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Vail Resorts Reports Fiscal 2013 First Quarter Results and Early Season Indicators

BROOMFIELD, Colo., Dec. 4, 2012 /PRNewswire/ -- Vail Resorts, Inc. (NYSE: MTN) today reported results for the first quarter of fiscal 2013 ended October 31, 2012 as well as certain early season indicators.


Commenting on the Company's fiscal 2013 first quarter results, Rob Katz, Chief Executive Officer said, "Our first fiscal quarter is historically a loss quarter since our mountain resorts are not open for winter ski operations during the period.  The quarter is driven primarily by our late summer mountain activities, dining, retail and lodging operations, and administrative expenses for our year-round employees.  In the first quarter of fiscal 2013, we observed improving trends in our summer business in both our Mountain and Lodging operations from improved summer visitation in our mountain resorts driving increased summer activities revenue, higher lodging RevPar and improved dining revenues.  Our Lodging business also benefitted from increased group business at Keystone, as well as the addition of a new national park property, Flagg Ranch, partially offset by lower results at our Grand Teton Lodging Company ("GTLC") summer national park business, which was impacted by the effects of wildfires in the area. For the quarter, our Resort Reported EBITDA loss, excluding Kirkwood, Skiinfo and Flagg Ranch, declined 5.1%, which was slightly favorable to our expectations, reflecting the increase in revenues from our Mountain and Lodging summer operations, which was more than offset by normal expense increases across our business as well as lower retail sales compared to the record pre-ski season sales of the prior year."

Turning to Real Estate, Katz said, "In the first quarter of fiscal 2013, we closed on four condominiums at The Ritz-Carlton Residences, Vail and are pleased with the continued momentum of sales at this luxury project.  Although Real Estate Reported EBITDA was a negative $3.7 million in this year's first quarter, given that the vast majority of costs included in cost of sales were incurred in prior years, Net Real Estate Cash Flow was a positive $5.5 million in the first quarter of fiscal 2013."

Katz continued "Our balance sheet remains in a very strong position.  We ended the quarter with $44.0 million of cash on hand, and our Net Debt was 2.4 times trailing twelve months Total Reported EBITDA.  We had no borrowings under the revolver component of our senior credit facility and we have virtually no principal payments on debt due until 2019."

Katz added "I am pleased to announce that our Board of Directors has declared a quarterly cash dividend on Vail Resorts' common stock of $0.1875 per share, payable on December 27, 2012 to shareholders of record on December 19, 2012."

Regarding the upcoming ski season, Katz said, "Our 2012/2013 ski season is just underway and we are looking forward to a memorable season.  This year marks the 50th anniversary of Vail Mountain and we are looking forward to events all year long that celebrate this milestone.  To commemorate the occasion, we recently christened our new state of the art, high-speed 10 passenger gondola at Vail, named Gondola One, as a tribute to Vail's original gondola that was the first gondola in Colorado when it opened in 1962.  The new gondola is the first of its kind in North America and is the fastest gondola of its type in the world.  Additionally, the gondola has cabins that include heated and cushioned seats and Wi-Fi access for our guests."

Moving to the early ski season indicators, Katz said, "All seven of our mountain resorts are open and ramping up operations for the upcoming holiday season.  Season pass (including 4-Pack) sales are up approximately 5% in units and 8% in sales dollars through December 2, 2012 compared with the similar period in the prior year and including Kirkwood in both periods.  We are very pleased with the results of our pass sales effort this year, particularly given the challenging weather last season and the record performance we had in passes last year. We had anticipated the year-over-year percentage increase in season pass sales to come down from our last announcement in September.  The total growth of the program is slightly below our expectations, as we believe that the amount of sales that we pulled forward to earlier selling periods was somewhat larger than expected and that weather was still a concern for those purchasers who delayed their purchasing decisions. Sales in Tahoe and international markets continued to show the most strength.  We expect the final results of the program will be generally consistent with these percentage increases as final sales conclude in the coming weeks.  As a reminder, revenue from season pass sales is recognized over the course of the second and third fiscal quarters.  Lodging bookings for the winter season are slightly down to this time last year, with strength at Keystone, which has shown strong early bookings driven by our newly introduced "Kids Ski Free" program as well as strong results at our Doubletree at Breckenridge property that was branded at the end of calendar 2011.  Based on historical averages, less than 50% of the bookings for the winter season have been made by this time." 

Operating Results

A complete Management's Discussion and Analysis of Financial Condition and Results of Operations can be found in the Company's Form 10-Q for the first fiscal quarter of 2013 ended October 31, 2012 filed today with the Securities and Exchange Commission.  The following are segment highlights:

Mountain Segment

Strong summer visitation supported revenue growth in summer activities and dining operations, including group and wedding business.  Dining revenues increased $0.7 million, or 12.9% in the first quarter of fiscal 2013 compared to the same period in the prior year, with the addition of Kirkwood contributing $0.4 million to total dining revenues.  Retail/Rental revenues decreased by 0.9% compared to the same period in the prior year primarily due to lower sales at pre-ski season sales events compared to the prior year's record sales from these events.  Mountain operating expenses increased $9.0 million, or 9.1%, for the three months ended October 31, 2012 compared to the three months ended October 31, 2011 primarily driven by $3.4 million in expenses related to Kirkwood and Skiinfo, $2.7 million in normal wage adjustments and increased staffing levels to support higher volumes in summer operations and new retail stores, and $1.1 million in increased general and administrative expenses that include timing of marketing campaigns and a shift in allocated corporate expenses from the Real Estate segment to the Mountain segment, partially offset by lower employee medical costs due to continued benefits from a new plan design. 

Lodging Segment

Revenue from owned hotel rooms increased $1.7 million, or 13.8%, for the three months ended October 31, 2012 compared to the three months ended October 31, 2011, primarily driven by $1.0 million in incremental room revenue from Flagg Ranch (an NPS concessionaire contract was awarded in November 2011) and an increase in group business primarily at our Keystone resort, partially offset by a decrease in GTLC transient revenue due to adverse conditions caused by late summer wild fires.  Dining revenues in the first quarter of fiscal 2013 were up $1.1 million, or 11.0% over the first fiscal quarter of the prior year, also primarily due to the addition of Flagg Ranch and increased group business at our Keystone resort.  Increases in operating expenses were partially offset by lower overhead and labor costs associated with the previously announced RockResorts reorganization plan. Excluding reimbursed payroll costs, operating expenses increased $1.1 million, or 2.2% in the first quarter of fiscal 2013 compared to the same period in the prior fiscal year.   

Resort — Combination of Mountain and Lodging Segments

Real Estate Segment

In the first quarter of fiscal 2013, we closed on four condominium units at The Ritz-Carlton Residences, Vail ($11.6 million of revenue with an average selling price per unit of $2.9 million and an average price per square foot of $1,165).

Total Performance


Commenting on fiscal 2013 guidance, Katz continued, "In September, we issued guidance of 27-32% growth in Resort Reported EBITDA.  Based on some of the most recent booking trends we are currently seeing, we believe that it will be more difficult to achieve that guidance than we anticipated in September.  We will know more about the season after the holidays and intend to address our fiscal 2013 guidance when we release our ski season metrics in mid-January."  

Earnings Conference Call

For further discussion of the contents of this press release, please listen to our live webcast today at 11:00 am ET, available at in the Investor Relations section.

About Vail Resorts

Vail Resorts, Inc., through its subsidiaries, is the leading mountain resort operator in the United States. The Company's subsidiaries operate the mountain resorts of Vail, Beaver Creek, Breckenridge and Keystone mountain resorts in Colorado, and Heavenly, Northstar and Kirkwood 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. Vail Resorts Development Company is the real estate planning, development and construction subsidiary of Vail Resorts, Inc. Vail Resorts, Inc. is a publicly held company traded on the New York Stock Exchange (NYSE: MTN).  The Vail Resorts company website is and consumer website is

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 prolonged weakness in general economic conditions, including adverse affects on the overall travel and leisure related industries; unfavorable weather conditions or natural disasters; adverse events that occur during our peak operating periods combined with the seasonality of our business; competition in our mountain and lodging businesses; our ability to grow our resort and real estate operations; our ability to successfully initiate, complete, and sell, new real estate development projects and achieve the anticipated financial benefits from such projects; further adverse changes in real estate markets; continued volatility in credit markets; our ability to obtain financing on terms acceptable to us to finance our real estate development, capital expenditures and growth strategy; our reliance on government permits or approvals for our use of Federal land or to make operational and capital improvements; demand for planned summer activities and our ability to successfully obtain necessary approvals and construct the planned improvements; adverse consequences of current or future legal claims; our ability to hire and retain a sufficient seasonal workforce; willingness of our guests to travel due to terrorism, the uncertainty of military conflicts or outbreaks of contagious diseases, and the cost and availability of travel options; negative publicity which diminishes the value of our brands; our ability to integrate and successfully realize anticipated benefits of acquisitions or future acquisitions; and implications arising from new Financial Accounting Standards Board ("FASB")/governmental legislation, rulings or interpretations. 

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 us with the Securities and Exchange Commission.

We use the terms "Reported EBITDA" and "Net Debt" when reporting financial results in accordance with Securities and Exchange Commission rules regarding the use of non-GAAP financial measures.  We define Reported EBITDA as segment net revenue less segment operating expense plus or minus segment equity investment income or loss and for the Real Estate segment plus gain on sale of real property.  We define Net Debt as long-term debt plus long-term debt due within one year less cash and cash equivalents.  In addition, for the Real Estate segment we define Net Real Estate Cash Flow (which is not a measure of financial performance under GAAP) as Real Estate Reported EBITDA, plus non-cash real estate cost of sales, plus non-cash stock-based compensation expense, plus change in real estate deposits less investment in real estate, which we use as a cash flow indicator for our Real Estate segment.

Please see "Reconciliation of Non-GAAP Financial Measures" below for more information.  For the Lodging segment we primarily focus on Lodging net revenue excluding payroll cost reimbursement and Lodging operating expense excluding reimbursed payroll costs (which are not measures of financial performance under GAAP) as the reimbursements are made based upon the costs incurred with no added margin, as such the revenue and corresponding expense have no effect on our Lodging Reported EBITDA which we use to evaluate Lodging segment performance.

Vail Resorts, Inc.

Consolidated Condensed Statements of Operations

(In thousands, except per share amounts)


Three Months Ended

October 31,



Net revenue:


$  51,912

$  49,670




Real estate



Total net revenue



Segment operating expense:







Real estate



Total segment operating expense



Other operating expense:

Depreciation and amortization



Loss on disposal of fixed assets, net



Loss from operations



Mountain equity investment income, net



Investment income, net



Interest expense, net



Loss before benefit from income taxes



Benefit from income taxes



Net loss

$ (60,603)

$ (55,734)

Net loss attributable to noncontrolling interests



Net loss attributable to Vail Resorts, Inc.

$ (60,580)

$ (55,709)

Per share amounts:

Basic net loss per share attributable to Vail Resorts, Inc.

$    (1.70)

$    (1.54)

Diluted net loss per share attributable to Vail Resorts, Inc.

$    (1.70)

$    (1.54)

Cash dividends declared per share

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