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
1, 2006
Vail
Resorts, Inc.
(Exact
name of registrant as specified in its charter)
|
Delaware
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1-9614
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51-0291762
|
||
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(State
or other jurisdiction of incorporation)
|
(Commission
File Number)
|
(IRS
Employer Identification No.)
|
||
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137
Benchmark Road Avon, Colorado
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81620
|
|||
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(Address
of principal executive offices)
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(Zip
Code)
|
|||
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Registrant's
telephone number, including area code:
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(970)
845-2500
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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 2.02. Results of Operations and Financial Condition.
On
June 7, 2006, Vail Resorts, Inc. (the “Company”) issued a press release
announcing the Company’s results for the three and nine months ended April 30,
2006 (the “Press Release”). A copy of the Press Release is being furnished as
Exhibit 99.1 to this Current Report on Form 8-K.
The
information furnished pursuant to this Item 2.02, including Exhibit 99.1,
shall
not be deemed to be “filed” for the purposes of Section 18 of the Securities
Exchange Act of 1934, as amended, and will not be incorporated by reference
into
any registration statement filed under the Securities Act of 1933, as amended,
unless specifically identified therein as being incorporated therein by
reference.
Item
3.01. Notice of Delisting or Failure to Satisfy a Continued Listing Rule
or
Standard; Transfer of Listing.
As
a result of the previously announced appointment to Chief Executive Officer
of
one of the Company’s independent directors who also served on the audit
committee, that individual was required to resign from the Company's audit
committee under applicable New York Stock Exchange (“NYSE”) listing standards
that require full independence in the composition of the audit committee.
Any
time a NYSE listed company does not have three independent members on its
audit
committee, such company ceases to be in compliance with the applicable NYSE
listing standard. Since that appointment, the Company's nominating &
corporate governance committee has undertaken a search for a new independent
director to become a member of the audit committee and expects to announce
a
replacement shortly. On June 1, 2006, the Company received notice from the
NYSE
of noncompliance with Section 303A.07(a) of the NYSE Listed Company Manual
as a
result of the failure to have three independent members on its audit committee
due to such prior resignation. If the Company is unable to fill the audit
committee vacancy by June 29, 2006, then the NYSE will append the Company's
ticker symbol with a BC indicator beginning on or about July 3, 2006, indicating
such non-compliance. Upon appointing a new member of the audit committee,
the
Company will regain compliance with this NYSE listing
standard.
Item
9.01. Financial Statements and Exhibits.
(d)
Exhibits. The following exhibit is furnished herewith:
|
Exhibit
No.
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Description
|
|
99.1
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Press
Release dated June 7, 2006.
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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.
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Dated:
June 7, 2006
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|
Vail
Resorts, Inc.
|
|
|
By:
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/s/
Jeffrey W. Jones
|
|
|
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Jeffrey
W. Jones
|
|
|
|
Senior
Executive Vice President and
Chief
Financial Officer
|
EXHIBIT
INDEX
|
Exhibit
No.
|
Description
|
|
99.1
|
Press
Release dated June 7,
2006.
|
Exhibit
99.1
VAIL
RESORTS, INC.
NEWS
RELEASE
FOR
IMMEDIATE RELEASE
Vail
Resorts Contacts:
Media: Kelly
Ladyga, (970) 845-5720, kladyga@vailresorts.com
Investor
Relations: Jeff Jones, CFO, (970) 845-2552,
jwjones@vailresorts.com
VAIL
RESORTS ANNOUNCES FISCAL 2006 THIRD QUARTER RESULTS
| · |
Record
third quarter net income of $68.3 million, a 16.2% increase over
third
quarter last year
|
| · |
Skier
visits and effective ticket price up 6.0% and 6.5%, respectively,
for the
2005/2006 ski season
|
| · |
Record
third quarter Resort Reported EBITDA, 12.4% higher than same period
last
year
|
| · |
Record
nine-months Resort Reported EBITDA, 15.9% higher than same period
last
year
|
VAIL,
Colo. - June 7, 2006 - Vail Resorts, Inc. (NYSE: MTN) today announced financial
results for the third quarter of fiscal 2006 ended April 30, 2006.
The
Company uses the term “Reported EBITDA” and “Reported EBITDA excluding
stock-based compensation” when reporting financial results in accordance with
SEC rules regarding the use of non-GAAP financial measures. The Company defines
Reported EBITDA as segment net revenues less segment specific operating expense
plus segment equity investment income or loss.
Effective
August 1, 2005, the Company adopted the fair value recognition provisions
of
SFAS 123R, Share-Based Payment, using the modified prospective method. As
a
result, the Company recorded total pre-tax stock-based compensation expense
of
$1.1 million in the three months ended April 30, 2006, as compared to $0.1
million under the provisions of APB 25, Accounting for Stock Issued to
Employees, for the three months ended April 30, 2005. The Company recorded
total
pre-tax stock-based compensation expense of $4.7 million in the nine months
ended April 30, 2006, as compared to $0.4 million for the nine months ended
April 30, 2005.
THIRD
QUARTER PERFORMANCE
Mountain
revenue for the third quarter of fiscal 2006 was $294.8 million, a 14.8%
increase from $256.8 million for the comparable period last year. Mountain
expense increased $17.0 million, or 12.9%, to $149.4 million. Excluding
stock-based compensation expense, Mountain expense increased $16.4 million,
or
12.4%, to $148.7 million.
Lodging
revenue for the quarter decreased by $16.8 million, or 29.8%, to $39.5 million.
Lodging expense decreased $12.6 million, or 29.3%, to $30.5 million. Excluding
stock-based compensation expense, Lodging expense decreased $12.8 million,
or
29.7%, to $30.4 million. In fiscal 2005, the Company sold the assets
constituting the Vail Marriott Mountain Resort & Spa (“Vail Marriott”) and
The Lodge at Rancho Mirage (“Rancho Mirage”). Additionally, in January 2006, the
Company sold the assets constituting the Snake River Lodge & Spa
(“SRL&S”). Consequently, results for the third quarter of fiscal 2006 do not
reflect the operations of the sold assets. For the third quarter of fiscal
2005,
the Lodging segment included revenue of $18.7 million and operating expense
of
$12.8 million related to these properties. In addition, the Company retained
management contracts for all three properties. As a result, Lodging revenue
includes incremental management fee revenue of $0.6 million related to retained
management contracts for these properties for the third quarter of fiscal
2006.
Excluding the impact of the sales of hotels, Lodging revenue (including the
incremental management fees) increased $1.9 million, or 5.0%, in the third
quarter as compared to the prior year’s quarter while expenses increased $0.2
million, or 0.6% in the third quarter as compared to the prior year’s
quarter.
Resort
revenue, the combination of Mountain and Lodging revenues, rose $21.2 million,
or 6.8%, to $334.3 million. Resort expense increased 2.5% to $179.9 million,
up
$4.4 million. Excluding stock-based compensation expense, Resort expense
increased $3.6 million, or 2.0%, to $179.1 million.
Real
Estate revenue for the quarter decreased 50.3% to $7.1 million, and Real
Estate
expense decreased 29.7% to $11.4 million. Excluding stock-based compensation
expense, Real Estate expense decreased $5.1 million, or 31.3%, to $11.1 million
for the quarter.
Income
from operations for the quarter improved $14.2 million, or 13.0%, to $123.2
million compared to $109.1 million for the same period last year.
Reported
EBITDA for the Mountain segment grew $21.3 million, or 17.0%, to $146.1 million
compared to $124.9 million for the comparable period last year. Reported
EBITDA
excluding stock-based compensation for the Mountain segment increased $21.9
million, or 17.5%, to $146.8 million compared to $124.9 million for the prior
year fiscal quarter.
Reported
EBITDA for the Lodging segment decreased $4.1 million, or 31.6%, from $13.1
million in the third quarter of last year to $9.0 million in the current
year
third quarter. Reported EBITDA excluding stock-based compensation for the
Lodging segment decreased $4.0 million, or 30.4%, to $9.1 million compared
to
$13.1 million for the same period last year. As mentioned previously, the
results for the third quarter of fiscal 2006 do not reflect the operations
of
the sold assets constituting the Vail Marriott, Rancho Mirage and SRL&S. For
the third quarter of fiscal 2005, Lodging Reported EBITDA included revenue
of
$18.7 million and operating expense of $12.8 million relating to the Vail
Marriott, Rancho Mirage and SRL&S. Lodging Reported EBITDA also includes
incremental management fee revenue of $0.6 million related to retained
management contracts for the Vail Marriott, Rancho Mirage and SRL&S for the
third quarter of fiscal 2006.
Third
quarter Resort Reported EBITDA rose $17.1 million to $155.1 million, a 12.4%
improvement over the comparable period last year. Resort Reported EBITDA
excluding stock-based compensation was $156.0 million, a $17.9 million, or
13.0%, improvement over the $138.1 million reported in the third fiscal quarter
of last year.
Real
Estate Reported EBITDA for the quarter decreased to a loss of $4.3 million,
as
compared to a loss of $1.9 million last year. Third quarter Real Estate Reported
EBITDA excluding stock-based compensation decreased $2.1 million to a loss
of
$4.0 million from a loss of $1.9 million in the comparable period last
year.
The
Company reported third quarter net income of $68.3 million, or $1.75 per
diluted
share, compared to net income of $58.8 million, or $1.61 per diluted share,
for
the same period last year, an increase of 16.2% in net income. Excluding
stock-based compensation expense required to be recorded pursuant to the
adoption of SFAS 123R in fiscal 2006, the Company’s net income for the third
quarter of fiscal 2006 would have been $69.1 million, or $1.77 per diluted
share
compared to $58.8 million excluding stock-based compensation recorded pursuant
to APB 25, or $1.61 per diluted share, for the same period last year, an
increase of 17.4% in net income.
NINE
MONTH PERFORMANCE
Mountain
revenue for the nine months ended April 30, 2006 was $581.3 million, a 15.0%
increase from $505.5 million for the comparable period last year. Mountain
expense increased $43.2 million, or 13.1%, to $372.4 million. Excluding
stock-based compensation expense, Mountain expense increased $40.7 million,
or
12.4%, to $369.7 million.
Lodging
revenue for the nine months ended April 30, 2006 decreased $31.8 million,
or
21.9%, to $113.3 million compared to the same period last year. Lodging expense
decreased $26.2 million, or 20.6%, to $101.1 million. Excluding stock-based
compensation expense, Lodging expense decreased $27.1 million, or 21.3%,
to
$100.1 million. For the nine months ended April 30, 2005, the Lodging segment
includes revenue of $42.6 million and operating expense of $35.0 million
relating to the Vail Marriott, Rancho Mirage and SRL&S. For the nine months
ended April 30, 2006, Lodging revenue includes revenue of $5.2 million and
operating expense of $4.9 million related to SRL&S prior to its sale in
January 2006. Lodging revenue includes incremental management fee revenue
of
$1.2 million for these properties for the nine months ended April 30, 2006.
Excluding the impact of sales of hotels, for the nine months ended April
30,
2006, Lodging revenue (including the incremental management fees) increased
$5.5
million, or 5.4%, compared to the prior year period while expenses increased
$3.8 million, or 4.2%, compared to the prior year period.
Resort
revenue rose $44.0 million, or 6.8%, to $694.6 million, and Resort expense
increased 3.7% to $473.4 million, up $16.9 million. Excluding stock-based
compensation expense, Resort expense increased $13.6 million, or 3.0%, to
$469.8
million.
Real
Estate revenue for the nine month period decreased $19.1 million, or 48.6%,
to
$20.2 million, and Real Estate expense decreased $9.1 million, or 27.7%,
to
$23.8 million. Excluding stock-based compensation expense, Real Estate expense
decreased $10.1 million, or 30.7%, to $22.8 million for the first nine months
of
fiscal year 2006.
Income
from operations for the nine months improved $22.3 million, or 17.4%, to
$150.4
million compared to $128.1 million for the same period last year.
Reported
EBITDA for the Mountain segment improved $33.7 million, or 18.9%, to $212.0
million compared to $178.3 million for the comparable period last year. Reported
EBITDA excluding stock-based compensation for the Mountain segment increased
$36.1 million, or 20.3%, to $214.6 million compared to $178.5 million for
the
first nine months of fiscal 2005.
Reported
EBITDA for the Lodging segment decreased from $15.2 million for the nine
month
period last year to $12.3 million in the current year, a decline of 19.2%.
Reported EBITDA
excluding stock-based compensation for the Lodging segment decreased $2.0
million, or 13.1%, to $13.3 million compared to $15.3 million for the same
period last year. For the nine months ended April 30, 2005, Lodging Reported
EBITDA includes revenue of $42.6 million and operating expense of $35.0 million
related to the Vail Marriott, Rancho Mirage and SRL&S, as well as equity
investment loss of $2.7 million in fiscal 2005 related to the Company’s 49%
interest in the joint venture that owned the Ritz-Carlton, Bachelor Gulch
(“BG
Resort”), prior to its sale in December 2005. For the nine months ended April
30, 2006, Lodging EBITDA includes revenue of $5.2 million and operating expense
of $4.9 million related to the SRL&S prior to its sale in January 2006.
Lodging Reported EBITDA includes incremental management fee revenue of $1.2
million related to management contracts for the Vail Marriott, Rancho Mirage
& SRL&S for the nine months ended April 30, 2006.
Resort
Reported EBITDA rose $30.8 million to $224.2 million, a 15.9% improvement
over
the nine month period last year. Resort Reported EBITDA excluding stock-based
compensation was $227.9 million, a $34.1 million, or 17.6%, improvement over
the
$193.7 million reported in the first nine months of the last fiscal
year.
Real
Estate Reported EBITDA for the nine months decreased $9.8 million to a loss
of
$3.5 million from a gain of $6.3 million for the same period last year. Real
Estate Reported EBITDA excluding stock-based compensation for the first nine
months of the year decreased $8.8 million to a loss of $2.5 million from
a gain
of $6.4 million for the comparable period last year.
The
Company reported net income for the nine months of $77.0 million, or $2.01
per
diluted share, compared to net income of $59.6 million, or $1.65 per diluted
share, for the same period last year. Excluding stock-based compensation
required to be recorded pursuant to the adoption of SFAS 123R in fiscal 2006,
the Company’s net income for the first nine months of fiscal 2006 would have
been $80.0 million, or $2.08 per diluted share compared to $59.8 million
excluding stock-based compensation recorded pursuant to APB 25, or $1.66
per
diluted share, for the same period last year.
Robert
Katz, Chief Executive Officer, commented, “I am obviously very pleased with our
results for the third quarter. Skier visits at our five resorts were up 4.4%
for
the quarter, with year-over-year growth at all five resorts, and we experienced
a 10.0% increase in effective ticket prices. All of this was achieved despite
going up against strong comparisons in the third quarter of last year. For
the
entire ski season, skier visits were up 6.0% and our effective ticket price
was
up 6.5%. In addition, we saw commensurate increases in all of our ancillary
businesses including ski school, dining and retail/rental. I am very pleased
that we were able to flow a significant amount of revenue to the bottom line,
given the predominantly fixed cost nature of our business and our constant
attention to expense control. The results for this past ski season continue
the
terrific progress our Company has made over the past three years. While we
clearly benefited from some early season snow, our strong performance is
also
based upon the realization of the benefits of many of the improvements we
have
made to our mountains and our focus on continuously enhancing the guest
experience.”
“I
continue to look forward to the impact that many of our real estate projects
will have on the guest experience at our resorts as well as the profitability
they will contribute. Planning and design for our Peaks of Breckenridge
development is currently underway and we are still anticipating a Christmas
2006
launch of our sales efforts. Construction of the Arrabelle at Vail Square
is
continuing and we are anticipating substantial completion in the fall of
2007.
Additionally, one of the first major development projects of Vail’s New Dawn,
Gore Creek Place Townhomes, is still on track to be completed this summer,”
continued Katz.
Katz
added, “We recently closed on the land-exchange with the USDA Forest Service as
part of the Company’s proposed "Front Door" project near the Vista Bahn
chairlift at the base of Vail Mountain. The land exchange involved the exchange
of approximately 493 acres of non-Federal land for approximately 5 acres
of
Federal lands, both within the White River National Forest in Eagle County,
Colorado. We are pleased to announce that we commenced a pre-marketing process
for The Lodge at Vail Chalets, part of the Front Door project, which resulted
in
the execution of contracts on nine of the thirteen chalets, representing
aggregate gross sales proceeds for the nine chalets upon closing of $110.5
million, at an average price of approximately $2400 per square foot. We have
also recently signed a guaranteed maximum price contract with a general
contractor and are beginning construction on the project this summer. We
currently estimate that operating income, before provision for taxes and
allocated corporate or Vail Resorts Development Company overhead, for this
project will range from $57 to $67 million and will be realized upon closing
on
the chalets, expected in the summer of 2008. We also plan to make cash
investments in resort assets related to the Front Door project, which will
include a new skier services building, retail venues, a private club, parking
garage with loading docks and new suites and a spa at The Lodge at Vail.
All of these amenities will be at the base of the Vista Bahn chairlift in
Vail
Village, greatly enhancing the resort experience at our nation’s most visited
ski resort. We currently estimate the total cost of these amenities at $60
to
$65 million, net of estimated cash proceeds from the sale of private club
memberships. All of these estimates on the Front Door project are based upon
our
current expectations of future sales revenues, our most recent construction
costs estimates and how the costs relate to both the real estate and resort
projects.”
Katz
concluded, “Based on the strength of the results we announced today, we would
like to take this opportunity to increase the previously announced full-year
fiscal 2006 guidance. Based on our current estimates, we now expect full-year
fiscal 2006 Resort Reported EBITDA to range between $189 million and $194
million and Resort Reported EBITDA excluding stock-based compensation to
range
between $194 million and $199 million. We are not changing our guidance for
Real
Estate Reported EBITDA and continue to expect it to range between $4 million
and
$9 million while Real Estate Reported EBITDA excluding stock-based compensation
will range between $5 million and $10 million. The Company now expects net
income for the year to range from $42 million to $48 million, and net income
excluding stock-based compensation to range from $46 million to $52
million.”
CONFERENCE
CALL
For
further discussion of the contents of this press release, please listen to
our
live webcast today at 11:00 am EST, available on www.vailresorts.com. In
order
to access the non-GAAP financial information that will be referenced on the
call, click on the Regulation G Compliance section under the Investor Relations
tab on www.vailresorts.com.
Vail
Resorts, Inc. is the premier mountain resort operator in North America. The
Company’s subsidiaries operate the mountain resorts of Vail, Beaver Creek,
Breckenridge and Keystone in Colorado, Heavenly Resort in 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. The Vail Resorts corporate website is
www.vailresorts.com and the consumer websites are www.snow.com and
www.rockresorts.com. Vail Resorts, Inc. is a publicly held company traded
on the
New York Stock Exchange (NYSE: MTN).
***
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; our ability to obtain financing on terms acceptable to us to
finance
our real estate investments, capital expenditures and growth strategy; our
ability to develop our resort and real estate operations; competition in
our
Mountain and Lodging businesses; failure to commence or complete the planned
real estate development projects; failure to achieve the anticipated short
and
long-term financial benefits from the planned real estate development projects;
implications arising from new Financial Accounting Standards Board
(“FASB”)/governmental legislation, rulings or interpretations; termination of
existing hotel management contracts; our reliance on government permits or
approval for our use of federal land or to make operational improvements;
our
ability to integrate and successfully operate future acquisitions; expenses
or
adverse consequences of current or future legal claims; shortages or rising
costs in construction materials; adverse changes in the real estate market;
unfavorable weather conditions; and our ability to efficiently complete the
relocation of the Company’s corporate and administrative operations. All
forward-looking statements attributable to us or any persons acting on our
behalf are expressly qualified in their entirety by these cautionary statements.
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,
|
||||||
|
2006
|
2005
|
|||||
|
Net
revenue:
|
||||||
|
Mountain
|
$
|
294,773
|
$
|
256,825
|
||
|
Lodging
|
39,492
|
56,285
|
||||
|
Real
estate
|
7,124
|
14,341
|
||||
|
Total
net revenue
|
341,389
|
327,451
|
||||
|
Segment
operating expense:
|
||||||
|
Mountain
|
149,431
|
132,399
|
||||
|
Lodging
|
30,515
|
43,164
|
||||
|
Real
estate
|
11,370
|
16,165
|
||||
|
Total
segment operating expense
|
191,316
|
191,728
|
||||
|
Other
operating expense:
|
||||||
|
Depreciation
and amortization
|
(22,942
|
)
|
(25,039
|
)
|
||
|
Relocation
and separation charges
|
(3,778
|
)
|
--
|
|||
|
Asset
impairment charge
|
--
|
(1,573
|
)
|
|||
|
Loss
on disposal of fixed assets, net
|
(108
|
)
|
(38
|
)
|
||
|
Income
from operations
|
123,245
|
109,073
|
||||
|
Mountain
equity investment income, net
|
780
|
438
|
||||
|
Real
estate equity investment loss, net
|
(20
|
)
|
(48
|
)
|
||
|
Investment
income, net
|
3,156
|
141
|
||||
|
Interest
expense
|
(8,849
|
)
|
(9,349
|
)
|
||
|
Loss
on sale of businesses, net
|
--
|
(3
|
)
|
|||
|
Contract
dispute charges
|
(816
|
)
|
--
|
|||
|
Loss
on put options, net
|
(113
|
)
|
(447
|
)
|
||
|
Minority
interest in income of consolidated subsidiaries, net
|
(5,355
|
)
|
(4,216
|
)
|
||
|
Income
before provision for income taxes
|
112,028
|
95,589
|
||||
|
Provision
for income taxes
|
(43,691
|
)
|
(36,801
|
)
|
||
|
Net
income
|
$
|
68,337
|
$
|
58,788
|
||
|
Per
share amounts:
|
||||||
|
Basic
net income per share
|
$
|
1.78
|
$
|
1.64
|
||
|
Diluted
net income per share
|
$
|
1.75
|
$
|
1.61
|
||
|
Other
Data:
|
||||||
|
Mountain
Reported EBITDA
|
$
|
146,122
|
$
|
124,864
|
||
|
Mountain
Reported EBITDA excluding stock-based compensation
|
$
|
146,820
|
$
|
124,914
|
||
|
Lodging
Reported EBITDA
|
$
|
8,977
|
$
|
13,121
|
||
|
Lodging
Reported EBITDA excluding stock-based compensation
|
$
|
9,139
|
$
|
13,138
|
||
|
Resort
Reported EBITDA
|
$
|
155,099
|
$
|
137,985
|
||
|
Resort
Reported EBITDA excluding stock-based compensation
|
$
|
155,959
|
$
|
138,052
|
||
|
Real
Estate Reported EBITDA
|
$
|
(4,266
|
)
|
$
|
(1,872
|
)
|
|
Real
Estate Reported EBITDA excluding stock-based compensation
|
$
|
(3,983
|
)
|
$
|
(1,854
|
)
|
|
Vail
Resorts, Inc.
|
||||||
|
Consolidated
Condensed Statements of Operations
|
||||||
|
(In
thousands, except per share amounts)
|
||||||
|
(Unaudited)
|
||||||
|
Nine
Months Ended
|
||||||
|
April
30,
|
||||||
|
2006
|
2005
|
|||||
|
Net
revenue:
|
||||||
|
Mountain
|
$
|
581,279
|
$
|
505,484
|
||
|
Lodging
|
113,321
|
145,148
|
||||
|
Real
estate
|
20,226
|
39,329
|
||||
|
Total
net revenue
|
714,826
|
689,961
|
||||
|
Segment
operating expense:
|
||||||
|
Mountain
|
372,387
|
329,210
|
||||
|
Lodging
|
101,050
|
127,282
|
||||
|
Real
estate
|
23,823
|
32,939
|
||||
|
Total
segment operating expense
|
497,260
|
489,431
|
||||
|
Other
operating (expense) income:
|
||||||
|
Depreciation
and amortization
|
(63,296
|
)
|
(69,387
|
)
|
||
|
Relocation
and separation charges
|
(3,778
|
)
|
--
|
|||
|
Asset
impairment charge
|
(136
|
)
|
(1,573
|
)
|
||
|
Mold
remediation credit
|
852
|
--
|
||||
|
Loss
on disposal of fixed assets, net
|
(835
|
)
|
(1,519
|
)
|
||
|
Income
from operations
|
150,373
|
128,051
|
||||
|
Mountain
equity investment income, net
|
3,085
|
2,003
|
||||
|
Lodging
equity investment loss, net
|
--
|
(2,679
|
)
|
|||
|
Real
estate equity investment income (loss), net
|
79
|
(107
|
)
|
|||
|
Investment
income, net
|
5,390
|
1,443
|
||||
|
Interest
expense
|
(27,788
|
)
|
(30,734
|
)
|
||
|
Loss
on extinguishment of debt
|
--
|
(612
|
)
|
|||
|
Gain
on sale of businesses, net
|
4,625
|
5,690
|
||||
|
Contract
dispute charges
|
(816
|
)
|
--
|
|||
|
(Loss)
gain on put options, net
|
(79
|
)
|
741
|
|||
|
Other
income, net
|
50
|
49
|
||||
|
Minority
interest in income of consolidated subsidiaries, net
|
(8,660
|
)
|
(6,980
|
)
|
||
|
Income
before provision for income taxes
|
126,259
|
96,865
|
||||
|
Provision
for income taxes
|
(49,240
|
)
|
(37,293
|
)
|
||
|
Net
income
|
$
|
77,019
|
$
|
59,572
|
||
|
Per
share amounts:
|
||||||
|
Basic
net income per share
|
$
|
2.05
|
$
|
1.68
|
||
|
Diluted
net income per share
|
$
|
2.01
|
$
|
1.65
|
||
|
Other
Data:
|
||||||
|
Mountain
Reported EBITDA
|
$
|
211,977
|
$
|
178,277
|
||
|
Mountain
Reported EBITDA excluding stock-based compensation
|
$
|
214,630
|
$
|
178,483
|
||
|
Lodging
Reported EBITDA
|
$
|
12,271
|
$
|
15,187
|
||
|
Lodging
Reported EBITDA excluding stock-based compensation
|
$
|
13,254
|
$
|
15,257
|
||
|
Resort
Reported EBITDA
|
$
|
224,248
|
$
|
193,464
|
||
|
Resort
Reported EBITDA excluding stock-based compensation
|
$
|
227,883
|
$
|
193,740
|
||
|
Real
Estate Reported EBITDA
|
$
|
(3,518
|
)
|
$
|
6,283
|
|
|
Real
Estate Reported EBITDA excluding stock-based compensation
|
$
|
(2,454
|
)
|
$
|
6,359
|
|
|
Vail
Resorts, Inc.
|
|||||||||||||||||||||
|
Resort
Revenue by Business Line and Skier Visits
|
|||||||||||||||||||||
|
(In
thousands)
|
|||||||||||||||||||||
|
Three
Months Ended
|
Nine
Months Ended
|
||||||||||||||||||||
|
April
30,
|
April
30,
|
||||||||||||||||||||
|
2006
|
2005
|
%
Change
|
2006
|
2005
|
%
Change
|
||||||||||||||||
|
Business
Line
|
|||||||||||||||||||||
|
Lift
tickets
|
$
|
149,563
|
$
|
130,200
|
14.9
|
%
|
$
|
263,036
|
$
|
233,109
|
12.8
|
%
|
|||||||||
|
Ski
school
|
41,851
|
36,727
|
14.0
|
%
|
72,628
|
63,842
|
13.8
|
%
|
|||||||||||||
|
Dining
|
27,973
|
25,951
|
7.8
|
%
|
52,745
|
49,353
|
6.9
|
%
|
|||||||||||||
|
Retail/rental
|
53,091
|
42,772
|
24.1
|
%
|
131,708
|
105,747
|
24.6
|
%
|
|||||||||||||
|
Other
|
22,295
|
21,175
|
5.3
|
%
|
61,162
|
53,433
|
14.5
|
%
|
|||||||||||||
|
Total
Mountain Revenue
|
$
|
294,773
|
$
|
256,825
|
14.8
|
%
|
$
|
581,279
|
$
|
505,484
|
15.0
|
%
|
|||||||||
|
Total
Lodging Revenue
|
$
|
39,492
|
$
|
56,285
|
(29.8
|
)
|
%
|
113,321
|
$
|
145,148
|
(21.9
|
)
|
%
|
||||||||
|
Total
Resort Revenue
|
$
|
334,266
|
$
|
313,110
|
6.8
|
%
|
$
|
694,599
|
$
|
650,633
|
6.8
|
%
|
|||||||||
|
Three
Months Ended
|
Nine
Months Ended
|
||||||||||||||||||||
|
April
30,
|
April
30,
|
||||||||||||||||||||
|
2006
|
2005
|
%
Change
|
2006
|
2005
|
%
Change
|
||||||||||||||||
|
Skier
Visits
|
|||||||||||||||||||||
|
Vail
|
923
|
889
|
3.8
|
%
|
1,676
|
1,568
|
6.9
|
%
|
|||||||||||||
|
Breckenridge
|
863
|
794
|
8.7
|
%
|
1,620
|
1,471
|
10.1
|
%
|
|||||||||||||
|
Heavenly
|
590
|
586
|
0.7
|
%
|
1,023
|
1,058
|
(3.3
|
)
|
%
|
||||||||||||
|
Keystone
|
547
|
539
|
1.5
|
%
|
1,094
|
1,021
|
7.1
|
%
|
|||||||||||||
|
Beaver
Creek
|
489
|
461
|
6.1
|
%
|
875
|
815
|
7.4
|
%
|
|||||||||||||
|
Total
Skier Visits
|
3,412
|
3,269
|
4.4
|
%
|
6,288
|
5,933
|
6.0
|
%
|
|||||||||||||
|
ETP
|
$
|
43.83
|
$
|
39.83
|
10.0
|
%
|
$
|
41.83
|
$
|
39.29
|
6.5
|
%
|
|||||||||
|
Note:
|
Certain
reclassifications have been made within Mountain revenue for the
three and
nine months ended April 30, 2005 to conform to the current period
presentation.
|
||||||||||||||||||||
|
April
30,
|
||||||
|
(In
thousands)
|
2006
|
2005
|
||||
|
Key
Balance Sheet Data:
|
||||||
|
Real
estate held for sale and investment
|
$
|
240,615
|
$
|
140,009
|
||
|
Total
stockholders' equity
|
679,585
|
561,162
|
||||
|
Total
debt
|
521,291
|
522,527
|
||||
|
Less:
cash and cash equivalents
|
240,116
|
41,068
|
||||
|
Net
debt
|
$
|
281,175
|
$
|
481,459
|
||
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 and Reported EBITDA excluding stock-based compensation are
not
measures of financial performance under accounting principles generally accepted
in the United States of America ("GAAP"), and they might not be comparable
to
similarly titled measures. Reported EBITDA and Reported EBITDA excluding
stock-based compensation do not purport to represent cash provided by operating
activities and should not be considered in isolation or as a substitute for
measures of performance prepared in accordance with GAAP. 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 determining management bonuses.
Additionally, the company believes that reported EBITDA excluding stock-based
compensation is an important measurement for comparability purposes as prior
periods do not reflect the impact of the adoption of SFAS
123R.
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, 2006 and 2005.
|
(In
thousands)
|
|||||||
|
Three
Months Ended
|
|||||||
|
April
30,
|
|||||||
|
2006
|
2005
|
||||||
|
Mountain
revenue, net
|
$
|
294,773
|
$
|
256,825
|
|||
|
Mountain
operating expense excluding stock-based compensation
|
(148,733
|
)
|
(132,349
|
)
|
|||
|
Mountain
equity investment income, net
|
780
|
438
|
|||||
|
Mountain
Reported EBITDA excluding stock-based compensation
|
146,820
|
124,914
|
|||||
|
Mountain
stock-based compensation
|
(698
|
)
|
(50
|
)
|
|||
|
Mountain
Reported EBITDA
|
146,122
|
124,864
|
|||||
|
Lodging
revenue, net
|
39,492
|
56,285
|
|||||
|
Lodging
operating expense excluding stock-based compensation
|
(30,353
|
)
|
(43,147
|
)
|
|||
|
Lodging
Reported EBITDA excluding stock-based compensation
|
9,139
|
13,138
|
|||||
|
Lodging
stock-based compensation
|
(162
|
)
|
(17
|
)
|
|||
|
Lodging
Reported EBITDA
|
8,977
|
13,121
|
|||||
|
Resort
Reported EBITDA*
|
155,099
|
137,985
|
|||||
|
Resort
Reported EBITDA excluding stock-based compensation*
|
155,959
|
138,052
|
|||||
|
Real
Estate revenue, net
|
7,124
|
14,341
|
|||||
|
Real
Estate operating expense excluding stock-based
compensation
|
(11,087
|
)
|
(16,147
|
)
|
|||
|
Real
Estate equity investment loss, net
|
(20
|
)
|
(48
|
)
|
|||
|
Real
Estate Reported EBITDA excluding stock-based compensation
|
(3,983
|
)
|
(1,854
|
)
|
|||
|
Real
Estate stock-based compensation
|
(283
|
)
|
(18
|
)
|
|||
|
Real
Estate Reported EBITDA
|
(4,266
|
)
|
(1,872
|
)
|
|||
|
Total
Reported EBITDA
|
150,833
|
136,113
|
|||||
|
Depreciation
and amortization
|
(22,942
|
)
|
(25,039
|
)
|
|||
|
Relocation
and separation charges
|
(3,778
|
)
|
--
|
||||
|
Asset
impairment charge
|
--
|
(1,573
|
)
|
||||
|
Loss
on disposal of fixed assets, net
|
(108
|
)
|
(38
|
)
|
|||
|
Investment
income, net
|
3,156
|
141
|
|||||
|
Interest
expense
|
(8,849
|
)
|
(9,349
|
)
|
|||
|
Loss
on sale of businesses, net
|
--
|
(3
|
)
|
||||
|
Contract
dispute charges
|
(816
|
)
|
--
|
||||
|
Loss
on put options, net
|
(113
|
)
|
(447)
|
||||
|
Minority
interest in income of consolidated subsidiaries, net
|
(5,355
|
)
|
(4,216
|
)
|
|||
|
Income
before provision for income taxes
|
112,028
|
95,589
|
|||||
|
Provision
for income taxes
|
(43,691
|
)
|
(36,801
|
)
|
|||
|
Net
income
|
$
|
68,337
|
$
|
58,788
|
|||
*
Resort
represents the sum of Mountain and Lodging
|
(In
thousands)
|
|||||||
|
Nine
Months Ended
|
|||||||
|
April
30,
|
|||||||
|
2006
|
2005
|
||||||
|
Mountain
revenue, net
|
$
|
581,279
|
$
|
505,484
|
|||
|
Mountain
operating expense excluding stock-based compensation
|
(369,734
|
)
|
(329,004
|
)
|
|||
|
Mountain
equity investment income, net
|
3,085
|
2,003
|
|||||
|
Mountain
Reported EBITDA excluding stock-based compensation
|
214,630
|
178,483
|
|||||
|
Mountain
stock-based compensation
|
(2,653
|
)
|
(206
|
)
|
|||
|
Mountain
Reported EBITDA
|
211,977
|
178,277
|
|||||
|
Lodging
revenue, net
|
113,321
|
145,148
|
|||||
|
Lodging
operating expense excluding stock-based compensation
|
(100,067
|
)
|
(127,212
|
)
|
|||
|
Lodging
equity investment loss, net
|
--
|
(2,679
|
)
|
||||
|
Lodging
Reported EBITDA excluding stock-based compensation
|
13,254
|
15,257
|
|||||
|
Lodging
stock-based compensation
|
(983
|
)
|
(70
|
)
|
|||
|
Lodging
Reported EBITDA
|
12,271
|
15,187
|
|||||
|
Resort
Reported EBITDA*
|
224,248
|
193,464
|
|||||
|
Resort
Reported EBITDA excluding stock-based compensation*
|
227,884
|
193,740
|
|||||
|
Real
Estate revenue, net
|
20,226
|
39,329
|
|||||
|
Real
Estate operating expense excluding stock-based
compensation
|
(22,759
|
)
|
(32,863
|
)
|
|||
|
Real
Estate equity investment income (loss), net
|
79
|
(107
|
)
|
||||
|
Real
Estate Reported EBITDA excluding stock-based compensation
|
(2,454
|
)
|
6,359
|
||||
|
Real
Estate stock-based compensation
|
(1,064
|
)
|
(76
|
)
|
|||
|
Real
Estate Reported EBITDA
|
(3,518
|
)
|
6,283
|
||||
|
Total
Reported EBITDA
|
220,730
|
199,747
|
|||||
|
Depreciation
and amortization
|
(63,296
|
)
|
(69,387
|
)
|
|||
|
Relocation
and separation charges
|
(3,778
|
)
|
--
|
||||
|
Asset
impairment charge
|
(136
|
)
|
(1,573
|
)
|
|||
|
Mold
remediation credit
|
852
|
--
|
|||||
|
Loss
on disposal of fixed assets, net
|
(835
|
)
|
(1,519
|
)
|
|||
|
Investment
income, net
|
5,390
|
1,443
|
|||||
|
Interest
expense
|
(27,788
|
)
|
(30,734
|
)
|
|||
|
Loss
on extinguishment of debt
|
--
|
(612
|
)
|
||||
|
Gain
on sale of businesses, net
|
4,625
|
5,690
|
|||||
|
Contract
dispute charges
|
(816
|
)
|
--
|
||||
|
(Loss)
gain on put options, net
|
(79
|
)
|
741
|
||||
|
Other
income, net
|
50
|
49
|
|||||
|
Minority
interest in income of consolidated subsidiaries, net
|
(8,660
|
)
|
(6,980
|
)
|
|||
|
Income
before provision for income taxes
|
126,259
|
96,865
|
|||||
|
Provision
for income taxes
|
(49,240
|
)
|
(37,293
|
)
|
|||
|
Net
income
|
$
|
77,019
|
$
|
59,572
|
|||
*
Resort
represents the sum of Mountain and Lodging
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, 2006 and 2005. Also presented is
a
reconciliation of diluted net income per share excluding stock-based
compensation, tax effected, to diluted net income per share of the Company
calculated in accordance with GAAP for the three and nine months ended April
30,
2006 and 2005. The Company has presented these non-GAAP measures as it believes
that this presentation provides a more comparable measure of the Company's
results from ongoing operations for the three and nine months ended April
30,
2006 compared to April 30, 2005.
|
Three
Months Ended
|
||||||||
|
April
30,
|
||||||||
|
(In
thousands, except per share amounts)
|
2006
|
2005
|
||||||
|
Net
income excluding stock-based compensation
|
$
|
69,051
|
$
|
58,841
|
||||
|
Stock-based
compensation expense, before benefit from income taxes
|
(1,143
|
)
|
(85
|
)
|
||||
|
Adjustment
to benefit from income taxes
|
429
|
32
|
||||||
|
Net
income
|
$
|
68,337
|
$
|
58,788
|
||||
|
Diluted
net income per share excluding stock-based compensation
|
$
|
1.77
|
$
|
1.61
|
||||
|
Stock-based
compensation expense per diluted share, before benefit from income
taxes
|
(0.03
|
)
|
(0.00
|
)
|
||||
|
Adjustment
to benefit from income taxes, per diluted share
|
0.01
|
0.00
|
||||||
|
Diluted
net income per share
|
$
|
1.75
|
$
|
1.61
|
||||
|
Nine
Months Ended
|
||||||||
|
April
30,
|
||||||||
|
(In
thousands, except per share amounts)
|
2006
|
2005
|
||||||
|
Net
income excluding stock-based compensation
|
$
|
79,954
|
$
|
59,792
|
||||
|
Stock-based
compensation expense, before benefit from income taxes
|
(4,700
|
)
|
(352
|
)
|
||||
|
Adjustment
to benefit from income taxes
|
1,765
|
132
|
||||||
|
Net
income
|
$
|
77,019
|
$
|
59,572
|
||||
|
Diluted
net income per share excluding stock-based compensation
|
$
|
2.08
|
$
|
1.66
|
||||
|
Stock-based
compensation expense per diluted share, before benefit from income
taxes
|
(0.12
|
)
|
(0.01
|
)
|
||||
|
Adjustment
to benefit from income taxes, per diluted share
|
0.05
|
0.00
|
||||||
|
Diluted
net income per share
|
$
|
2.01
|
$
|
1.65
|
||||
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, 2006 is presented below.
|
(In
thousands)
|
|||||||
|
For
the Year Ending
|
|||||||
|
July
31, 2006
|
|||||||
|
Low
End Range*
|
High
End Range*
|
||||||
|
Resort
Reported EBITDA excluding stock-based compensation
|
$
|
194,000
|
$
|
199,000
|
|||
|
Resort
segment stock-based compensation
|
(5,000
|
)
|
(5,000
|
)
|
|||
|
Resort
Reported EBITDA
|
189,000
|
194,000
|
|||||
|
Real
Estate Reported EBITDA excluding stock-based compensation
|
5,000
|
10,000
|
|||||
|
Real
Estate segment stock-based compensation
|
(1,500
|
)
|
(1,500
|
)
|
|||
|
Real
Estate Reported EBITDA
|
3,500
|
8,500
|
|||||
|
Total
Reported EBITDA
|
192,500
|
202,500
|
|||||
|
Depreciation
and amortization
|
(86,000
|
)
|
(86,000
|
)
|
|||
|
Relocation
and separation charges
|
(6,200
|
)
|
(5,800
|
)
|
|||
|
Asset
impairment charge
|
(136
|
)
|
(136
|
)
|
|||
|
Mold
remediation credit
|
852
|
852
|
|||||
|
Loss
on disposal of fixed assets, net
|
(1,200
|
)
|
(1,200
|
)
|
|||
|
Investment
income, net
|
7,500
|
7,500
|
|||||
|
Interest
expense
|
(37,500
|
)
|
(37,500
|
)
|
|||
|
Gain
on sale of businesses, net
|
4,625
|
4,625
|
|||||
|
Loss
on put option
|
(79
|
)
|
(79
|
)
|
|||
|
Other
income
|
50
|
50
|
|||||
|
Minority
interest in income of consolidated subsidiaries, net
|
(6,000
|
)
|
(6,400
|
)
|
|||
|
Income
before provision for income taxes
|
68,412
|
78,412
|
|||||
|
Provision
for income taxes
|
(26,681
|
)
|
(30,581
|
)
|
|||
|
Net
income
|
$
|
41,731
|
$
|
47,831
|
|||
*
Does not include any estimate for the Cheeca Lodge & Spa contract
dispute.
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, 2006 is presented below.
|
(In
thousands)
|
|||||||
|
For
the Year Ending
|
|||||||
|
July
31, 2006
|
|||||||
|
New
Low End Range
|
New
High End Range
|
||||||
|
Net
income excluding stock-based compensation
|
$
|
45,696
|
$
|
51,796
|
|||
|
Stock-based
compensation expense, before benefit from income taxes
|
(6,500
|
)
|
(6,500
|
)
|
|||
|
Adjustment
to provision for income taxes
|
2,535
|
2,535
|
|||||
|
Net
income
|
$
|
41,731
|
$
|
47,831
|
|||