Early Season Indicators Show Season Pass Sales Up 13%

BROOMFIELD, Colo., Dec. 9, 2013 -- Vail Resorts, Inc. (NYSE: MTN) today reported results for the first quarter of fiscal 2014 ended October 31, 2013 as well as certain early season indicators.

Highlights

  • Resort Reported EBITDA loss, which includes the Company's Mountain and Lodging segments, was $66.5 million for the first fiscal quarter of 2014 versus a loss of $54.5 million in the same period in the prior year. This includes operating results of the Urban Ski Areas and Canyons, transactions in fiscal 2013, which generated $7.6 million of negative EBITDA, including $2.7 million of integration and litigation related costs (Canyons, together with the Urban Ski Areas, referred to collectively as the "Acquisitions").
  • Net loss attributable to Vail Resorts, Inc. was $73.4 million for the first fiscal quarter of 2014 compared to a net loss of $60.6 million in the same period in the prior year.
  • Sales of season passes through December 7, 2013 for the upcoming 2013/2014 ski season were up approximately 13% in units and approximately 16% in sales dollars versus the comparable period in the prior year, including the Acquisitions in both periods.
  • Company reissued guidance for Fiscal 2014, which was unchanged from guidance issued in September 2013.
  • In the first quarter of fiscal 2014, we closed on two Ritz-Carlton Residence units, and one One Ski Hill Place unit. Net Real Estate Cash Flow was $7.5 million for the first fiscal quarter of 2014.

For complete results and accompanying tables please visit: http://investors.vailresorts.com/releasedetail.cfm?ReleaseID=812627

Commenting on the Company's fiscal 2014 first quarter results, Rob Katz, Chief Executive Officer said, "Our first fiscal quarter is historically a loss quarter since our mountain resorts are not open for winter ski operations during the period. The quarter is driven primarily by our late summer mountain activities, dining, retail and lodging operations, and administrative expenses for our year-round employees. Our Resort EBITDA loss for the quarter was consistent with our expectations and was higher than the prior year largely due to expenses from the Acquisitions. Mountain net revenue in the quarter advanced 10.4% to $57.3 million, driven by growing summer visitation, resulting retail and rental activity and strong dining revenue as well as the impact of the Acquisitions. Our Lodging segment revenue increased $4.7 million, or 9.0%, for the three months ended October 31, 2013 as compared to the same period in the prior year. Lodging revenue growth was partially offset by the negative impact of the government shutdown on Grand Teton Lodge Company that forced the park to close early."

Regarding Real Estate, Katz said, "In the first fiscal quarter, we closed on sales of two Ritz-Carlton Residences, Vail units and one unit at One Ski Hill Place. While Real Estate Reported EBITDA was a loss of $0.4 million for the first fiscal quarter, Net Real Estate Cash Flow totaled $7.5 million. Since quarter end, we have closed on one additional One Ski Hill Place unit."

Katz continued, "Our balance sheet remains very strong. We ended the quarter with $114.2 million of cash on hand, and no borrowings under the revolver of our senior credit facility. Our Net Debt was 3.1 times trailing twelve months Total Reported EBITDA which includes $307.7 million of capitalized long-term obligations associated with the Canyons transaction. I am also very pleased to announce that our Board of Directors has declared a quarterly cash dividend on Vail Resorts' common stock. The quarterly dividend will be $0.2075 per share of common stock and will be payable on January 10, 2014 to shareholders of record on December 26, 2013."

Regarding the upcoming ski season, Katz said, "Our 2013/2014 ski season is just underway and we are excited about the quality and variety of enhancements we are offering guests this year. We look forward to welcoming new and returning skiers and riders to Canyons, marking our first season in Park City, Utah. Our Urban Ski Areas in Minneapolis and Detroit are open and benefiting from significant improvements in facilities, snowmaking and lifts that will differentiate Afton Alps and Mount Brighton in their local markets. We are thrilled that our guests will have the opportunity to experience the new terrain at Peak 6 at Breckenridge, offering 23% more terrain for the resort, serviced by two new lifts including a high speed six-person chair. In addition, Vail is following up on the successful launch of Gondola One with an upgrade to Chair 4 from a four-person to a six-person chairlift and Beaver Creek guests will enjoy the new Talons on-mountain restaurant. Our continued focus on disciplined reinvestment allows us to offer our customers the outstanding mountain resort experiences that they expect from Vail Resorts."

Moving to the early ski season indicators, Katz said, "Our season pass results continue to be strong as we approach the end of our selling period, with season pass sales (including 4-Packs) up approximately 13% in units and 16% in sales dollars through December 7, 2013 compared with the similar period in the prior year and including the Acquisitions in both periods. This year's season pass sales represent the largest percentage increase in the program since the introduction of the Epic Pass in 2008. These season pass results continue to demonstrate a compelling value proposition to our loyal guests and the ongoing success of our effort to get our guests to commit to skiing and riding our resorts before the ski season begins. We continue to see strong growth in our large Colorado and Tahoe markets and also showed good growth for our first year with a presence in Utah. Once again, pass sales in Minneapolis and Detroit represented our best performing destination markets. Our international markets all reported strong growth, with the exception of the UK, which continues to be sluggish due to its economic issues. We believe adding Canyons and the Urban Ski Areas to our pass products had a very positive impact on our results. As a reminder, revenue from season pass sales is recognized over the course of the second and third fiscal quarters. As we look forward to the season, we are seeing lodging bookings trending ahead of this time last year, with good momentum across our properties on both occupancy and rate, particularly in Vail, Beaver Creek, Breckenridge and Canyons. Based on historical averages, less than 50% of the bookings for the winter season have been made by this time."

Operating Results A complete Management's Discussion and Analysis of Financial Condition and Results of Operations can be found in the Company's Form 10-Q for the first fiscal quarter of 2014 ended October 31, 2013 filed today with the Securities and Exchange Commission. The following are segment highlights:

Mountain Segment

  • Mountain segment net revenue increased $5.4 million, or 10.4%, to $57.3 million for the three months ended October 31, 2013 as compared to the same period in the prior year. Excluding the Acquisitions, Mountain segment net revenue increased $3.0 million, or 5.9%, to $55.0 million for the quarter.
  • Mountain Reported EBITDA declined $11.6 million, or 21.1%, to a loss of $66.8 million for the three months ended October 31, 2013 as compared to the same period in the prior year. Excluding the Acquisitions, Mountain Reported EBITDA declined $4.2 million, or 7.7%, for the quarter.
  • Mountain Reported EBITDA includes $2.7 million of stock-based compensation expense for both the three months ended October 31, 2013 and 2012, respectively.

Lodging Segment

  • Lodging segment net revenue increased $4.7 million, or 9.0%, to $57.2 million for the three months ended October 31, 2013 as compared to the same period in the prior year. Excluding the Acquisitions and payroll cost reimbursements, Lodging segment net revenue increased $1.8 million, or 3.5%, to $51.1 million for the quarter.
  • Lodging Reported EBITDA declined $0.4 million, or 56.0%, to $0.3 million for the three months ended October 31, 2013 as compared to the same period in the prior year. Excluding the Acquisitions, Lodging Reported EBITDA declined $0.2 million, or 29.8%, for the quarter.
  • Lodging Reported EBITDA includes $0.4 million of stock-based compensation expense for both the three months ended October 31, 2013 and 2012, respectively.

Resort - Combination of Mountain and Lodging Segments

  • Resort net revenue increased $10.1 million, or 9.7%, to $114.5 million for the three months ended October 31, 2013 as compared to the same period in the prior year. Excluding the Acquisitions, Resort net revenue increased $4.0 million, or 3.9%, to $108.5 million for the quarter.
  • Resort Reported EBITDA declined $12.0 million, or 22.1%, to a loss of $66.5 million for the three months ended October 31, 2013 as compared to the same period in the prior year. Excluding the Acquisitions, Resort Reported EBITDA declined $4.4 million, or 8.1%, for the quarter.

Real Estate Segment

  • Real Estate segment net revenue declined $3.1 million, or 25.9%, to $8.8 million for the three months ended October 31, 2013 as compared to the same period in the prior year.
  • Net Real Estate Cash Flow was $7.5 million for the three months ended October 31, 2013, up 36.5% from the same period in the prior year.
  • Real Estate Reported EBITDA improved $3.3 million, or 89.5%, to a loss of $0.4 million for the three months ended October 31, 2013 as compared to the same period in the prior year.
  • Real Estate Reported EBITDA includes $0.4 million of stock-based compensation expense for both the three months ended October 31, 2013 and 2012, respectively.

Total Performance

  • Total net revenue increased $7.0 million, or 6.1%, to $123.4 million for the three months ended October 31, 2013 as compared to the same period in the prior year.
  • Net loss attributable to Vail Resorts, Inc. was $73.4 million, or a loss of $2.04 per diluted share, for the first quarter of fiscal 2014 compared to net loss attributable to Vail Resorts, Inc. of $60.6 million, or a loss of $1.70 per diluted share, in the first quarter of the prior year.

Share Repurchase The Company did not repurchase any shares of common stock in the first quarter of fiscal 2014. Since inception of the stock repurchase program in 2006, the Company has repurchased an aggregate of 4,949,111 shares at a cost of approximately $193.2 million. As of October 31, 2013, 1,050,889 shares remained available to repurchase under the existing repurchase authorization.

Outlook Commenting on fiscal 2014 guidance, Katz continued, "Our guidance, issued in September, of Resort Reported EBITDA between $280 million and $295 million remains unchanged and would result in 16.3% to 22.5% growth from fiscal year 2013. It is important to note that included in our estimates for fiscal 2014 Resort Reported EBITDA is an estimated $7.2 million of integration and litigation related expenses, including an estimated $5.0 million in fees associated with the Park City Mountain Resort litigation."

Regarding calendar year 2014 capital expenditures, Katz said, "We remain committed to reinvesting in our resorts and generating strong returns for our shareholders. While we will announce our final capital plan for 2014 in March 2014, we expect the plan will provide for capital expenditures of approximately $85 million, excluding any spending for new summer activities, the timing of which will be determined based on regulatory and other approvals, and any future acquisitions. While we will discuss full details of the plan in March, the highlights of the plan will include two new six-person chairlifts that will upgrade both the Centennial Chair at the base of Beaver Creek and the Colorado Chair at Breckenridge. These improvements will create additional skier capacity and improve the guest experience at two of our most profitable mountain resorts, dramatically reducing wait times at these critical high volume lifts."

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) 941-1467 (U.S. and Canada) or (480) 629-9676 (international). A replay of the conference call will be available two hours following the conclusion of the call through December 23, 2013. To access the replay, dial (800) 406-7325 (U.S. and Canada) or (303) 590-3030 (international), pass code 4650658. The conference call will also be archived at www.vailresorts.com.

About Vail Resorts, Inc.

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.

Contact: Investor Relations: Michael Barkin

InvestorRelations@vailresorts.com / (303) 404-1800

Contact: Kelly Ladyga

kladyga@vailresorts.com / (303) 404-1862

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