain	329,210		-		329,210
	Lodging	127,282		(12,398)	(l)	114,884
	Real estate	32,939		-		32,939
Total segment operating expense		489,431		(12,398)		477,033
Other operating expense:
	Depreciation and amortization	(69,387)		2,553	(m)	(66,834)
	Asset impairment charge	(1,573)		-		(1,573)
	Loss on disposal of fixed assets, net	(1,519)		-		(1,519)
Income from operations		128,051		(2,588)		125,463
Mountain equity investment income, net		2,003		-		2,003
Lodging equity investment loss, net		(2,679)		-		(2,679)
Real estate equity investment (loss) income, net		(107)		-		(107)
Investment income, net		1,443		(20)	(n)	1,423
Interest expense		(30,734)		-		(30,734)
Loss on extinguishment of debt		(612)		-		(612)
Gain on sale of equity investment		5,690		-		5,690
Gain on put options, net		741		-		741
Other income, net		49		-		49
Minority interest in income of consolidated subsidiaries, net		(6,980)		-		(6,980)
	Income before provision for income taxes	96,865		(2,608)		94,257
Provision for income taxes		(37,293)		991	(o)	(36,302)
	Net income	$   59,572		$  (1,617)		$    57,955
Per share amounts:
	Basic net income per share	$       1.68				$       1.63
	Diluted net income per share	$       1.65				$       1.61
Basic weighted-average shares outstanding		35,526				35,526
Diluted weighted-average shares outstanding		36,021				36,021

 

The accompanying Notes to Unaudited Pro Forma Consolidated Financial Statements are an integral part of these financial statements.

Vail Resorts, Inc.
Unaudited Pro Forma Consolidated Statement of Operations
For the Year Ended July 31, 2004
(In thousands, except per share amounts)

			Year Ended				Year Ended
			July 31,				July 31,
			2004		Pro Forma		2004
			As Reported		Adjustments		Pro Forma
Net revenues:
	Mountain		$   500,436		$            -		$  500,436
	Lodging		176,334		(19,689)	(k)	156,645
	Real estate		45,123		-		45,123
Total net revenues			721,893		(19,689)		702,204
Operating expenses:
	Mountain		368,984		-		368,984
	Lodging		161,124		(15,581)	(l)	145,543
	Real estate		16,790		-		16,790
Total segment operating expense			546,898		(15,581)		531,317
Other operating income (expense):
	Gain on transfer of property, net		2,147		-		2,147
	Depreciation and amortization		(86,378)		3,386	(m)	(82,992)
	Asset impairment charge		(1,108)		-		(1,108)
	Mold remediation charge		(5,500)		-		(5,500)
	Loss on disposal of fixed assets, net		(2,345)		-		(2,345)
Income from operations			81,811		(722)		81,089
Other income (expense):
	Mountain equity investment income, net		1,376		-		1,376
	Lodging equity investment loss, net		(3,432)		-		(3,432)
	Real estate equity investment income, net		460		-		460
	Investment income, net		1,886		(12)	(n)	1,874
	Interest expense, net		(47,479)		-		(47,479)
	Loss on extinguishment of debt		(37,084)		-		(37,084)
	Loss on put options, net		(1,875)		-		(1,875)
	Other expense, net		(179)		-		(179)
	Minority interest in income of consolidated subsidiaries, net		(4,000)		-		(4,000)
Loss before provision for income taxes			(8,516)		(734)		(9,250)
	Benefit for income taxes		2,557		279	(o)	2,836
Net loss			$ (5,959)		$    (455)		$   (6,414)
Per share amounts:
	Basic		$   (0.17)				$     (0.18)
	Diluted		$   (0.17)				$     (0.18)
Basic weighted-average shares outstanding			35,294				35,294
Diluted weighted-average shares outstanding			35,294				35,294

 

The accompanying Notes to Unaudited Pro Forma Consolidated Financial Statements are an integral part of these financial statements.

Vail Resorts, Inc.
Notes to Unaudited Pro Forma Consolidated Financial Statements

1. Basis of Presentation

The accompanying unaudited pro forma consolidated financial statements reflect the sale of the assets constituting the Vail Marriott Mountain Resort and Spa (the "Vail Marriott") by VAMHC, Inc. ("VAMHC"), a subsidiary of Vail Resorts, Inc. (the "Company"). The accompanying unaudited pro forma consolidated statements of operations for the nine months ended April 30, 2005 and for the year ended July 31, 2004 assume that the disposition of the assets constituting the Vail Marriott occurred at the beginning of each such period. The accompanying unaudited pro forma consolidated balance sheet as of April 30, 2005 assumes that the disposition of the assets constituting the Vail Marriott occurred on April 30, 2005.

2. Pro Forma Adjustments

The unaudited pro forma consolidated financial statements reflect the following pro forma adjustments:

The following estimated nonrecurring loss resulting as of the assumed transaction date of April 30, 2005 will be recognized, subject to final adjustments, by the Company in its fourth quarter of fiscal 2005. This loss was not considered in the pro forma income statements presented herein.

(c) Exhibits

10.1(a) Purchase and Sale Agreement by and between VAHMC, Inc. and DiamondRock Hospitality Limited Partnership, dated May 3, 2005 (incorporated by reference to Exhibit 10.18(a) of the Company's Quarterly Report on Form 10-Q for the period ending April 30, 2005).

10.1(b) First Amendment to Purchase and Sale Agreement by and between VAHMC, Inc. and DiamondRock Hospitality Limited Partnership, dated May 10, 2005 (incorporated by reference to Exhibit 10.18(b) of the Company's Quarterly Report on Form 10-Q for the period ending April 30, 2005).

 

 

 

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: June 30, 2005		Vail Resorts, Inc.
	By:	/s/ Jeffrey W. Jones
		Jeffrey W. Jones
		Senior Vice President and Chief Financial Officer