Vail Resorts Results

Vail Resorts Reports Fiscal 2016 Second Quarter Results

Resort Reported EBITDA was $242.1 million for the second fiscal quarter of 2016, an increase of 21.2% compared to the same period in the prior year.

Vail Resorts

Vail Resorts, Inc. (NYSE:  MTN) today reported results for the second quarter of fiscal 2016 ended January 31, 2016, provided the Company's ski season-to-date metrics through March 6, 2016 and updated full year fiscal 2016 guidance.

Highlights

  • Resort Reported EBITDA was $242.1 million for the second fiscal quarter of 2016, an increase of 21.2% compared to the same period in the prior year. 
  • Net income attributable to Vail Resorts, Inc. was $117.0 million for the second fiscal quarter of 2016, representing a 1.1% increase compared to the same period in the prior year.  Excluding the tax benefit recorded in the prior year resulting from an IRS settlement, net income for the second fiscal quarter of 2016 increased 27.2%, as compared to the same period in the prior year. 
  • The Company increased its fiscal 2016 guidance range and is now expecting Resort Reported EBITDA to be between $430 million and $445 million. 
  • The Company's Board of Directors approved a 30% increase in the quarterly cash dividend to $0.81 per share from $0.6225 per share beginning with the dividend payable on April 13, 2016 to stockholders of record as of March 29, 2016.

Commenting on the Company's fiscal 2016 second quarter results, Rob Katz, Chief Executive Officer said, "Our results were very strong in the second quarter of fiscal 2016.  Total lift revenue increased 20.2%, driven by a 12.5% growth in visitation and a 6.8% increase in effective ticket price ("ETP") compared to the prior year.  We continue to see robust spending trends that drove an 8.3% increase in ski school revenue, and a 15.8% increase in food and beverage revenue compared to the prior year. The Tahoe market has seen a significant rebound in visitation this year with outstanding conditions since opening and we are pleased with the double-digit visitation and revenue growth at Park City, following our transformational capital investments.  Our Colorado resorts continue to deliver outstanding results, with solid growth above our record prior year.  Our U.S. destination visitation has remained very strong throughout the year at all of our mountain resorts, as we saw the benefit of the appeal of our resorts to high-end leisure travelers, our sophisticated marketing efforts and the strong U.S. economy.  While we have continued to see a decline in international visitation, it has moderated since the Christmas holiday, in large part due to the strength of Australian visitation which is now up considerably over last year due to the success of the Epic Australia Pass. Visits from Mexico have been largely flat from last year though we are seeing declines from our UK, Canadian and Brazilian markets."

Regarding Lodging, Katz said, "Our lodging results were strong for the second fiscal quarter with both occupancy and rate increases compared to the prior year. Revenue (excluding payroll cost reimbursements) increased 5.1% compared to the prior year and revenue per available room ("RevPAR") increased 9.8% compared to the prior year. We are experiencing robust demand at our lodging properties across each of our geographies."

Katz continued, "Resort Reported EBITDA was $242.1 million for the fiscal quarter, an increase of 21.2% over the prior year.  Our Resort EBITDA Margin for the fiscal quarter improved 240 basis points over the prior year as we continue to drive strong flow through from our revenue growth. Given our performance to date and assuming that conditions remain consistent through the remainder of the season, we now expect Resort Reported EBITDA for fiscal 2016 to be between $430 million and $445 million. Our updated guidance highlights the success of our efforts to drive destination visitation, grow season pass sales, enhance our network of resorts through strategic acquisitions and be disciplined in our investments to drive strong financial results."

Regarding Real Estate, Katz said, "We continue to see momentum in our resort real estate markets including an increased interest by third party developers in our land parcels.  Net Real Estate Cash Flow for the second quarter of fiscal 2016 was $2.2 million.  During the fiscal quarter, we closed on one unit at The Ritz-Carlton Residences, Vail."

Regarding capital allocation, Katz said, "Further demonstrating our continued commitment to return capital to our stockholders, we are pleased to announce that the Board of Directors has approved a 30% increase to our quarterly dividend and declared a quarterly cash dividend on Vail Resorts' common stock of $0.81 per share, payable on April 13, 2016 to stockholders of record on March 29, 2016.  The increase in our dividend demonstrates our confidence in the stability of our business model and our consistent strong cash flow generation."  Katz added, "Our balance sheet remains very strong. We ended the fiscal quarter with $45.4 million of cash on hand and our Net Debt, including the capitalized Canyons obligation, was 1.6 times trailing twelve months Total Reported EBITDA."

The Company expects to invest approximately $100 million in its calendar year 2016 capital plan, excluding capital expenditures for summer related activities and the one-time transformational investments at Wilmot Mountain ("Wilmot"). The plan includes approximately $60 million of maintenance capital expenditures and a number of high-impact, high ROI discretionary investments.  Commenting on the capital plan, Katz said, "We plan to build a new 500-seat restaurant at the top of the Peak 7 chairlift at Breckenridge. This will improve the dining experience at the most visited ski resort in the United States with a modern restaurant located adjacent to the new Peak 6 terrain, which is not currently served by a major food and beverage venue. We are also upgrading the Sun Up chairlift at Vail Mountain (Chair 17), from a fixed grip triple to a high-speed four-passenger chairlift. This upgrade will increase capacity of the lift by approximately 40% and reduce the ride time to four minutes in a critical area for accessing Vail Mountain's legendary Back Bowls. With this new addition, every major chairlift on Vail Mountain will be a high-speed chairlift and this will be Vail Mountain's 9th new chairlift in the last ten years.  Our capital plan also includes the beginning of a two-year process to revamp our primary websites to a single 'responsive' desktop/mobile platform which will be integrated with our data-based and personalized marketing technology.  We will also be further upgrading our customer database, our call center technology, and remodeling the Pines Lodge at Beaver Creek."

The Company also announced its plan to invest approximately $14 million in calendar year 2016 for Epic Discovery summer activities.  This capital will be focused on additional canopy tours, zip lines, climbing walls, hiking trails and nature education programming primarily at Breckenridge, with more modest spending at Vail and Heavenly.

Wilmot Acquisition

On January 19, 2016 the Company acquired Wilmot. Located approximately 65 miles north of Chicago, Illinois, Wilmot serves the Chicago area, which is one of Vail Resorts' most important destination geographies with approximately 800,000 skiers and riders. The acquisition was completed for total cash consideration of approximately $20 million.

The Company is also announcing a plan to invest approximately $13 million in calendar year 2016 to dramatically enhance the guest experience at Wilmot. These investments will focus on modernized and expanded dining and entertainment offerings at the base area, the installation of three new lifts and other lift upgrades that will increase the area's uphill capacity by 45%, a new children's ski school facility, redesigned and updated terrain parks and upgrades to the snowmaking infrastructure that will nearly double snowmaking capacity to provide a more consistent experience throughout the ski season.  The Company expects the acquisition of Wilmot will contribute at least $4 million of incremental Resort Reported EBITDA in fiscal 2017.

Commenting on the acquisition and planned investment, Katz said, "The Wilmot acquisition and our planned capital investment represent an opportunity to meaningfully enhance the guest experience at the ski area, creating an incredible introduction to the sport for kids and adults, and building a stronger connection to our western resorts for skiers and riders in the Chicago area. We have achieved incredible success with our Urban strategy thus far and the Wilmot acquisition provides an opportunity for us to build on that success in one of our most important destination geographies."

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 second fiscal quarter of 2016 ended January 31, 2016 filed today with the Securities and Exchange Commission.  The following are segment highlights:

Mountain Segment

  • Total lift revenue increased $48.4 million, or 20.2%, compared to the same period in the prior year, to $287.7 million for the three months ended January 31, 2016, driven by a $25.6 million, or 19.5%, increase in lift revenue excluding season pass revenue, as well as a $22.8 million, or 21.1%, increase in season pass revenue. 
  • Ski school revenue increased by $4.7 million, or 8.3%, and dining revenue increased $6.1 million, or 15.8%, for the three months ended January 31, 2016 compared to the same period in the prior year, driven in particular by the strong results in Tahoe.  The increase in dining revenue was further bolstered by the opening of the new Miners' Camp restaurant and the upgrade of the Red Pine Lodge and Summit House at Park City. 
  • Retail/rental revenue increased $8.0 million, or 8.4%, for the three months ended January 31, 2016 compared to the same period in the prior year, primarily due to increases in retail sales and rental revenue in Tahoe. 
  • Operating expense increased $27.3 million, or 10.1%, for the three months ended January 31, 2016 compared to the three months ended January 31, 2015, including incremental expenses of $4.2 million from Perisher. 
  • Mountain Reported EBITDA increased $42.3 million, or 21.8%, for the fiscal quarter compared to the same period in the prior year. 
  • Mountain Reported EBITDA includes $3.3 million of stock-based compensation expense for the three months ended January 31, 2016 compared to $3.0 million in the same period in the prior year.

Lodging Segment

  • Lodging segment net revenue (excluding payroll cost reimbursements) for the three months ended January 31, 2016 increased $2.9 million, or 5.1%, as compared to the same period in the prior year. 
  • For the three months ended January 31, 2016, occupancy increased 3.9 percentage points and RevPAR increased 9.8% at the Company's owned hotels and managed condominiums compared to the same period in the prior year. 
  • Lodging Reported EBITDA for the three months ended January 31, 2016 increased slightly compared to the same period in the prior year. 
  • Lodging Reported EBITDA includes $0.8 million of stock-based compensation expense for the three months ended January 31, 2016 as compared to $0.7 million in the same period in the prior year.

Resort - Combination of Mountain and Lodging Segments

  • Resort net revenue increased $73.3 million, or 14.0%, to $595.7 million for the three months ended January 31, 2016 as compared to the same period in the prior year. 
  • Resort Reported EBITDA was $242.1 million for the three months ended January 31, 2016, an increase of $42.3 million, or 21.2%, compared to the same period in the prior year.

Real Estate Segment

  • Real Estate segment net revenue for the three months ended January 31, 2016 decreased $4.2 million, or 53.0%, as compared to the same period in the prior year. 
  • Net Real Estate Cash Flow was $2.2 million for the three months ended January 31, 2016, a decrease of $2.1 million from the same period in the prior year. 
  • Real Estate Reported EBITDA improved by $1.7 million, to a loss of $0.3 million for the three months ended January 31, 2016 as compared to the same period in the prior year. 
  • Real Estate Reported EBITDA includes $0.2 million and $0.3 million of stock-based compensation expense for the three months ended January 31, 2016 and 2015, respectively.

Total Performance

  • Total net revenue increased $69.1 million, or 13.0%, to $599.4 million for the three months ended January 31, 2016 as compared to the same period in the prior year. 
  • Net income attributable to Vail Resorts, Inc. was $117.0 million, or $3.14 per diluted share, for the second quarter of fiscal 2016 compared to net income attributable to Vail Resorts, Inc. of $115.8 million, or $3.10 per diluted share, in the second fiscal quarter of the prior year.  Excluding the tax benefit recorded in the prior year resulting from an IRS settlement, net income for the second quarter of fiscal 2016 increased 27.2%, as compared to the same period in the prior year.

Season-to-Date Metrics through March 6, 2016

The Company announced ski season-to-date metrics for the comparative periods from the beginning of the ski season through Sunday, March 6, 2016, and for the prior year period through Sunday, March 8, 2015. The reported ski season metrics are for our U.S. mountain resorts, excluding results from Perisher and the urban ski areas of Afton Alps, Mt. Brighton and Wilmot. The following data is interim period data and subject to fiscal quarter end review and adjustments.

  • Season-to-date total lift revenue at the Company's U.S. mountain resorts, including an allocated portion of season pass revenue for each applicable period, was up 19.6% compared to the prior year season-to-date period. 
  • Season-to-date ancillary spending increased over the prior year, with ski school revenue up 9.4% and dining revenue up 13.3% at the Company's U.S. mountain resorts. Additionally, retail/rental revenue for resort store locations was up 8.7% compared to the prior year season-to-date period. 
  • Season-to-date total skier visits for the Company's U.S. mountain resorts were up 9.9% compared to the prior year season-to-date period.

Outlook

  • We have updated our estimated range of Resort Reported EBITDA for fiscal 2016 to $430 million to $445 million. 
  • We expect Resort EBITDA Margin (defined as Resort Reported EBITDA divided by Resort net revenue) to be approximately 28.3% in fiscal 2016, at the midpoint of our updated guidance range. This is an estimated 270 basis point increase over fiscal 2015, excluding the non-cash gain on the Park City litigation settlement and Perisher EBITDA in the prior year. 
  • Our fiscal 2016 Real Estate Reported EBITDA guidance is unchanged and expected to be negative $4 million to a positive $2 million. 
  • Our Net Real Estate Cash Flow guidance is unchanged and is expected to be $13 million to $28 million. 
  • Net income attributable to Vail Resorts, Inc. is now expected to be in a range of $132 million to $152 million in fiscal 2016.

The following table reflects the forecasted guidance range for the Company's fiscal year ending July 31, 2016, 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 2016.

Fiscal 2016 Guidance

(In thousands)

For the Year Ending

July 31, 2016

Low End

Range

High End

Range

Mountain Reported EBITDA (1)

$

406,000

$

418,000

Lodging Reported EBITDA (2)

22,000

29,000

Resort Reported EBITDA (3)

430,000

445,000

Real Estate Reported EBITDA  (4)

(4,000)

2,000

Total Reported EBITDA

426,000

447,000

Depreciation and amortization

(163,000)

(157,000)

Loss on disposal of fixed assets and other, net

(4,500)

(3,500)

Change in fair value of contingent consideration (5)

Investment income, net

300

700

Interest expense

(44,000)

(41,000)

Income before provision for income taxes

214,800

246,200

Provision for income taxes

(83,000)

(94,600)

Net income

$

131,800

$

151,600

Net loss attributable to noncontrolling interests

200

400

Net income attributable to Vail Resorts, Inc.

$

132,000

$

152,000

(1) Mountain Reported EBITDA includes approximately $13 million of stock-based compensation.

(2) Lodging Reported EBITDA includes approximately $3 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 of the expected ranges provided for the Mountain and Lodging segments, while possible, do not sum to the high or low 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 $1 million of stock-based compensation.

(5) Our guidance excludes any change in the fair value of contingent consideration which is based upon, among other things, financial projections including long-term growth rates for Park City, which such change may be material.

Statement Concerning Non-GAAP Financial Measures

When reporting financial results, we use the terms Reported EBITDA, Reported EBITDA excluding the non-cash gain on the Park Citylitigation settlement and Perisher EBITDA, Resort EBITDA Margin, Resort EBITDA Margin excluding the non-cash gain on the Park Citylitigation settlement and Perisher EBITDA, 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 plus gain on litigation settlement, 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.  In this release, we also separately present Resort EBITDA Margin excluding the non-cash gain on the Park City litigation settlement and Perisher EBITDA. 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, non-cash stock-based compensation expense, and change in real estate deposits and recovery of previously incurred project costs/land basis 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 January 31,

Six Months Ended January 31,

2016

2015

2016

2015

Net revenue:

Mountain

$

532,872

$

463,031

$

633,805

$

523,417

Lodging

62,807

59,364

127,093

117,857

Real estate

3,684

7,842

13,032

17,225

Total net revenue

599,363

530,237

773,930

658,499

Segment operating expense:

Mountain

296,256

268,966

447,414

400,918

Lodging

57,311

53,927

118,748

111,681

Real estate

4,617

9,871

13,958

21,485

Total segment operating expense

358,184

332,764

580,120

534,084

Other operating (expense) income:

Depreciation and amortization

(40,541)

(37,376)

(79,241)

(73,345)

Gain on sale of real property

632

1,791

Gain on litigation settlement

16,400

Change in fair value of contingent consideration

4,550

Loss on disposal of fixed assets and other, net

(1,206)

(26)

(2,985)

(781)

Income from operations

200,064

160,071

113,375

71,239

Mountain equity investment (loss) income, net

(61)

200

781

525

Investment income, net

161

62

359

36

Interest expense

(10,910)

(13,807)

(21,505)

(27,375)

Income before (provision) benefit from income taxes

189,254

146,526

93,010

44,425

(Provision) benefit from income taxes

(72,383)

(30,826)

(35,809)

6,951

Net income

$

116,871

$

115,700

$

57,201

$

51,376

Net loss attributable to noncontrolling interests

111

62

194

110

Net income attributable to Vail Resorts, Inc.

$

116,982

$

115,762

$

57,395

$

51,486

Per share amounts:

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

$

3.23

$

3.19

$

1.58

$

1.42

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

$

3.14

$

3.10

$

1.54

$

1.38

Cash dividends declared per share

$

0.6225

$

0.4150

$

1.2450

$

0.8300

Weighted average shares outstanding:

Basic

36,246

36,329

36,359

36,289

Diluted

37,256

37,367

37,358

37,313

Other Data:

Mountain Reported EBITDA

$

236,555

$

194,265

$

187,172

$

139,424

Lodging Reported EBITDA

$

5,496

$

5,437

$

8,345

$

6,176

Resort Reported EBITDA

$

242,051

$

199,702

$

195,517

$

145,600

Real Estate Reported EBITDA

$

(301)

$

(2,029)

$

865

$

(4,260)

Total Reported EBITDA

$

241,750

$

197,673

$

196,382

$

141,340

Mountain stock-based compensation

$

3,331

$

2,997

$

6,711

$

6,240

Lodging stock-based compensation

$

783

$

701

$

1,530

$

1,303

Resort stock-based compensation

$

4,114

$

3,698

$

8,241

$

7,543

Real Estate stock-based compensation

$

186

$

327

$

149

$

683

Total stock-based compensation

$

4,300

$

4,025

$

8,390

$

8,226

 

Vail Resorts, Inc.

Mountain Segment Operating Results

(In thousands, except ETP)

(Unaudited)

Three Months Ended January 31,

Percentage

Increase

Six Months Ended January 31,

Percentage

Increase

2016

2015

(Decrease)

2016

2015

(Decrease)

Net Mountain revenue:

Lift

$

287,685

$

239,288

20.2

%

$

307,838

$

239,288

28.6

%

Ski school

62,040

57,295

8.3

%

65,424

57,295

14.2

%

Dining

44,738

38,619

15.8

%

57,093

46,658

22.4

%

Retail/rental

102,975

95,012

8.4

%

135,364

124,485

8.7

%

Other

35,434

32,817

8.0

%

68,086

55,691

22.3

%

Total Mountain net revenue

$

532,872

$

463,031

15.1

%

$

633,805

$

523,417

21.1

%

Mountain operating expense:

Labor and labor-related benefits

$

114,794

$

102,470

12.0

%

$

166,593

$

145,475

14.5

%

Retail cost of sales

38,262

35,546

7.6

%

54,741

52,336

4.6

%

Resort related fees

28,452

24,866

14.4

%

30,344

26,150

16.0

%

General and administrative

48,762

43,550

12.0

%

85,976

75,566

13.8

%

Other

65,986

62,534

5.5

%

109,760

101,391

8.3

%

Total Mountain operating expense

$

296,256

$

268,966

10.1

%

$

447,414

$

400,918

11.6

%

Gain on litigation settlement

nm

16,400

(100.0)

%

Mountain equity investment (loss) income, net

(61)

200

(130.5)

%

781

525

48.8

%

Mountain Reported EBITDA

$

236,555

$

194,265

21.8

%

$

187,172

$

139,424

34.2

%

Total skier visits

4,581

4,071

12.5

%

5,016

4,071

23.2

%

ETP

$

62.80

$

58.78

6.8

%

$

61.37

$

58.78

4.4

%

 

Vail Resorts, Inc.

Lodging Operating Results

(In thousands, except Average Daily Rate ("ADR") and RevPAR)

(Unaudited)

Three Months Ended 

January 31,

Percentage

Increase

Six Months Ended January 

31,

Percentage

Increase

2016

2015

(Decrease)

2016

2015

(Decrease)

Lodging net revenue:

Owned hotel rooms

$

12,045

$

11,333

6.3

%

$

29,351

$

26,251

11.8

%

Managed condominium rooms

21,063

19,648

7.2

%

29,310

27,759

5.6

%

Dining

8,841

8,222

7.5

%

23,882

21,760

9.8

%

Transportation

8,293

8,497

(2.4)

%

10,613

10,814

(1.9)

%

Golf

nm

8,502

7,644

11.2

%

Other

9,425

9,059

4.0

%

19,595

18,782

4.3

%

59,667

56,759

5.1

%

121,253

113,010

7.3

%

Payroll cost reimbursements

3,140

2,605

20.5

%

5,840

4,847

20.5

%

Total Lodging net revenue

$

62,807

$

59,364

5.8

%

$

127,093

$

117,857

7.8

%

Lodging operating expense:

Labor and labor-related benefits

$

27,026

$

25,943

4.2

%

$

55,721

$

53,318

4.5

%

General and administrative

9,410

8,849

6.3

%

17,379

16,366

6.2

%

Other

17,735

16,530

7.3

%

39,808

37,150

7.2

%

54,171

51,322

5.6

%

112,908

106,834

5.7

%

Reimbursed payroll costs

3,140

2,605

20.5

%

5,840

4,847

20.5

%

Total Lodging operating expense

$

57,311

$

53,927

6.3

%

$

118,748

$

111,681

6.3

%

Lodging Reported EBITDA

$

5,496

$

5,437

1.1

%

$

8,345

$

6,176

35.1

%

Owned hotel statistics:

ADR

$

255.44

$

246.68

3.6

%

$

219.94

$

211.09

4.2

%

RevPAR

$

161.66

$

148.42

8.9

%

$

143.94

$

129.98

10.7

%

Managed condominium statistics:

ADR

$

403.76

$

409.37

(1.4)

%

$

316.44

$

315.85

0.2

%

RevPAR

$

159.75

$

145.16

10.1

%

$

101.59

$

93.04

9.2

%

Owned hotel and managed condominium statistics (combined):

ADR

$

353.96

$

352.72

0.4

%

$

272.20

$

267.79

1.6

%

RevPAR

$

160.21

$

145.94

9.8

%

$

114.02

$

103.70

10.0

%

 

Key Balance Sheet Data

(In thousands)

(Unaudited)

As of January 31,

2016

2015

Real estate held for sale and investment

$

117,999

$

151,103

Total Vail Resorts, Inc. stockholders' equity

840,607

849,503

Long-term debt

682,195

634,739

Long-term debt due within one year

13,340

1,196

Total debt

695,535

635,935

Less: cash and cash equivalents

45,368

36,578

Net debt

$

650,167

$

599,357

Reconciliation of Non-GAAP Financial Measures

Reported EBITDA, Reported EBITDA excluding the non-cash gain on the Park City litigation settlement and Perisher EBITDA, Resort EBITDA Margin, Resort EBITDA Margin excluding the non-cash gain on the Park City litigation settlement and Perisher EBITDA, 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, Reported EBITDA excluding the non-cash gain on the Park Citylitigation settlement and Perisher EBITDA, Resort EBITDA Margin, Resort EBITDA Margin excluding the non-cash gain on the Park Citylitigation settlement and Perisher EBITDA, 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. In this release, the Company also separately presents Resort EBITDA Margin excluding the non-cash gain on the Park City litigation settlement and Perisher EBITDA. 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 Reported EBITDA to net income attributable to Vail Resorts, Inc. calculated in accordance with GAAP for the three and six months ended January 31, 2016 and 2015.

(In thousands)

(Unaudited)

(In thousands)

(Unaudited)

Three Months Ended 

January 31,

Six Months Ended 

January 31,

2016

2015

2016

2015

Mountain Reported EBITDA

$

236,555

$

194,265

$

187,172

$

139,424

Lodging Reported EBITDA

5,496

5,437

8,345

6,176

Resort Reported EBITDA*

242,051

199,702

195,517

145,600

Real Estate Reported EBITDA

(301)

(2,029)

865

(4,260)

Total Reported EBITDA

241,750

197,673

196,382

141,340

Depreciation and amortization

(40,541)

(37,376)

(79,241)

(73,345)

Loss on disposal of fixed assets and other, net

(1,206)

(26)

(2,985)

(781)

Change in fair value of contingent consideration

4,550

Investment income, net

161

62

359

36

Interest expense

(10,910)

(13,807)

(21,505)

(27,375)

Income before (provision) benefit from income taxes

189,254

146,526

93,010

44,425

(Provision) benefit from income taxes

(72,383)

(30,826)

(35,809)

6,951

Net income

$

116,871

$

115,700

$

57,201

$

51,376

Net loss attributable to noncontrolling interests

111

62

194

110

Net income attributable to Vail Resorts, Inc.

$

116,982

$

115,762

$

57,395

$

51,486

* Resort represents the sum of Mountain and Lodging

The following table reconciles Resort Net Revenue to Resort EBITDA Margin for the three months ended January 31, 2016 and 2015.

(In thousands)

(Unaudited)

Three Months Ended

January 31, 2016

(In thousands)

(Unaudited)

Three Months Ended

January 31, 2015

Resort net revenue*

$

595,679

$

522,395

Resort Reported EBITDA*

$

242,051

$

199,702

Resort EBITDA margin

40.6%

38.2%

* Resort represents the sum of Mountain and Lodging

Presented below is a reconciliation of Total Reported EBITDA to net income attributable to Vail Resorts, Inc. calculated in accordance with GAAP for the twelve months ended January 31, 2016.

(In thousands)

(unaudited)

Twelve Months Ended 

January 31, 2016

Mountain Reported EBITDA

$

391,852

Lodging Reported EBITDA

23,845

Resort Reported EBITDA*

415,697

Real Estate Reported EBITDA

(1,790)

Total Reported EBITDA

413,907

Depreciation and amortization

(155,019)

Loss on disposal of fixed assets and other, net

(4,261)

Change in fair value of contingent consideration

(900)

Investment income, net

569

Interest expense

(45,371)

Loss on extinguishment of debt

(11,012)

Income before provision for income taxes

197,913

Provision for income taxes

(77,478)

Net income

$

120,435

Net loss attributable to noncontrolling interests

228

Net income attributable to Vail Resorts, Inc.

$

120,663

*

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 January 31, 2016.

(In thousands)

(Unaudited)

As of January 31, 2016

Long-term debt

$

682,195

Long-term debt due within one year

13,340

Total debt

695,535

Less: cash and cash equivalents

45,368

Net debt

$

650,167

Net debt to Total Reported EBITDA

1.6

x

The following table reconciles Real Estate Reported EBITDA to Net Real Estate Cash Flow for the three and six months ended January 31, 2016 and 2015.

(In thousands)

(Unaudited) 

Three Months Ended 

January 31,

(In thousands)

(Unaudited) 

Six Months Ended 

January 31,

2016

2015

2016

2015

Real Estate Reported EBITDA

$

(301)

$

(2,029)

$

865

$

(4,260)

Non-cash real estate cost of sales

2,504

5,605

9,444

12,620

Non-cash real estate stock-based compensation

186

327

149

683

Change in real estate deposits and recovery of previously incurred project costs/land basis less investments in real estate

(212)

384

1,712

235

Net Real Estate Cash Flow

$

2,177

$

4,287

$

12,170

$

9,278

The following table reconciles Reported EBITDA to net income attributable to Vail Resorts, Inc. calculated in accordance with GAAP for the fiscal year ended July 31, 2015.

(In thousands)

(Unaudited)

Fiscal Year Ended July 31,

2015

Mountain Reported EBITDA excluding gain on litigation settlement and Perisher EBITDA

$

320,278

Lodging Reported EBITDA

21,676

Resort Reported EBITDA excluding gain on litigation settlement and Perisher EBITDA*

341,954

Gain on litigation settlement

16,400

Perisher EBITDA

7,426

Resort Reported EBITDA*

365,780

Real Estate Reported EBITDA

(6,915)

Total Reported EBITDA

358,865

Depreciation and amortization

(149,123)

Loss on disposal of fixed assets and other, net

(2,057)

Change in fair value of contingent consideration

3,650

Investment income, net

246

Interest expense

(51,241)

Loss on extinguishment of debt

(11,012)

Income before provision for income taxes

149,328

(Provision) for income taxes

(34,718)

Net income

$

114,610

Net loss attributable to noncontrolling interests

144

Net income attributable to Vail Resorts, Inc.

$

114,754

* Resort represents the sum of Mountain and Lodging

The following table reconciles Resort Net Revenue to Resort EBITDA Margin for fiscal 2015 and fiscal 2016 guidance.

(In thousands)

(Unaudited)

Fiscal Year Ended

July 31, 2015

(In thousands)

(Unaudited)

Fiscal 2016 Guidance (2)

Resort net revenue (1)

$

1,358,582

$

1,547,000

Resort net revenue excluding Perisher (1)

$

1,337,345

n/a

Resort Reported EBITDA (1)

$

365,780

$

437,500

Resort Reported EBITDA (1), excluding the non-cash gain on the Park City litigation settlement and Perisher EBITDA

$

341,954

n/a

Resort EBITDA margin

26.9%

28.3%

Resort EBITDA margin, excluding the non-cash gain on the Park City litigation settlement and Perisher EBITDA

25.6%

n/a

(1) Resort represents the sum of Mountain and Lodging

(2) Represents the mid-point range of Guidance

 

 



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