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EX-32 - EXHIBIT 32 - VAIL RESORTS INCexhibit32.htm
EX-4.1H - EXHIBIT 4.1(H) - VAIL RESORTS INCexhibit4_1h.htm
EX-31.1 - EXHIBIT 31.1 - VAIL RESORTS INCexhibit31_1.htm
EX-31.2 - EXHIBIT 31.2 - VAIL RESORTS INCexhibit31_2.htm

 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-Q

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended April 30, 2010

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from       to

Commission File Number:  001-09614


Vail Resorts, Inc.
(Exact Name of Registrant as Specified in Its Charter)


Delaware
 
51-0291762
(State or Other Jurisdiction of Incorporation or Organization)
 
(I.R.S. Employer Identification No.)
     
390 Interlocken Crescent
Broomfield, Colorado
 
80021
(Address of Principal Executive Offices)
 
(Zip Code)

(303) 404-1800
(Registrant’s Telephone Number, Including Area Code)


Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.
x Yes ¨ No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). 
¨ Yes ¨ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer x                                                                             Accelerated filer ¨
Non-accelerated filer ¨ (Do not check if a smaller reporting company) Smaller reporting company ¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
¨ Yes x No
As of June 2, 2010, 36,293,774 shares of the registrant’s common stock were outstanding.

 
 
 
 

Table of Contents
     
PART I
FINANCIAL INFORMATION
 
     
Item 1.
F-1
Item 2.
1
Item 3.
17
Item 4.
17
     
     
PART II
OTHER INFORMATION
 
     
Item 1.
17
Item 1A.
18
Item 2.
18
Item 3.
19
Item 4.
Reserved.
19
Item 5.
19
Item 6.
19

 
 
 
 



 
 
 
 

Vail Resorts, Inc.
Consolidated Condensed Balance Sheets
(In thousands, except share and per share amounts)

     
April 30,
     
July 31,
     
April 30,
 
     
2010
     
2009
     
2009
 
     
(Unaudited)
             
(Unaudited)
 
Assets
                       
Current assets:
                       
Cash and cash equivalents
 
$
51,147
   
$
69,298
   
$
170,537
 
Restricted cash
   
11,826
     
11,065
     
10,129
 
Trade receivables, net
   
35,039
     
58,063
     
47,729
 
Inventories, net
   
42,669
     
48,947
     
45,667
 
Other current assets
   
46,037
     
41,615
     
34,761
 
            Total current assets
   
186,718
     
228,988
     
308,823
 
Property, plant and equipment, net (Note 5)
   
1,024,977
     
1,057,658
     
1,066,165
 
Real estate held for sale and investment
   
445,885
     
311,485
     
276,952
 
Goodwill, net
   
168,197
     
167,950
     
167,950
 
Intangible assets, net
   
86,581
     
79,429
     
79,607
 
Other assets
   
32,481
     
38,970
     
41,154
 
            Total assets
 
$
1,944,839
   
$
1,884,480
   
$
1,940,651
 
                         
Liabilities and Stockholders’ Equity
                       
Current liabilities:
                       
Accounts payable and accrued liabilities (Note 5)
 
$
237,583
   
$
245,536
   
$
220,927
 
Income taxes payable
   
10,022
     
5,460
     
32,156
 
Long-term debt due within one year (Note 4)
   
1,851
     
352
     
350
 
          Total current liabilities
   
249,456
     
251,348
     
253,433
 
Long-term debt (Note 4)
   
489,822
     
491,608
     
491,668
 
Other long-term liabilities (Note 5)
   
196,693
     
233,169
     
221,462
 
Deferred income taxes
   
152,089
     
112,234
     
131,970
 
Commitments and contingencies (Note 9)
                       
Redeemable noncontrolling interest (Note 8)
   
--
     
15,415
     
15,016
 
Stockholders’ equity:
                       
Preferred stock, $0.01 par value, 25,000,000 shares authorized, no shares issued and outstanding
   
--
     
--
     
--
 
Common stock, $0.01 par value, 100,000,000 shares authorized, 40,170,403 (unaudited), 40,049,988 and 40,034,958 (unaudited) shares issued, respectively
   
402
     
400
     
400
 
Additional paid-in capital
   
561,089
     
555,728
     
552,748
 
Retained earnings
   
429,301
     
356,995
     
395,725
 
Treasury stock, at cost; 3,878,535 (unaudited), 3,878,535 and 3,600,235 (unaudited) shares, respectively (Note 11)
   
(147,828
)
   
 
(147,828
)
   
(140,333
)
            Total Vail Resorts, Inc. stockholders’ equity
   
842,964
     
765,295
     
808,540
 
            Noncontrolling interests
   
13,815
     
15,411
     
18,562
 
  Total stockholders’ equity
   
856,779
     
780,706
     
827,102
 
     Total liabilities and stockholders’ equity
 
$
1,944,839
   
$
1,884,480
   
$
1,940,651
 

The accompanying Notes are an integral part of these consolidated condensed financial statements.

 
 
 
 

Vail Resorts, Inc.
Consolidated Condensed Statements of Operations
(In thousands, except per share amounts)
(Unaudited)

   
Three months ended
 
   
April 30,
 
   
2010
   
2009
 
Net revenue:
           
Mountain
$
302,213
 
$
279,180
 
Lodging
 
44,877
   
44,896
 
Real estate
 
3,164
   
9,407
 
Total net revenue
 
350,254
   
333,483
 
Segment operating expense (exclusive of depreciation and amortization shown separately below):
           
Mountain
 
156,454
   
144,998
 
Lodging
 
39,292
   
38,988
 
Real estate
 
8,391
   
14,129
 
Total segment operating expense
 
204,137
   
198,115
 
Other operating (expense) income:
           
Depreciation and amortization
 
(27,812
)
 
(27,582
)
Gain (loss) on disposal of fixed assets, net
 
18
   
(206
)
Income from operations
 
118,323
   
107,580
 
Mountain equity investment income (loss), net
 
838
   
(410
)
Investment income
 
141
   
449
 
Interest expense, net
 
(3,673
)
 
(6,490
)
Income before provision for income taxes
 
115,629
   
101,129
 
Provision for income taxes
 
(39,238
)
 
(36,737
)
Net income
 
76,391
   
64,392
 
Net income attributable to noncontrolling interests
 
(3,602
)
 
(2,753
)
Net income attributable to Vail Resorts, Inc.
$
72,789
 
$
61,639
 
             
Per share amounts (Note 3):
           
Basic net income per share attributable to Vail Resorts, Inc.
$
2.01
 
$
1.69
 
Diluted net income per share attributable to Vail Resorts, Inc.
$
1.98
 
$
1.68
 


The accompanying Notes are an integral part of these consolidated condensed financial statements.

 
 
 
 

Vail Resorts, Inc.
Consolidated Condensed Statements of Operations
(In thousands, except per share amounts)
(Unaudited)

   
Nine months ended
 
   
April 30,
 
   
2010
   
2009
 
Net revenue:
           
Mountain
$
602,395
 
$
578,447
 
Lodging
 
124,908
   
131,299
 
Real estate
 
4,239
   
165,314
 
Total net revenue
 
731,542
   
875,060
 
Segment operating expense (exclusive of depreciation and amortization shown separately below):
           
Mountain
 
386,940
   
382,409
 
Lodging
 
119,703
   
122,583
 
Real estate
 
20,985
   
125,014
 
Total segment operating expense
 
527,628
   
630,006
 
Other operating (expense) income:
           
Depreciation and amortization
 
(82,768
)
 
(80,098
)
Gain on sale of real property
 
6,087
   
--
 
Loss on disposal of fixed assets, net
 
(83
)
 
(808
)
Income from operations
 
127,150
   
164,148
 
Mountain equity investment income, net
 
1,299
   
1,766
 
Investment income
 
563
   
1,428
 
Interest expense, net
 
(12,656
)
 
(21,732
)
Income before provision for income taxes
 
116,356
   
145,610
 
Provision for income taxes
 
(38,397
)
 
(53,740
)
Net income
 
77,959
   
91,870
 
Net income attributable to noncontrolling interests
 
(5,653
)
 
(4,190
)
Net income attributable to Vail Resorts, Inc.
$
72,306
 
$
87,680
 
             
Per share amounts (Note 3):
           
Basic net income per share attributable to Vail Resorts, Inc.
$
2.00
 
$
2.39
 
Diluted net income per share attributable to Vail Resorts, Inc.
$
1.97
 
$
2.39
 

The accompanying Notes are an integral part of these consolidated condensed financial statements.

 
 
 
 

Vail Resorts, Inc.
Consolidated Condensed Statements of Cash Flows
(In thousands)
(Unaudited)

   
Nine Months Ended
   
April 30,
   
2010
 
2009
Cash flows from operating activities:
               
Net income
 
$
77,959
   
$
91,870
 
Adjustments to reconcile net income to net cash provided by operating activities:
               
Depreciation and amortization
   
82,768
     
80,098
 
Cost of real estate sales
   
2,477
     
94,330
 
Stock-based compensation expense
   
8,979
     
7,794
 
Deferred income taxes, net
   
38,397
     
53,549
 
Gain on sale of real property
   
(6,087
)
   
--
 
Other non-cash income, net
   
(5,707
)
   
(4,286
)
Changes in assets and liabilities:
               
Restricted cash
   
(761
)
   
48,308
 
Trade receivables, net
   
23,030
     
2,999
 
Inventories, net
   
6,278
     
4,041
 
Investments in real estate
   
(145,829
)
   
(117,895
)
Accounts payable and accrued liabilities
   
(35,932
)
   
(42,715
)
Deferred real estate deposits
   
1,243
     
(36,078
)
Private club deferred initiation fees and deposits
   
1,616
     
40,960
 
Other assets and liabilities, net
   
8,280
     
(14,964
)
Net cash provided by operating activities
   
56,711
     
208,011
 
Cash flows from investing activities:
               
Capital expenditures
   
(48,801
)
   
(87,089
)
Acquisition of business
   
--
     
(38,170
)
Cash received from sale of real property
   
8,920
     
--
 
Other investing activities, net
   
(7,915
)
   
(355
)
Net cash used in investing activities
   
(47,796
)
   
(125,614
)
Cash flows from financing activities:
               
Acquisition of noncontrolling interest
   
(31,000
)
   
--
 
Repurchases of common stock
   
--
     
(14,872
)
Proceeds from borrowings under non-recourse real estate financings
   
--
     
9,013
 
Payments of non-recourse real estate financings
   
--
     
(58,407
)
Proceeds from borrowings under other long-term debt
   
85,962
     
63,396
 
Payments of other long-term debt
   
(86,246
)
   
(78,689
)
Other financing activities, net
   
4,218
     
5,354
 
Net cash used in financing activities
   
(27,066
)
   
(74,205
)
Net (decrease) increase in cash and cash equivalents
   
(18,151
)
   
8,192
 
Cash and cash equivalents:
               
Beginning of period
   
69,298
     
162,345
 
End of period
 
$
51,147
   
$
170,537
 
                 

The accompanying Notes are an integral part of these consolidated condensed financial statements.

 
 
 
 

Vail Resorts, Inc.
Notes to Consolidated Condensed Financial Statements
(Unaudited)

1.           Organization and Business
 
Vail Resorts, Inc. (“Vail Resorts” or the “Parent Company”) is organized as a holding company and operates through various subsidiaries.  Vail Resorts and its subsidiaries (collectively, the “Company”) currently operate in three business segments: Mountain, Lodging and Real Estate.  In the Mountain segment, the Company owns and operates five world-class ski resort properties at the Vail, Breckenridge, Keystone and Beaver Creek mountain resorts in Colorado and the Heavenly Mountain Resort in the Lake Tahoe area of California and Nevada, as well as ancillary services, primarily including ski school, dining and retail/rental operations.  These resorts operate primarily on Federal land under the terms of Special Use Permits granted by the USDA Forest Service (the “Forest Service”).    In the Lodging segment, the Company owns and/or manages a collection of luxury hotels under its RockResorts brand, as well as other strategic lodging properties and a large number of condominiums located in proximity to the Company’s ski resorts, the Grand Teton Lodge Company (“GTLC”), which operates three destination resorts at Grand Teton National Park (under a National Park Service concessionaire contract), Colorado Mountain Express (“CME”), a resort ground transportation company, and golf courses. Vail Resorts Development Company (“VRDC”), a wholly-owned subsidiary, conducts the operations of the Company’s Real Estate segment, which owns and develops real estate in and around the Company’s resort communities.  The Company’s mountain business and its lodging properties at or around the Company’s ski resorts are seasonal in nature with peak operating seasons from mid-November through mid-April.  The Company’s operations at GTLC and its golf courses generally operate from mid-May through mid-October. The Company also has non-majority owned investments in various other entities, some of which are consolidated (see Note 6, Variable Interest Entities).

2.           Summary of Significant Accounting Policies

The Financial Accounting Standards Board (“FASB”) has established the FASB Accounting Standards Codification (“ASC”) as the source of authoritative accounting principles recognized by the FASB to be applied by nongovernmental entities in the United States of America for financial statements of interim and annual periods ending after September 15, 2009.  This standard does not alter current accounting principles generally accepted in the United States of America (“GAAP”), but rather integrates existing accounting standards with other authoritative guidance.

Basis of Presentation
 
Consolidated Condensed Financial Statements-- In the opinion of the Company, the accompanying Consolidated Condensed Financial Statements reflect all adjustments necessary to state fairly the Company's financial position, results of operations and cash flows for the interim periods presented.  All such adjustments are of a normal recurring nature.  Results for interim periods are not indicative of the results for the entire fiscal year.  The accompanying Consolidated Condensed Financial Statements should be read in conjunction with the audited Consolidated Financial Statements included in the Company's Annual Report on Form 10-K for the year ended July 31, 2009.  Certain information and footnote disclosures, including significant accounting policies, normally included in fiscal year financial statements prepared in accordance with GAAP have been condensed or omitted.  The July 31, 2009 Consolidated Condensed Balance Sheet was derived from audited financial statements.

Use of Estimates-- The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the balance sheet date and the reported amounts of revenue and expenses during the reporting period.  Actual results could differ from those estimates.

Noncontrolling Interests in Consolidated Financial Statements-- Effective August 1, 2009, the Company adopted Statement of Financial Accounting Standards (“SFAS”) No. 160, “Noncontrolling Interest in Consolidated Financial Statements – an Amendment of Accounting Research Bulletin No. 51” (“SFAS 160”).  The guidance of this statement is now included in ASC Topic 810 “Consolidation.” This statement requires the presentation of net income or loss attributable to noncontrolling interests (previously referred to as minority interest) along with net income or loss attributable to the stockholders of the Company separately in its consolidated statement of operations.  Additionally, noncontrolling interests in the consolidated subsidiaries of the Company are reported as a separate component of equity in the consolidated balance sheet, apart from the Company’s equity.  However, redeemable noncontrolling interests in which the Company is subject to a put option under which it may be required to repurchase an interest in a consolidated subsidiary from a noncontrolling interest holder, must be classified outside of stockholders’ equity.

On April 23, 2010, the Company entered into a transfer agreement with the noncontrolling interest holder in SSI Venture, LLC (“SSV”) to acquire all the noncontrolling interest holder’s remaining interest in SSV. As a result of this agreement, equity-noncontrolling interest and redeemable noncontrolling interest related to SSV has been eliminated and the purchase price in excess of the carrying value of the noncontrolling interest of approximately $2.6 million (net of deferred taxes) was recorded as a reduction in additional paid-in capital (see Note 8, Redeemable Noncontrolling Interest).  Prior to the acquisition of the remaining noncontrolling interest in SSV, the Company was subject to a put option beginning August 1, 2010 and each year thereafter.  As such, the redeemable noncontrolling interest in SSV was classified in the mezzanine section of the accompanying consolidated condensed balance sheets at the redemption value at the end of each prior reporting period.

Upon adoption, the provisions of this statement have been applied to all noncontrolling interests prospectively, except for the presentation and disclosure requirements, which have been applied retrospectively for all periods presented.  The retrospective impact of applying this guidance was a reclassification of $15.4 million and $15.0 million as of July 31, 2009 and April 30, 2009, respectively, of minority interest to redeemable noncontrolling interest, representing noncontrolling interest which was subject to a put option.  In addition, as of July 31, 2009 and April 30, 2009, noncontrolling interests, which were not subject to a put option, have been reclassified as part of equity-noncontrolling interests.  The following table summarizes the changes in total stockholders’ equity (in thousands):

 
For the Nine months ended April 30,
 
2010
 
2009
   
Vail Resorts Stockholders’ Equity
   
Noncontrolling Interests
   
Total Equity
     
Vail Resorts Stockholders’ Equity
   
Noncontrolling Interests
   
Total Equity
 
Balance, beginning of period
$
765,295
 
$
15,411
 
$
780,706
   
$
716,633
 
$
8,848
 
$
725,481
 
  Net income
 
72,306
   
5,653
   
77,959
     
87,680
   
4,190
   
91,870
 
Stock-based compensation expense
 
8,979
   
--
   
8,979
     
7,794
   
--
   
7,794
 
    Issuance of shares under share award plans
 
(1,180
)
 
--
   
(1,180
)
   
(590
)
 
--
   
(590
)
    Tax benefit (expense) from share award plans
 
140
   
--
   
140
     
(225
)
 
--
   
(225
)
    Repurchases of common stock
 
--
   
--
   
--
     
(14,872
)
 
--
   
(14,872
)
    Adjustment to redemption value of redeemable noncontrolling interest
 
--
   
(10,338
)
 
(10,338
)
   
12,120
   
6,051
   
18,171
 
    Contributions (distributions) from/to noncontrolling interests, net
 
--
   
3,203
   
3,203
     
--
   
(527
)
 
(527
)
    Acquisition of noncontrolling interest, net of deferred taxes
 
(2,576
)
 
(114)
   
(2,690
)
   
--
   
--
   
--
 
Balance, end of period
$
842,964
 
$
13,815
 
$
856,779
   
$
808,540
 
$
18,562
 
$
827,102
 

Additionally, upon adoption of this statement, even though the Company’s total provision for income taxes did not change, the Company’s effective tax rate calculation has changed because net income or loss attributable to noncontrolling interests is no longer included in the determination of pre-tax income in calculating its effective tax rate.

Fair Value Instruments-- The recorded amounts for cash and cash equivalents, receivables, other current assets, and accounts payable and accrued liabilities approximate fair value due to their short-term nature.  The fair value of amounts outstanding under the Employee Housing Bonds (Note 4, Long-Term Debt) approximate book value due to the variable nature of the interest rate associated with that debt.  The fair value of the 6.75% Senior Subordinated Notes (“6.75% Notes”) (Note 4, Long-Term Debt) is based on quoted market price.  The fair value of the Company's Industrial Development Bonds (Note 4, Long-Term Debt) and other long-term debt have been estimated using discounted cash flow analyses based on current borrowing rates for debt with similar remaining maturities and ratings.  The estimated fair value of the 6.75% Notes, Industrial Development Bonds and other long-term debt as of April 30, 2010 is presented below (in thousands):

   
April 30, 2010
 
   
Carrying
 
Fair
 
   
Value
 
Value
 
6.75% Notes
 
$
390,000
 
$
394,875
 
Industrial Development Bonds
 
$
42,700
 
$
47,420
 
Other long-term debt
 
$
6,398
 
$
6,247
 


New Accounting Standards

Fair Value Measurements and Disclosures-- In September 2006, the FASB issued guidance which is included in ASC Topic 820, “Fair Value Measurements and Disclosures” (SFAS No. 157 “Fair Value Measurements”) on fair value measurements and disclosures.  This standard defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements.  The fair value guidance in this standard for financial assets and liabilities was effective for the Company on August 1, 2008.  The Company adopted the guidance for nonfinancial assets and liabilities on August 1, 2009 and the provisions did not have a material impact on the Company’s financial position or results of operations.

Business Combinations-- In December 2007, the FASB issued guidance which is included in ASC Topic 805, “Business Combinations” (SFAS No. 141R, “Business Combinations”) which establishes principles and requirements on how an acquirer recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed, and any noncontrolling interest in an acquiree, including the recognition and measurement of goodwill acquired in a business combination.  This standard also requires acquisition-related transaction expenses and restructuring costs be expensed as incurred rather than capitalized as a component of the business combination.  The guidance was effective for the Company on August 1, 2009 and will be applied prospectively to business combinations.

 Amendments to FASB Interpretation, Consolidation of Variable Interest Entities-- In June 2009, the FASB issued guidance which is included in ASC 810, “Consolidation” (SFAS 167 “Amendments to FASB No. 46(R)”) which amends the consolidation guidance for variable interest entities.  Under this new standard, entities must perform a qualitative assessment in determining the primary beneficiary of a variable interest entity which includes, among other things, consideration as to whether a variable interest holder has the power to direct the activities that most significantly impact the economic performance of the variable interest entity and the obligation to absorb losses or the right to receive benefits of the variable interest entity that could potentially be significant to the variable interest entity.  This standard is effective for the Company beginning August 1, 2010 (the Company’s fiscal year ending July 31, 2011).  The Company is currently evaluating the impacts, if any, the adoption of this new standard will have on the Company’s financial position or results of operations.

Revenue Recognition Guidance for Arrangements with Multiple Deliverables-- In September 2009, the FASB issued Accounting Standards Update (“ASU”) 2009-13, “Multiple-Deliverables Revenue Arrangements” (amendments to ASC Topic 605, “Revenue Recognition,” and the Emerging Issues Task Force Issue No. 08-01 “Revenue Arrangements with Multiple Deliverables”) which amends the revenue recognition guidance for arrangements with multiple deliverables.  This new standard requires entities to allocate revenue in arrangements with multiple deliverables using estimated selling prices and eliminates the use of the residual method.  The provisions of this new standard are effective for the Company beginning August 1, 2010 (the Company’s fiscal year ending July 31, 2011); however, early adoption is permitted.  The Company is currently evaluating the impacts, if any, the adoption of this new standard will have on the Company’s financial position or results of operations.

3.           Net Income Per Common Share

Basic earnings per share (“EPS”) excludes dilution and is computed by dividing net income attributable to Vail Resorts stockholders by the weighted-average shares outstanding during the period.  Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised, resulting in the issuance of shares of common stock that would then share in the earnings of Vail Resorts.  Presented below is basic and diluted EPS for the three months ended April 30, 2010 and 2009 (in thousands, except per share amounts):

   
Three Months Ended April 30,
   
2010
 
2009
   
Basic
 
Diluted
 
Basic
 
Diluted
Net income per share:
                               
Net income attributable to Vail Resorts
 
$
72,789
   
$
72,789
   
$
61,639
   
$
61,639
 
                                 
Weighted-average shares outstanding
   
36,271
     
36,271
     
36,574
     
36,574
 
Effect of dilutive securities
   
--
     
563
     
--
     
99
 
Total shares
   
36,271
     
36,834
     
36,574
     
36,673
 
                                 
Net income per share attributable to Vail Resorts
 
$
2.01
   
$
1.98
   
$
1.69
   
$
1.68
 

The number of shares issuable on the exercise of share based awards that were excluded from the calculation of diluted net income per share because the effect of their inclusion would have been anti-dilutive totaled 35,000 and 696,000 for the three months ended April 30, 2010 and 2009, respectively.

Presented below is basic and diluted EPS for the nine months ended April 30, 2010 and 2009 (in thousands, except per share amounts):

   
Nine months ended April 30,
   
2010
 
2009
 
 
Basic
 
Diluted
 
Basic
Diluted
Net income per share:
                             
Net income attributable to Vail Resorts
 
$
72,306
   
$
72,306
   
$
87,680
 
$
87,680
 
                               
Weighted-average shares outstanding
   
36,239
     
36,239
     
36,624
   
36,624
 
Effect of dilutive securities
   
--
     
499
     
--
   
128
 
Total shares
   
36,239
     
36,738
     
36,624
   
36,752
 
                               
Net income per share attributable to Vail Resorts
 
$
2.00
   
$
1.97
   
$
2.39
 
$
2.39
 

The number of shares issuable on the exercise of share based awards that were excluded from the calculation of diluted net income per share because the effect of their inclusion would have been anti-dilutive totaled 12,000 and 816,000 for the nine months ended April 30, 2010 and 2009, respectively.

4.           Long-Term Debt

Long-term debt as of April 30, 2010, July 31, 2009 and April 30, 2009 is summarized as follows (in thousands):

   
April 30,
July 31,
April 30,
 
Maturity (a)
2010
2009
2009
Credit Facility Revolver
2012
$
--
$
--
$
--
SSI Venture LLC Facility (b)
--
 
--
 
--
 
--
Industrial Development Bonds
2011-2020
 
42,700
 
42,700
 
42,700
Employee Housing Bonds
2027-2039
 
52,575
 
52,575
 
52,575
6.75% Senior Subordinated Notes
2014
 
390,000
 
390,000
 
390,000
Other
2010-2029
 
6,398
 
6,685
 
6,743
Total debt
   
491,673
 
491,960
 
492,018
Less:  Current maturities (c)
   
1,851
 
352
 
350
Long-term debt
 
$
489,822
$
491,608
$
491,668

(a)  
Maturities are based on the Company's July 31 fiscal year end.

(b)  
As result of the Company’s acquisition of the remaining noncontrolling interest in SSV on April 30, 2010 (see Note 8, Redeemable Noncontrolling Interest) and the ensuing designation of SSV as a restricted subsidiary under its senior credit facility, the Amended and Restated Revolving Credit and Security Agreement dated as of September 23, 2005 (SSV Facility), by and between SSI Venture LLC and U.S. Bank National Association was terminated on April 29, 2010.

(c)  
Current maturities represent principal payments due in the next 12 months.



Aggregate maturities for debt outstanding as of April 30, 2010 reflected by fiscal year are as follows (in thousands):

2010
$
61
2011
 
1,831
2012
 
305
2013
 
319
2014
 
390,219
Thereafter
 
98,938
Total debt
$
491,673



The Company incurred gross interest expense of $8.4 million in each of the three months ended April 30, 2010 and 2009, of which $0.4 million in each period was amortization of deferred financing costs. The Company capitalized $4.7 million and $1.9 million of interest during the three months ended April 30, 2010 and 2009, respectively.  The Company incurred gross interest expense of $25.3 million and $26.7 million for the nine months ended April 30, 2010 and 2009, respectively, of which $1.2 million and $1.6 million, respectively, was amortization of deferred financing costs.  The Company capitalized $12.6 million and $5.0 million of interest during the nine months ended April 30, 2010 and 2009, respectively.

5.           Supplementary Balance Sheet Information

The composition of property, plant and equipment follows (in thousands):

     
April 30,
 
July 31,
 
April 30,
     
2010
 
2009
 
2009
Land and land improvements
 
$
269,176
   
$
262,255
   
$
263,966
 
Buildings and building improvements
   
738,228
     
734,576
     
732,288
 
Machinery and equipment
   
514,009
     
498,912
     
500,720
 
Furniture and fixtures
   
191,054
     
187,316
     
182,011
 
Software
   
53,687
     
44,584
     
44,114
 
Vehicles
   
35,296
     
33,991
     
34,300
 
Construction in progress
   
46,947
     
40,724
     
32,063
 
 
Gross property, plant and equipment
   
1,848,397
     
1,802,358
     
1,789,462
 
Accumulated depreciation
   
(823,420
)
   
(744,700
)
   
(723,297
)
 
Property, plant and equipment, net
 
$
1,024,977
   
$
1,057,658
   
$
1,066,165
 

The composition of accounts payable and accrued liabilities follows (in thousands):

     
April 30,
 
July 31,
 
April 30,
     
2010
 
2009
 
2009
Trade payables
 
$
37,717
   
$
42,530
   
$
49,657
 
Real estate development payables
   
35,920
     
45,681
     
34,925
 
Deferred revenue
   
31,363
     
57,171
     
42,420
 
Deferred real estate and other deposits
   
56,940
     
21,637
     
18,833
 
Accrued salaries, wages and deferred compensation
   
24,000
     
15,202
     
17,167
 
Accrued benefits
   
28,716
     
23,496
     
27,251
 
Accrued interest
   
6,506
     
14,002
     
6,591
 
Liabilities to complete real estate projects, short term
   
1,937
     
3,972
     
5,639
 
Other accruals
   
14,484
     
21,845
     
18,444
 
 
Total accounts payable and accrued liabilities
 
$
237,583
   
$
245,536
   
$
220,927
 

The composition of other long-term liabilities follows (in thousands):

     
April 30,
 
July 31,
 
April 30,
     
2010
 
2009
 
2009
Private club deferred initiation fee revenue and deposits
 
$
149,889
   
$
153,265
   
$
154,950
 
Deferred real estate deposits
   
--
     
32,792
     
46,151
 
Other long-term liabilities
   
46,804
     
47,112
     
20,361
 
 
Total other long-term liabilities
 
$
196,693
   
$
233,169
   
$
221,462
 


6.           Variable Interest Entities

The Company is the primary beneficiary of four employee housing entities (collectively, the “Employee Housing Entities”), Breckenridge Terrace, LLC, The Tarnes at BC, LLC, BC Housing, LLC and Tenderfoot Seasonal Housing, LLC, which are Variable Interest Entities (“VIEs”), and has consolidated them in its Consolidated Condensed Financial Statements.  As a group, as of April 30, 2010, the Employee Housing Entities had total assets of $34.9 million (primarily recorded in property, plant and equipment, net) and total liabilities of $61.6 million (primarily recorded in long-term debt as “Employee Housing Bonds”).  The Company’s lenders have issued letters of credit totaling $53.4 million under the Company’s senior credit facility (the “Credit Facility”) related to Employee Housing Bonds.  Payments under the letters of credit would be triggered in the event that one of the entities defaults on required payments.  The letters of credit have no default provisions.

The Company is the primary beneficiary of Avon Partners II, LLC (“APII”), which is a VIE. APII owns commercial space and the Company currently leases substantially all of that space.  APII had total assets of $5.3 million (primarily recorded in property, plant and equipment, net) and no debt as of April 30, 2010.

The Company, through various lodging subsidiaries, manages hotels in which the Company has no ownership interest in the entities that own such hotels. The Company has extended a $2.0 million note receivable to one of these entities. These entities were formed by unrelated third parties to acquire, own, operate and realize the value in resort hotel properties.  The Company managed the day-to-day operations of seven hotel properties as of April 30, 2010.  The Company has determined that the entities that own the hotel properties are VIEs, and the management contracts are significant variable interests in these VIEs.  The Company has also determined that it is not the primary beneficiary of these entities and, accordingly, is not required to consolidate any of these entities.  Based upon the latest information provided by these third party entities, these VIEs had estimated total assets of approximately $229 million and total liabilities of approximately $151 million.  The Company's maximum exposure to loss as a result of its involvement with these VIEs is limited to a $2.4 million note receivable including accrued interest from one of the third parties and the net book value of the intangible asset associated with a management agreement in the amount of $0.5 million as of April 30, 2010.

7.           Fair Value Measurements

The FASB issued fair value guidance that establishes how reporting entities should measure fair value for measurement and disclosure purposes.  The guidance establishes a common definition of fair value applicable to all assets and liabilities measured at fair value and prioritizes the inputs into valuation techniques used to measure fair value.  Accordingly, the Company uses valuation techniques which maximize the use of observable inputs and minimize the use of unobservable inputs when determining fair value.  The three levels of the hierarchy are as follows:

Level 1: Inputs that reflect unadjusted quoted prices in active markets that are accessible to the Company for identical assets or liabilities;

Level 2: Inputs include quoted prices for similar assets and liabilities in active and inactive markets or that are observable for the asset or liability either directly or indirectly; and

Level 3: Unobservable inputs which are supported by little or no market activity.

The table below summarizes the Company’s cash equivalents measured at fair value (all other assets and liabilities measured at fair value are immaterial) (in thousands):

Fair Value Measurements at
April 30,
 
July 31,
 
April 30,
Reporting Date Using
2010
 
2009
 
2009
Level 1
$
8,695
   
$
47,915
   
$
121,742
 
Level 2
 
300
     
13,300
     
35,000
 
Level 3
 
--
     
--
     
--
 
Total
$
8,995
   
$
61,215
   
$
156,742
 

The Company’s cash equivalents include money market funds (Level 1) and time deposits (Level 2) which are measured utilizing quoted market prices or pricing models whereby all significant inputs are either observable or corroborated by observable market data.
 
 

8.           Redeemable Noncontrolling Interest

On April 23, 2010, the Company entered into a transfer agreement with GSSI LLC (“GSSI”), the noncontrolling interest holder in SSV, to acquire all of GSSI’s remaining 30.7% ownership interest in SSV for a negotiated price of $31.0 million. The purchase of GSSI’s interest in SSV was completed on April 30, 2010, resulting in the Company holding 100% interest in SSV.  As a result of this agreement, equity-noncontrolling interest and redeemable noncontrolling interest related to SSV has been eliminated.  The purchase price in excess of the carrying value of the noncontrolling interest of approximately $2.6 million (net of deferred taxes) was recorded as a reduction in additional paid-in capital.  Additionally, GSSI held a management agreement with SSV which was terminated concurrent with the Company’s purchase of GSSI’s interest in SSV.  Under the SSV operating agreement, the Company held call rights and GSSI held put rights (discussed below) which were waived as a result of the transfer agreement.
 
 
The Company’s and GSSI’s put and call rights were as follows: (i) beginning August 1, 2010 and each year thereafter, each of the Company and GSSI had the right to call or put, respectively, 100% of GSSI's ownership interest in SSV to the Company during certain periods each year and (ii) GSSI had the right to put to the Company 100% of its ownership interest in SSV at any time after GSSI had been removed as manager of SSV or after an involuntary transfer of the Company's ownership interest in SSV has occurred.  The put and call pricing was generally based on a multiple of the trailing twelve month EBITDA (as defined in the operating agreement) of SSV for the fiscal period ended prior to the commencement of the put or call period, as applicable.

Since GSSI's remaining interest in SSV had a redemption feature, as a result of the put option, the Company had classified the redeemable noncontrolling interest in SSV in the mezzanine section in the Consolidated Condensed Balance Sheets, outside of stockholders' equity.  The Company had recorded the redeemable noncontrolling interest at the redemption value as prescribed in the operating agreement at the end of each reporting period.  At the end of each reporting period if the redemption value was below the carrying value of the noncontrolling interest, the difference was recorded in noncontrolling interests as a component of stockholders’ equity; however, if the redemption value exceeded the carrying value of the noncontrolling interest the difference was recorded in retained earnings.

9.           Commitments and Contingencies

Metropolitan Districts

The Company credit-enhances $8.5 million of bonds issued by Holland Creek Metropolitan District (“HCMD”) through an $8.1 million letter of credit issued under the Company's Credit Facility.  HCMD's bonds were issued and used to build infrastructure associated with the Company's Red Sky Ranch residential development.  The Company has agreed to pay capital improvement fees to Red Sky Ranch Metropolitan District (“RSRMD”) until RSRMD's revenue streams from property taxes are sufficient to meet debt service requirements under HCMD's bonds, and the Company has recorded a liability of $1.8 million, $1.9 million and $1.4 million, primarily within “other long-term liabilities” in the accompanying Consolidated Condensed Balance Sheets, as of April 30, 2010, July 31, 2009 and April 30, 2009, respectively, with respect to the estimated present value of future RSRMD capital improvement fees.  The Company estimates that it will make capital improvement fee payments under this arrangement through the year ending July 31, 2028.

Guarantees

As of April 30, 2010, the Company had various other letters of credit in the amount of $73.9 million, consisting primarily of $53.4 million in support of the Employee Housing Bonds, $14.3 million of construction and development related guarantees and $5.4 million for workers’ compensation and general liability deductibles related to construction and development activities.

In addition to the guarantees noted above, the Company has entered into contracts in the normal course of business which include certain indemnifications under which it could be required to make payments to third parties upon the occurrence or non-occurrence of certain future events.  These indemnities include indemnities to licensees in connection with the licensees’ use of the Company’s trademarks and logos, indemnities for liabilities associated with the infringement of other parties’ technology and software products, indemnities related to liabilities associated with the use of easements, indemnities related to employment of contract workers, the Company’s use of trustees, indemnities related to the Company’s use of public lands and environmental indemnifications.  The duration of these indemnities generally is indefinite and generally do not limit the future payments the Company could be obligated to make.

As permitted under applicable law, the Company and certain of its subsidiaries indemnify their directors and officers over their lifetimes for certain events or occurrences while the officer or director is, or was, serving the Company or its subsidiaries in such a capacity.  The maximum potential amount of future payments the Company could be required to make under these indemnification agreements is unlimited; however, the Company has a director and officer insurance policy that should enable the Company to recover a portion of any future amounts paid.

Unless otherwise noted, the Company has not recorded any significant liabilities for the letters of credit, indemnities and other guarantees noted above in the accompanying Consolidated Condensed Financial Statements, either because the Company has recorded on its Consolidated Condensed Balance Sheets the underlying liability associated with the guarantee, the guarantee is with respect to the Company’s own performance and is therefore not subject to the measurement requirements as prescribed by GAAP, or because the Company has calculated the fair value of the indemnification or guarantee to be immaterial based upon the current facts and circumstances that would trigger a payment under the indemnification clause.  In addition, with respect to certain indemnifications it is not possible to determine the maximum potential amount of liability under these guarantees due to the unique set of facts and circumstances that are likely to be involved in each particular claim and indemnification provision.  Historically, payments made by the Company under these obligations have not been material.

As noted above, the Company makes certain indemnifications to licensees in connection with their use of the Company’s trademarks and logos.  The Company does not record any liabilities with respect to these indemnifications.

Self Insurance

The Company is self-insured for claims under its health benefit plans and for the majority of workers’ compensation claims, subject to a stop loss policy.  The self-insurance liability related to workers' compensation is determined actuarially based on claims filed.  The self-insurance liability related to claims under the Company’s health benefit plans is determined based on analysis of actual claims.  The amounts related to these claims are included as a component of accrued benefits in accounts payable and accrued liabilities (see Note 5, Supplementary Balance Sheet Information).

Legal

The Company is a party to various lawsuits arising in the ordinary course of business.  Management believes the Company has adequate insurance coverage or has accrued for loss contingencies for all known matters that are deemed to be probable losses and estimable.  As of April 30, 2010, July 31, 2009 and April 30, 2009 the accrual for the above loss contingencies was not material individually and in the aggregate.

10.           Segment Information

The Company has three reportable segments: Mountain, Lodging and Real Estate.  The Mountain segment includes the operations of the Company’s ski resorts and related ancillary services.  The Lodging segment includes the operations of all of the Company’s owned hotels, RockResorts, GTLC, condominium management, CME and golf operations.  The Real Estate segment owns and develops real estate in and around the Company’s resort communities.  The Company’s reportable segments, although integral to the success of the others, offer distinctly different products and services and require different types of management focus.  As such, these segments are managed separately.
 
The Company reports its segment results using Reported EBITDA (defined as segment net revenue less segment operating expenses, plus or minus segment equity investment income or loss and for the Real Estate segment plus gain on sale of real property), which is a non-GAAP financial measure.  The Company reports segment results in a manner consistent with management’s internal reporting of operating results to the chief operating decision maker (Chief Executive Officer) for purposes of evaluating segment performance.

Reported EBITDA is not a measure of financial performance under GAAP.  Items excluded from Reported EBITDA are significant components in understanding and assessing financial performance.  Reported EBITDA should not be considered in isolation or as an alternative to, or substitute for, net income (loss), net change in cash and cash equivalents or other financial statement data presented in the Consolidated Condensed Financial Statements as indicators of financial performance or liquidity.  Because Reported EBITDA is not a measurement determined in accordance with GAAP and thus is susceptible to varying calculations, Reported EBITDA as presented may not be comparable to other similarly titled measures of other companies.

The Company utilizes Reported EBITDA in evaluating performance of the Company and in allocating resources to its segments.  Mountain Reported EBITDA consists of Mountain net revenue less Mountain operating expense plus or minus Mountain equity investment income or loss.  Lodging Reported EBITDA consists of Lodging net revenue less Lodging operating expense.  Real Estate Reported EBITDA consists of Real Estate net revenue less Real Estate operating expense plus gain on sale of real property.  All segment expenses include an allocation of corporate administrative expense.  Assets are not allocated between segments, or used to evaluate performance, except as shown in the table below.

 
Following is key financial information by reportable segment which is used by management in evaluating performance and allocating resources (in thousands):

       
Three Months Ended
 
Nine Months Ended
       
April 30,
 
April 30,
       
2010
 
2009
 
2010
 
2009
Net revenue:
                             
Lift tickets
$
159,772
   
$
149,384
   
$
289,289
   
$
276,542
 
Ski school
 
40,625
     
36,374
     
70,694
     
65,336
 
Dining
 
25,837
     
24,246
     
49,094
     
48,456
 
Retail/rental
 
55,107
     
48,214
     
137,671
     
129,878
 
Other
 
20,872
     
20,962
     
55,647
     
58,235
 
Total Mountain net revenue
 
302,213
     
279,180
     
602,395
     
578,447
 
Lodging
 
44,877
     
44,896
     
124,908
     
131,299
 
Total Resort net revenue
 
347,090
     
324,076
     
727,303
     
709,746
 
Real Estate
 
3,164
     
9,407
     
4,239
     
165,314
 
Total net revenue
$
350,254
   
$
333,483
   
$
731,542
   
$
875,060
 
Operating expense:
                             
Mountain
$
156,454
   
$
144,998
   
$
386,940
   
$
382,409
 
Lodging
 
39,292
     
38,988
     
119,703
     
122,583
 
Total Resort operating expense
 
195,746
     
183,986
     
506,643
     
504,992
 
Real estate
 
8,391
     
14,129
     
20,985
     
125,014
 
Total segment operating expense
$
204,137
   
$
198,115
   
$
527,628
   
$
630,006
 
Gain on sale of real property
$
--
   
$
--
   
$
6,087
   
$
--
 
Mountain equity investment income (loss), net
$
838
   
$
(410
)
 
$
1,299
   
$
1,766
 
                               
Reported EBITDA:
                             
Mountain
$
146,597
   
$
133,772
   
$
216,754
   
$
197,804
 
Lodging
 
5,585
     
5,908
     
5,205
     
8,716
 
Resort
 
152,182
     
139,680
     
221,959
     
206,520
 
Real Estate
 
(5,227
)
   
(4,722
)
   
(10,659
)
   
40,300
 
Total Reported EBITDA
$
146,955
   
$
134,958
   
$
211,300
   
$
246,820
 
                               
Real estate held for sale and investment
$
445,885
   
$
276,952
   
$
445,885
   
$
276,952
 
                               
Reconciliation to net income attributable to Vail Resorts, Inc:
                             
Total Reported EBITDA
$
146,955
   
$
134,958
   
$
211,300
   
$
246,820
 
Depreciation and amortization
 
(27,812
)
   
(27,582
)
   
(82,768
)
   
(80,098
)
Gain (loss) on disposal of fixed assets, net
 
18
     
(206
)
   
(83
)
   
(808
)
Investment income
 
141
     
449
     
563
     
1,428
 
Interest expense, net
 
(3,673
)
   
(6,490
)
   
(12,656
)
   
(21,732
)
Income before provision for income taxes
 
115,629
     
101,129
     
116,356
     
145,610
 
    Provision for income taxes
 
(39,238
)
   
(36,737
)
   
(38,397
)
   
(53,740
)
Net income
$
76,391
   
$
64,392
   
$
77,959
   
$
91,870
 
Net income attributable to noncontrolling interests
 
(3,602
)
   
(2,753
)
   
(5,653
)
   
(4,190
)
Net income attributable to Vail Resorts, Inc.
$
72,789
   
$
61,639
   
$
72,306
   
$
87,680
 

11.           Stock Repurchase Plan

On March 9, 2006, the Company’s Board of Directors approved the repurchase of up to 3,000,000 shares of common stock and on July 16, 2008 approved an increase of the Company’s common stock repurchase authorization by an additional 3,000,000 shares.  The Company did not repurchase any shares of common stock during the three and nine months ended April 30, 2010.  Since inception of its stock repurchase plan through April 30, 2010, the Company has repurchased 3,878,535 shares at a cost of approximately $147.8 million.  As of April 30, 2010, 2,121,465 shares remained available to repurchase under the existing repurchase authorization.  Shares of common stock purchased pursuant to the repurchase program will be held as treasury shares and may be used for the issuance of shares under the Company's employee share award plans.


12.           Guarantor Subsidiaries and Non-Guarantor Subsidiaries

The Company’s payment obligations under the 6.75% Notes (see Note 4, Long-Term Debt) are fully and unconditionally guaranteed on a joint and several, senior subordinated basis by substantially all of the Company’s consolidated subsidiaries (collectively, and excluding Non-Guarantor Subsidiaries (as defined below), the “Guarantor Subsidiaries”) except for Eagle Park Reservoir Company, Gros Ventre Utility Company, Mountain Thunder, Inc., SSV (subsequent to April 30, 2010, SSV became a Guarantor Subsidiary under the 6.75% Notes), Larkspur Restaurant & Bar, LLC, Gore Creek Place, LLC and certain other insignificant entities (together, the “Non-Guarantor Subsidiaries”).  APII and the Employee Housing Entities are included with the Non-Guarantor Subsidiaries for purposes of the consolidated financial information, but are not considered subsidiaries under the indenture governing the 6.75% Notes.

Presented below is the consolidated financial information of the Parent Company, the Guarantor Subsidiaries and the Non-Guarantor Subsidiaries.  Financial information for the Non-Guarantor Subsidiaries is presented in the column titled “Other Subsidiaries.”  Balance sheets are presented as of April 30, 2010, July 31, 2009 and April 30, 2009.  Statements of operations are presented for the three and nine months ended April 30, 2010 and 2009.  Statements of cash flows are presented for the nine months ended April 30, 2010 and 2009.

Investments in subsidiaries are accounted for by the Parent Company and Guarantor Subsidiaries using the equity method of accounting.  Net income (loss) of Guarantor and Non-Guarantor Subsidiaries is, therefore, reflected in the Parent Company's and Guarantor Subsidiaries' investments in and advances to (from) subsidiaries.  Net income (loss) of the Guarantor and Non-Guarantor Subsidiaries is reflected in Parent Company and Guarantor Subsidiaries as equity in income (loss) of consolidated subsidiaries.  The elimination entries eliminate investments in Other Subsidiaries and intercompany balances and transactions for consolidated reporting purposes.

 
 
 
 

 
Supplemental Condensed Consolidating Balance Sheet
As of April 30, 2010
(in thousands)
(Unaudited)
                                 
             
100% Owned
                 
       
Parent
   
Guarantor
   
Other
   
Eliminating
   
       
Company
   
Subsidiaries
   
Subsidiaries
 
Entries
   
Consolidated
Current assets:
                           
 
Cash and cash equivalents
$
--
 
$
26,315
 
$
24,832
 
$
--
 
$
51,147
 
Restricted cash
 
--
   
11,448
   
378
   
--
   
11,826
 
Trade receivables, net
 
--
   
33,455
   
1,584
   
--
   
35,039
 
Inventories, net
 
--
   
10,383
   
32,286
   
--
   
42,669
 
Other current assets
 
24,819
   
19,364
   
1,854
   
--
   
46,037
   
Total current assets
 
24,819
   
100,965
   
60,934
   
--
   
186,718
Property, plant and equipment, net
 
--
   
966,348
   
58,629
   
--
   
1,024,977
Real estate held for sale and investment
 
--
   
445,885
   
--
   
--
   
445,885
Goodwill, net
 
--
   
148,949
   
19,248
   
--
   
168,197
Intangible assets, net
 
--
   
63,136
   
23,445
   
--
   
86,581
Other assets
 
2,693
   
24,711
   
5,077
   
--
   
32,481
Investments in subsidiaries and advances to (from) parent
 
1,403,150
   
358,365
   
(4,485
)
 
(1,757,030
)
 
--
 
Total assets
$
1,430,662
 
$
2,108,359
 
$
162,848
 
$
(1,757,030
)
$
1,944,839
                                 
Current liabilities:
                           
 
Accounts payable and accrued liabilities
$
5,897
 
$
215,565
 
$
16,121
 
$
--
 
$
237,583
 
Income taxes payable
 
10,022
   
--
   
--
   
--
   
10,022
 
Long-term debt due within one year
 
--
   
1,509
   
342
   
--
   
1,851
   
Total current liabilities
 
15,919
   
217,074
   
16,463
   
--
   
249,456
Long-term debt
 
390,000
   
41,213
   
58,609
   
--
   
489,822
Other long-term liabilities
 
29,690
   
165,058
   
1,945
   
--
   
196,693
Deferred income taxes
 
152,089
   
--
   
--
   
--
   
152,089
Redeemable noncontrolling interest
 
--
   
--
   
--
   
--
   
--
 
Total Vail Resorts, Inc. stockholders’ equity
 
842,964
   
1,685,014
   
72,016
   
(1,757,030
)
 
842,964
 
Noncontrolling interests
 
--
   
--
   
13,815
   
--
   
13,815
 
Total stockholders’ equity
 
842,964
   
1,685,014
   
85,831
   
(1,757,030
)
 
856,779
 
Total liabilities and stockholders' equity
$
1,430,662
 
$
2,108,359
 
$
162,848
 
$
(1,757,030
)
$
1,944,839
 
 
 
 
 
 
Supplemental Condensed Consolidating Balance Sheet
As of July 31, 2009
(in thousands)

           
100% Owned
                       
   
Parent
 
Guarantor
 
Other
 
Eliminating
       
   
Company
 
Subsidiaries
 
Subsidiaries
 
Entries
 
Consolidated
Current assets:
                                       
Cash and cash equivalents
 
$
--
   
$
66,364
   
$
2,934
   
$
--
   
$
69,298
 
Restricted cash
   
--
     
11,065
     
--
     
--
     
11,065
 
Trade receivables, net
   
--
     
56,834
     
1,229
     
--
     
58,063
 
Inventories, net
   
--
     
11,895
     
37,052
     
--
     
48,947
 
Other current assets
   
21,333
     
18,407
     
1,875
     
--
     
41,615
 
Total current assets
   
21,333
     
164,565
     
43,090
     
--
     
228,988
 
Property, plant and equipment, net
   
--
     
991,027
     
66,631
     
--
     
1,057,658
 
Real estate held for sale and investment
   
--
     
311,485
     
--
     
--
     
311,485
 
Goodwill, net
   
--
     
148,702
     
19,248
     
--
     
167,950
 
Intangible assets, net
   
--
     
63,580
     
15,849
     
--
     
79,429
 
Other assets
   
3,226
     
30,710
     
5,034
     
--
     
38,970
 
Investments in subsidiaries and advances to (from) parent
   
1,290,532
     
307,124
     
(15,179
)
   
(1,582,477
)
   
--
 
Total assets
 
$
1,315,091
   
$
2,017,193
   
$
134,673
   
$
(1,582,477
)
 
$
1,884,480
 
                                         
Current liabilities:
                                       
Accounts payable and accrued liabilities
 
$
12,412
   
$
214,021
   
$
19,103
   
$
--
   
$
245,536
 
Income taxes payable
   
5,460
     
--
     
--
     
--
     
5,460
 
Long-term debt due within one year
   
--
     
9
     
343
     
--
     
352
 
Total current liabilities
   
17,872
     
214,030
     
19,446
     
--
     
251,348
 
Long-term debt
   
390,000
     
42,716
     
58,892
     
--
     
491,608
 
Other long-term liabilities
   
29,690
     
200,974
     
2,505
     
--
     
233,169
 
Deferred income taxes
   
112,234
     
--
     
--
     
--
     
112,234
 
Redeemable noncontrolling interest
   
--
     
--
     
15,415
     
--
     
15,415
 
       Total Vail Resorts, Inc. stockholders’ equity
   
765,295
     
1,559,473
     
23,004
     
(1,582,477
)
   
765,295
 
       Noncontrolling interests
   
--
     
--
     
15,411
     
--
     
15,411
 
       Total stockholders’ equity
   
765,295
     
1,559,473
     
38,415
     
(1,582,477
)
   
780,706
 
       Total liabilities and stockholders’ equity
 
$
1,315,091
   
$
2,017,193
   
$
134,673
   
$
(1,582,477
)
 
$
1,884,480
 
 
 
 
 
 
 
 
Supplemental Condensed Consolidating Balance Sheet
As of April 30, 2009
(in thousands)
(Unaudited)


       
100% Owned
               
   
Parent
 
Guarantor
 
Other
 
Eliminating
       
   
Company
 
Subsidiaries
 
Subsidiaries
 
Entries
 
Consolidated
Current assets:
                                       
Cash and cash equivalents
 
$
--
   
$
161,853
   
$
8,684
   
$
--
   
$
170,537
 
Restricted cash
   
--
     
9,881
     
248
     
--
     
10,129
 
Trade receivables, net
   
--
     
45,990
     
1,739
     
--
     
47,729
 
Inventories, net
   
--
     
10,321
     
35,346
     
--
     
45,667
 
Other current assets
   
18,102
     
14,770
     
1,889
     
--
     
34,761
 
Total current assets
   
18,102
     
242,815
     
47,906
     
--
     
308,823
 
Property, plant and equipment, net
   
--
     
999,086
     
67,079
     
--
     
1,066,165
 
Real estate held for sale and investment
   
--
     
276,952
     
--
     
--
     
276,952
 
Goodwill, net
   
--
     
148,702
     
19,248
     
--
     
167,950
 
Intangible assets, net
   
--
     
63,757
     
15,850
     
--
     
79,607
 
Other assets
   
3,403
     
32,700
     
5,051
     
--
     
41,154
 
Investments in subsidiaries and advances to (from) parent
   
1,350,254
     
307,604
     
(13,220
)
   
(1,644,638
)
   
--
 
Total assets
 
$
1,371,759
   
$
2,071,616
   
$
141,914
   
$
(1,644,638
)
 
$
1,940,651
 
                                         
Current liabilities:
                                       
Accounts payable and accrued liabilities
 
$
5,951
   
$
198,486
   
$
16,490
   
$
--
   
$
220,927
 
Income taxes payable
   
32,156
     
--
     
--
     
--
     
32,156
 
Long-term debt due within one year
   
--
     
9
     
341
     
--
     
350
 
Total current liabilities
   
38,107
     
198,495
     
16,831
     
--
     
253,433
 
Long-term debt
   
390,000
     
42,717
     
58,951
     
--
     
491,668
 
Other long-term liabilities
   
3,142
     
216,118
     
2,202
     
--
     
221,462
 
Deferred income taxes
   
131,970
     
--
     
--
     
--
     
131,970
 
Redeemable noncontrolling interest
   
--
     
--
     
15,016
     
--
     
15,016
 
       Total Vail Resorts, Inc. stockholders’ equity
   
808,540
     
1,614,286
     
30,352
     
(1,644,638
)
   
808,540
 
       Noncontrolling interests
   
--
     
--
     
18,562
     
--
     
18,562
 
       Total stockholders’ equity
   
808,540
     
1,614,286
     
48,914
     
(1,644,638
)
   
827,102
 
       Total liabilities and stockholders’ equity
 
$
1,371,759
   
$
2,071,616
   
$
141,914
   
$
(1,644,638
)
 
$
1,940,651
 

 
 
 
 
 

 
 
Supplemental Condensed Consolidating Statement of Operations
 
For the three months ended April 30, 2010
 
(in thousands)
 
(Unaudited)
                                     
             
100% Owned
                     
       
Parent
   
Guarantor
   
Other
   
Eliminating
         
       
Company
   
Subsidiaries
   
Subsidiaries
   
Entries
   
Consolidated
   
Total net revenue
$
--
 
$
294,644
 
$
58,567
 
$
(2,957
)
$
350,254
   
Total operating expense
 
172
   
187,398
   
47,280
   
(2,919
)
 
231,931
   
 
(Loss) income from operations
 
(172
)
 
107,246
   
11,287
   
(38
)
 
118,323
   
Other (expense) income, net
 
(6,758
)
 
3,490
   
(302
)
 
38
   
(3,532
)
 
Equity investment income, net
 
--
   
838
   
--
   
--
   
838
   
 
(Loss) income before benefit (provision) for income taxes
 
(6,930
)
 
111,574
   
10,985
   
--
   
115,629
   
 
Benefit (provision) for income taxes
 
1,699
   
(40,937
)
 
--
      --    
(39,238
)