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Press release from PR Newswire

Vail Resorts Reports Fiscal 2014 Third Quarter Results and Spring Season Pass Sales Results

Thursday, June 05, 2014

Vail Resorts Reports Fiscal 2014 Third Quarter Results and Spring Season Pass Sales Results

16:01 EDT Thursday, June 05, 2014

BROOMFIELD, Colo., June 5, 2014 /PRNewswire/ -- Vail Resorts, Inc. (NYSE: MTN) today reported results for the third quarter of fiscal 2014 ended April 30, 2014, as well as the Company's results of its spring season pass sales for the 2014/2015 ski season.  Additionally, the Company provided its outlook for the full fiscal year ending July 31, 2014.

Highlights

  • Resort Reported EBITDA increased 18.9% for the third quarter of fiscal 2014 compared to the same period in the prior year.
  • Net income attributable to Vail Resorts, Inc. was $117.9 million for the third quarter of fiscal 2014, representing a 20.8% increase compared to the same period in the prior year.
  • Total skier visits for the third quarter of fiscal 2014 increased 11.2% compared to the same period in the prior year, including the addition of Canyons Resort.
  • Skier visits at our Colorado resorts maintained the strong momentum from earlier in the year, growing 5.6% for the third quarter of fiscal 2014 compared to the same period in the period year. The Tahoe resorts experienced a 4.4% decline in skier visitation for the third quarter of fiscal 2014 compared to the same period in the prior year, due to adverse weather conditions.
  • The Company revised its fiscal 2014 guidance range upward to reflect strong results in Colorado in the third quarter of fiscal 2014. Resort Reported EBITDA is now expected to be between $267 million and $273 million, which includes approximately $10 million of estimated Canyons integration and litigation expenses.
  • During the third quarter of fiscal 2014, the Company closed on three units at the Ritz Carlton Residences, Vail, and closed on five units at One Ski Hill Place. Net Real Estate Cash Flow for the third quarter was $11.3 million and was $20.9 million year-to-date. Subsequent to quarter end, three Ritz-Carlton Residences, Vail, units and one One Ski Hill Place unit have closed.
  • Spring season pass sales for the 2014/2015 ski season were up approximately 14% in units and approximately 20% in sales dollars through May 27, 2014 compared with the prior year period ended May 28, 2013.

Commenting on the Company's fiscal 2014 third quarter results, Rob Katz, Chief Executive Officer said, "We are very pleased with our performance in the third quarter of fiscal 2014.   We saw continued strong performance in Colorado and improved results in Tahoe, leading to an 11.2% increase in total visitation this quarter compared to the prior year.  Total lift revenue increased by 17.1%, ski school revenue increased by 16.8% and total Mountain revenue increased by 14.6% compared to the prior year.  Our mountain performance includes the results of Canyons, which were in line with our previous public estimates, and the results of our Urban ski areas, whose performance was ahead of our expectations."

"Our results in Colorado were particularly encouraging.  Compared to the prior year, total visitation at our Colorado resorts increased 5.6%, ski school revenue increased 11.3% and dining revenue increased 9.5%, despite the unfavorable late timing of Easter in the current year.  Our overall results continued to be negatively impacted in the quarter by the poor snowfall and warm weather experienced in Tahoe throughout the season.  Late season storms helped mitigate early season declines and brought back more local California visitors with total visitation for the third quarter down only 4.4% compared to the prior year.  Throughout the ski season, our Tahoe resorts consistently delivered some of the best conditions in the marketplace."

Regarding Lodging, Katz said, "Our lodging business continues to have a great year.  Revenue, excluding payroll cost reimbursements, increased 24.6% compared to the prior year and revenue per available room, or RevPAR, increased 14.5% compared to the prior year.  These results were driven by strong performance in our core Colorado markets with increased occupancy and favorable rate increases, along with the addition of the Canyons lodging properties to our portfolio.  The Tahoe region does not represent a material component of our lodging business and therefore the challenging conditions in the region did not have a significant impact on lodging results."

Katz continued, "Resort Reported EBITDA was $241.1 million for the quarter, an increase of 18.9% over the prior year.  Canyons integration and Park City Mountain Resort ("PCMR") litigation related expenses were $2.4 million in the quarter.  We revised guidance upward for Resort Reported EBITDA for fiscal 2014 to $267 million to $273 million reflecting the better than anticipated results in Colorado in the third quarter. This guidance includes approximately $10 million of estimated Canyons integration and PCMR litigation expenses for fiscal 2014."

Regarding Real Estate, Katz said, "Net Real Estate Cash Flow for the third quarter of fiscal 2014 was $11.3 million and was $20.9 million year-to-date.  During the quarter, we closed on three Ritz-Carlton Residences, Vail units, and five One Ski Hill Place units.  We are continuing to see strong buyer interest at both of our properties and closed on three Ritz-Carlton Residences, Vail units, and one One Ski Hill Place unit subsequent to April 30, 2014."

Katz continued, "Our balance sheet remains very strong.  We ended the quarter with $307.4 million of cash on hand, and no borrowings under the revolver of our senior credit facility.  Our Net Debt, which includes $310.5 million of capitalized long-term obligations associated with the Canyons transaction, was 1.8 times trailing twelve months Total Reported EBITDA.  I am pleased to announce that today we provided notice of a redemption for $175 million of our $390 million in outstanding principal amount of 6.50% Senior Subordinated Notes using available cash on hand.  This will reduce our annual cash borrowing cost by approximately $11.4 million (before tax) without an impact to our Net Debt.  Additionally, I am also pleased to announce that our Board of Directors has declared a quarterly cash dividend on Vail Resorts' common stock.  The quarterly dividend will be $0.4150 per share of common stock and will be payable on July 8, 2014 to shareholders of record on June 23, 2014.

Operating Results

A complete Management's Discussion and Analysis of Financial Condition and Results of Operations can be found in the Company's Form 10-Q for the third fiscal quarter of 2014 ended April 30, 2014 filed today with the Securities and Exchange Commission.  The following are segment highlights:

Mountain Segment

  • Total lift revenue increased $36.8 million, or 17.1%, compared to the same period in the prior year, to $251.9 million for the three months ended April 30, 2014, driven by an increase in lift revenue excluding season pass revenue of $20.9 million, or 14.5%, as well as a $15.9 million, or 22.3%, increase in season pass revenue. The increase in lift revenue excluding season pass revenue was driven by increases at our Colorado resorts and incremental revenue from Canyons, partially offset by lower lift revenue excluding season pass revenue from our Tahoe resorts driven by a decline in visitation excluding season pass holders in Tahoe.
  • Ski school revenue increased by $9.0 million, or 16.8%, and dining revenue increased $4.4 million, or 11.7%, for the three months ended April 30, 2014 compared to the same period in the prior year.
  • Retail/rental revenue increased $7.5 million, or 11.2%, for the three months ended April 30, 2014 compared to the same period in the prior year, due primarily to increases in rental and retail sales in our Colorado and Utah regions and incremental revenue generated by Hoigaard's (our mid-west retailer acquired in April 2013); partially offset by a decrease in on-line sales due to the shutdown of our on-line retail platform as we are transitioning to a different approach to on-line sales and rental revenue declines at stores proximate to our Tahoe resorts as a result of the decline in skier visitation due to the poor conditions in the region.
  • Operating expense increased $25.3 million, or 12.2%, for the three months ended April 30, 2014 compared to the three months ended April 30, 2013, primarily due to incremental expenses from Canyons of $13.0 million (including current year integration and PCMR litigation related expense of $2.4 million, net of prior year Canyons transaction related expense of $2.6 million).
  • Mountain Reported EBITDA increased $33.6 million, or 17.3%, for the third quarter of fiscal 2014 compared to the same period in the prior year.

Lodging Segment

  • Lodging segment net revenue excluding payroll cost reimbursements increased $12.5 million, or 24.6%, for the three months ended April 30, 2014, as compared to the same period in the prior year. The revenue increase includes $6.7 million from the addition of Canyons.
  • For the three months ended April 30, 2014, average daily rate ("ADR") increased 0.8% and RevPAR increased 14.5% at the Company's owned hotels and managed condominiums compared to the same period in the prior year.
  • Lodging Reported EBITDA increased 56.3% as compared to the same period in the prior year, to $13.1 million for the third quarter of fiscal 2014.

Resort - Combination of Mountain and Lodging Segments

  • Resort net revenue was $526.9 million for the third quarter of fiscal 2014, up 15.6% from the same period in the prior year.
  • Resort Reported EBITDA was $241.1 million for the third quarter of fiscal 2014, up 18.9% from the same period in the prior year.

Real Estate Segment

  • Real Estate segment net revenue increased $2.3 million, or 16.8%, as compared to the same period in the prior year, to $16.2 million for the three months ended April 30, 2014.
  • Net Real Estate Cash Flow was $11.3 million for the three months ended April 30, 2014, up $5.3 million from the same period in the prior year.
  • Real Estate Reported EBITDA improved by $0.9 million, or 27.8%, as compared to the same period in the prior year, to a loss of $2.3 million for the three months ended April 30, 2014.

Total Performance

  • Total net revenue increased $73.4 million, or 15.6%, as compared to the same period in the prior year, to $543.0 million for the three months ended April 30, 2014.
  • Net income attributable to Vail Resorts, Inc. was $117.9 million, or $3.18 per diluted share, for the third quarter of fiscal 2014, compared to net income attributable to Vail Resorts, Inc. of $97.6 million, or $2.66 per diluted share, in the third fiscal quarter of the prior year.

Spring Pass Sales

Commenting on the Company's spring season pass sales for the upcoming 2014/2015 ski season, Katz said, "We are extremely pleased that our spring season pass sales through May 27, 2014 for the upcoming 2014/2015 ski season, increased approximately 14% in units and approximately 20% in sales dollars, as compared to the prior year period through May 28, 2013.  These strong season pass results followed record sales last spring and are driven by our successful marketing efforts, the compelling value of our products and our ability to drive the purchase decision earlier in the year.  The results include very good momentum in Colorado, which was partially offset by softer results in Tahoe.  Most importantly, we saw very strong growth from our destination markets, which represented more than half of our total growth for the spring selling period and remains the largest area of untapped potential for our season pass program.  We saw continuing success expanding the pass holder base in our Urban ski area markets in Minneapolis and Detroit, with both metropolitan areas growing faster than any of our other major destination markets."

Katz continued, "Our effort to drive spring pass sales continues to accelerate the timing of when our guests purchase their passes for skiing and riding.  As always, it is important to note that we do not believe that the growth rates from this spring will be maintained through the fall, as our spring growth includes pass holders who purchased last fall.  However, we believe the earlier we can move our guest's purchase decision in the year, the more opportunity it provides us for stable and consistent growth. It is also important to remember that nearly all of the 2014 spring pass sales will be recorded as revenue in fiscal 2015, over the course of the 2014/2015 ski season."

Updated Guidance

  • We now estimate Resort Reported EBITDA for fiscal 2014 will be $267 million to $273 million, representing an approximate 11% to 13% increase over fiscal 2013.
  • Included in our estimates for fiscal 2014 Resort Reported EBITDA is approximately $10 million of integration and litigation related expenses, including approximately $9 million in fees associated with the PCMR litigation.
  • We expect Resort EBITDA Margin (defined as Resort Reported EBITDA divided by Resort net revenue) to be approximately 22.4% in fiscal 2014 at the midpoint of the revised guidance range.
  • We have narrowed our estimate of fiscal 2014 Real Estate Reported EBITDA to negative $7 million to negative $9 million.
  • We have increased our Net Real Estate Cash Flow guidance to $27 million to $32 million (defined as Real Estate Reported EBITDA, plus non-cash real estate cost of sales, plus non-cash stock-based compensation expense, plus change in real estate deposits and recovery of previously incurred project costs less investment in real estate).
  • Net income attributable to Vail Resorts, Inc. is now expected to be in a range of $26 million to $33.5 million in fiscal 2014 after the loss on extinguishment of debt.

The following table reflects the forecasted guidance range for the Company's fiscal year ending July 31, 2014, 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 2014.

Fiscal 2014 Guidance

(In thousands)

For the Year Ending

July 31, 2014

Low End

Range

High End

Range

Mountain Reported EBITDA (1)

$

251,000

$

256,000

Lodging Reported EBITDA (2)

15,000

18,000

Resort Reported EBITDA (3)

267,000

273,000

Real Estate Reported EBITDA  (4)

(9,000)

(7,000)

Total Reported EBITDA

258,000

266,000

Depreciation and amortization

(141,000)

(139,000)

Loss on disposal of fixed assets, net

(1,000)

(500)

Investment income, net

300

400

Interest expense

(65,000)

(64,000)

Loss on extinguishment of debt

(10,800)

(10,800)

Income before provision for income taxes

40,500

52,100

Provision for income taxes

(14,700)

(19,000)

Net income

25,800

33,100

Net loss attributable to noncontrolling interests

200

400

Net income attributable to Vail Resorts, Inc.

$

26,000

$

33,500

(1) Mountain Reported EBITDA includes approximately $10 million of stock-based compensation.

(2) Lodging Reported EBITDA includes approximately $2 million of stock-based compensation.

(3) The Company provides Reported EBITDA ranges for the Mountain and Lodging segments, as well as for the two combined. The low and high end of the expected ranges provided for the Lodging and Mountain segments, while possible, do not sum to the low or high end of the Resort Reported EBITDA range provided because we do not expect or assume that we will hit the low or high end of both ranges.

(4) Real Estate Reported EBITDA includes approximately $2 million of stock-based compensation.

 

Partial Bond Redemption

The Company announced today that it has provided a notice to the trustee to redeem $175 million of its $390 million in outstanding principal amount of 6.50% Senior Subordinated Notes on July 7, 2014, the redemption date, using available cash on hand.  The Company will pay a 4.875% call premium and expects to record a loss on extinguishment of debt in its fourth quarter fiscal 2014 of approximately $10.8 million including a write-off of unamortized debt issuance costs.  This will save approximately $11.4 million in annual interest expense.  After the partial redemption, $215 million of the 6.50% Senior Subordinated Notes will remain outstanding.

Earnings Conference Call

The Company will conduct a conference call today at 4:30 p.m. eastern time to discuss the financial results.  The call will be webcast and can be accessed at www.vailresorts.com in the Investor Relations section, or dial (877) 723-9517 (U.S. and Canada) or (719) 325-4903 (international).  A replay of the conference call will be available two hours following the conclusion of the conference call through June 19, 2014, at 7:30 p.m. eastern time.  To access the replay, dial (888) 203-1112 (U.S. and Canada) or (719) 457-0820 (international), pass code 7201123.  The conference call will also be archived at www.vailresorts.com.

About Vail Resorts, Inc. (NYSE: MTN)

Vail Resorts, Inc., through its subsidiaries, is the leading mountain resort operator in the United States. The Company's subsidiaries operate the mountain resorts of Vail, Beaver Creek, Breckenridge and Keystone in Colorado; Heavenly, Northstar and Kirkwood in the Lake Tahoe area of California and Nevada; Canyons in Park City, Utah; Afton Alps in Minnesota and Mt. Brighton in Michigan; and the Grand Teton Lodge Company in Jackson Hole, Wyoming. The Company's subsidiary, RockResorts, a luxury resort hotel company, manages casually elegant properties. Vail Resorts Development Company is the real estate planning, development and construction subsidiary of Vail Resorts, Inc. Vail Resorts 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.

Forward-Looking Statements

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. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. All forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those projected. Such risks and uncertainties include but are not limited to prolonged weakness in general economic conditions, including adverse effects on the overall travel and leisure related industries; unfavorable weather conditions or natural disasters; adverse events that occur during our peak operating periods combined with the seasonality of our business; competition in our mountain and lodging businesses; our ability to grow our resort and real estate operations; our ability to successfully initiate, complete, and sell 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 capital expenditures, growth strategy and future real estate development; our reliance on government permits or approvals for our use of Federal land or to make operational and capital improvements; demand for planned summer activities and our ability to successfully obtain necessary approvals and construct the planned improvements; adverse consequences of current or future legal claims; our ability to hire and retain a sufficient seasonal workforce; willingness of our guests to travel due to terrorism, the uncertainty of military conflicts or outbreaks of contagious diseases, and the cost and availability of travel options; negative publicity which diminishes the value of our brands; our ability to integrate and successfully realize anticipated benefits from the lease of Canyons operations or future acquisitions; the ultimate outcome of litigation regarding the ski terrain of Park City Mountain Resort; adverse consequences on lease payment obligations for Canyons due to increases in consumer price index, or CPI; our ability to realize the anticipated tax benefits from Canyons transaction; implications arising from new Financial Accounting Standards Board ("FASB")/governmental legislation, rulings or interpretations; and other risks detailed in the Company's filings with the Securities and Exchange Commission, including the "Risk Factors" section of the Company's Annual Report on Form 10-K for the fiscal year ended July 31, 2013.

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 whether as a result of new information, future events or otherwise, except as may be required by law.

Statement Concerning Non-GAAP Financial Measures

When reporting financial results, we use the terms Reported EBITDA, Resort EBITDA Margin, Net Debt, Net Real Estate Cash Flow, Lodging net revenue excluding payroll cost reimbursement, and Lodging operating expense excluding reimbursed payroll costs, which are not financial measures under accounting principles generally accepted in the United States of America ("GAAP"). We define Reported EBITDA as segment net revenue less segment operating expense plus or minus segment equity investment income or loss and for the Real Estate segment plus gain on sale of real property. For Resort, we define Resort EBITDA Margin as Resort Reported EBITDA divided by Resort net revenue. We define Net Debt as long-term debt plus long-term debt due within one year less cash and cash equivalents. For the Real Estate segment, we define Net Real Estate Cash Flow as Real Estate Reported EBITDA, plus non-cash real estate cost of sales, plus non-cash stock-based compensation expense, plus change in real estate deposits and recovery of previously incurred project costs less investment in real estate. For the Lodging segment we primarily focus on Lodging net revenue excluding payroll cost reimbursement and Lodging operating expense excluding reimbursed payroll costs as the reimbursements are made based upon the costs incurred with no added margin, as such the revenue and corresponding expense have no effect on our Lodging Reported EBITDA which we use to evaluate Lodging segment performance. Please see "Reconciliation of Non-GAAP Financial Measures" below for more information.

 

Vail Resorts, Inc.

Consolidated Condensed Statements of Operations

(In thousands, except per share amounts)

(Unaudited)

Three Months Ended

April 30,

Nine Months Ended

April 30,

2014

2013

2014

2013

Net revenue:

Mountain

$

460,587

$

402,017

$

909,574

$

815,670

Lodging

66,293

53,834

179,694

152,885

Real estate

16,167

13,840

29,890

39,937

Total net revenue

543,047

469,691

1,119,158

1,008,492

Segment operating expense:

Mountain

233,301

207,953

601,587

536,498

Lodging

53,182

45,446

163,346

142,055

Real estate

18,445

16,996

35,682

49,349

Total segment operating expense

304,928

270,395

800,615

727,902

Other operating expense:

Depreciation and amortization

(35,588)

(33,730)

(105,948)

(98,827)

Gain (loss) on disposal of fixed assets, net

634

(224)

(839)

(757)

Income from operations

203,165

165,342

211,756

181,006

Mountain equity investment income, net

665

266

1,282

799

Investment income, net

124

153

289

306

Interest expense

(16,408)

(8,359)

(48,745)

(25,268)

Income before provision for income taxes

187,546

157,402

164,582

156,843

Provision for income taxes

(69,680)

(59,814)

(60,953)

(59,329)

Net income

$

117,866

$

97,588

$

103,629

$

97,514

Net loss attributable to noncontrolling interests

80

52

204

97

Net income attributable to Vail Resorts, Inc.

$

117,946

$

97,640

$

103,833

$

97,611

Per share amounts:

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

$

3.26

$

2.72

$

2.88

$

2.72

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

$

3.18

$

2.66

$

2.80

$

2.66

Cash dividends declared per share

$

0.4150

$

0.2075

$

0.83

$

0.5825

Weighted average shares outstanding:

Basic

36,159

35,911

36,105

35,835

Diluted

37,054

36,774

37,025

36,681

Other Data:

Mountain Reported EBITDA

$

227,951

$

194,330

$

309,269

$

279,971

Lodging Reported EBITDA

$

13,111

$

8,388

$

16,348

$

10,830

Resort Reported EBITDA

$

241,062

$

202,718

$

325,617

$

290,801

Real Estate Reported EBITDA

$

(2,278)

$

(3,156)

$

(5,792)

$

(9,412)

Total Reported EBITDA

$

238,784

$

199,562

$

319,825

$

281,389

Mountain stock-based compensation

$

2,475

$

2,073

$

7,657

$

7,008

Lodging stock-based compensation

$

587

$

494

$

1,599

$

1,436

Resort stock-based compensation

$

3,062

$

2,567

$

9,256

$

8,444

Real Estate stock-based compensation

$

423

$

346

$

1,283

$

1,100

Total stock-based compensation

$

3,485

$

2,913

$

10,539

$

9,544

 

Vail Resorts, Inc.

Mountain Segment Operating Results

(In thousands, except effective ticket price ("ETP"))

(Unaudited)

Three Months EndedApril 30,

Percentage

Increase

Nine Months Ended

April 30,

Percentage Increase

2014

2013

(Decrease)

2014

2013

(Decrease)

Net Mountain revenue:

Lift

$

251,914

$

215,163

17.1%

$

447,271

$

390,820

14.4%

Ski school

62,512

53,531

16.8%

109,442

95,254

14.9%

Dining

42,303

37,876

11.7%

82,369

74,075

11.2%

Retail/rental

73,785

66,329

11.2%

188,401

176,802

6.6%

Other

30,073

29,118

3.3%

82,091

78,719

4.3%

Total Mountain net revenue

$

460,587

$

402,017

14.6%

$

909,574

$

815,670

11.5%

Mountain operating expense:

Labor and labor-related benefits

$

92,342

$

83,372

10.8%

$

226,143

$

201,350

12.3%

Retail cost of sales

25,419

23,795

6.8%

76,109

75,230

1.2%

Resort related fees

26,117

22,445

16.4%

47,148

40,830

15.5%

General and administrative

36,073

31,581

14.2%

105,010

93,698

12.1%

Other

53,350

46,760

14.1%

147,177

125,390

17.4%

Total Mountain operating expense

$

233,301

$

207,953

12.2%

$

601,587

$

536,498

12.1%

Mountain equity investment income, net

665

266

150.0%

1,282

799

60.5%

Mountain Reported EBITDA

$

227,951

$

194,330

17.3%

$

309,269

$

279,971

10.5%

Total skier visits

4,176

3,756

11.2%

7,688

6,977

10.2%

ETP

$

60.32

$

57.29

5.3%

$

58.18

$

56.02

3.9%

 

Vail Resorts, Inc.

Lodging Operating Results

(In thousands, except ADR and RevPAR)

(Unaudited)

Three Months EndedApril 30,

Percentage

Increase

Nine Months Ended

April 30,

Percentage

Increase

2014

2013

(Decrease)

2014

2013

(Decrease)

Lodging net revenue:

Owned hotel rooms

$

12,632

$

10,966

15.2%

$

36,943

$

33,566

10.1%

Managed condominium rooms

20,578

16,110

27.7%

46,474

36,529

27.2%

Dining

9,768

6,044

61.6%

31,016

22,146

40.1%

Transportation

9,865

8,756

12.7%

19,489

17,570

10.9%

Golf

?

?

?%

7,642

7,711

(0.9)%

Other

10,757

9,180

17.2%

30,225

26,868

12.5%

63,600

51,056

24.6%

171,789

144,390

19.0%

Payroll cost reimbursements

2,693

2,778

(3.1)%

7,905

8,495

(6.9)%

Total Lodging net revenue

$

66,293

$

53,834

23.1%

$

179,694

$

152,885

17.5%

Lodging operating expense:

Labor and labor-related benefits

$

24,918

$

21,384

16.5%

$

76,841

$

66,306

15.9%

General and administrative

8,571

7,553

13.5%

24,900

21,814

14.1%

Other

17,000

13,731

23.8%

53,700

45,440

18.2%

50,489

42,668

18.3%

155,441

133,560

16.4%

Reimbursed payroll costs

2,693

2,778

(3.1)%

7,905

8,495

(6.9)%

Total Lodging operating expense

$

53,182

$

45,446

17.0%

$

163,346

$

142,055

15.0%

Lodging Reported EBITDA

$

13,111

$

8,388

56.3%

$

16,348

$

10,830

51.0%

Owned hotel statistics:

ADR

$

243.33

$

244.97

(0.7)%

$

218.30

$

212.16

2.9%

RevPar

$

183.02

$

157.73

16.0%

$

141.33

$

128.40

10.1%

Managed condominium statistics:

ADR

$

394.52

$

382.80

3.1%

$

366.41

$

358.09

2.3%

RevPar

$

165.49

$

145.48

13.8%

$

111.82

$

98.92

13.0%

Owned hotel and managed condominium statistics (combined):

ADR

$

333.26

$

330.70

0.8%

$

294.17

$

287.46

2.3%

RevPar

$

170.32

$

148.71

14.5%

$

120.96

$

107.75

12.3%

 

Key Balance Sheet Data

(In thousands)

(Unaudited)

As of April 30,

2014

2013

Real estate held for sale and investment

$

170,818

$

201,861

Total Vail Resorts, Inc. stockholders' equity

907,149

888,748

Long-term debt

799,223

489,240

Long-term debt due within one year

879

518

Total debt

800,102

489,758

Less: cash and cash equivalents

307,431

237,735

Net debt

$

492,671

$

252,023

 

Reconciliation of Non-GAAP Financial Measures

Reported EBITDA, Resort EBITDA Margin, Net Debt, and Net Real Estate Cash Flow are not measures of financial performance under GAAP, and they might not be comparable to similarly titled measures of other companies. Reported EBITDA, Resort EBITDA Margin, Net Debt, and Net Real Estate Cash Flow 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, net change in cash and cash equivalents or other financial statement data.

Reported EBITDA and Net Real Estate Cash Flow have been presented herein as measures of the Company's performance. 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 other companies in the resort and lodging industries. The Company primarily uses Reported EBITDA based targets in evaluating performance. For Resort, the Company defines Resort EBITDA Margin as Resort Reported EBITDA divided by Resort net revenue, which is not a measure of financial performance under GAAP, as the Company believes it is an important measurement of operating performance. The Company believes that Net Debt is an important measurement of liquidity as it is an indicator of the Company's ability to obtain additional capital resources for its future cash needs. Additionally, the Company believes Net Real Estate Cash Flow is important as a cash flow indicator for its Real Estate segment.

Presented below is a reconciliation of Total Reported EBITDA to net income attributable to Vail Resorts, Inc. calculated in accordance with GAAP for the three and nine months ended April 30, 2014 and 2013.

(In thousands)(Unaudited)

(In thousands)(Unaudited)

Three Months Ended

April 30,

Nine Months Ended

April 30,

2014

2013

2014

2013

Mountain Reported EBITDA

$

227,951

$

194,330

$

309,269

$

279,971

Lodging Reported EBITDA

13,111

8,388

16,348

10,830

Resort Reported EBITDA*

241,062

202,718

325,617

290,801

Real Estate Reported EBITDA

(2,278)

(3,156)

(5,792)

(9,412)

Total Reported EBITDA

238,784

199,562

319,825

281,389

Depreciation and amortization

(35,588)

(33,730)

(105,948)

(98,827)

Gain (loss) on disposal of fixed assets, net

634

(224)

(839)

(757)

Investment income, net

124

153

289

306

Interest expense

(16,408)

(8,359)

(48,745)

(25,268)

Income before provision for income taxes

187,546

157,402

164,582

156,843

Provision for income taxes

(69,680)

(59,814)

(60,953)

(59,329)

Net income

$

117,866

$

97,588

$

103,629

$

97,514

Net loss attributable to noncontrolling interests

80

52

204

97

Net income attributable to Vail Resorts, Inc.

$

117,946

$

97,640

$

103,833

$

97,611

*

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 April 30, 2014.

(In thousands)(Unaudited)

Twelve Months Ended

April 30,

2014

Mountain Reported EBITDA

$

257,997

Lodging Reported EBITDA

17,679

Resort Reported EBITDA*

275,676

Real Estate Reported EBITDA

(5,486)

Total Reported EBITDA

270,190

Depreciation and amortization

(139,809)

Loss on disposal of fixed assets, net

(1,304)

Investment income, net

334

Interest expense

(62,443)

Income before provision for income taxes

66,968

Provision for income taxes

(23,243)

Net income

$

43,725

Net loss attributable to noncontrolling interests

240

Net income attributable to Vail Resorts, Inc.

$

43,965

*

Resort represents the sum of Mountain and Lodging

 

The following table reconciles Net Debt to long-term debt and the calculation of Net Debt to Total Reported EBITDA for the twelve months ended April 30, 2014.

(In thousands)

(Unaudited)

As of April 30, 2014

Long-term debt

$

799,223

Long-term debt due within one year

879

Total debt

800,102

Less: cash and cash equivalents

307,431

Net debt

$

492,671

Net debt to Total Reported EBITDA

1.8

x

 

The following table reconciles Real Estate Reported EBITDA to Net Real Estate Cash Flow for the three and nine months ended April 30, 2014.

(In thousands)

(Unaudited)

Three Months Ended

April 30, 2014

(In thousands)

(Unaudited)

Nine Months Ended

April 30, 2014

Real Estate Reported EBITDA

$

(2,278)

$

(5,792)

Non-cash Real Estate cost of sales

12,531

22,635

Non-cash Real Estate stock-based compensation

423

1,283

Change in Real Estate deposits and recovery of previously incurred project costs less investments in Real Estate

641

2,751

Net Real Estate Cash Flow

$

11,317

$

20,877

 

The following table reconciles Resort Net Revenue to Resort EBITDA Margin for fiscal 2014 guidance.

(In thousands)

(Unaudited)

Fiscal 2014

Guidance**

Resort net revenue*

$

1,208,000

Resort EBITDA*

270,000

Resort EBITDA margin*

22.4%

* Resort represents the sum of Mountain and Lodging

**Represents the mid-point range of Guidance

 

SOURCE Vail Resorts, Inc.

For further information: Investor Relations, Michael Barkin, (303) 404-1800, InvestorRelations@vailresorts.com; or Media, Meredith Mirrington, (303) 494-6956, mmirrington@vailresorts.com

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