Vail
Resorts, Inc.


For
Immediate Release


News
Release




Vail Resorts
Contacts:




Investor
Relations:  Michelle Lang, (303) 404-1819,
mlang@vailresorts.com


Media:  Kelly
Ladyga, (303) 404-1862, kladyga@vailresorts.com




Vail Resorts Reports Fiscal
2010 Second Quarter Results
 BROOMFIELD,
Colo. - March 10, 2010 - Vail Resorts, Inc. (NYSE:  MTN) today
reported results for the second quarter of fiscal 2010 ended January 31, 2010,
as well as the Company’s ski season to date metrics through March 7, 2010, and
the Company’s calendar year 2010 resort capital plan.
 
 Highlights
  ·
              Mountain
      Reported EBITDA and Resort Reported EBITDA (which includes the Company’s
      Mountain and Lodging segments) for the second quarter improved from the
      same period in the prior year by 3.6% and 2.0%,
    respectively.
  ·
              Total
      revenue, Real Estate Reported EBITDA and net income attributable to Vail
      Resorts, Inc. significantly declined for the second quarter compared to
      the same period in the prior year due to the timing of real estate project
      closings.
  ·
              Net
      Debt leverage ratio of 2.6 times trailing twelve months Total Reported
      EBITDA and no revolver borrowings under the Company’s $400 million senior
      credit facility as of January 31,
2010.
  Commenting
on the Company’s fiscal 2010 second quarter results, Rob Katz, Chief Executive
Officer said, “I am pleased with how we have performed so far this season,
particularly given the low early season snowfall levels at our Colorado resorts
and a still challenging economy.  Our Mountain Reported EBITDA
increased 3.6% due to an increase in our season pass revenue and cost reduction
initiatives implemented during the second half of the prior fiscal
year.  While current conditions at all of our resorts are terrific,
snowfall in the earlier part of the ski season was at thirty year lows at our
Colorado resorts, leading to a 1.6% decline in visitation at our Colorado
resorts when compared to the prior year, though our overall visitation was up
0.1% due to increased visitation at Heavenly.  Vail Mountain
visitation was the most impacted as we could not open the vast majority of the
back bowls until after Christmas.  Lift ticket revenue increased 1.9%
during the quarter due to a 6.2% increase in season pass revenue, partially
offset by a reduction in other lift ticket revenue.  The increase in
season pass revenue was generated on overall flat visitation from season pass
holders and lower visits per pass, demonstrating the value of the program, even
in periods of challenging snow conditions.  Also encouraging was the
improvement we saw in guest spending in our ski school and retail/rental
operations, which realized revenue increases of 3.8% and 3.0%,
respectively.  Lodging segment results fell below the prior year due
primarily to declines at our Keystone lodging properties, which have been
hardest hit in the current economic environment; but I am pleased with the
improvements reported by our lodging properties at our other mountain
resorts.  Our Lodging segment bookings have trended lower than the
prior year; although, our guests continue to book closer to their arrival date
than they had in years past and we have seen the gaps fully close in all of our
resorts, except Keystone.  As expected, Real Estate segment revenue
and Real Estate Reported EBITDA declined significantly due to the prior year
quarter closings of certain Lodge at Vail Chalet (“Chalet”), Crystal Peak Lodge
and Arrabelle units.  The strength of our Resort business has led to
strong free cash flow over the past twelve months before real estate activities,
despite the state of the economy.  Overall, our balance sheet position
remains strong, even though we have been funding the investment in two real
estate development projects under construction, with Net Debt leverage of 2.6
times trailing twelve months Total Reported EBITDA; no borrowings under our
revolver at the end of the second quarter of fiscal 2010 and virtually no
principal maturities due on any of our debt until 2014.”
  Mountain
Segment
  ·
              Mountain
      segment net revenue was $261.0 million for the three months ended January
      31, 2010 compared to $258.5 million in the same period in the prior year,
      a 1.0% increase.
  ·
              Mountain
      Reported EBITDA was $107.2 million for the three months ended January 31,
      2010 compared to $103.5 million in the same period in the prior year, a
      3.6% improvement.
  Lift
revenue increased $2.4 million, or 1.9%, for the three months ended January 31,
2010 compared to the same period in the prior year, primarily due to a $3.1
million, or 6.2%, increase in season pass revenue, partially offset by a
decrease in lift revenue excluding season passes of $0.7 million, or
0.9%.  The increase in season pass revenue was due to an increase in
season pass units sold.  Total skier visitation was up 0.1% with
overall visitation for the four Colorado resorts (excluding Heavenly) being down
1.6%.  The four Colorado resorts were negatively impacted by
significantly below average snowfall.  Despite the increase in season
pass units sold, visitation by pass holders was relatively flat while visitation
excluding season pass holders was up slightly by 0.2%, as season pass holder
visitation was impacted more by the earlier season historically low snowfall
levels at the Company’s Colorado resorts.  In addition, effective
ticket price (“ETP”) growth of 1.7% was driven by an increase in season pass
revenue when combined with a decline in the average number of days skied by pass
holders, partially offset by a decline of 1.1% in ETP excluding season pass
products. Total skier visitation and, to a lesser degree, total lift revenue
were favorably impacted by the timing of the current year quarter end compared
to the prior year (the current year quarter ended on a Sunday versus the prior
year quarter which ended on a Saturday).  Total skier visitation was
down 1.6% and lift ticket revenue was up 0.6% when comparing the season to date
period ending Sunday, January 31, 2010 with the prior year period ending Sunday,
February 1, 2009.
  Revenue
for the Company’s ancillary ski school and retail/rental operations experienced
higher growth than the Company’s lift ticket revenue growth, while dining
revenue was impacted by  the significantly lower than average early
season snowfall, which resulted in delays in the opening of certain on-mountain
dining venues.  Ski school revenue increased $1.1 million, or 3.8%, in
the three months ended January 31, 2010 compared to the same period in the prior
year primarily due to a 3.7% increase in yield per skier visit as both group and
private lessons benefited from higher guest spend and were also favorably
impacted by new programs being offered in ski school this
year.  Dining revenue decreased $0.5 million, or 2.4%, in the three
months ended January 31, 2010 compared to the same period in the prior year, due
to an approximate 5.6% decrease in the number of total on-mountain food and
beverage transactions partially offset by a 4.2% increase in revenue per
transaction.  Additionally, fine dining was down approximately 4.4%
driven by lower revenue per transaction.  Revenue from retail/rental
operations increased $1.8 million, or 3.0%, primarily due to higher retail sales
and rental volumes at the Company’s Vail and Breckenridge mountain resort stores
and San Francisco Bay area stores.  Ski school and retail/rental
revenue were up 2.3% and 2.4%, respectively, while dining revenue was down 3.3%,
when comparing the season to date period ending Sunday, January 31, 2010 with
the prior year period ending Sunday, February 1, 2009.  Other revenue
mainly consists of private club revenue (which includes both club dues and
amortization of initiation fees), other mountain activities revenue, marketing
revenue, commercial leasing revenue, employee housing revenue, municipal
services revenue and other recreation activity revenue.  For the three
months ended January 31, 2010, other revenues decreased $2.3 million, or 9.9%,
compared to the three months ended January 31, 2009, primarily due to a decrease
in employee housing revenue especially at Breckenridge and Vail, strategic
alliance marketing revenue and other revenue associated with parking and
mountain ski area transportation services.  The reduction in employee
housing revenue was due to lower occupancy at Company owned and leased
facilities, caused by a significant expansion in affordable housing options for
the Company’s employees.
  Operating
expense decreased $2.2 million, or 1.4%, for the three months ended January 31,
2010 compared to the same period in the prior year.  This decrease
primarily resulted from a decrease in labor and labor-related benefits expense
of $2.0 million, or 3.3%, due to the impacts of cost reduction initiatives
including the suspension of the Company’s matching contribution to its 401(k)
program effective January 2009 and a company-wide wage reduction plan
implemented in April 2009 and lower workers’ compensation costs; and a $0.9
million, or 3.8%, decrease in retail cost of sales due to improved inventory
management and lower average inventory costs resulting in improved gross
margins.  Additionally, other expenses decreased $1.3 million, or
4.0%, due primarily to lower food and beverage cost of sales, supplies and fuel
expense.  All of the above decreases were partially offset by a $2.0
million, or 8.1%, increase in general and administrative expenses primarily
attributable to increased employee medical costs, as well as the timing of
marketing spend, as more marketing expenditures occurred in the first quarter of
the prior year as compared to the second quarter of the current
year.
  Mountain
equity investment income primarily includes the Company's share of income from
the operations of a real estate brokerage joint venture.  The decrease
in equity investment income for the three months ended January 31, 2010 compared
to the three months ended January 31, 2009 is primarily due to decreased
commissions earned by the brokerage due to a lower level of real estate closures
primarily on multi-unit projects compared to the three months ended January 31,
2009.
 
 Lodging
Segment
  ·
              Lodging
      segment net revenue was $38.7 million for the three months ended January
      31, 2010 compared to $41.2 million for the same period in the prior year,
      a 6.0% decrease.
  ·
              For
      the three months ended January 31, 2010, average daily rate (“ADR”)
      decreased 2.1% and revenue per available room (“RevPAR”) decreased 11.1%
      at the Company’s owned hotels and managed condominiums compared to the
      same period in the prior year.
  ·
              Lodging
      Reported EBITDA was $0.9 million for the three months ended January 31,
      2010 compared to $2.5 million in the same period in the prior year, with
      the decrease due almost entirely to declines at Keystone Lodging
      properties as well as an increase in general and administrative expense
      primarily due to higher employee medical
costs.
  Total
Lodging net revenue for the three months ended January 31, 2010 decreased $2.5
million, or 6.0%, compared to the three months ended January 31,
2009.  Revenue from owned hotel rooms decreased $0.5 million, or 5.6%,
for the three months ended January 31, 2010 compared to the three months ended
January 31, 2009, which was driven by a decrease in occupancy of 6.9 percentage
points primarily due to significant declines in transient guest
visitation.  Revenue from managed condominium rooms decreased $1.3
million, or 11.1%, for the three months ended January 31, 2010 compared to the
three months ended January 31, 2009, primarily due to a decline in transient
guest visitation at Keystone resulting in a decrease in revenue of $0.7
million.
  Dining
revenue for the three months ended January 31, 2010 decreased $0.5 million, or
9.4%, as compared to the three months ended January 31, 2009, mainly due to
decreased occupancy and the temporary closing of one restaurant for
renovation.  Transportation revenue for the three months ended January
31, 2010 decreased $0.2 million, or 2.5%, as compared to the three months ended
January 31, 2009, primarily due to a slight decrease in revenue per
passenger.  Other revenue increased 0.2% due to an increase in revenue
from managed properties.
  Operating
expense decreased $0.9 million, or 2.3%, for the three months ended January 31,
2010 compared to the three months ended January 31, 2009, primarily due to a
decrease in labor and labor-related benefits of $2.0 million, or 9.6%, primarily
due to lower staffing levels associated with decreased occupancy and impacts of
cost reduction initiatives including the suspension of the Company’s matching
contribution to its 401(k) program effective January 2009 and a company-wide
wage reduction plan implemented in April 2009; a decrease in other expense of
$0.1 million, or 0.5%, primarily due to decreased variable operating costs
associated with lower revenue including lower food and beverage cost of sales
and other operating expense partially offset by higher property
taxes.  The above decreases were partially offset by an increase in
general and administrative expense of $1.1 million, or 16.9%, primarily due to
higher employee medical costs.
 
 Resort – Combination of
Mountain and Lodging Segments
  ·
              Resort
      net revenue was $299.7 million for the three months ended January 31, 2010
      compared to $299.6 million in the same period in the prior
      year.
  ·
              Resort
      Reported EBITDA was $108.1 million for the three months ended January 31,
      2010 compared to $105.9 million in the same period in the prior year, a
      2.0% improvement.
  Real Estate
Segment
  ·
              Real
      Estate segment net revenue was $0.9 million for the three months ended
      January 31, 2010 compared to $89.2 million in the same period in the prior
      year.
  ·
              Real
      Estate Reported EBITDA was a negative $6.5 million for the three months
      ended January 31, 2010 compared to a positive $29.6 million in the same
      period in the prior year.
  The
Company’s Real Estate operating revenue is primarily determined by the timing of
closings and the mix of real estate sold in any given period.  In the
second quarter of fiscal 2010, Real Estate segment net revenue for the three
months ended January 31, 2010, primarily included allocated corporate
revenue.  Operating expense for the three months ended January 31,
2010, primarily included general and administrative costs of approximately $7.2
million (including $1.1 million of stock-based compensation
expense).  General and administrative costs were primarily comprised
of marketing expense for the real estate projects under development, overhead
costs such as labor and labor-related benefits and allocated corporate
costs.
  In the
second quarter of fiscal 2009, Real Estate segment net revenue for the prior
year three months was driven primarily by the closing of six Chalet units ($76.9
million of revenue with an average selling price per unit of $12.8 million and
an average price per square foot of $2,689), three residences at Crystal Peak
Lodge ($3.7 million of revenue with an average selling price per unit of $1.2
million and an average price per square foot of $972) and the closing of one
condominium at Arrabelle ($7.7 million of revenue with an average price per
square foot of $1,533).  Operating expense for the three months ended
January 31, 2009, included cost of sales of $44.5 million commensurate with
revenue recognized, primarily driven by the closing of six Chalets units ($36.6
million in cost of sales with an average cost per square foot of $1,280), three
residences at Crystal Peak Lodge ($1.5 million in cost of sales with an average
cost per square foot of $416) and the closing of one condominium at Arrabelle
($6.3 million in cost of sales with an average cost per square foot of
$1,251).  Operating expense also included sales commissions of
approximately $4.6 million commensurate with revenue recognized and general and
administrative costs of approximately $7.4 million (including $1.1 million of
stock-based compensation expense).   In addition, included in segment
operating expense in the three months ended January 31, 2009, the Company
recorded $3.0 million of costs in excess of anticipated sales proceeds for an
affordable housing commitment resulting from the cancellation of a contract by a
third party developer related to its Jackson Hole Golf & Tennis Club
development, which is reflected in Real Estate segment operating expense in the
three months ended January 31, 2009.
 
 Total
Performance
  ·
              Total
      net revenue was $300.5 million for the three months ended January 31, 2010
      compared to $388.8 million in the same period in the prior year, a 22.7%
      decline, driven primarily by the timing of real estate
      closings.
  ·
              Net
      income attributable to Vail Resorts, Inc. was $40.7 million, or $1.11 per
      diluted share, for the three months ended January 31, 2010 compared to net
      income attributable to Vail Resorts, Inc. of $60.5 million, or $1.65 per
      diluted share, in the same period in the prior
  year.
  Balance
Sheet
  As of
January 31, 2010, the Company had cash and cash equivalents on hand of $58.0
million, Net Debt of 2.6 times trailing twelve months Total Reported EBITDA and
no revolver borrowings under a $400 million senior credit facility, which
matures in 2012 and has $308.1 million available for borrowing after considering
$91.9 million in currently issued letters of credit.  The Company has
virtually no principal maturities due until 2014.
 
 Stock Repurchase
Program
  The
Company did not repurchase any shares of common stock during the three months
ended January 31, 2010.  Since inception of its stock repurchase plan
in 2006, the Company has repurchased 3,878,535 shares at a cost of approximately
$147.8 million, through January 31, 2010.  As of January 31, 2010,
2,121,465 shares remained available to repurchase under the existing repurchase
authorization.  The purchases under this program are reviewed by the
Company’s Board of Directors quarterly and are based on a number of factors,
including the Company’s expected future financial performance, the Company’s
available cash resources and competing uses for cash that may arise in the
future, the restrictions in the Company’s senior credit facility and in the
indenture governing the outstanding 6.75% senior subordinated notes, prevailing
prices of the Company’s common stock and the number of shares that become
available for sale at prices that the Company believes are
attractive.
 
 Calendar Year 2010 Resort
Capital Expenditure Announcement
  Vail
Resorts remains committed to offering our guests an exceptional guest experience
by investing in our resort assets and amenities.  Today, the Company
announced its calendar year 2010 Resort capital expenditure plans, exclusive of
resort depreciable assets associated with the Company’s real estate
projects.  The Company has historically invested significant cash in
capital expenditures for its resort operations, and expects to continue to
invest in the future; however, plans for such investment were reduced in
calendar year 2009 given the significant level of capital expenditures made in
the previous few years including individually significant projects that do not
annually re-occur such as gondolas and major hotel renovations coupled with the
economic environment.  The Company has increased its expected level of
resort discretionary investment for calendar year 2010 above the calendar year
2009 level, although such spending is still expected to remain well below the
2007 and 2008 calendar year levels.  Current capital expenditure
levels will primarily include investments that allow the Company to maintain its
high quality standards, as well as certain incremental discretionary
improvements at the Company’s five ski resorts and throughout its owned
hotels.  The Company evaluates additional discretionary capital
improvements based on an expected level of return on investment.  The
Company currently anticipates it will spend approximately $75 million to $85
million of resort capital expenditures for calendar year 2010, excluding resort
depreciable assets arising from real estate activities.  Included in
these capital expenditures are approximately $37 million to $42 million which
are necessary to maintain appearance and level of service appropriate to the
Company’s resort operations, including routine replacement of snow grooming
equipment and rental fleet equipment.  Discretionary expenditures for
calendar year 2010 are expected to include a new high speed chairlift to serve
Vail mountain’s back bowls; a new on-mountain restaurant at Heavenly; a new
coaster slide at Breckenridge; expansion of Vail mountain’s adventure ridge;
Keystone Lodge guest room renovation and new marketing campaign management
software, among other projects.
 
 Commenting
on the calendar year 2010 resort capital expenditure announcement, Katz said,
“Our capital expenditure plan for calendar year 2010 focuses on high-profile,
high-return projects that underscores our commitment to delivering an
unparalleled guest experience through the highest quality
amenities.  This expected investment includes the first high speed
chairlift to serve Vail’s famous Sun Up and Sun Down bowls, which will
dramatically improve the guest experience, as well as the addition of a year
round restaurant at the top of Heavenly’s gondola significantly increasing the
indoor seating capacity of the resort and investment in high returning year
round mountain activities at our resorts.  Our ability to continue to
invest in our world-class assets further distinguishes Vail Resorts as the
leader in the mountain resort industry.”
 
 Season to Date Metrics
through March 7, 2010
  The
Company is providing an update on the ski season metrics for the comparative
periods from the beginning of the ski season through Sunday, March 7, 2010 and
for the similar prior year period through Sunday, March 8, 2009, which includes
interim period data and is subject to fiscal third quarter end review and
adjustments.
  ·
              Season
      to date total skier visits for the Company’s five mountain resorts were up
      0.4% for the season to date period through March 7, 2010 compared to the
      prior year season to date period ending March 8,
  2009.
  ·
              Season
      to date total lift ticket revenue through March 7, 2010, including an
      allocated portion of season pass revenue for each applicable period, was
      up 1.6% compared to the prior year season to date period ending March 8,
      2009.
  ·
              Season
      to date ski school and retail/rental revenues through March 7, 2010 were
      up 3.8% and 5.5%, respectively, compared to the prior year season to date
      period ending March 8, 2009.
  Commenting
on the ski season to date metrics, Rob Katz said, “We are pleased with the
improvement of our ski season to date metrics through Sunday, March 7, 2010
compared to the prior year period ending Sunday, March 8, 2009.  Since
we released our early season metrics through January 6, 2010, our metrics have
shown consistent improvement.  Our total skier visits through March 7,
2010 are now up 0.4%, reflecting improved visitation as the year has progressed,
and total lift revenue is now up by 1.6%.  Our ski school and
retail/rental revenues are up approximately 3.8% and approximately 5.5%,
respectively through March 7, 2010, reflecting a meaningful improvement in guest
spend per visit.  Our dining revenue, which was negatively impacted in
the early season by the lack of facilities being open with limited terrain
available, has also shown improvement, and is down 1.3% through March 7,
2010.  In addition, our lodging bookings through our central
reservations and directly at our owned and managed properties have improved
considerably from down approximately 13% in room nights in early December 2009
to down approximately 6% as of February 28, 2010, with our Keystone lodging
entirely driving the unfavorable comparison to last year.  Excluding
Keystone, our bookings are up 1% compared to last year at this
time.”
 
 Outlook
  Commenting
on the Company’s outlook for the remainder of fiscal 2010 and guidance, Katz
said, “While we are experiencing a number of favorable operating trends during
this year, we currently believe the slow start to the ski season, which lasted
through the beginning of the Christmas holiday period, will make it challenging
for us to reach the top end of the guidance we issued in September 2009 and
reiterated on December 8, 2009 for Resort Reported EBITDA and net income
attributable to Vail Resorts, Inc.”
 
 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 www.vailresorts.com in the
Investor Relations section.
 
 Vail
Resorts, Inc., through its subsidiaries, is the leading mountain resort operator
in the United States. The Company's subsidiaries operate the mountain resort
properties of 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, Inc. 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
prolonged downturn in general economic conditions, including continued 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 complete 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 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 or unauthorized use of our trademarks which
diminishes the value of our brands; our ability to integrate and successfully
operate 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 the Company with the Securities and Exchange
Commission.
 
 The
Company uses 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.  The Company defines 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.  The Company defines Net Debt as
long-term debt plus long-term debt due within one year less cash and cash
equivalents.
   
 Vail
      Resorts, Inc.Consolidated
      Condensed Statements of Operations(In
      thousands, except per share amounts)(Unaudited)Three
      Months EndedJanuary
      31,2010
              2009Net
      revenue:Mountain
              $
              260,978
              
              $
              258,489Lodging
              
              38,676
              
              
              41,150Real
      estate
              
              870
              
              
              89,157Total
      net revenue
              
              300,524
              
              
              388,796Segment
      operating expense:Mountain
              
              154,018
              
              
              156,188Lodging
              
              37,788
              
              
              38,697Real
      estate
              
              7,417
              
              
              59,508Total
      segment operating expense
              
              199,223
              
              
              254,393Other
      operating (expense) income:Depreciation
      and amortization
              
              (27,772
              )
              
              (27,438
              )Gain
      (loss) on disposal of fixed assets, net
              
              12
              
              
              (422
              )Income
      from operations
              
              73,541
              
              
              106,543Mountain
      equity investment income, net
              
              207
              
              
              1,161Investment
      income
              
              192
              
              
              336Interest
      expense, net
              
              (4,148
              )
              
              (7,295
              )Income
      before provision for income taxes
              
              69,792
              
              
              100,745Provision
      for income taxes
              
              (24,713
              )
              
              (36,412
              )Net
      income
              
              45,079
              
              
              64,333Net
      income attributable to noncontrolling interests
              
              (4,389
              )
              
              (3,788
              )Net
      income attributable to Vail Resorts, Inc.
              $
              40,690
              
              $
              60,545Per share
      amounts:Basic
      net income per share attributable to Vail Resorts, Inc.
              $
              1.12
              
              $
              1.66Diluted
      net income per share attributable to Vail Resorts, Inc.
              $
              1.11
              
              $
              1.65Weighted
      average shares outstanding:Basic
              
              36,245
              
              
              36,570Diluted
              
              36,754
              
              
              36,663Other
      Data (unaudited):Mountain
      Reported EBITDA
              $
              107,167
              
              $
              103,462Lodging
      Reported EBITDA
              $
              888
              
              $
              2,453Resort
      Reported EBITDA
              $
              108,055
              
              $
              105,915Real
      Estate Reported EBITDA
              $
              (6,547
              )
              $
              29,649Total
      Reported EBITDA
              $
              101,508
              
              $
              135,564
 
 Mountain
      stock-based compensation
              $
              1,277
              
              $
              1,128Lodging
      stock-based compensation
              $
              496
              
              $
              472Resort
      stock-based compensation
              $
              1,773
              
              $
              1,600Real
      Estate stock-based compensation
              $
              1,131
              
              $
              1,074Total
      stock-based compensation
              $
              2,904
              
              $
              2,674
 
 
 
 Vail
      Resorts, Inc.Consolidated
      Condensed Statements of Operations(In
      thousands, except per share amounts)(Unaudited)Six
      Months EndedJanuary
      31,2010
              2009Net
      revenue:Mountain
              $
              300,182
              
              $
              299,267Lodging
              
              80,031
              
              
              86,403Real
      estate
              
              1,075
              
              
              155,907Total
      net revenue
              
              381,288
              
              
              541,577Segment
      operating expense:Mountain
              
              230,486
              
              
              237,411Lodging
              
              80,411
              
              
              83,595Real
      estate
              
              12,594
              
              
              110,885Total
      segment operating expense
              
              323,491
              
              
              431,891Other
      operating (expense) income:Depreciation
      and amortization
              
              (54,956
              )
              
              (52,516
              )Gain
      on sale of real property
              
              6,087
              
              
              --Loss
      on disposal of fixed assets, net
              
              (101
              )
              
              (602
              )Income
      from operations
              
              8,827
              
              
              56,568Mountain
      equity investment income, net
              
              461
              
              
              2,176Investment
      income
              
              422
              
              
              979Interest
      expense, net
              
              (8,983
              )
              
              (15,242
              )Income
      before benefit (provision) for income taxes
              
              727
              
              
              44,481Benefit
      (provision) for income taxes
              
              841
              
              
              (17,003
              )Net
      income
              
              1,568
              
              
              27,478Net
      income attributable to noncontrolling interests
              
              (2,051
              )
              
              (1,437
              )Net
      (loss) income attributable to Vail Resorts, Inc.
              $
              (483
              )
              $
              26,041Per share
      amounts:Basic
      net (loss) income per share attributable to Vail Resorts,
    Inc.
              $
              (0.01
              )
              $
              0.71Diluted
      net (loss) income per share attributable to Vail Resorts,
    Inc.
              $
              (0.01
              )
              $
              0.71Weighted
      average shares outstanding:Basic
              
              36,223
              
              
              36,728Diluted
              
              36,223
              
              
              36,912Other
      Data (unaudited):Mountain
      Reported EBITDA
              $
              70,157
              
              $
              64,032Lodging
      Reported EBITDA
              $
              (380
              )
              $
              2,808Resort
      Reported EBITDA
              $
              69,777
              
              $
              66,840Real
      Estate Reported EBITDA
              $
              (5,432
              )
              $
              45,022Total
      Reported EBITDA
              $
              64,345
              
              $
              111,862
 
 Mountain
      stock-based compensation
              $
              2,850
              
              $
              2,321Lodging
      stock-based compensation
              $
              1,012
              
              $
              901Resort
      stock-based compensation
              $
              3,862
              
              $
              3,222Real
      Estate stock-based compensation
              $
              2,506
              
              $
              2,019Total
      stock-based compensation
              $
              6,368
              
              $
              5,241
 
 
 
 Vail
      Resorts, Inc.Mountain
      Segment Operating Results and Skier Visits(In
      thousands, except Effective Ticket Price)(Unaudited)Three
      Months Ended
              Percentage
              Six
      Months Ended
              PercentageJanuary
      31,
              Increase
              January
      31,
              Increase2010
              2009
              (Decrease)
              2010
              2009
              (Decrease)Net
      Mountain revenue:Lift
      tickets
              $
              129,517
              
              $
              127,158
              
              1.9
              %
              $
              129,517
              $
              127,158
              1.9
              %Ski
      school
              
              30,069
              
              
              28,962
              
              3.8
              %
              
              30,069
              
              28,962
              3.8
              %Dining
              
              19,789
              
              
              20,281
              
              (2.4
              )
      %
              
              23,257
              
              24,210
              (3.9
              )
      %Retail/rental
              
              61,026
              
              
              59,238
              
              3.0
              %
              
              82,564
              
              81,664
              1.1
              %Other
              
              20,577
              
              
              22,850
              
              (9.9
              )
      %
              
              34,775
              
              37,273
              (6.7
              )
      %Total
      Mountain net revenue
              $
              260,978
              
              $
              258,489
              
              1.0
              %
              $
              300,182
              $
              299,267
              0.3
              %Mountain
      operating expense:Labor
      and labor-related benefits
              $
              57,859
              
              $
              59,849
              
              (3.3
              )
      %
              $
              81,243
              $
              83,865
              (3.1
              )
      %Retail
      cost of sales
              
              23,731
              
              
              24,662
              
              (3.8
              )
      %
              
              36,294
              
              37,914
              (4.3
              )
      %Resort
      related fees
              
              14,381
              
              
              14,247
              
              0.9
              %
              
              15,106
              
              14,962
              1.0
              %General
      and administrative
              
              26,043
              
              
              24,082
              
              8.1
              %
              
              46,570
              
              47,337
              (1.6
              )
      %Other
              
              32,004
              
              
              33,348
              
              (4.0
              )
      %
              
              51,273
              
              53,333
              (3.9
              )
      %Total
      Mountain operating expense
              $
              154,018
              
              $
              156,188
              
              (1.4
              )
      %
              $
              230,486
              $
              237,411
              (2.9
              )
      %Mountain
      equity investment income, net
              
              207
              
              
              1,161
              
              (82.2
              )
      %
              
              461
              
              2,176
              (78.8
              )
      %Total
      Mountain Reported EBITDA
              $
              107,167
              
              $
              103,462
              
              3.6
              %
              $
              70,157
              $
              64,032
              9.6
              %Three
      Months Ended
              Percentage
              Six
      Months Ended
              PercentageJanuary
      31,
              Increase
              January
      31,
              Increase2010
              2009
              (Decrease)
              2010
              2009
              (Decrease)Skier
      VisitsVail
              
              684
              
              
              741
              
              (7.7
              )
      %
              
              684
              
              741
              (7.7
              )
      %Breckenridge
              
              764
              
              
              730
              
              4.7
              %
              
              764
              
              730
              4.7
              %Keystone
              
              513
              
              
              515
              
              (0.4
              )
      %
              
              513
              
              515
              (0.4
              )
      %Heavenly
              
              404
              
              
              361
              
              11.9
              %
              
              404
              
              361
              11.9
              %Beaver
      Creek
              
              417
              
              
              431
              
              (3.2
              )
      %
              
              417
              
              431
              (3.2
              )
      %Total
      Skier Visits
              
              2,782
              
              
              2,778
              
              0.1
              %
              
              2,782
              
              2,778
              0.1
              %Effective
      Ticket Price
              $
              46.56
              
              $
              45.77
              
              1.7
              %
              $
              46.56
              $
              45.77
              1.7
              %
 
 
 Vail
      Resorts, Inc.Lodging
      Operating Results(In
      thousands, except ADR and RevPAR)(Unaudited)Three
      Months Ended
              Percentage
              Six
      Months Ended
              PercentageJanuary
      31,
              Increase
              January
      31,
              Increase2010
              2009
              (Decrease)
              2010
              2009
              (Decrease)Lodging
      net revenue:Owned
      hotel rooms
              $
              8,286
              
              $
              8,774
              (5.6
              )
      %
              $
              19,282
              $
              20,974
              (8.1
              )
      %Managed
      condominium rooms
              
              10,819
              
              
              12,164
              (11.1
              )
      %
              
              15,229
              
              17,219
              (11.6
              )
      %Dining
              
              4,522
              
              
              4,989
              (9.4
              )
      %
              
              13,468
              
              15,478
              (13.0
              )
      %Transportation
              
              7,341
              
              
              7,528
              (2.5
              )
      %
              
              8,974
              
              7,528
              19.2
              %Golf
              
              --
              
              
              --
              --
              
              
              6,823
              
              8,055
              (15.3
              )
      %Other
              
              7,708
              
              
              7,695
              0.2
              %
              
              16,255
              
              17,149
              (5.2
              )
      %Total
      Lodging net revenue
              $
              38,676
              
              $
              41,150
              (6.0
              )
      %
              $
              80,031
              $
              86,403
              (7.4
              )
      %Lodging
      operating expenseLabor
      and labor-related benefits
              $
              18,449
              
              $
              20,408
              (9.6
              )
      %
              $
              38,824
              $
              41,252
              (5.9
              )
      %General
      and administrative
              
              7,653
              
              
              6,547
              16.9
              %
              
              14,631
              
              14,028
              4.3
              %Other
              
              11,686
              
              
              11,742
              (0.5
              )
      %
              
              26,956
              
              28,315
              (4.8
              )
      %Total
      Lodging operating expense
              $
              37,788
              
              $
              38,697
              (2.3
              )
      %
              $
              80,411
              $
              83,595
              (3.8
              )
      %Total
      Lodging Reported EBITDA
              $
              888
              
              $
              2,453
              (63.8
              )
      %
              $
              (380
              )  $
              2,808
              (113.5
              )
      %Owned
      hotel statistics:ADR
              $
              205.85
              
              $
              206.25
              (0.2
              )%
              $
              187.90
              $
              180.85
              3.9
              %RevPAR
              $
              103.50
              
              $
              117.95
              (12.3
              )%
              $
              94.98
              $
              107.86
              (11.9
              )
      %Managed
      condominium statistics:ADR
              $
              336.13
              
              $
              348.07
              (3.4
              )%
              $
              286.90
              $
              283.41
              1.2
              %RevPAR
              $
              113.13
              
              $
              126.37
              (10.5
              )%
              $
              69.91
              $
              82.10
              (14.8
              )
      %Owned
      hotel and managed condominium statistics (combined):ADR
              $
              280.84
              
              $
              286.93
              (2.1
              )%
              $
              231.42
              $
              226.73
              2.1
              %RevPAR
              $
              109.95
              
              $
              123.64
              (11.1
              )%
              $
              79.45
              $
              91.76
              (13.4
              )
      %
 
 
 Key
      Balance Sheet Data(In
      thousands)(Unaudited)As
      of January 31,2010
              
              2009Real
      estate held for sale and investment
              
              $
              414,501
              
              $
              247,329Total
      Vail Resorts, Inc. stockholders' equity
              
              $
              770,188
              
              $
              740,497Long-term
      debt
              
              $
              489,865
              
              $
              491,777Long-term
      debt due within one year
              
              
              1,870
              
              
              304Total
      debt
              
              
              491,735
              
              
              492,081Less:
      cash and cash equivalents
              
              
              58,008
              
              
              139,172Net
      debt
              
              $
              433,727
              
              $
              352,909
 
  Reconciliation
of Non-GAAP Financial Measures
 
 Resort,
Mountain and Lodging, and Real Estate Reported EBITDA have been presented herein
as measures of the Company's financial operating
performance.  Reported EBITDA and Net Debt 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 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 (loss), net change in cash and cash
equivalents or other financial statement data.  The Company believes
that Reported EBITDA is an indicative measurement of the Company's operating
performance, and is similar to performance metrics generally used by investors
to evaluate companies in the resort and lodging industries.  The
Company primarily uses Reported EBITDA based 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 Total Reported EBITDA to net income (loss)
attributable to Vail Resorts, Inc. calculated in accordance with GAAP for the
three and six months ended January 31, 2010 and 2009.
  (In
      thousands)(Unaudited)Three
      Months Ended
              
              Six
      Months EndedJanuary
      31,
              
              January
      31,2010
              
              2009
              
              2010
              
              2009Mountain
      Reported EBITDA
              $
              107,167
              
              
              $
              103,462
              
              
              $
              70,157
              
              
              $
              64,032Lodging
      Reported EBITDA
              
              888
              
              
              
              2,453
              
              
              
              (380
              )
              
              
              2,808Resort
      Reported EBITDA*
              
              108,055
              
              
              
              105,915
              
              
              
              69,777
              
              
              
              66,840Real
      Estate Reported EBITDA
              
              (6,547
              )
              
              
              29,649
              
              
              
              (5,432
              )
              
              
              45,022Total
      Reported EBITDA
              
              101,508
              
              
              
              135,564
              
              
              
              64,345
              
              
              
              111,862Depreciation
      and amortization
              
              (27,772
              )
              
              
              (27,438
              )
              
              
              (54,956
              )
              
              
              (52,516
              )Gain
      (loss) on disposal of fixed assets, net
              
              12
              
              
              
              (422
              )
              
              
              (101
              )
              
              
              (602
              )Investment
      income
              
              192
              
              
              
              336
              
              
              
              422
              
              
              
              979Interest
      expense, net
              
              (4,148
              )
              
              
              (7,295
              )
              
              
              (8,983
              )
              
              
              (15,242
              )Income
      before provision for income taxes
              
              69,792
              
              
              
              100,745
              
              
              
              727
              
              
              
              44,481(Provision)
      benefit for income taxes
              
              (24,713
              )
              
              
              (36,412
              )
              
              
              841
              
              
              
              (17,003
              )Net
      income
              
              45,079
              
              
              
              64,333
              
              
              
              1,568
              
              
              
              27,478Net
      income attributable to noncontrolling interests
              
              (4,389
              )
              
              
              (3,788
              )
              
              
              (2,051
              )
              
              
              (1,437
              )Net
      income (loss) attributable to Vail Resorts, Inc.
              $
              40,690
              
              
              $
              60,545
              
              
              $
              (483
              )
              
              $
              26,041*
      Resort represents the sum of Mountain and
  Lodging
 
 
 Presented
below is a reconciliation of Total Reported EBITDA to net income attributable to
Vail Resorts, Inc. calculated in accordance with GAAP for the twelve months
ended January 31, 2010.  Also presented is a reconciliation of Net
Debt to Long-term Debt and the calculation of Net Debt to Total Reported EBITDA
for the twelve months ended January 31, 2010.
 (In
      thousands)(Unaudited)TwelveMonths
      EndedJanuary
      31,2010Mountain
      Reported EBITDA
              $
              170,514Lodging
      Reported EBITDA
              
              3,571Resort
      Reported EBITDA*
              
              174,085Real
      Estate Reported EBITDA
              
              (6,374
              )Total
      Reported EBITDA
              
              167,711Depreciation
      and amortization
              
              (109,653
              )Loss
      on disposal of fixed assets, net
              
              (563
              )Investment
      income
              
              1,236Interest
      expense, net
              
              (21,289
              )Income
      before provision for income taxes
              
              37,442Provision
      for income taxes
              
              (12,800
              )Net
      income
              $
              24,642Net
      income attributable to noncontrolling interests
              
              (2,216
              )Net
      income attributable to Vail Resorts, Inc
              $
              22,426
 * Resort represents the sum of Mountain
and Lodging
  (In
      thousands)(Unaudited)As
      of January 31, 2010Long-term
      debt
              $
              489,865Long-term
      debt due within one year
              
              1,870Total
      debt
              
              491,735Less:
      cash and cash equivalents
              
              58,008Net
      debt
              $
              433,727Net
      debt to Total Reported EBITDA
              
              2.6
              x
 
 The
following table reflects the forecasted guidance range for the Company’s fiscal
year ending July 31, 2010 for Reported EBITDA (after stock-based compensation
expense) and reconciles such Reported EBITDA guidance to net income attributable
to Vail Resorts, Inc. guidance for fiscal 2010.
 
 Fiscal
      2010 Guidance(In
      thousands)For
      the Year EndingJuly
      31, 2010Low
      End
                Range
              
              High
      End RangeMountain
      Reported EBITDA (1)
              $
              170,000
              
              
              $
              180,000Lodging
      Reported EBITDA (2)
              
              5,000
              
              
              
              11,000Resort
      Reported EBITDA (3)
              
              178,000
              
              
              
              188,000Real
      Estate Reported EBITDA  (4)
              
              (8,000
              )
              
              
              --Total
      Reported EBITDA
              
              170,000
              
              
              
              188,000Depreciation
      and amortization
              
              (111,000
              )
              
              
              (111,000
              )Loss
      on disposal of fixed assets, net
              
              (1,100
              )
              
              
              (1,100
              )Investment
      income
              
              800
              
              
              
              850Interest
      expense, net
              
              (17,000
              )
              
              
              (17,000
              )Income
      before provision for income taxes
              
              41,700
              
              
              
              59,750Provision
      for income taxes
              
              (16,050
              )
              
              
              (23,000
              )Net
      income
              
              25,650
              
              
              
              36,750Net
      income attributable to the noncontrolling interests
              
              (650
              )
              
              
              (1,750
              )Net
      income attributable to Vail Resorts, Inc.
              $
              25,000
              
              
              $
              35,000
 
 (1)
              Mountain
      Reported EBITDA includes approximately $5 million of stock-based
      compensation.
  (2)
              Lodging
      Reported EBITDA includes approximately $2 million of stock-based
      compensation.
  (3)
              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
      Reported EBITDA range.
  (4)
              Real
      Estate Reported EBITDA includes approximately $4 million of stock-based
      compensation.