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 First Quarter Results and Early Season Indicators


BROOMFIELD,
Colo. - December 8, 2009 - Vail Resorts, Inc. (NYSE:  MTN) today
reported results for the first quarter of fiscal 2010 ended October 31, 2009, as
well as certain early season indicators.





Highlights




·
            Resort
      Reported EBITDA, which includes our Mountain and Lodging segments, for the
      first quarter improved from the prior year by $0.8 million, or 2.0%, due
      in part to the favorable impact of cost savings initiatives implemented
      subsequent to the prior year first
quarter.




·
            Total
      revenue and Real Estate Reported EBITDA declined and net loss was greater
      for the first quarter compared to the prior year due to the timing of real
      estate project closings.




·
            Net
      Debt leverage ratio of 2.4 times trailing twelve months Total Reported
      EBITDA and no revolver borrowings under the Company’s $400 million senior
      credit facility as of October 31,
2009.




·
            Season
      pass sales to date, including the Epic Season Pass, up approximately 11%
      in units and approximately 9% in sales dollars compared to the same time
      period in the prior year.




Commenting
on the Company’s fiscal 2010 first quarter results, Rob Katz, Chief Executive
Officer said, “Our first fiscal quarter is a seasonally low earnings period and
historically a loss quarter, since our mountain resorts are not open for winter
ski operations during the period.  The first quarter Resort results
are generally driven by the Company’s summer mountain operations, lodging
operations including our summer seasonal business at Grand Teton Lodge Company
(“GTLC”), golf operations and group business.  The Company’s Mountain
Reported EBITDA results in this year’s first quarter improved by $2.4 million,
or 6.1%, compared to the prior year first quarter and benefited from the cost
savings initiatives previously implemented in January and April of 2009,
including wage reductions for our full-time and seasonal
employees.  Additionally, Mountain segment results were favorably
impacted by improved retail/rental contribution due to higher gross margins,
improved summer operations due in part to prior year construction impacts,
higher fees and dues revenue from private club operations and the timing of
marketing spend including a significant shift away from more traditional print
media.  Lodging segment results in the current year first fiscal
quarter included Colorado Mountain Express (“CME”), which was acquired after the
prior year first quarter on November 1, 2008, and negatively impacted
year-over-year Lodging Reported EBITDA comparisons by $1 million in a seasonal
loss first quarter.  The Company’s Lodging segment results in the
first fiscal quarter are historically impacted by group business, which was down
as expected in the current year compared to the pre-recessionary period of the
prior year.  When combined with a similarly impacted drop-off in
transient guest occupancy, hotel revenue per available room (“RevPAR”) declined
by 11.7% at our owned hotels, which is a much smaller decline than that
experienced by the luxury and the upper upscale segments of the lodging industry
as a whole for the same period, which experienced estimated RevPAR declines of
approximately 22% and 17%, respectively.  Real Estate revenue and Real
Estate Reported EBITDA was significantly decreased, as expected, due to the
prior year closings of 39 Crystal Peak Lodge units and one Lodge at Vail Chalet
unit, partially offset by the current year sale of a land parcel at the
Arrowhead base area of the Beaver Creek Resort for $8.5 million, resulting in a
gain on sale of $6.1 million (net of $2.4 million in related cost of
sales).  Despite the impacts of the back-to-back seasonally low fourth
and first fiscal quarters as well as our continued investment in two real estate
projects under construction, our balance sheet position remains solid with Net
Debt leverage of 2.4 times trailing twelve months Total Reported EBITDA, no
borrowings under our revolver at the end of the first quarter of fiscal 2010 and
virtually no principal maturities due on any of our debt until
2014.”





Mountain
Segment




·
            Mountain
      segment net revenue was $39.2 million in the first quarter of fiscal 2010
      compared to $40.8 million in the first quarter of fiscal 2009, a 3.9%
      decline.




·
            Mountain
      Reported EBITDA was a loss of $37.0 million in the first quarter of fiscal
      2010 compared to a loss of $39.4 million in the first quarter of fiscal
      2009, a 6.1% improvement.




The
Company's first fiscal quarter historically results in negative Mountain
Reported EBITDA, as the Company's ski resorts generally do not open for ski
operations until the Company's second fiscal quarter.  The first
fiscal quarter consists primarily of operating and administrative expenses plus
summer business and retail/rental operations.




Total
Mountain segment net revenue decreased in part due to a $0.9 million, or 4.0%,
decrease in retail/rental revenue due to lower sales volumes primarily at the
Company’s mountain resort stores.  In addition, dining revenue
decreased $0.5 million, or 11.7%, in the first quarter of fiscal 2010 compared
to the first quarter of fiscal 2009, primarily due to a reduction in group
business at the Company’s mountain resorts.  Other revenue primarily
consists of private club revenue (which includes both club dues and amortization
of initiation fees), summer visitation, other mountain activities revenue,
marketing revenue, employee housing revenue as well as commercial leasing
revenue.   For the first quarter of fiscal 2010, other revenue
decreased $0.2 million, or 1.6%, compared to the first quarter of fiscal 2009,
primarily due to a decrease in marketing and employee housing revenue, mostly
offset by an increase in private club operations resulting from the opening of
the Vail Mountain Club in November 2008 and an increase in on-mountain summer
activities at Breckenridge and Keystone as the prior year’s on-mountain summer
activities were restricted due to construction activities at the respective
resorts.




Mountain
segment operating expense decreased $4.8 million, or 5.9%, during the first
quarter of fiscal 2010 compared to the first quarter of fiscal 2009, which
primarily resulted from a decrease in labor and labor-related benefits expense,
retail cost of sales and general and administrative expenses.  Labor
and labor-related benefits decreased $0.6 million, or 2.6%, due to decreased
staffing levels driven by lower volume in dining and retail/rental operations as
well as the impacts of cost reduction initiatives including the suspension of
the Company’s matching contribution to its 401(k) program effective January 2009
and the company-wide wage reduction plan implemented in April 2009, partially
offset by severance charges and increased stock compensation expense in the
first quarter of fiscal 2010.  Retail cost of sales decreased $0.7
million, or 5.2%, due to the decrease in retail revenue combined with an
increase in gross margins from improved inventory management.  General
and administrative expenses decreased $2.7 million, or 11.7%, primarily due to
the timing of marketing spend as well as lower allocated corporate expenses,
which were also impacted by the cost reduction initiatives discussed
above.  Other expenses decreased $0.8 million, or 3.6%, primarily due
to lower supplies and repairs and maintenance expense resulting from strategic
sourcing initiatives, partially offset by higher property taxes.




Mountain
equity investment income, net, which primarily represents the Company's share of
income from its real estate brokerage joint venture, decreased $0.8 million for
the first quarter of fiscal 2010 compared to the first quarter of fiscal 2009,
was unfavorably impacted by an overall decline in real estate closings compared
to the same period in the prior year from both commercial projects and
residential sales.




Lodging
Segment




·
            Lodging
      segment net revenue was $41.4 million in the first quarter of fiscal 2010
      compared to $45.3 million in the first quarter of fiscal 2009, an 8.6%
      decrease.




·
            First
      fiscal quarter 2010 average daily rate (“ADR”) increased 5.1% and RevPAR
      decreased 17.0% at the Company’s owned hotels and managed condominiums
      compared to the prior year first fiscal
quarter.




·
            Lodging
      Reported EBITDA was a negative $1.3 million in the first quarter of fiscal
      2010 compared to a positive $0.4 million in the first quarter of fiscal
      2009.  Fiscal 2010 first quarter Lodging segment results
      included $1.8 million of net revenue and $2.7 million of operating expense
      from CME, which was acquired on November 1,
  2008.




Total
Lodging net revenue for the first quarter of fiscal 2010 decreased $3.9 million,
or 8.6%, compared to the first quarter of fiscal 2009.  This decrease
in lodging net revenue was partially offset by transportation revenue of $1.8
million due to the acquisition of CME on November 1, 2008.  Excluding
the impact of CME revenue, total lodging net revenue decreased $5.7 million, or
12.6%, for the first quarter of fiscal 2010 compared to the first quarter of
fiscal 2009.


Revenue
from owned hotel rooms for the first quarter of fiscal 2010 decreased $1.2
million, or 9.9%, compared to the first quarter of fiscal 2009, which was driven
by a decrease in occupancy of 10.6 percentage points primarily due to
significant declines in group business as well as declines in transient guest
visitation, partially offset by an increase in ADR of 6.7% at the Company’s
owned hotels, due primarily to increases at GTLC.  GTLC’s room revenue
for the first quarter of fiscal 2010 was flat compared to the first quarter of
fiscal 2009, as GTLC’s ADR increased by 9.6%, which offset a 5.5 percentage
point decline in occupancy from lower transient guest
visitation.  Revenue from managed condominium rooms decreased $0.6
million, or 12.8%, for the first quarter of fiscal 2010 compared to the first
quarter of fiscal 2009, primarily due to a decline in group
business.




First
quarter fiscal 2010 dining revenue decreased $1.5 million, or 14.7%, as compared
to the first quarter of fiscal 2009 mainly due to decreased group visitation
primarily at the Company’s Colorado mountain resorts.  Golf revenues
decreased $1.2 million, or 15.1%, for the first quarter of fiscal 2010 compared
to the first quarter of fiscal 2009, resulting from a 15% decrease in the number
of golf rounds played combined with lower revenue per round.  Other
revenue decreased $1.1 million, or 11.5%, in the first quarter of fiscal 2010
compared to the first quarter of fiscal 2009, primarily due to a decrease in
revenue from spa and conferences services, which were negatively impacted by
lower occupancy from groups.




Lodging
segment operating expense decreased $2.3 million, or 5.1%, for the first quarter
of fiscal 2010 compared to the first quarter of fiscal 2009.  Lodging
segment operating expense in the first quarter fiscal 2010 included $2.7 million
of CME operating expense.  Excluding the impact of CME operating
expense, total operating expense decreased $5.0 million, or 11.2%, for the first
quarter of fiscal 2010 compared to the first quarter of fiscal 2009, primarily
due to a decrease in labor and labor-related benefits of $2.2 million, or 10.5%,
primarily due to lower staffing levels associated with decreased occupancy and
wage decreases as a result of the company-wide wage reduction plan implemented
in April 2009 and a decrease in other expenses of $2.4 million, or 14.3%,
primarily due to decreased variable operating costs associated with the lower
revenue including lower food and beverage cost of sales, credit card fees and
other operating expenses and a decrease in general and administrative expenses
of $0.4 million, or 5.7%, primarily due to a decrease in marketing
spend.





Resort – Combination of
Mountain and Lodging Segments




·
            Resort
      net revenue was $80.6 million in the first quarter of fiscal 2010 compared
      to $86.0 million in the first quarter of fiscal 2009, a 6.4%
      decline.




·
            Resort
      Reported EBITDA was a loss of $38.3 million in the first quarter of fiscal
      2010 compared to a loss of $39.1 million in the first quarter of fiscal
      2009, a 2.0% improvement.







Real Estate
Segment




·
            Real
      Estate segment net revenue was $0.2 million in the first quarter of fiscal
      2010 compared to $66.8 million in the first quarter of fiscal
      2009.




·
            Real
      Estate Reported EBITDA was $1.1 million in the first quarter of fiscal
      2010 compared to $15.4 million in the first quarter of fiscal
      2009.




In
the first quarter of fiscal 2010, the Company sold a land parcel located at the
Arrowhead base area of the Beaver Creek Resort for $8.5 million and recorded a
gain on sale of real property of $6.1 million (net of $2.4 million in related
cost of sales), which is included in Real Estate Reported EBITDA but not in Real
Estate segment net revenue.  In the first quarter of fiscal 2009, Real
Estate segment net revenue was driven primarily by the closings on 39 residences
at Crystal Peak Lodge ($51.2 million of revenue with an average selling price
per unit of $1.3 million and an average price per square foot of $1,045) in
Breckenridge and the closing on one Lodge at Vail Chalet unit ($14.4 million of
revenue with an average price per square foot of $2,880).




In the
first quarter of fiscal 2010, Real Estate segment operating expense primarily
included general and administrative costs of approximately $5.2 million
(including $1.4 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 first
quarter of fiscal 2009, operating expense included cost of sales of $40.1
million commensurate with revenue recognized, primarily driven by the closing on
39 residences at Crystal Peak Lodge ($33.0 million in cost of sales with an
average cost per square foot of $679) and the closing on one Lodge at Vail
Chalet unit ($7.3 million in cost of sales with an average cost per square foot
of $1,465).  Prior year operating expense also included sales
commissions of approximately $4.2 million commensurate with revenue recognized
and general and administrative costs of approximately $7.1 million (including
$0.9 million of stock-based compensation expense).





Total
Performance




·
            Total
      net revenue was $80.8 million in the first quarter of fiscal 2010 compared
      to $152.8 million in the first quarter of fiscal 2009, a 47.1% decline,
      driven primarily by the timing of real estate
  closings.




·
            Net
      loss attributable to Vail Resorts, Inc. was $41.2 million, or a loss of
      $1.14 per diluted share, in the first quarter of fiscal 2010 compared to a
      net loss attributable to Vail Resorts, Inc. of $34.5 million, or a loss of
      $0.93 per diluted share, in the first quarter of fiscal
    2009.




Balance
Sheet




As of
October 31, 2009, the Company had cash and cash equivalents on hand of $13.0
million, Net Debt of 2.4 times trailing twelve months Total Reported EBITDA and
no revolver borrowings under a $400 million senior credit facility, which
matures in 2012 and has $307 million available for borrowing after considering
$93 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 October 31, 2009.  Since inception of this stock repurchase plan
in 2006, the Company has repurchased 3,878,535 shares at a cost of approximately
$147.8 million, through October 31, 2009.  As of October 31, 2009,
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 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.




Outlook




Commenting
on the Company’s 2009/2010 season pass sales, Katz said, “We are very pleased
with the results of our season pass sales efforts.  Even in this
challenging economic environment, our Company has been able to markedly grow
total season pass sales in advance of the ski season, which continues to expand
one of our most important guest loyalty programs. Through December 6, 2009,
compared to the comparable period of the prior year, our total season pass sales
to date have increased approximately 11% in units and approximately 9% in sales
dollars.  As season pass sales in the prior year represented 34% of
ultimate total lift ticket revenue, we believe this season pass sales
performance provides stability and good momentum heading into this ski
season.  Among the various season pass products, the sales of the
Summit Season Pass increased significantly, with a majority of the increase
coming from guests outside of Colorado.  We believe this increase was
due to the inclusion of the Summit Season Pass in our national marketing efforts
for the Epic Season Pass and its availability starting this year online for
first time purchasers.  The season pass program is a cornerstone of
our business model, as more of our guests are committing earlier to the Vail
Resorts experience and finding value in our season pass products, while enabling
the Company to continue to lock-in an even greater portion of our lift ticket
revenue before the start of the ski season.”




Commenting
on advance bookings trends, Katz continued, “As of November 30, 2009, the
Company’s lodging advance bookings through our central reservations and directly
at our owned and managed properties for the 2009/2010 ski season are down
approximately 13% in room nights compared to the same period last
year.  However, at this point in the bookings cycle, it is still very
difficult to project trends for the current season.  Though overall
advanced reservations are lower than the prior year, we have seen an even
shorter booking window than last year and are seeing bookings at some resorts
and some time periods actually ahead of last year.  In fact, as of
November 30, at our owned and managed properties, total room night bookings are
down 7% for the second quarter ending January 31, 2010.  It is also
important to note that as of November 30 of last year, advance bookings for
transient guests represented less than 50% of such total ultimate bookings for
the prior year ski season.  In addition, airline reservations for
Eagle County Airport, the nearest airport to our Vail and Beaver Creek resorts,
are currently approximately 4% ahead in the number of seats sold compared to the
same time in the prior year.  Given all of these trends, we currently
anticipate the booking trend for the full ski season to improve significantly
from the booking status as of November 30.”


Commenting
on the Company’s fiscal 2010 outlook, Katz said, “Overall, our key early season
metrics are indicating some optimistic signs with strong year-over-year season
pass sales and improved airline bookings into Eagle County
Airport.  However, our overall lodging bookings are showing mixed
results with some periods and locations stronger, while most periods are down
compared to the prior year, especially in Summit County.  Accordingly,
at this early point in our 2009/2010 ski season, we are reiterating our fiscal
2010 guidance ranges issued in late September 2009.”





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 non-controlling 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.







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 EndedOctober
      31,2009
            2008Net
      revenue:Mountain
            $
            39,204
            
            $
            40,778Lodging
            
            41,355
            
            
            45,253Real
      estate
            
            205
            
            
            66,750Total
      net revenue
            
            80,764
            
            
            152,781Segment
      operating expense (exclusive of depreciation and amortization
              shown
      separately below):Mountain
            
            76,468
            
            
            81,223Lodging
            
            42,623
            
            
            44,898Real
      estate
            
            5,177
            
            
            51,377Total
      segment operating expense
            
            124,268
            
            
            177,498Other
      operating (expense) income:Depreciation
      and amortization
            
            (27,184
            )
            
            (25,078
            )Gain
      on sale of real property
            
            6,087
            
            
            --Loss
      on disposal of fixed assets, net
            
            (113
            )
            
            (180
            )Loss
      from operations
            
            (64,714
            )
            
            (49,975
            )Mountain
      equity investment income, net
            
            254
            
            
            1,015Investment
      income
            
            230
            
            
            643Interest
      expense, net
            
            (4,835
            )
            
            (7,947
            )Loss
      before benefit from income taxes
            
            (69,065
            )
            
            (56,264
            )Benefit
      from income taxes
            
            25,554
            
            
            19,409Net
      loss
            $
            (43,511
            )
            $
            (36,855
            )Net
      loss attributable to noncontrolling interests
            
            2,338
            
            
            2,351Net
      loss attributable to Vail Resorts, Inc.
            $
            (41,173
            )
            $
            (34,504
            )Per share
      amounts:Basic
      net loss per share
            $
            (1.14
            )
            $
            (0.93
            )Diluted
      net loss per share
            $
            (1.14
            )
            $
            (0.93
            )Weighted
      average shares outstanding:Basic
            
            36,201
            
            
            36,922Diluted
            
            36,201
            
            
            36,922Other
      Data (unaudited):Mountain
      Reported EBITDA
            $
            (37,010
            )
            $
            (39,430
            )Lodging
      Reported EBITDA
            $
            (1,268
            )
            $
            355Resort
      Reported EBITDA
            $
            (38,278
            )
            $
            (39,075
            )Real
      Estate Reported EBITDA
            $
            1,115
            
            $
            15,373Total
      Reported EBITDA
            $
            (37,163
            )
            $
            (23,702
            )





Mountain
      stock-based compensation
            $
            1,573
            
            $
            1,193Lodging
      stock-based compensation
            $
            516
            
            $
            429Resort
      stock-based compensation
            $
            2,089
            
            $
            1,622Real
      Estate stock-based compensation
            $
            1,375
            
            $
            945Total
      stock-based compensation
            $
            3,464
            
            $
            2,567







Vail
      Resorts, Inc.Mountain
      Segment Operating Results(In
      thousands)(Unaudited)Three
      Months Ended
            PercentageOctober
      31,
            Increase2009
            2008
            (Decrease)Net
      Mountain revenue:Lift
      tickets
            $
            --
            
            $
            --
            
            --Ski
      school
            
            --
            
            
            --
            
            --Dining
            
            3,468
            
            
            3,929
            
            (11.7
            )
      %Retail/rental
            
            21,538
            
            
            22,426
            
            (4.0
            )
      %Other
            
            14,198
            
            
            14,423
            
            (1.6
            )
      %Total
      Mountain net revenue
            $
            39,204
            
            $
            40,778
            
            (3.9
            )
      %Mountain
      operating expense:Labor
      and labor-related benefits
            $
            23,384
            
            $
            24,017
            
            (2.6
            )
      %Retail
      cost of sales
            
            12,563
            
            
            13,251
            
            (5.2
            )
      %General
      and administrative
            
            20,273
            
            
            22,949
            
            (11.7
            )
      %Other
            
            20,248
            
            
            21,006
            
            (3.6
            )
      %Total
      Mountain operating expense
            $
            76,468
            
            $
            81,223
            
            (5.9
            )
      %Mountain
      equity investment income, net
            
            254
            
            
            1,015
            
            (75.0
            )
      %Total
      Mountain Reported EBITDA
            $
            (37,010
            )
            $
            (39,430
            )
            6.1
            %







Vail
      Resorts, Inc.Lodging
      Operating Results(In
      thousands, except ADR and RevPAR)(Unaudited)Three
      Months Ended
              PercentageOctober
      31,
              Increase2009
              2008
              (Decrease)Lodging
      net revenue:Owned
      hotel rooms
              $
              10,997
              
              $
              12,200
              (9.9
              )
      %Managed
      condominium rooms
              
              4,410
              
              
              5,055
              (12.8
              )
      %Dining
              
              8,946
              
              
              10,489
              (14.7
              )
      %Transportation
              
              1,787
              
              
              --
              --Golf
              
              6,759
              
              
              7,958
              (15.1
              )
      %Other
              
              8,456
              
              
              9,551
              (11.5
              )
      %Total
      Lodging net revenue
              $
              41,355
              
              $
              45,253
              (8.6
              )
      %Lodging
      operating expense:Labor
      and labor-related benefits
              $
              20,375
              
              $
              20,843
              (2.2
              )
      %General
      and administrative
              
              6,707
              
              
              7,113
              (5.7
              )
      %Other
              
              15,541
              
              
              16,942
              (8.3
              )
      %Total
      Lodging operating expense
              $
              42,623
              
              $
              44,898
              (5.1
              )
      %Total
      Lodging Reported EBITDA
              $
              (1,268
              )
              $
              355
              (457.2
              )
      %Owned
      hotel statistics:ADR
              $
              175.92
              
              $
              164.82
              6.7
              %RevPAR
              $
              89.24
              
              $
              101.03
              (11.7
              )
      %Managed
      condominium statistics:ADR
              $
              176.07
              
              $
              172.89
              1.8
              %RevPAR
              $
              26.46
              
              $
              37.23
              (28.9
              )
      %Owned
      hotel and managed condominium statistics (combined):ADR
              $
              175.96
              
              $
              167.45
              5.1
              %RevPAR
              $
              53.08
              
              $
              63.95
              (17.0
              )
      %







Key
      Balance Sheet Data(In
      thousands)(Unaudited)As
      of October 31,2009
            
            2008Real
      estate held for sale and investment
            
            $
            366,748
            
            $
            256,323Total
      Vail Resorts, Inc. stockholders' equity
            
            $
            726,597
            
            $
            674,584Long-term
      debt
            
            $
            489,919
            
            $
            491,778Long-term
      debt due within one year
            
            
            1,862
            
            
            354Total
      debt
            
            
            491,781
            
            
            492,132Less:
      cash and cash equivalents
            
            
            13,019
            
            
            102,668Net
      debt
            
            $
            478,762
            
            $
            389,464








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 loss attributable to
Vail Resorts, Inc. calculated in accordance with GAAP for the three months ended
October 31, 2009 and 2008.





(In
      thousands)(Unaudited)Three
      Months EndedOctober
      31,2009
              
              2008Mountain
      Reported EBITDA
              $
              (37,010
              )
              
              $
              (39,430
              )Lodging
      Reported EBITDA
              
              (1,268
              )
              
              
              355Resort
      Reported EBITDA
              
              (38,278
              )
              
              
              (39,075
              )Real
      Estate Reported EBITDA
              
              1,115
              
              
              
              15,373Total
      Reported EBITDA
              
              (37,163
              )
              
              
              (23,702
              )Depreciation
      and amortization
              
              (27,184
              )
              
              
              (25,078
              )Loss
      on disposal of fixed assets, net
              
              (113
              )
              
              
              (180
              )Investment
      income
              
              230
              
              
              
              643Interest
      expense, net
              
              (4,835
              )
              
              
              (7,947
              )Loss
      before benefit from income taxes
              
              (69,065
              )
              
              
              (56,264
              )Benefit
      from income taxes
              
              25,554
              
              
              
              19,409Net
      loss
              
              (43,511
              )
              
              
              (36,855
              )Net
      loss attributable to noncontrolling interests
              
              2,338
              
              
              
              2,351Net
      loss attributable to Vail Resorts, Inc.
              $
              (41,173
              )
              
              $
              (34,504
              )*
      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 October 31, 2009.  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 October 31, 2009.





(In
      thousands)(Unaudited)TwelveMonths
      EndedOctober
      31,2009Mountain
      Reported EBITDA
            $
            166,809Lodging
      Reported EBITDA
            
            5,136Resort
      Reported EBITDA*
            
            171,945Real
      Estate Reported EBITDA
            
            29,822Total
      Reported EBITDA
            
            201,767Depreciation
      and amortization
            
            (109,319
            )Loss
      on disposal of fixed assets, net
            
            (997
            )Investment
      income
            
            1,380Interest
      expense, net
            
            (24,436
            )Income
      before provision for income taxes
            
            68,395Provision
      for income taxes
            
            (24,499
            )Net
      income
            $
            43,896Net
      income attributable to noncontrolling interests
            
            (1,615
            )Net
      income attributable to Vail Resorts, Inc
            $
            42,281


* Resort represents the sum of Mountain
and Lodging





(In
      thousands)(Unaudited)As
      of October 31, 2009Long-term
      debt
            $
            489,919Long-term
      debt due within one year
            
            1,862Total
      debt
            
            491,781Less:
      cash and cash equivalents
            
            13,019Net
      debt
            $
            478,762Net
      debt to Total Reported EBITDA
            
            2.4
            x