UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q

ýQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended January 31,April 30, 2013
 
¨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.    ý  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).    ý  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 ý  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    ý  No
As of March 1,June 3, 2013, 35,909,06935,913,960 shares of the registrant’s common stock were outstanding.



Table of Contents
 
   
PART IFINANCIAL INFORMATION 
   
Item 1.
Financial Statements.
F-1
Item 2.
Management’s Discussion and Analysis of Financial Condition and Results of Operations.
1
Item 3.
Quantitative and Qualitative Disclosures About Market Risk.
1819
Item 4.
Controls and Procedures.
1820
   
PART IIOTHER INFORMATION 
   
Item 1.
Legal Proceedings.
1820
Item 1A.
Risk Factors.
1920
Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds.
1920
Item 3.
Defaults Upon Senior Securities.
1920
Item 4.
Mine Safety Disclosures.
1920
Item 5.
Other Information.
1921
Item 6.
Exhibits.
2021



PART I FINANCIAL INFORMATION
Item 1. Financial Statements — Unaudited
 
Consolidated Condensed Balance Sheets as of January 31,April 30, 2013, July 31, 2012 and January 31,April 30, 2012
F-2
Consolidated Condensed Statements of Operations for the Three and SixNine Months Ended January  31,April 30, 2013 and 2012
F-3
Consolidated Condensed Statements of Comprehensive Income (Loss) for the Three and SixNine Months Ended January 31,April 30, 2013 and 2012
F-4
Consolidated Condensed Statements of Cash Flows for the SixNine Months Ended January  31,April 30, 2013 and 2012
F-5
Notes to Consolidated Condensed Financial Statements
F-6

F-1




Vail Resorts, Inc.
Consolidated Condensed Balance Sheets
(In thousands, except share and per share amounts)
 
 January 31, 2013 (Unaudited) July 31, 2012 January 31, 2012 (Unaudited) April 30, 2013 (Unaudited) July 31, 2012 April 30, 2012 (Unaudited)
Assets            
Current assets:            
Cash and cash equivalents $136,579
 $46,053
 $95,642
 $237,735
 $46,053
 $147,110
Restricted cash 12,194
 14,284
 16,221
 11,991
 14,284
 13,666
Trade receivables, net 53,486
 65,743
 48,430
 73,733
 65,743
 65,133
Inventories, net 70,341
 65,873
 62,594
 61,201
 65,873
 56,237
Other current assets 49,633
 40,417
 56,998
 50,478
 40,417
 55,671
Total current assets 322,233
 232,370
 279,885
 435,138
 232,370
 337,817
Property, plant and equipment, net (Note 6) 1,057,399
 1,049,207
 1,057,930
 1,039,907
 1,049,207
 1,056,243
Real estate held for sale and investment 216,815
 237,668
 257,169
 201,861
 237,668
 248,262
Goodwill, net 271,762
 269,769
 268,058
 271,855
 269,769
 269,678
Intangible assets, net 92,590
 92,070
 90,196
 92,039
 92,070
 93,715
Other assets 42,950
 46,530
 45,997
 38,869
 46,530
 44,024
Total assets $2,003,749
 $1,927,614
 $1,999,235
 $2,079,669
 $1,927,614
 $2,049,739
Liabilities and Stockholders’ Equity            
Current liabilities:            
Accounts payable and accrued liabilities (Note 6) $317,504
 $227,538
 $301,473
 $246,352
 $227,538
 $224,047
Income taxes payable 14,979
 20,721
 19,569
 13,173
 20,721
 19,005
Long-term debt due within one year (Note 4) 806
 990
 1,058
 518
 990
 1,119
Total current liabilities 333,289
 249,249
 322,100
 260,043
 249,249
 244,171
Long-term debt (Note 4) 489,497
 489,775
 490,302
 489,240
 489,775
 489,757
Other long-term liabilities (Note 6) 230,157
 232,869
 235,629
 226,145
 232,869
 233,923
Deferred income taxes 140,704
 139,393
 129,962
 201,511
 139,393
 185,160
Commitments and contingencies (Note 9) 
 
 
 
 
 
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, 40,855,859 (unaudited), 40,531,204 and 40,477,796 (unaudited) shares issued, respectively 409
 405
 405
Common stock, $0.01 par value, 100,000,000 shares authorized, 40,861,919 (unaudited), 40,531,204 and 40,516,476 (unaudited) shares issued, respectively 409
 405
 405
Additional paid-in capital 593,424
 586,691
 581,217
 596,167
 586,691
 583,818
Accumulated other comprehensive income (loss) 198
 (255) —
Accumulated other comprehensive (loss) income (4) (255) 61
Retained earnings 395,175
 408,662
 396,335
 485,368
 408,662
 469,148
Treasury stock, at cost; 4,949,111 (unaudited), 4,949,111 and 4,468,181 (unaudited) shares, respectively (Note 11) (193,192) (193,192) (170,696) (193,192) (193,192)��(170,696)
Total Vail Resorts, Inc. stockholders’ equity 796,014
 802,311
 807,261
 888,748
 802,311
 882,736
Noncontrolling interests 14,088
 14,017
 13,981
 13,982
 14,017
 13,992
Total stockholders’ equity (Note 2) 810,102
 816,328
 821,242
 902,730
 816,328
 896,728
Total liabilities and stockholders’ equity $2,003,749
 $1,927,614
 $1,999,235
 $2,079,669
 $1,927,614
 $2,049,739
The accompanying Notes are an integral part of these consolidated condensed financial statements.


F-2


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, Three Months Ended April 30, Nine Months Ended April 30,
 2013 2012 2013 2012 2013 2012 2013 2012
Net revenue:                
Mountain $361,741
 $315,938
 $413,653
 $365,608
 $402,017
 $354,586
 $815,670
 $720,194
Lodging 46,543
 48,306
 99,051
 101,900
 53,834
 53,972
 152,885
 155,872
Real estate 14,167
 9,088
 26,097
 22,197
 13,840
 12,587
 39,937
 34,784
Total net revenue 422,451
 373,332
 538,801
 489,705
 469,691
 421,145
 1,008,492
 910,850
Segment operating expense (exclusive of depreciation and amortization shown separately below):                
Mountain 220,997
 195,489
 328,545
 294,044
 207,953
 184,211
 536,498
 478,256
Lodging 44,803
 47,093
 96,609
 102,394
 45,446
 47,103
 142,055
 149,497
Real estate 16,739
 12,563
 32,353
 30,410
 16,996
 16,069
 49,349
 46,479
Total segment operating expense 282,539
 255,145
 457,507
 426,848
 270,395
 247,383
 727,902
 674,232
Other operating expense:                
Depreciation and amortization (33,418) (33,050) (65,097) (61,980) (33,730) (33,266) (98,827) (95,245)
Loss on disposal of fixed assets, net (531) (919) (533) (1,033) (224) (90) (757) (1,123)
Income (loss) from operations 105,963
 84,218
 15,664
 (156)
Income from operations 165,342
 140,406
 181,006
 140,250
Mountain equity investment income, net 99
 178
 533
 608
 266
 336
 799
 944
Investment income, net 99
 310
 153
 374
Investment income (loss), net 153
 (18) 306
 356
Interest expense, net (8,534) (8,542) (16,909) (16,783) (8,359) (8,443) (25,268) (25,226)
Income (loss) before (provision) benefit from income taxes 97,627
 76,164
 (559) (15,957)
(Provision) benefit from income taxes (37,098) (29,743) 485
 6,644
Net income (loss) 60,529
 46,421
 (74) (9,313)
Net loss (income) attributable to noncontrolling interests 22
 (32) 45
 (7)
Net income (loss) attributable to Vail Resorts, Inc. $60,551
 $46,389
 $(29) $(9,320)
Income before provision for income taxes 157,402
 132,281
 156,843
 116,324
Provision for income taxes (59,814) (52,753) (59,329) (46,108)
Net income 97,588
 79,528
 97,514
 70,216
Net loss attributable to noncontrolling interests 52
 41
 97
 34
Net income attributable to Vail Resorts, Inc. $97,640
 $79,569
 $97,611
 $70,250
Per share amounts (Note 3):                
Basic net income (loss) per share attributable to Vail Resorts, Inc. $1.69
 $1.29
 $—
 $(0.26)
Diluted net income (loss) per share attributable to Vail Resorts, Inc. $1.65
 $1.27
 $—
 $(0.26)
Basic net income per share attributable to Vail Resorts, Inc. $2.72
 $2.21
 $2.72
 $1.95
Diluted net income per share attributable to Vail Resorts, Inc. $2.66
 $2.17
 $2.66
 $1.92
Cash dividends declared per share $0.1875
 $0.15
 $0.3750
 $0.30
 $0.2075
 $0.1875
 $0.5825
 $0.4875
The accompanying Notes are an integral part of these consolidated condensed financial statements.



F-3



Vail Resorts, Inc.
Consolidated Condensed Statements of Comprehensive Income (Loss)
(In thousands)
(Unaudited)

  Three Months Ended January 31, Six Months Ended January 31,
  2013 2012 2013 2012
Net income (loss) $60,529
 $46,421
 $(74) $(9,313)
Foreign currency translation adjustments, net of tax 159
 —
 453
 —
Comprehensive income (loss) 60,688
 46,421
 379
 (9,313)
Comprehensive loss (income) attributable to noncontrolling interests 22
 (32) 45
 (7)
Comprehensive income (loss) attributable to Vail Resorts, Inc. $60,710
 $46,389
 $424
 $(9,320)
  Three Months Ended April 30, Nine Months Ended April 30,
  2013 2012 2013 2012
Net income $97,588
 $79,528
 $97,514
 $70,216
Foreign currency translation adjustments, net of tax (202) 61
 251
 61
Comprehensive income 97,386
 79,589
 97,765
 70,277
Comprehensive loss attributable to noncontrolling interests 52
 41
 97
 34
Comprehensive income attributable to Vail Resorts, Inc. $97,438
 $79,630
 $97,862
 $70,311
The accompanying Notes are an integral part of these consolidated condensed financial statements.


F-4


Vail Resorts, Inc.
Consolidated Condensed Statements of Cash Flows
(In thousands)
(Unaudited)
 
 Six Months Ended January 31, Nine Months Ended April 30,
 2013 2012 2013 2012
Cash flows from operating activities:        
Net loss $(74) $(9,313)
Adjustments to reconcile net loss to net cash provided by operating activities:    
Net income $97,514
 $70,216
Adjustments to reconcile net income to net cash provided by operating activities:    
Depreciation and amortization 65,097
 61,980
 98,827
 95,245
Cost of real estate sales 19,900
 16,385
 30,282
 25,357
Stock-based compensation expense 6,631
 6,820
 9,544
 9,349
Deferred income taxes, net (485) (6,644) 59,329
 46,108
Other non-cash income, net (4,060) (2,875) (5,697) (4,548)
Changes in assets and liabilities:        
Restricted cash 2,100
 (3,783) 2,292
 (1,109)
Trade receivables, net 12,677
 9,919
 (7,354) (1,890)
Inventories, net (3,822) (8,622) 5,944
 (1,494)
Investments in real estate (1,410) (1,850) (1,662) (2,005)
Accounts payable and accrued liabilities 83,200
 75,225
 12,231
 (6,596)
Other assets and liabilities, net (8,477) 147
 (9,905) 5,412
Net cash provided by operating activities 171,277
 137,389
 291,345
 234,045
Cash flows from investing activities:        
Capital expenditures (53,920) (93,186) (65,461) (107,999)
Acquisition of businesses (19,958) 342
 (19,958) (23,479)
Other investing activities, net 246
 (904) 861
 (944)
Net cash used in investing activities (73,632) (93,748) (84,558) (132,422)
Cash flows from financing activities:        
Proceeds from borrowings under long-term debt 96,000
 56,000
 96,000
 56,000
Payments of long-term debt (96,444) (56,383) (96,989) (57,002)
Repurchases of common stock —
 (7,869) —
 (7,869)
Dividends paid (13,458) (10,801) (20,905) (17,559)
Other financing activities, net 6,722
 911
 6,778
 1,778
Net cash used in financing activities (7,180) (18,142) (15,116) (24,652)
Effect of exchange rate changes on cash and cash equivalents 61
 —
 11
 (4)
Net increase in cash and cash equivalents 90,526
 25,499
 191,682
 76,967
Cash and cash equivalents:        
Beginning of period 46,053
 70,143
 46,053
 70,143
End of period $136,579
 $95,642
 $237,735
 $147,110
The accompanying Notes are an integral part of these consolidated condensed financial statements.


F-5


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 operates the seven world-class ski resort properties of Vail, Breckenridge, Keystone and Beaver Creek mountain resorts in Colorado, and Heavenly, Northstar and Kirkwood mountain resorts in the Lake Tahoe area of California and Nevada; the ski areas of Afton Alps in Minnesota and Mount Brighton in Michigan;Michigan ("Urban Ski Areas"); as well as ancillary services, primarily including ski school, dining and retail/rental operations. TheseThe resorts (with the exception of Northstar Afton Alps and Mount Brighton)the Urban Ski Areas) 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; National Park Service (“NPS”) concessionaire properties including the Grand Teton Lodge Company (“GTLC”), which operates destination resorts in the Grand Teton National Park; Colorado Mountain Express (“CME”), a Colorado resort ground transportation company; and mountain resort 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 its NPS concessionaire properties 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 7, Variable Interest Entities).
 

2.Summary of Significant Accounting Policies
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, 2012. Certain information and footnote disclosures, including significant accounting policies, normally included in fiscal year financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been condensed or omitted. The Consolidated Condensed Balance Sheet as of July 31, 2012 was derived from audited financial statements.
Presentation of Comprehensive Income — Effective August 1, 2012, the Company adopted Accounting Standard Update ("ASU") No. 2011-05 -“Comprehensive Income (Topic 220): Presentation of Comprehensive Income” which amends existing guidance by allowing two options for presenting the components of net income and other comprehensive income: (1) in a single continuous financial statement, a statement of comprehensive income or (2) in two separate but consecutive financial statements, an income statement followed by a separate statement of other comprehensive income. The Company also adopted ASU No. 2011-12—“Comprehensive Income (Topic 220): Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income in ASU No. 2011-05” which defers until further notice ASU No. 2011-05's requirement that items that are reclassified from other comprehensive income to net income be presented on the face of the financial statements.statements (see below). ASU No. 2011-05 required retrospective application. The adoption of these standards only amended presentation and disclosure requirements concerning comprehensive income; therefore, the adoption of these standards did not affect the Company’s financial position or results of operations. The Company elected to present the total of comprehensive income, (loss), the components of net income (loss) (i.e. statements of operations), and the components of other comprehensive income (loss) for both the three and sixnine months ended January 31,April 30, 2013 and 2012, in two separate but consecutive statements.
New Accounting Standards -- In January 2013, the FASB issued ASU No. 2013-02, "Comprehensive Income (Topic 220): Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income", to improve the transparency of reporting these reclassifications. The amendments in this ASU supersede and replace the presentation requirements for reclassifications out of accumulated other comprehensive income in ASU No. 2011-05 (issued in June 2011) and ASU No.

F-6


2011-12 (issued in December 2011). This amendment does not change the current requirements for reporting net income or other comprehensive income in financial statements, but the standard requires that companies present either in a single note or parenthetically on the face of the financial statements, the effect of significant amounts reclassified from each component of accumulated other comprehensive income based on its source and the income statement line items affected by the reclassification. If a component is not required to be reclassified to net income in its entirety, companies would instead cross reference to the related footnote for additional information. The amendments are effective for fiscal years beginning after December 15, 2012 (the Company's 2014 first fiscal quarter). The Company does not currently have any components of other comprehensive income that require reclassification to net income, as such, the adoption of this standard is not expected to have an impact on the presentation of the Company's 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— Net income/loss attributable to noncontrolling interests along with net income/lossincome attributable to the stockholders of the Company are reported separately in the Consolidated Condensed Statement of Operations. Additionally, noncontrolling interests in the consolidated subsidiaries of the Company are reported as a separate component of equity in the Consolidated Condensed Balance Sheet, apart from the Company’s equity. The following table summarizes the changes in total stockholders’ equity (in thousands):
 
 For the Six Months Ended January 31, For the Nine Months Ended April 30,
 2013 2012 2013 2012
 
Vail Resorts
Stockholders’
Equity
 
Noncontrolling
Interests
 
Total
Stockholders' Equity
 
Vail Resorts
Stockholders’
Equity
 
Noncontrolling
Interests
 
Total
Stockholders' Equity
 
Vail Resorts
Stockholders’
Equity
 
Noncontrolling
Interests
 
Total
Stockholders' Equity
 
Vail Resorts
Stockholders’
Equity
 
Noncontrolling
Interests
 
Total
Stockholders' Equity
Balance, beginning of period $802,311
 $14,017
 $816,328
 $829,723
 $13,996
 $843,719
 $802,311
 $14,017
 $816,328
 $829,723
 $13,996
 $843,719
Net (loss) income (29) (45) (74) (9,320) 7
 (9,313)
Net income (loss) 97,611
 (97) 97,514
 70,250
 (34) 70,216
Stock-based compensation expense 6,631
 —
 6,631
 6,820
 —
 6,820
 9,544
 —
 9,544
 9,349
 —
 9,349
Issuance of shares under share award plans, net of shares withheld for taxes (3,792) —
 (3,792) (2,219) —
 (2,219) (3,832) —
 (3,832) (2,661) —
 (2,661)
Tax benefit from share award plans 3,898
 —
 3,898
 927
 —
 927
 3,768
 —
 3,768
 1,442
 —
 1,442
Cash dividends paid on common stock (13,458) —
 (13,458) (10,801) —
 (10,801) (20,905) —
 (20,905) (17,559) —
 (17,559)
Repurchases of common stock —
 —
 —
 (7,869) —
 (7,869) —
 —
 —
 (7,869) —
 (7,869)
Contributions (distributions) from/to noncontrolling interests, net —
 116
 116
 —
 (22) (22)
Foreign currency translation adjustments 453
 —
 453
 —
 —
 —
Contributions from noncontrolling interests, net —
 62
 62
 —
 30
 30
Foreign currency translation adjustments, net of tax 251
 —
 251
 61
 —
 61
Balance, end of period $796,014
 $14,088
 $810,102
 $807,261
 $13,981
 $821,242
 $888,748
 $13,982
 $902,730
 $882,736
 $13,992
 $896,728
Fair Value Instruments— The recorded amounts for cash and cash equivalents, trade 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 6.50% Senior Subordinated Notes due 2019 (“6.50% Notes”) (Note 4, Long-Term Debt) are based on quoted market prices (a Level 1 input). 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 (a Level 3 input). The estimated fair values of the 6.50% Notes, Industrial Development Bonds and other long-term debt as of January 31,April 30, 2013 are presented below (in thousands):
 

F-7


 January 31, 2013 April 30, 2013
 
Carrying
Value
 
Fair
Value
 
Carrying
Value
 
Fair
Value
6.50% Notes $390,000
 $421,200
 $390,000
 $420,713
Industrial Development Bonds $41,200
 $47,364
 $41,200
 $48,644
Other long-term debt $6,527
 $7,097
 $5,983
 $6,696


3.Net Income (Loss) Per Common Share
Basic earnings per share (“EPS”) excludes dilution and is computed by dividing net income (loss) 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 January 31,April 30, 2013 and 2012 (in thousands, except per share amounts):
 
 Three Months Ended January 31, Three Months Ended April 30,
 2013 2012 2013 2012
 Basic Diluted Basic Diluted Basic Diluted Basic Diluted
Net income per share:                
Net income attributable to Vail Resorts $60,551
 $60,551
 $46,389
 $46,389
 $97,640
 $97,640
 $79,569
 $79,569
Weighted-average shares outstanding 35,895
 35,895
 36,005
 36,005
 35,911
 35,911
 36,032
 36,032
Effect of dilutive securities —
 768
 —
 646
 —
 863
 —
 672
Total shares 35,895
 36,663
 36,005
 36,651
 35,911
 36,774
 36,032
 36,704
Net income per share attributable to Vail Resorts $1.69
 $1.65
 $1.29
 $1.27
 $2.72
 $2.66
 $2.21
 $2.17

The Company computes the effect of dilutive securities using the treasury stock method and average market prices during the period. 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 1,00025,000 and 38,00042,000 for the three months ended January 31,April 30, 2013 and 2012, respectively.

Presented below is basic and diluted EPS for the sixnine months ended January 31,April 30, 2013 and 2012 (in thousands, except per share amounts):
 Six Months Ended January 31, Nine Months Ended April 30,
 2013 2012 2013 2012
 Basic Diluted Basic Diluted Basic Diluted Basic Diluted
Net loss per share:        
Net loss attributable to Vail Resorts $(29) $(29) $(9,320) $(9,320)
Net income per share:        
Net income attributable to Vail Resorts $97,611
 $97,611
 $70,250
 $70,250
Weighted-average shares outstanding 35,798
 35,798
 36,036
 36,036
 35,835
 35,835
 36,034
 36,034
Effect of dilutive securities —
 —
 —
 —
 —
 846
 —
 630
Total shares 35,798
 35,798
 36,036
 36,036
 35,835
 36,681
 36,034
 36,664
Net loss per share attributable to Vail Resorts $—
 $—
 $(0.26) $(0.26)
Net income per share attributable to Vail Resorts $2.72
 $2.66
 $1.95
 $1.92

The Company computes the effect of dilutive securities using the treasury stock method and average market prices during the period. The number of shares issuable on the exercise of share based awards that were excluded from the calculation of diluted net lossincome per share because the effect of their inclusion would have been anti-dilutive totaled 842,00010,000 and 666,00024,000 for the sixnine months ended January 31,April 30, 2013 and 2012, respectively.
On June 7, 2011 the Company’s Board of Directors approved the commencement of a regular quarterly cash dividend on the Company's common stock at an annual rate of $0.60 per share, subject to quarterly declaration. On March 5, 2012 the Company’s Board of Directors approved a 25% increase to the annual cash dividend to an annual rate of $0.75 per share, subject to quarterly declaration. During the three and six months ended January 31, 2013, the Company paid cash dividends of $0.1875 and $0.3750 per share, respectively ($6.7 million and $13.5 million, respectively, in the aggregate). During the three and six months ended January 31, 2012, the Company paid cash dividends of $0.15 and $0.30 per share, respectively ($5.4

F-8


million and $10.8 million, respectively, in the aggregate). On March 4, 2013 the Company’s Board of Directors approved an approximate 10% increase to its annual cash dividend on its common stock,to an annual rate of $0.83 per share, subject to quarterly declaration. As a result,During the three and nine months ended April 30, 2013, the Company paid cash dividends of $0.2075 and $0.5825 per share, respectively ($7.5 million

F-8


and $20.9 million, respectively, in the aggregate). During the three and nine months ended April 30, 2012, the Company paid cash dividends of $0.1875 and $0.4875 per share, respectively ($6.8 million and $17.6 million, respectively, in the aggregate). On June 5, 2013 the Company’s Board of Directors declared a quarterly cash dividend of $0.2075 per share was declared by the Company's Board of Directors payable on AprilJuly 9, 2013 to stockholders of record as of March 25,June 24, 2013.
 
4.Long-Term Debt
Long-term debt as of January 31,April 30, 2013, July 31, 2012 and January 31,April 30, 2012 is summarized as follows (in thousands):
 
 Maturity (a) January 31, 2013 July 31, 2012 January 31, 2012 Maturity (a) April 30, 2013 July 31, 2012 April 30, 2012
Credit Facility Revolver 2016 $—
 $—
 $—
 2016 $—
 $—
 $—
Industrial Development Bonds 2020 41,200
 41,200
 41,200
 2020 41,200
 41,200
 41,200
Employee Housing Bonds 2027-2039 52,575
 52,575
 52,575
 2027-2039 52,575
 52,575
 52,575
6.50% Notes 2019 390,000
 390,000
 390,000
 2019 390,000
 390,000
 390,000
Other 2013-2029 6,528
 6,990
 7,585
 2013-2029 5,983
 6,990
 7,101
Total debt 490,303
 490,765
 491,360
 489,758
 490,765
 490,876
Less: Current maturities (b) 806
 990
 1,058
 518
 990
 1,119
Long-term debt $489,497
 $489,775
 $490,302
 $489,240
 $489,775
 $489,757
 
(a)Maturities are based on the Company’s July 31 fiscal year end.
(b)Current maturities represent principal payments due in the next 12 months.

Aggregate maturities for debt outstanding as of January 31,April 30, 2013 reflected by fiscal year are as follows (in thousands):
 
  
2013$553
$9
2014509
509
2015533
533
2016244
244
2017257
257
Thereafter488,207
488,206
  
Total debt$490,303
$489,758
  
The Company incurred gross interest expense of $8.58.4 million for both the three months ended January 31,April 30, 2013 and 2012, respectively, of which $0.5 million was amortization of deferred financing costs. The Company had no capitalized interest during the three months ended January 31,April 30, 2013 and 2012. The Company incurred gross interest expense of $16.925.3 million and $25.4 million for both the sixnine months ended January 31,April 30, 2013 and 2012, respectively, of which $1.01.5 million was amortization of deferred financing costs.costs in both years. The Company had no capitalized interest during the sixnine months ended January 31,April 30, 2013. The Company capitalized $0.1 million of interest during the sixnine months ended and January 31,April 30, 2012.
 
5.Acquisitions

Skiinfo
On February 1, 2012, the Company acquired the capital stock of Skiinfo, AS, a Norwegian company which owns and operates several European websites focused on the ski and snowboarding industry, for total cash consideration of $5.7 million, net of cash assumed. The purchase price was allocated to identifiable tangible and intangible assets acquired and liabilities assumed based on their estimated fair values at the acquisition date. The Company completed its purchase price allocation and has recorded $2.4 million in property, plant and equipment, $2.7 million in other assets, $1.8 million in goodwill, $0.7 million in indefinite-lived intangible assets, $0.5 million in other intangible assets (with a weighted-average amortization period of 6.7 years), and $2.6 million of assumed liabilities on the date of acquisition. The operating results of Skiinfo are reported within the Mountain segment.


F-9


Kirkwood Mountain Resort
On April 12, 2012, the Company acquired substantially all of the assets of Kirkwood Mountain Resort (“Kirkwood”), a mountain resort located in Lake Tahoe, California, for total cash consideration of approximately $18.2 million, net of cash assumed, subject to certain working capital adjustments as provided for in the purchase agreement. The purchase price was allocated to identifiable tangible and intangible assets acquired and liabilities assumed based on their estimated fair values at the acquisition date. The Company has completed its preliminary purchase price allocation and has recorded $16.8 million in property, plant and equipment, $2.5 million in other assets, $0.8 million in indefinite-lived intangible assets, $1.2 million in other intangible assets (with a weighted-average amortization period of 21.5 years), and $3.1 million of assumed liabilities on the date of acquisition. The operating results of Kirkwood are reported within the Mountain segment.

Afton Alps and Mount BrightonUrban Ski Areas
In December 2012, the Company acquired all of the assets of two ski areas in the Midwest, Afton Alps in Minnesota and Mount Brighton in Michigan, for total cash consideration of $20.0 million, net of cash assumed. The purchase price was allocated to identifiable tangible and intangible assets acquired and liabilities assumed based on their estimated fair values at the acquisition date. The Company has completed its preliminary purchase price allocation and has recorded $17.8 million in property, plant and equipment, $1.0 million in other assets, $1.82.0 million in goodwill, $1.21.0 million in other intangible assets (with a weighted-average amortization period of 510 years), and $1.8 million of assumed liabilities on the date of acquisition. The operating results of Afton Alps and Mount Brighton are reported within the Mountain segment.

The estimated fair values of assets acquired and liabilities assumed for the acquisitions of Afton Alps and Mount Brighton are preliminary and are based on the information that was available as of the acquisition date to estimate the fair value of assets acquired and liabilities assumed. The Company believes that information provides a reasonable basis for estimating the fair values of assets acquired and liabilities assumed, but the Company is obtaining additional information necessary to finalize those fair values. Therefore, the preliminary measurements of fair value reflected are subject to change. The Company expects to finalize the valuation and complete the purchase price allocation as soon as practicable but no later than one year from the acquisition date.

6.Supplementary Balance Sheet Information
The composition of property, plant and equipment follows (in thousands):
 January 31, 2013 July 31, 2012 January 31, 2012 April 30, 2013 July 31, 2012 April 30, 2012
Land and land improvements $289,127
 $281,729
 $277,061
 $295,559
 $281,729
 $282,038
Buildings and building improvements 854,130
 838,780
 833,331
 852,483
 838,780
 835,291
Machinery and equipment 598,944
 563,309
 559,897
 599,199
 563,309
 566,466
Furniture and fixtures 257,496
 243,587
 237,585
 254,671
 243,587
 240,367
Software 92,473
 81,659
 77,533
 91,987
 81,659
 80,591
Vehicles 48,307
 44,798
 44,760
 48,592
 44,798
 44,536
Construction in progress 15,423
 36,979
 16,618
 27,273
 36,979
 26,341
Gross property, plant and equipment 2,155,900
 2,090,841
 2,046,785
 2,169,764
 2,090,841
 2,075,630
Accumulated depreciation (1,098,501) (1,041,634) (988,855) (1,129,857) (1,041,634) (1,019,387)
Property, plant and equipment, net $1,057,399
 $1,049,207
 $1,057,930
 $1,039,907
 $1,049,207
 $1,056,243
The composition of accounts payable and accrued liabilities follows (in thousands): 
 January 31, 2013 July 31, 2012 January 31, 2012 April 30, 2013 July 31, 2012 April 30, 2012
Trade payables $63,914
 $56,508
 $75,751
 $59,515
 $56,508
 $55,619
Deferred revenue 117,812
 78,793
 104,570
 81,092
 78,793
 68,182
Accrued salaries, wages and deferred compensation 30,838
 21,242
 24,143
 28,563
 21,242
 23,534
Accrued benefits 21,870
 20,216
 23,256
 24,002
 20,216
 26,089
Deposits 26,411
 12,031
 20,730
 12,173
 12,031
 12,310
Accrued interest 7,896
 8,015
 7,914
 13,543
 8,015
 13,534
Other accruals 48,763
 30,733
 45,109
 27,464
 30,733
 24,779
Total accounts payable and accrued liabilities $317,504
 $227,538
 $301,473
 $246,352
 $227,538
 $224,047


F-10



The composition of other long-term liabilities follows (in thousands):
 January 31, 2013 July 31, 2012 January 31, 2012 April 30, 2013 July 31, 2012 April 30, 2012
Private club deferred initiation fee revenue $133,432
 $135,660
 $137,922
 $133,578
 $135,660
 $136,740
Unfavorable lease obligation, net 34,723
 36,058
 37,393
 34,055
 36,058
 36,726
Other long-term liabilities 62,002
 61,151
 60,314
 58,512
 61,151
 60,457
Total other long-term liabilities $230,157
 $232,869
 $235,629
 $226,145
 $232,869
 $233,923
 
7.    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 January 31,April 30, 2013, the Employee Housing Entities had total assets of $30.430.3 million (primarily recorded in property, plant and equipment, net) and total liabilities of $63.062.9 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 (“Credit Agreement”) 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 $4.84.4 million (primarily recorded in property, plant and equipment, net) and no debt as of January 31,April 30, 2013.
 
8.    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):
 

F-11


          
   Fair Value Measurement as of January 31, 2013
 Description Balance at January 31, 2013 Level 1 Level 2 Level 3
 
 Money Market $19,025
 $19,025
 $—
 $—
 Commercial Paper $10,626
 $—
 $10,626
 $—
 Certificates of Deposit $630
 $—
 $630
 $—
    
   Fair Value Measurement as of July 31, 2012
 Description Balance at July 31, 2012 Level 1 Level 2 Level 3
 Money Market $6,581
 $6,581
 $—
 $—
 Commercial Paper $2,441
 $—
 $2,441
 $—
 Certificates of Deposit $1,260
 $—
 $1,260
 $—
    
   Fair Value Measurement as of January 31, 2012
 Description Balance at January 31, 2012 Level 1 Level 2 Level 3
 Money Market $8,386
 $8,386
 $—
 $—
 Commercial Paper $19,990
 $—
 $19,990
 $—
 Certificates of Deposit $1,890
 $—
 $1,890
 $—
          
   Fair Value Measurement as of April 30, 2013
 Description Balance at April 30, 2013 Level 1 Level 2 Level 3
 
 Money Market $49,025
 $49,025
 $—
 $—
 Commercial Paper $630
 $—
 $630
 $—
 Certificates of Deposit $630
 $—
 $630
 $—
    
   Fair Value Measurement as of July 31, 2012
 Description Balance at July 31, 2012 Level 1 Level 2 Level 3
 Money Market $6,581
 $6,581
 $—
 $—
 Commercial Paper $2,441
 $—
 $2,441
 $—
 Certificates of Deposit $1,260
 $—
 $1,260
 $—
    
   Fair Value Measurement as of April 30, 2012
 Description Balance at April 30, 2012 Level 1 Level 2 Level 3
 Money Market $1,392
 $1,392
 $—
 $—
 Commercial Paper $6,993
 $—
 $6,993
 $—
 Certificates of Deposit $1,890
 $—
 $1,890
 $—

The Company’s cash equivalents are measured utilizing quoted market prices or pricing models whereby all significant inputs are either observable or corroborated by observable market data. 

9.    Commitments and Contingencies
Metropolitan Districts
The Company credit-enhances $8.0 million of bonds issued by Holland Creek Metropolitan District (“HCMD”) through an $8.1 million letter of credit issued under the Company’s Credit Agreement. 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 primarily within “other long-term liabilities” in the accompanying Consolidated Condensed Balance Sheets, as of January 31,April 30, 2013, July 31, 2012 and January 31,April 30, 2012, 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/Indemnifications
As of January 31,April 30, 2013, the Company had various other letters of credit in the amount of $59.558.4 million, consisting primarily of $53.4 million in support of the Employee Housing Bonds and $4.53.4 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

F-12


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 6, 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 and/or has accrued for loss contingencies for all known matters that are deemed to be probable losses and estimable. As of January 31,April 30, 2013, July 31, 2012 and January 31,April 30, 2012, 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/areas and related ancillary services. The Lodging segment includes the operations of all of the Company’s owned hotels, RockResorts, NPS concessionaire properties, condominium management, CME and mountain resort 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 each other, 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), 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 (the 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. All segment expenses include an allocation of corporate administrative expenses. Assets are not allocated between segments, or used to evaluate performance, except as shown in the table below.

F-13


The following table presents financial information by reportable segment which is used by management in evaluating performance and allocating resources (in thousands):
 
 Three Months Ended January 31, Six Months Ended January 31, Three Months Ended April 30, Nine Months Ended April 30,
 2013 2012 2013 2012 2013 2012 2013 2012
Net revenue:                
Lift tickets $175,658
 $153,699
 $175,658
 $153,699
 $215,163
 $188,712
 $390,820
 $342,411
Ski school 41,723
 37,252
 41,723
 37,252
 53,531
 47,040
 95,254
 84,292
Dining 29,826
 24,722
 36,199
 30,369
 37,876
 31,388
 74,075
 61,757
Retail/rental 83,748
 73,850
 110,473
 100,814
 66,329
 60,144
 176,802
 160,958
Other 30,786
 26,415
 49,600
 43,474
 29,118
 27,302
 78,719
 70,776
Total Mountain net revenue 361,741
 315,938
 413,653
 365,608
 402,017
 354,586
 815,670
 720,194
Lodging 46,543
 48,306
 99,051
 101,900
 53,834
 53,972
 152,885
 155,872
Total Resort net revenue 408,284
 364,244
 512,704
 467,508
 455,851
 408,558
 968,555
 876,066
Real estate 14,167
 9,088
 26,097
 22,197
 13,840
 12,587
 39,937
 34,784
Total net revenue $422,451
 $373,332
 $538,801
 $489,705
 $469,691
 $421,145
 $1,008,492
 $910,850
Operating expense:                
Mountain $220,997
 $195,489
 $328,545
 $294,044
 $207,953
 $184,211
 $536,498
 $478,256
Lodging 44,803
 47,093
 96,609
 102,394
 45,446
 47,103
 142,055
 149,497
Total Resort operating expense 265,800
 242,582
 425,154
 396,438
 253,399
 231,314
 678,553
 627,753
Real estate 16,739
 12,563
 32,353
 30,410
 16,996
 16,069
 49,349
 46,479
Total segment operating expense $282,539
 $255,145
 $457,507
 $426,848
 $270,395
 $247,383
 $727,902
 $674,232
Mountain equity investment income, net $99
 $178
 $533
 $608
 $266
 $336
 $799
 $944
Reported EBITDA:                
Mountain $140,843
 $120,627
 $85,641
 $72,172
 $194,330
 $170,711
 $279,971
 $242,882
Lodging 1,740
 1,213
 2,442
 (494) 8,388
 6,869
 10,830
 6,375
Resort 142,583
 121,840
 88,083
 71,678
 202,718
 177,580
 290,801
 249,257
Real estate (2,572) (3,475) (6,256) (8,213) (3,156) (3,482) (9,412) (11,695)
Total Reported EBITDA $140,011
 $118,365
 $81,827
 $63,465
 $199,562
 $174,098
 $281,389
 $237,562
                
Real estate held for sale and investment $216,815
 $257,169
 $216,815
 $257,169
 $201,861
 $248,262
 $201,861
 $248,262
                
Reconciliation to net income (loss) attributable to Vail Resorts, Inc.:        
Reconciliation to net income attributable to Vail Resorts, Inc.:        
Total Reported EBITDA $140,011
 $118,365
 $81,827
 $63,465
 $199,562
 $174,098
 $281,389
 $237,562
Depreciation and amortization (33,418) (33,050) (65,097) (61,980) (33,730) (33,266) (98,827) (95,245)
Loss on disposal of fixed assets, net (531) (919) (533) (1,033) (224) (90) (757) (1,123)
Investment income, net 99
 310
 153
 374
Investment income (loss), net 153
 (18) 306
 356
Interest expense, net (8,534) (8,542) (16,909) (16,783) (8,359) (8,443) (25,268) (25,226)
Income (loss) before (provision) benefit from income taxes 97,627
 76,164
 (559) (15,957)
(Provision) benefit from income taxes (37,098) (29,743) 485
 6,644
Net income (loss) $60,529
 $46,421
 $(74) $(9,313)
Net loss (income) attributable to noncontrolling interests 22
 (32) 45
 (7)
Net income (loss) attributable to Vail Resorts, Inc. $60,551
 $46,389
 $(29) $(9,320)
Income before provision for income taxes 157,402
 132,281
 156,843
 116,324
Provision for income taxes (59,814) (52,753) (59,329) (46,108)
Net income $97,588
 $79,528
 $97,514
 $70,216
Net loss attributable to noncontrolling interests 52
 41
 97
 34
Net income attributable to Vail Resorts, Inc. $97,640
 $79,569
 $97,611
 $70,250


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 sixnine months ended January 31,April 30, 2013. Since inception of its stock repurchase program through January 31,April 30, 2013, the Company has repurchased 4,949,111 shares at a cost of approximately $193.2 million. As of January 31,April 30, 2013, 1,050,889 shares remained available to repurchase under the

F-14


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 plan.
 

12.    Guarantor Subsidiaries and Non-Guarantor Subsidiaries
The Company’s payment obligations under the 6.50% 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, Larkspur Restaurant & Bar, LLC, Black Diamond Insurance, Inc., Skiinfo AS 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 6.50% 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 January 31,April 30, 2013, July 31, 2012, and January 31,April 30, 2012. Statements of operations and statements of comprehensive income (loss) are presented for the three and sixnine months ended January 31,April 30, 2013 and 2012. Statements of cash flows are presented for the sixnine months ended January 31,April 30, 2013 and 2012.
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 Guarantor Subsidiaries and Parent Company as equity in consolidated subsidiaries. The elimination entries eliminate investments in Other Subsidiaries and intercompany balances and transactions for consolidated reporting purposes.

F-15


Supplemental Condensed Consolidating Balance Sheet
As of January 31,April 30, 2013
(in thousands)
(Unaudited)
 
 
Parent
Company
 
100%
Owned
Guarantor
Subsidiaries
 
Other
Subsidiaries
 
Eliminating
Entries
 Consolidated 
Parent
Company
 
100%
Owned
Guarantor
Subsidiaries
 
Other
Subsidiaries
 
Eliminating
Entries
 Consolidated
Current assets:                    
Cash and cash equivalents $—
 $129,258
 $7,321
 $—
 $136,579
 $—
 $230,429
 $7,306
 $—
 $237,735
Restricted cash —
 10,979
 1,215
 —
 12,194
 —
 10,894
 1,097
 —
 11,991
Trade receivables, net —
 49,475
 4,011
 —
 53,486
 —
 70,424
 3,309
 —
 73,733
Inventories, net —
 70,095
 246
 —
 70,341
 —
 61,014
 187
 —
 61,201
Other current assets 27,586
 20,988
 1,059
 —
 49,633
 28,699
 20,543
 1,236
 —
 50,478
Total current assets 27,586
 280,795
 13,852
 —
 322,233
 28,699
 393,304
 13,135
 —
 435,138
Property, plant and equipment, net —
 1,010,349
 47,050
 —
 1,057,399
 —
 993,813
 46,094
 —
 1,039,907
Real estate held for sale and investment —
 216,815
 —
 —
 216,815
 —
 201,861
 —
 —
 201,861
Goodwill, net —
 269,875
 1,887
 —
 271,762
 —
 270,076
 1,779
 —
 271,855
Intangible assets, net —
 73,022
 19,568
 —
 92,590
 —
 72,563
 19,476
 —
 92,039
Other assets 6,573
 41,469
 4,367
 (9,459) 42,950
 6,319
 37,661
 4,348
 (9,459) 38,869
Investments in subsidiaries 1,788,271
 (1,798) —
 (1,786,473) —
 1,885,121
 (2,153) —
 (1,882,968) —
Advances (446,303) 443,135
 3,168
 —
 —
 (385,997) 382,375
 3,622
 —
 —
Total assets $1,376,127
 $2,333,662
 $89,892
 $(1,795,932) $2,003,749
 $1,534,142
 $2,349,500
 $88,454
 $(1,892,427) $2,079,669
Current liabilities:                    
Accounts payable and accrued liabilities $6,502
 $302,077
 $8,925
 $—
 $317,504
 $12,856
 $225,420
 $8,076
 $—
 $246,352
Income taxes payable 14,979
 —
 —
 —
 14,979
 13,173
 —
 —
 —
 13,173
Long-term debt due within one year —
 587
 219
 —
 806
 —
 299
 219
 —
 518
Total current liabilities 21,481
 302,664
 9,144
 —
 333,289
 26,029
 225,719
 8,295
 —
 260,043
Long-term debt 390,000
 41,759
 57,738
 —
 489,497
 390,000
 41,502
 57,738
 —
 489,240
Other long-term liabilities 28,050
 200,968
 10,598
 (9,459) 230,157
 27,852
 197,158
 10,594
 (9,459) 226,145
Deferred income taxes 140,582
 —
 122
 —
 140,704
 201,513
 —
 (2) —
 201,511
Total Vail Resorts, Inc. stockholders’ equity (deficit) 796,014
 1,788,271
 (1,798) (1,786,473) 796,014
 888,748
 1,885,121
 (2,153) (1,882,968) 888,748
Noncontrolling interests —
 —
 14,088
 —
 14,088
 —
 —
 13,982
 —
 13,982
Total stockholders’ equity 796,014
 1,788,271
 12,290
 (1,786,473) 810,102
 888,748
 1,885,121
 11,829
 (1,882,968) 902,730
Total liabilities and stockholders’ equity $1,376,127
 $2,333,662
 $89,892
 $(1,795,932) $2,003,749
 $1,534,142
 $2,349,500
 $88,454
 $(1,892,427) $2,079,669


F-16


Supplemental Condensed Consolidating Balance Sheet
As of July 31, 2012
(in thousands)
 
  
Parent
Company
 
100%
Owned
Guarantor
Subsidiaries
 
Other
Subsidiaries
 
Eliminating
Entries
 Consolidated
Current assets:          
Cash and cash equivalents $—
 $38,380
 $7,673
 $—
 $46,053
Restricted cash —
 13,300
 984
 —
 14,284
Trade receivables, net —
 64,185
 1,558
 —
 65,743
Inventories, net —
 65,673
 200
 —
 65,873
Other current assets 24,458
 15,522
 437
 —
 40,417
Total current assets 24,458
 197,060
 10,852
 —
 232,370
Property, plant and equipment, net —
 1,000,767
 48,440
 —
 1,049,207
Real estate held for sale and investment —
 237,668
 —
 —
 237,668
Goodwill, net —
 268,058
 1,711
 —
 269,769
Intangible assets, net —
 72,751
 19,319
 —
 92,070
Other assets 7,113
 42,939
 5,937
 (9,459) 46,530
Investments in subsidiaries 1,775,195
 (553) —
 (1,774,642) —
Advances (421,115) 418,001
 3,114
 —
 —
Total assets $1,385,651
 $2,236,691
 $89,373
 $(1,784,101) $1,927,614
Current liabilities:          
Accounts payable and accrued liabilities $6,542
 $215,308
 $5,688
 $—
 $227,538
Income taxes payable 20,721
 —
 —
 —
 20,721
Long-term debt due within one year —
 782
 208
 —
 990
Total current liabilities 27,263
 216,090
 5,896
 —
 249,249
Long-term debt 390,000
 41,817
 57,958
 —
 489,775
Other long-term liabilities 28,104
 203,589
 10,635
 (9,459) 232,869
Deferred income taxes 137,973
 —
 1,420
 —
 139,393
Total Vail Resorts, Inc. stockholders’ equity (deficit) 802,311
 1,775,195
 (553) (1,774,642) 802,311
Noncontrolling interests —
 —
 14,017
 —
 14,017
Total stockholders’ equity 802,311
 1,775,195
 13,464
 (1,774,642) 816,328
Total liabilities and stockholders’ equity $1,385,651
 $2,236,691
 $89,373
 $(1,784,101) $1,927,614


F-17


Supplemental Condensed Consolidating Balance Sheet
As of January 31,April 30, 2012
(in thousands)
(Unaudited) 
 
Parent
Company
 
100%
Owned
Guarantor
Subsidiaries
 
Other
Subsidiaries
 
Eliminating
Entries
 Consolidated 
Parent
Company
 
100%
Owned
Guarantor
Subsidiaries
 
Other
Subsidiaries
 
Eliminating
Entries
 Consolidated
Current assets:                    
Cash and cash equivalents $—
 $88,164
 $7,478
 $—
 $95,642
 $—
 $138,001
 $9,109
 $—
 $147,110
Restricted cash —
 15,164
 1,057
 —
 16,221
 —
 12,619
 1,047
 —
 13,666
Trade receivables, net —
 47,513
 917
 —
 48,430
 —
 62,390
 2,743
 —
 65,133
Inventories, net —
 62,340
 254
 —
 62,594
 —
 56,050
 187
 —
 56,237
Other current assets 31,801
 24,847
 350
 —
 56,998
 32,809
 20,925
 1,937
 —
 55,671
Total current assets 31,801
 238,028
 10,056
 —
 279,885
 32,809
 289,985
 15,023
 —
 337,817
Property, plant and equipment, net —
 1,010,430
 47,500
 —
 1,057,930
 —
 1,007,074
 49,169
 —
 1,056,243
Real estate held for sale and investment —
 257,169
 —
 —
 257,169
 —
 248,262
 —
 —
 248,262
Goodwill, net —
 268,058
 —
 —
 268,058
 —
 268,057
 1,621
 —
 269,678
Intangible assets, net —
 72,041
 18,155
 —
 90,196
 —
 74,327
 19,388
 —
 93,715
Other assets 7,620
 33,826
 4,551
 —
 45,997
 7,368
 32,124
 4,532
 —
 44,024
Investments in subsidiaries 1,718,870
 (4,657) —
 (1,714,213) —
 1,857,590
 2,147
 —
 (1,859,737) —
Advances (376,815) 381,611
 (4,796) —
 —
 (381,351) 387,860
 (6,509) —
 —
Total assets $1,381,476
 $2,256,506
 $75,466
 $(1,714,213) $1,999,235
 $1,516,416
 $2,309,836
 $83,224
 $(1,859,737) $2,049,739
Current liabilities:                    
Accounts payable and accrued liabilities $6,579
 $288,258
 $6,636
 $—
 $301,473
 $12,852
 $205,081
 $6,114
 $—
 $224,047
Income taxes payable 19,569
 —
 —
 —
 19,569
 19,005
 —
 —
 —
 19,005
Long-term debt due within one year —
 850
 208
 —
 1,058
 —
 911
 208
 —
 1,119
Total current liabilities 26,148
 289,108
 6,844
 —
 322,100
 31,857
 205,992
 6,322
 —
 244,171
Long-term debt 390,000
 42,344
 57,958
 —
 490,302
 390,000
 41,799
 57,958
 —
 489,757
Other long-term liabilities 28,105
 206,184
 1,340
 —
 235,629
 28,105
 204,455
 1,363
 —
 233,923
Deferred income taxes 129,962
 —
 —
 —
 129,962
 183,718
 —
 1,442
 —
 185,160
Total Vail Resorts, Inc. stockholders’ equity (deficit) 807,261
 1,718,870
 (4,657) (1,714,213) 807,261
 882,736
 1,857,590
 2,147
 (1,859,737) 882,736
Noncontrolling interests —
 —
 13,981
 —
 13,981
 —
 —
 13,992
 —
 13,992
Total stockholders’ equity 807,261
 1,718,870
 9,324
 (1,714,213) 821,242
 882,736
 1,857,590
 16,139
 (1,859,737) 896,728
Total liabilities and stockholders’ equity $1,381,476
 $2,256,506
 $75,466
 $(1,714,213) $1,999,235
 $1,516,416
 $2,309,836
 $83,224
 $(1,859,737) $2,049,739


F-18


Supplemental Condensed Consolidating Statement of Operations
For the three months ended January 31,April 30, 2013
(in thousands)
(Unaudited)
 
 
Parent
Company
 
100% Owned
Guarantor
Subsidiaries
 
Other
Subsidiaries
 
Eliminating
Entries
 Consolidated 
Parent
Company
 
100% Owned
Guarantor
Subsidiaries
 
Other
Subsidiaries
 
Eliminating
Entries
 Consolidated
Total net revenue $—
 $419,427
 $6,363
 $(3,339) $422,451
 $—
 $467,095
 $6,406
 $(3,810) $469,691
Total operating expense 105
 313,727
 5,957
 (3,301) 316,488
 116
 301,696
 6,309
 (3,772) 304,349
(Loss) income from operations (105) 105,700
 406
 (38) 105,963
 (116) 165,399
 97
 (38) 165,342
Other expense, net (6,600) (1,521) (352) 38
 (8,435) (6,600) (1,322) (322) 38
 (8,206)
Equity investment income, net —
 99
 —
 —
 99
 —
 266
 —
 —
 266
(Loss) income before benefit (provision) from income taxes (6,705) 104,278
 54
 —
 97,627
 (6,716) 164,343
 (225) —
 157,402
Benefit (provision) from income taxes 2,547
 (39,564) (81) —
 (37,098) 2,551
 (62,452) 87
 —
 (59,814)
Net (loss) income before equity in income (loss) of consolidated subsidiaries (4,158) 64,714
 (27) —
 60,529
 (4,165) 101,891
 (138) —
 97,588
Equity in income (loss) of consolidated subsidiaries 64,709
 (5) —
 (64,704) —
 101,805
 (86) —
 (101,719) —
Net income (loss) 60,551
 64,709
 (27) (64,704) 60,529
 97,640
 101,805
 (138) (101,719) 97,588
Net loss attributable to noncontrolling interests —
 —
 22
 —
 22
 —
 —
 52
 —
 52
Net income (loss) attributable to Vail Resorts, Inc. $60,551
 $64,709
 $(5) $(64,704) $60,551
 $97,640
 $101,805
 $(86) $(101,719) $97,640

Supplemental Condensed Consolidating Statement of Operations
For the three months ended January 31,April 30, 2012
(in thousands)
(Unaudited)
 
  
Parent
Company
 
100% Owned
Guarantor
Subsidiaries
 
Other
Subsidiaries
 
Eliminating
Entries
 Consolidated
Total net revenue $—
 $372,190
 $4,324
 $(3,182) $373,332
Total operating (income) expense (187) 288,471
 3,973
 (3,143) 289,114
Income from operations 187
 83,719
 351
 (39) 84,218
Other expense, net (6,686) (1,225) (360) 39
 (8,232)
Equity investment income, net —
 178
 —
 —
 178
(Loss) income before benefit (provision) from income taxes (6,499) 82,672
 (9) —
 76,164
Benefit (provision) from income taxes 2,535
 (32,278) —
 —
 (29,743)
Net (loss) income before equity in income (loss) of consolidated subsidiaries (3,964) 50,394
 (9) —
 46,421
Equity in income (loss) of consolidated subsidiaries 50,353
 (41) —
 (50,312) —
Net income (loss) 46,389
 50,353
 (9) (50,312) 46,421
Net income attributable to noncontrolling interests —
 —
 (32) —
 (32)
Net income (loss) attributable to Vail Resorts, Inc. $46,389
 $50,353
 $(41) $(50,312) $46,389
  
Parent
Company
 
100% Owned
Guarantor
Subsidiaries
 
Other
Subsidiaries
 
Eliminating
Entries
 Consolidated
Total net revenue $—
 $417,945
 $6,225
 $(3,025) $421,145
Total operating expense 98
 277,907
 5,721
 (2,987) 280,739
(Loss) income from operations (98) 140,038
 504
 (38) 140,406
Other expense, net (6,637) (1,514) (348) 38
 (8,461)
Equity investment income, net —
 336
 —
 —
 336
(Loss) income before benefit (provision) from income taxes (6,735) 138,860
 156
 —
 132,281
Benefit (provision) from income taxes 2,626
 (55,379) —
 —
 (52,753)
Net (loss) income before equity in income of consolidated subsidiaries (4,109) 83,481
 156
 —
 79,528
Equity in income of consolidated subsidiaries 83,678
 197
 —
 (83,875) —
Net income 79,569
 83,678
 156
 (83,875) 79,528
Net loss attributable to noncontrolling interests —
 —
 41
 —
 41
Net income attributable to Vail Resorts, Inc. $79,569
 $83,678
 $197
 $(83,875) $79,569


F-19


Supplemental Condensed Consolidating Statement of Operations
For the sixnine months ended January 31,April 30, 2013
(in thousands)
(Unaudited)
 
 
Parent
Company
 
100% Owned
Guarantor
Subsidiaries
 
Other
Subsidiaries
 
Eliminating
Entries
 Consolidated 
Parent
Company
 
100% Owned
Guarantor
Subsidiaries
 
Other
Subsidiaries
 
Eliminating
Entries
 Consolidated
Total net revenue $—
 $535,431
 $9,374
 $(6,004) $538,801
 $—
 $1,002,526
 $15,780
 $(9,814) $1,008,492
Total operating expense 218
 518,085
 10,762
 (5,928) 523,137
 334
 819,781
 17,071
 (9,700) 827,486
(Loss) income from operations (218) 17,346
 (1,388) (76) 15,664
 (334) 182,745
 (1,291) (114) 181,006
Other expense, net (13,210) (2,935) (687) 76
 (16,756) (19,810) (4,257) (1,009) 114
 (24,962)
Equity investment income, net —
 533
 —
 —
 533
 —
 799
 —
 —
 799
(Loss) income before benefit (provision) from income taxes (13,428) 14,944
 (2,075) —
 (559) (20,144) 179,287
 (2,300) —
 156,843
Benefit (provision) from income taxes 5,157
 (4,773) 101
 —
 485
 7,708
 (67,225) 188
 —
 (59,329)
Net (loss) income before equity in income (loss) of consolidated subsidiaries (8,271) 10,171
 (1,974) —
 (74) (12,436) 112,062
 (2,112) —
 97,514
Equity in income (loss) of consolidated subsidiaries 8,242
 (1,929) —
 (6,313) —
 110,047
 (2,015) —
 (108,032) —
Net (loss) income (29) 8,242
 (1,974) (6,313) (74)
Net income (loss) 97,611
 110,047
 (2,112) (108,032) 97,514
Net loss attributable to noncontrolling interests —
 —
 45
 —
 45
 —
 —
 97
 —
 97
Net (loss) income attributable to Vail Resorts, Inc. $(29) $8,242
 $(1,929) $(6,313) $(29)
Net income (loss) attributable to Vail Resorts, Inc. $97,611
 $110,047
 $(2,015) $(108,032) $97,611

Supplemental Condensed Consolidating Statement of Operations
For the sixnine months ended January 31,April 30, 2012
(in thousands)
(Unaudited)
 
  
Parent
Company
 
100% Owned
Guarantor
Subsidiaries
 
Other
Subsidiaries
 
Eliminating
Entries
 Consolidated
Total net revenue $—
 $489,224
 $6,390
 $(5,909) $489,705
Total operating (income) expense (59) 488,737
 7,015
 (5,832) 489,861
Income (loss) from operations 59
 487
 (625) (77) (156)
Other expense, net (13,285) (2,508) (693) 77
 (16,409)
Equity investment income, net —
 608
 —
 —
 608
Loss before benefit from income taxes (13,226) (1,413) (1,318) —
 (15,957)
Benefit from income taxes 5,579
 1,065
 —
 —
 6,644
Net loss before equity in loss of consolidated subsidiaries (7,647) (348) (1,318) —
 (9,313)
Equity in loss of consolidated subsidiaries (1,673) (1,325) —
 2,998
 —
Net loss (9,320) (1,673) (1,318) 2,998
 (9,313)
Net income attributable to noncontrolling interests —
 —
 (7) —
 (7)
Net loss attributable to Vail Resorts, Inc. $(9,320) $(1,673) $(1,325) $2,998
 $(9,320)
  
Parent
Company
 
100% Owned
Guarantor
Subsidiaries
 
Other
Subsidiaries
 
Eliminating
Entries
 Consolidated
Total net revenue $—
 $907,169
 $12,615
 $(8,934) $910,850
Total operating expense 39
 766,644
 12,736
 (8,819) 770,600
(Loss) income from operations (39) 140,525
 (121) (115) 140,250
Other expense, net (19,922) (4,022) (1,041) 115
 (24,870)
Equity investment income, net —
 944
 —
 —
 944
(Loss) income before benefit (provision) from income taxes (19,961) 137,447
 (1,162) —
 116,324
Benefit (provision) from income taxes 8,206
 (54,314) —
 —
 (46,108)
Net (loss) income before equity in income (loss) of consolidated subsidiaries (11,755) 83,133
 (1,162) —
 70,216
Equity in income (loss) of consolidated subsidiaries 82,005
 (1,128) —
 (80,877) —
Net income (loss) 70,250
 82,005
 (1,162) (80,877) 70,216
Net loss attributable to noncontrolling interests —
 —
 34
 —
 34
Net income (loss) attributable to Vail Resorts, Inc. $70,250
 $82,005
 $(1,128) $(80,877) $70,250


F-20


Supplemental Condensed Consolidating Statement of Comprehensive Income (Loss)
For the three months ended January 31,April 30, 2013
(In thousands)
(Unaudited)

 
Parent
Company
 
100% Owned
Guarantor
Subsidiaries
 
Other
Subsidiaries
 
Eliminating
Entries
 Consolidated 
Parent
Company
 
100% Owned
Guarantor
Subsidiaries
 
Other
Subsidiaries
 
Eliminating
Entries
 Consolidated
Net income (loss) $60,551
 $64,709
 $(27) $(64,704) $60,529
 $97,640
 $101,805
 $(138) $(101,719) $97,588
Foreign currency translation adjustments, net of tax 159
 159
 159
 (318) 159
 (202) (202) (202) 404
 (202)
Comprehensive income 60,710
 64,868
 132
 (65,022) 60,688
Comprehensive income (loss) 97,438
 101,603
 (340) (101,315) 97,386
Comprehensive loss attributable to noncontrolling interests —
 —
 22
 —
 22
 —
 —
 52
 —
 52
Comprehensive income attributable to Vail Resorts, Inc. $60,710
 $64,868
 $154
 $(65,022) $60,710
Comprehensive income (loss) attributable to Vail Resorts, Inc. $97,438
 $101,603
 $(288) $(101,315) $97,438

Supplemental Condensed Consolidating Statement of Comprehensive Income (Loss)
For the three months ended January 31,April 30, 2012
(In thousands)
(Unaudited)

  
Parent
Company
 
100% Owned
Guarantor
Subsidiaries
 
Other
Subsidiaries
 
Eliminating
Entries
 Consolidated
Net income (loss) $46,389
 $50,353
 $(9) $(50,312) $46,421
Foreign currency translation adjustments, net of tax —
 —
 —
 —
 —
Comprehensive income (loss) 46,389
 50,353
 (9) (50,312) 46,421
Comprehensive income attributable to noncontrolling interests —
 —
 (32) —
 (32)
Comprehensive income (loss) attributable to Vail Resorts, Inc. $46,389
 $50,353
 $(41) $(50,312) $46,389
  
Parent
Company
 
100% Owned
Guarantor
Subsidiaries
 
Other
Subsidiaries
 
Eliminating
Entries
 Consolidated
Net income $79,569
 $83,678
 $156
 $(83,875) $79,528
Foreign currency translation adjustments, net of tax 61
 61
 61
 (122) 61
Comprehensive income 79,630
 83,739
 217
 (83,997) 79,589
Comprehensive loss attributable to noncontrolling interests —
 —
 41
 —
 41
Comprehensive income attributable to Vail Resorts, Inc. $79,630
 $83,739
 $258
 $(83,997) $79,630


F-21



Supplemental Condensed Consolidating Statement of Comprehensive Income (Loss)
For the sixnine months ended January 31,April 30, 2013
(In thousands)
(Unaudited)

 
Parent
Company
 
100% Owned
Guarantor
Subsidiaries
 
Other
Subsidiaries
 
Eliminating
Entries
 Consolidated 
Parent
Company
 
100% Owned
Guarantor
Subsidiaries
 
Other
Subsidiaries
 
Eliminating
Entries
 Consolidated
Net (loss) income $(29) $8,242
 $(1,974) $(6,313) $(74)
Net income (loss) $97,611
 $110,047
 $(2,112) $(108,032) $97,514
Foreign currency translation adjustments, net of tax 453
 453
 453
 (906) 453
 251
 251
 251
 (502) 251
Comprehensive income (loss) 424
 8,695
 (1,521) (7,219) 379
 97,862
 110,298
 (1,861) (108,534) 97,765
Comprehensive loss attributable to noncontrolling interests —
 —
 45
 —
 45
 —
 —
 97
 —
 97
Comprehensive income (loss) attributable to Vail Resorts, Inc. $424
 $8,695
 $(1,476) $(7,219) $424
 $97,862
 $110,298
 $(1,764) $(108,534) $97,862


Supplemental Condensed Consolidating Statement of Comprehensive Income (Loss)
For the sixnine months ended January 31,April 30, 2012
(In thousands)
(Unaudited)

  
Parent
Company
 
100% Owned
Guarantor
Subsidiaries
 
Other
Subsidiaries
 
Eliminating
Entries
 Consolidated
Net loss $(9,320) $(1,673) $(1,318) $2,998
 $(9,313)
Foreign currency translation adjustments, net of tax —
 —
 —
 —
 —
Comprehensive loss (9,320) (1,673) (1,318) 2,998
 (9,313)
Comprehensive income attributable to noncontrolling interests —
 —
 (7) —
 (7)
Comprehensive loss attributable to Vail Resorts, Inc. $(9,320) $(1,673) $(1,325) $2,998
 $(9,320)
  
Parent
Company
 
100% Owned
Guarantor
Subsidiaries
 
Other
Subsidiaries
 
Eliminating
Entries
 Consolidated
Net income (loss) $70,250
 $82,005
 $(1,162) $(80,877) $70,216
Foreign currency translation adjustments, net of tax 61
 61
 61
 (122) 61
Comprehensive income (loss) 70,311
 82,066
 (1,101) (80,999) 70,277
Comprehensive loss attributable to noncontrolling interests —
 —
 34
 —
 34
Comprehensive income (loss) attributable to Vail Resorts, Inc. $70,311
 $82,066
 $(1,067) $(80,999) $70,311


F-22


Supplemental Condensed Consolidating Statement of Cash Flows
For the sixnine months ended January 31,April 30, 2013
(in thousands)
(Unaudited) 
 
Parent
Company
 
100%  Owned
Guarantor
Subsidiaries
 
Other
Subsidiaries
 Consolidated 
Parent
Company
 
100%  Owned
Guarantor
Subsidiaries
 
Other
Subsidiaries
 Consolidated
Net cash (used in) provided by operating activities $(14,033) $185,445
 $(135) $171,277
Net cash provided by operating activities $46,034
 $244,970
 $341
 $291,345
Cash flows from investing activities:                
Capital expenditures —
 (53,385) (535) (53,920) —
 (64,765) (696) (65,461)
Acquisition of businesses —
 (19,958) —
 (19,958) —
 (19,958) —
 (19,958)
Other investing activities, net —
 228
 18
 246
 —
 943
 (82) 861
Net cash used in investing activities —
 (73,115) (517) (73,632) —
 (83,780) (778) (84,558)
Cash flows from financing activities:                
Proceeds from borrowings under other long-term debt —
 96,000
 —
 96,000
 —
 96,000
 —
 96,000
Payments of other long-term debt —
 (96,236) (208) (96,444) —
 (96,781) (208) (96,989)
Dividends paid (13,458) —
 —
 (13,458) (20,905) —
 —
 (20,905)
Other financing activities, net 3,934
 2,585
 203
 6,722
 3,986
 2,608
 184
 6,778
Advances 23,557
 (23,801) 244
 —
 (29,115) 29,065
 50
 —
Net cash provided by (used in) financing activities 14,033
 (21,452) 239
 (7,180)
Net cash (used in) provided by financing activities (46,034) 30,892
 26
 (15,116)
Effect of exchange rate changes on cash and cash equivalents —
 —
 61
 61
 —
 (33) 44
 11
Net increase (decrease) in cash and cash equivalents —
 90,878
 (352) 90,526
 —
 192,049
 (367) 191,682
Cash and cash equivalents:                
Beginning of period —
 38,380
 7,673
 46,053
 —
 38,380
 7,673
 46,053
End of period $—
 $129,258
 $7,321
 $136,579
 $—
 $230,429
 $7,306
 $237,735


F-23


Supplemental Condensed Consolidating Statement of Cash Flows
For the sixnine months ended January 31,April 30, 2012
(in thousands)
(Unaudited) 
 
Parent
Company
 
100% Owned
Guarantor
Subsidiaries
 
Other
Subsidiaries
 Consolidated 
Parent
Company
 
100% Owned
Guarantor
Subsidiaries
 
Other
Subsidiaries
 Consolidated
Net cash (used in) provided by operating activities $(15,584) $152,379
 $594
 $137,389
Net cash provided by operating activities $38,944
 $193,371
 $1,730
 $234,045
Cash flows from investing activities:       
       
Capital expenditures —
 (93,117) (69) (93,186) —
 (107,779) (220) (107,999)
Acquisition of business —
 342
 —
 342
Acquisition of businesses —
 (24,311) 832
 (23,479)
Other investing activities, net —
 (904) —
 (904) —
 (944) —
 (944)
Net cash used in investing activities —
 (93,679) (69) (93,748)
Net cash (used in) provided by investing activities —
 (133,034) 612
 (132,422)
Cash flows from financing activities:                
Proceeds from borrowings under other long-term debt —
 56,000
 —
 56,000
 —
 56,000
 —
 56,000
Payments of long-term debt —
 (56,186) (197) (56,383) —
 (56,805) (197) (57,002)
Repurchase of common stock (7,869) —
 —
 (7,869) (7,869) —
 —
 (7,869)
Dividends paid (10,801) —
 —
 (10,801) (17,559) —
 —
 (17,559)
Other financing activities, net 912
 (373) 372
 911
 1,502
 86
 190
 1,778
Advances 33,342
 (33,342) —
 —
 (15,018) 15,018
 —
 —
Net cash provided by (used in) financing activities 15,584
 (33,901) 175
 (18,142)
Net cash (used in) provided by financing activities (38,944) 14,299
 (7) (24,652)
Effect of exchange rate changes on cash and cash equivalents —
 —
 (4) (4)
Net increase in cash and cash equivalents —
 24,799
 700
 25,499
 —
 74,636
 2,331
 76,967
Cash and cash equivalents:                
Beginning of period —
 63,365
 6,778
 70,143
 —
 63,365
 6,778
 70,143
End of period $—
 $88,164
 $7,478
 $95,642
 $—
 $138,001
 $9,109
 $147,110


F-24


13.     Subsequent Event
VR CPC Holdings, Inc. (“VR CPC”), a wholly-owned subsidiary of the Company, and affiliate companies of Talisker Corporation (“Talisker”) entered into a Transaction Agreement, Master Agreement of Lease (the “Lease”) and ancillary transaction documents, pursuant to which the Company assumed the resort operations of Canyons Resort, which includes the ski area and related amenities, effective May 29, 2013. Additionally, these documents set forth the rights and obligations of the parties with respect to the acquisition of certain real estate and personal property, future resort development, access, water rights, intellectual property, transition services, and rights with respect to ongoing litigation between the current operator and Talisker related to the validity of a lease of the Talisker owned land under the ski terrain of Park City Mountain Resort. If the outcome of the litigation is favorable to Talisker, the land under the ski terrain of Park City Mountain Resort will become subject to the Lease. If the outcome of the litigation is unfavorable to Talisker, the Company will be entitled to receive from Talisker the rent payments that Talisker receives from the current resort operator until such time as the current resort operator's lease has ended and the ski terrain under Park City Mountain Resort is then included in the Lease.

The Lease between VR CPC and Talisker has an initial term of 50 years with six 50-year renewal options. The Lease provides for $25 million in annual fixed payments, which increase each year by an inflation linked index of CPI less 1%, with a floor of 2% per annum. In addition, the Lease includes participating contingent payments to Talisker of 42% of the amount by which EBITDA for the resort operations, as calculated under the Lease, exceeds approximately $35 million, with such threshold amount increased by an inflation linked index and a 10% adjustment for any capital improvements or investments made under the Lease by the Company. The inclusion of the ski terrain of Park City Mountain Resort in the Lease would require no additional consideration from VR CPC, but the financial contribution, if any, of the additional ski terrain would be included as part of the calculation of EBITDA for the resort operations, and as a result, factor into the participating contingent payment component of the Lease payment as described above. The Parent Company has guaranteed the obligations of VR CPC under the Lease.



F-25


ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
The following Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with our Annual Report on Form 10-K for the year ended July 31, 2012 (“Form 10-K”) and the Consolidated Condensed Financial Statements as of January 31,April 30, 2013 and 2012 and for the three and sixnine months then ended, included in Part I, Item 1 of this Form 10-Q, which provide additional information regarding our financial position, results of operations and cash flows. To the extent that the following Management’s Discussion and Analysis contains statements which are not of a historical nature, such statements are forward-looking statements which involve risks and uncertainties. See “Forward-Looking Statements” below. These risks include, but are not limited to those discussed in this Form 10-Q and in our other filings with the Securities and Exchange Commission (“SEC”), including the risks described in Item 1A “Risk Factors” of Part I of the Form 10-K.
The following Management’s Discussion and Analysis includes a discussion of the financial performance withinof each of our segments. We have chosen to specifically include Reported EBITDA (defined as segment net revenue less segment operating expense, plus or minus segment equity investment income or loss) and Net Debt (defined as long-term debt plus long-term debt due within one year less cash and cash equivalents), in the following discussion because we consider these measures to be significant indications of our financial performance and available capital resources. Reported EBITDA and Net Debt are not measures of financial performance or liquidity under accounting principles generally accepted in the United States of America (“GAAP”). We utilize Reported EBITDA in evaluating our performance and in allocating resources to our segments. Refer to the end of the Results of Operations section for a reconciliation of Reported EBITDA to net income (loss) attributable to Vail Resorts, Inc. We also believe that Net Debt is an important measurement as it is an indicator of our ability to obtain additional capital resources for our future cash needs. Refer to the end of the Results of Operations section for a reconciliation of Net Debt to long-term debt.
Items excluded from Reported EBITDA and Net Debt are significant components in understanding and assessing financial performance or liquidity. Reported EBITDA and Net Debt 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 and Net Debt are not measurements determined in accordance with GAAP and are thus susceptible to varying calculations, Reported EBITDA and Net Debt as presented may not be comparable to other similarly titled measures of other companies.
Overview
Our operations are grouped into three integrated and interdependent segments: Mountain, Lodging and Real Estate. Resort is the combination of the Mountain and Lodging segments.
Mountain Segment
The Mountain segment is comprised of the operations of ski resort properties at the Vail, Breckenridge, Keystone and Beaver Creek mountain resorts in Colorado ("Colorado" resorts),; the Heavenly, Northstar and Kirkwood (acquired in April 2012) mountain resorts in the Lake Tahoe area of California and Nevada ("Tahoe" resorts),; and Afton Alps ski area in Minnesota and Mount Brighton ski area in Michigan (both acquired in December 2012), ("Urban" ski areas); as well as ancillary services, primarily including ski school, dining and retail/rental operations. Our ski resorts are typically open for business from mid-November through mid-April, which is the peak operating season for the Mountain segment. Our single largest source of Mountain segment revenue is the sale of lift tickets (including season passes), which represented approximately 49%54% and 53% of Mountain net revenue for both the three months ended January 31,April 30, 2013 and 2012, respectively, and approximately 48% of Mountain segment net revenue for both the nine months ended April 30, 2013 and 2012.
Lift ticket revenue is driven by volume and pricing. Pricing is impacted by both absolute pricing as well as the demographic mix of guests, which impacts the price points at which various products are purchased. The demographic mix of guests at our Colorado and Tahoe resorts is divided into two primary categories: (i) out-of-state and international (“Destination”) guests and (ii) in-state and local (“In-State”) guests. For the three months ended January 31, 2012/2013 and 2011/2012 ski seasons, Destination guests comprised approximately 51%56% and 57%, respectively, of our skier visits, while In-State guests comprised approximately 49%44% and 43%, respectively, of our skier visits, which compares to approximately 52% and 48%, respectively, for the three months ended January 31, 2012.visits.
Destination guests generally purchase our higher-priced lift ticket products and utilize more ancillary services such as ski school, dining and retail/rental, as well as the lodging at or around our resorts. Destination guest visitation is less likely to be impacted by changes in the weather, but can be more impacted by adverse economic conditions or the global geopolitical climate. In-State guests tend to be more value-oriented and weather sensitive. We offer a variety of season pass products for all of our ski resorts,resorts/areas, marketed towards both Destination and In-State guests. Our season pass product offerings range from providing access to one or a combination of our ski resortsresorts/areas to our Epic Season Pass that allows pass holders unlimited and

1


unrestricted access to all of our ski resorts.resorts/areas. Our season pass products provide a value option to our guests, which in turn assists

1


us in developing a loyal base of customers who commit to ski at our resortsresorts/areas generally in advance of the ski season and typically ski more days each season at our resortsresorts/areas than those guests who do not buy season passes. As such, our season pass program drives strong customer loyalty; mitigates exposure to many weather sensitive guests; and generates additional ancillary spending. In addition, our season pass products attract new guests to our resorts.resorts/areas. All of our season pass products, including the Epic Season Pass, are sold predominately prior to the start of the ski season. Season pass revenue, although primarily collected prior to the ski season, is recognized in the Consolidated Condensed Statement of Operations ratably over the ski season. For the three months ended January 31, 2013 and 2012, approximately 43% and 45%, respectively, of the total lift revenue recognized was comprised of season pass revenue (of which revenue recognized represents approximately 52% of total season pass sales for both the 2012/2013 and 2011/2012 ski seasons, with the remaining season pass sales recognized asapproximately 38% and 40%, respectively, of total lift ticket revenue in our third fiscal quarter ending April 30).was comprised of season pass revenue.
The cost structure of our ski resortresort/areas operations hashave a significant fixed component with variable expenses including, but not limited to, USDA Forest Service (“Forest Service”) fees, credit card fees, retail/rental cost of sales and labor, ski school labor and dining operations; as such, profit margins can fluctuate greatly based on the level of revenues.
Lodging Segment
Operations within the Lodging segment include (i) ownership/management of a group of luxury hotels through the RockResorts brand, including several proximate to our ski resorts; (ii) ownership/management of non-RockResorts branded hotels and condominiums proximate to our ski resorts; (iii) National Park Service ("NPS") concessionaire properties including Grand Teton Lodge Company ("GTLC"); (iv) Colorado Mountain Express (“CME”), a Colorado resort ground transportation company; and (v) mountain resort golf courses.
The performance of lodging properties (including managed condominium rooms) at or around our ski resorts, and CME, is closely aligned with the performance of the Mountain segment and generally experiences similar seasonal trends, particularly with respect to visitation by Destination guests, and represented approximately 92%94% and 91%92% of Lodging segment revenue (excluding Lodging segment revenue associated with reimbursement of payroll costs) for the three months ended January 31,April 30, 2013 and 2012, respectively, and 76% and 75% of Lodging segment revenue (excluding Lodging segment revenue associated with reimbursement of payroll costs) for the nine months ended April 30, 2013 and 2012, respectively. Management primarily focuses on Lodging net revenue excluding payroll cost reimbursement and Lodging operating expense excluding reimbursed payroll costs (which are not measures of financial performance under GAAP) 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. Revenue of the Lodging segment during our first and fourth fiscal quarters is generated primarily by the operations of our NPS concessionaire properties (as their operating season generally occurs from mid-May to mid-October), golf operations and seasonally low operations from our other owned and managed properties and businesses.
Real Estate Segment
The Real Estate segment owns and develops real estate in and around our resort communities and primarily engages in vertical development of projects, as well as occasionally the sale of land to third-party developers. Currently, the principal activities of our Real Estate segment include the marketing and selling of remaining condominium units that are available for sale, planning for future real estate development projects, including zoning and acquisition of applicable permits, and the purchase of selected strategic land parcels for future development. Revenue from vertical development projects is not recognized until closing of individual units within a project, which occurs after substantial completion of the project. We attempt to mitigate the risk of vertical development by often utilizing guaranteed maximum price construction contracts (although certain construction costs may not be covered by contractual limitations), pre-selling a portion of the project, requiring significant non-refundable deposits, and potentially obtaining non-recourse financing for certain projects (although our last two major vertical development projects have not incurred any such direct third party financing). Additionally, our real estate development projects most often result in the creation of certain resort assets that provide additional benefit to the Mountain and Lodging segments. Our revenue from the Real Estate segment, and associated expense, can fluctuate significantly based upon the timing of closings and the type of real estate being sold, causing volatility in the Real Estate segment’s operating results from period to period.
Recent Trends, Risks and Uncertainties
Together with those risk factors that we have identified in our Form 10-K, our management has identified the following important factors (as well as risks and uncertainties associated with such factors) that could impact our future financial performance or condition:

The timing and amount of snowfall can have an impact on Mountain and Lodging revenue particularly in regards to skier visits and the duration and frequency of guest visitation. To help partially mitigate the impact to our operating

2


results from the timing and amount of snowfall, we sell a variety of season pass products prior to the beginning of the

2


ski season resulting in a more stabilized stream of lift revenue within the second and third fiscal quarters, when the season pass sales are recorded as revenue. Additionally, our season pass products provide a value option to our guests, which in turn creates a guest commitment predominately prior to the start of the ski season. For the 2011/2012 ski seasonIn March 2013, we began our pre-season pass revenue represented approximately 40% of total lift revenuesales program for the entire2013/2014 ski season. Due to increasedThrough May 28, 2013, our spring pre-season pass sales for the 2012/2013upcoming 2013/2014 ski season have increased approximately 18% in units and increased approximately 24% in sales dollars, compared to the 2011/2012 ski season, seasonprior year period ended May 29, 2012. However, we cannot predict if this favorable trend will continue through the Fall 2013 pass revenue has increased approximately $6.9 million,sales campaign or 9.9%, for the three months ended January 31, 2013 compared to the same period in the prior year. Additionally, deferred revenue related tooverall impact that season pass sales was $70.7 million as of January 31, 2013 (compared to $64.2 million as of January 31, 2012) which will be recognized as lift revenue during our third fiscal quarter ending April 30, 2013.

Slow or declining economic growth currently present or recently present in the United States, Europe and parts of the rest of the world, including the pending resolution of the Federal deficit issues, European debt crisis and continued high unemployment, may have negative effects on the travel and leisure industry and on our results of operations. We cannot predict what impact these uncertainties may have on overall travel and leisure or more specifically, on our guest visitation, guest spending or other related trendslift ticket revenue for the remainder of the 2012/20132013/2014 ski season.

Real Estate Reported EBITDA is highly dependent on, among other things, the timing of closings on condominium units available for sale, which determines when revenue and associated cost of sales is recognized. Changes to the anticipated timing or mix of closing on one or more real estate projects, or unit closings within a real estate project, could materially impact Real Estate Reported EBITDA for a particular quarter or fiscal year. For the sixnine months ended January 31,April 30, 2013 we have sold 1120 units (with an additional 7 unitsone unit closing after January 31,April 30, 2013) at The Ritz-Carlton Residences, Vail and One Ski Hill Place in Breckenridge and we currently have 22 units and 3330 units, respectively, remaining available for sale. We cannot predict the ultimate number of units that we will sell, the ultimate price we will receive, or when the units will sell, although we currently believe the selling process will take multiple years. Additionally, if a prolonged weakness in the real estate market or general economic conditions were to occur we may have to adjust our selling prices more than currently anticipated in an effort to sell and close on units available for sale. However, our risk associated with adjusting selling prices to levels that may not be acceptable to us is partially mitigated by the fact that we generate cash flow from placing unsold units into our rental program until such time selling prices are at acceptable levels to us. Furthermore, if weakness in the real estate market were to persist for multiple years, thus requiring us to sell remaining units below recentanticipated pricing levels (including any sales concessions and discounts) for the remaining inventory of units at The Ritz-Carlton Residences, Vail or One Ski Hill Place in Breckenridge, it may result in an impairment charge on one or both projects.

At January 31,During the nine months ended April 30, 2013, we announced our calendar 2013 capital expenditure plan which is estimated between approximately $130 million and $140 million and includes the largest number of planned improvements in our history; we completed the acquisition of two ski areas, Afton Alps in Minnesota and Mount Brighton in Michigan, for net cash consideration of approximately $20.0 million; and on March 4, 2013, our Board of Directors increased our regular quarterly cash dividend on our common stock approximately 10% to $0.2075 per share (or approximately $29.8 million annually). As of April 30, 2013, we had $136.6$237.7 million in cash and cash equivalents, as well as $332.7$333.8 million available under the revolver component of our senior credit facility (“Credit Agreement”) (which represents the total commitment of $400.0 million less certain letters of credit outstanding of $67.3$66.2 million). During the three months ended January 31, 2013, we completed the acquisition of two ski areas, Afton Alps in Minnesota and Mount Brighton in Michigan, for net cash consideration of approximately $20.0 million, and on March 4, 2013 our Board of Directors increased our regular quarterly cash dividend on our common stock to $0.2075 per share (or approximately $29.8 million annually). Additionally, we believe that the terms of our 6.50% Senior Subordinated Notes due 2019 (“6.50% Notes”) and our Credit Agreement allow for sufficient flexibility in our ability to make future acquisitions, investments, distributions to stockholders and incur additional debt. This, combined with the completion of our completed real estate projects where the proceeds from future real estate closings on The Ritz-Carlton Residences, Vail, and One Ski Hill Place in Breckenridge are expected to significantly exceed future carrying costs, and the continued positive cash flow from operating activities (primarily occurring during our fiscal second and third quarters) less capital expenditures has and is anticipated to continue to provide us with significant liquidity which we believe will allow us to consider strategic investments and other forms of providing return to our stockholders including the continued payment of a quarterly cash dividend. We cannot predict that any strategic initiatives undertaken will achieve the anticipated results.

On May 29, 2013, we entered into a lease with Talisker pursuant to which we assumed resort operations of Canyons Resort which includes the ski area and related amenities. In addition to the lease, we entered into ancillary transaction documents setting forth our rights among others, to ongoing litigation between the current operator and Talisker related to the validity of a lease of the Talisker owned land under the ski terrain of Park City Mountain Resort. If the outcome of the litigation is favorable to Talisker, the land under the ski terrain of Park City Mountain Resort will become subject to our lease with Talisker, which we expect would be beneficial to us. If the outcome of the litigation is unfavorable, we will be entitled to receive from Talisker the rent payments that Talisker receives from the current resort operator until such time as the current resort operator's lease has ended and the ski terrain under Park City Mountain Resort is then included in the lease. The lease between us and Talisker for Canyons Resort has an initial term of 50 years with six 50-year renewal options. The lease provides for $25 million in annual fixed payments, which increase each year by an inflation linked index of CPI less 1%, with a floor of 2% per annum. In addition, the lease includes participating contingent payments to Talisker of 42% of the amount by which EBITDA for the resort operations, as calculated under the lease, exceeds approximately $35 million, with such threshold amount increased by an inflation linked index and a 10% adjustment for any capital improvements or investments made under the lease by

3


us. The inclusion of the ski terrain of Park City Mountain Resort in the lease would require no additional consideration from us, but the financial contribution, if any, of the additional ski terrain would be included as part of the calculation of EBITDA for the resort operations, and as a result, factor into the participating contingent payment component of the lease payment as described above. We will be finalizing the accounting for the Canyons Resort transaction, including the lease, in the coming months but we expect to record an obligation on our consolidated balance sheet of approximately $305.0 million in long-term debt (including capital lease obligations). Additionally, we cannot predict whether we will realize all of the synergies expected to arise from our operation of Canyons Resort nor can we predict the resources required to integrate its operations and the ultimate impact Canyons Resort will have on our future results of operations. Furthermore, if the litigation associated with the land under the ski terrain of Park City Mountain Resort results in an unfavorable outcome it could result in a material impairment charge attributable to goodwill, certain indefinite-lived intangible assets and/or long-lived assets recorded in conjunction with this transaction, negatively impacting our results of operations and stockholders' equity.

Under GAAP we test goodwill and indefinite-lived intangible assets for impairment annually, as well as on an interim basis to the extent factors or indicators become apparent that could reduce the fair value of our goodwill or indefinite-lived intangible assets below book value and we evaluate long-lived assets for potential impairment whenever events or change in circumstances indicate that the carrying amount of an asset may not be recoverable. We evaluate the recoverability of our goodwill by estimating the future discounted cash flows of our reporting units and terminal values of the businesses using projected future levels of income as well as business trends, prospects and market and economic conditions. We evaluate the recoverability of indefinite-lived intangible assets using the income approach based upon estimated future revenue streams, and we evaluate long-lived assets based upon estimated undiscounted future cash flows. Our fiscal 2012 annual impairment test did not result in a goodwill or indefinite-lived intangible asset impairment. However, if lower than projected levels of cash flows were to occur due to prolonged abnormal

3


weather conditions or a prolonged weakness in general economic conditions, among other risks, it could cause less than expected growth and/or a reduction in terminal values and cash flows and could result in an impairment charge attributable to certain goodwill, indefinite-lived intangible assets and/or long-lived assets (particularly related to our Lodging operations), negatively impacting our results of operations and stockholders’ equity.

RESULTS OF OPERATIONS
Summary

Below is a summary of operating results for both the three and sixnine months ended January 31,April 30, 2013, compared to the three and sixnine months ended January 31,April 30, 2012 (in thousands):
 
 
Three Months Ended
January 31,
 
Six Months Ended
January 31,
 
Three Months Ended
April 30,
 
Nine Months Ended
April 30,
 2013 2012 2013 2012 2013 2012 2013 2012
Mountain Reported EBITDA $140,843
 $120,627
 $85,641
 $72,172
 $194,330
 $170,711
 $279,971
 $242,882
Lodging Reported EBITDA 1,740
 1,213
 2,442
 (494) 8,388
 6,869
 10,830
 6,375
Resort Reported EBITDA 142,583
 121,840
 88,083
 71,678
 202,718
 177,580
 290,801
 249,257
Real Estate Reported EBITDA (2,572) (3,475) (6,256) (8,213) (3,156) (3,482) (9,412) (11,695)
Income (loss) before (provision) benefit from income taxes 97,627
 76,164
 (559) (15,957)
Net income (loss) attributable to Vail Resorts, Inc. $60,551
 $46,389
 $(29) $(9,320)
Income before provision for income taxes 157,402
 132,281
 156,843
 116,324
Net income attributable to Vail Resorts, Inc. $97,640
 $79,569
 $97,611
 $70,250
A discussion of the segment results and other items can be found below.


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Mountain Segment

Three months ended January 31,April 30, 2013 compared to the three months ended January 31,April 30, 2012
Mountain segment operating results for the three months ended January 31,April 30, 2013 and 2012 are presented by category as follows (in thousands, except effective ticket price (“ETP”)):
 
 
Three Months Ended
January 31,
 
Percentage
Increase
(Decrease)
 
Three Months Ended
April 30,
 
Percentage
Increase
(Decrease)
 2013 2012  2013 2012 
Net Mountain revenue:            
Lift tickets $175,658
 $153,699
 14.3 % $215,163
 $188,712
 14.0 %
Ski school 41,723
 37,252
 12.0 % 53,531
 47,040
 13.8 %
Dining 29,826
 24,722
 20.6 % 37,876
 31,388
 20.7 %
Retail/rental 83,748
 73,850
 13.4 % 66,329
 60,144
 10.3 %
Other 30,786
 26,415
 16.5 % 29,118
 27,302
 6.7 %
Total Mountain net revenue $361,741
 $315,938
 14.5 % $402,017
 $354,586
 13.4 %
Mountain operating expense:            
Labor and labor-related benefits $83,684
 $72,730
 15.1 % $83,372
 $73,946
 12.7 %
Retail cost of sales 35,244
 29,427
 19.8 % 23,795
 22,633
 5.1 %
Resort related fees 17,396
 16,742
 3.9 % 22,445
 20,827
 7.8 %
General and administrative 34,813
 31,699
 9.8 % 31,581
 27,992
 12.8 %
Other 49,860
 44,891
 11.1 % 46,760
 38,813
 20.5 %
Total Mountain operating expense $220,997
 $195,489
 13.0 % $207,953
 $184,211
 12.9 %
Mountain equity investment income, net 99
 178
 (44.4)% 266
 336
 (20.8)%
Mountain Reported EBITDA $140,843
 $120,627
 16.8 % $194,330
 $170,711
 13.8 %
            
Total skier visits 3,220
 2,900
 11.0 % 3,756
 3,244
 15.8 %
ETP $54.55
 $53.00
 2.9 % $57.29
 $58.17
 (1.5)%


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Certain Mountain segment operating expenses presented above for the three months ended January 31,April 30, 2012 have been reclassified to conform to the current fiscal quarter presentation.

Mountain Reported EBITDA includes $2.2$2.1 million and $1.8$1.6 million of stock-based compensation expense for the three months ended January 31,April 30, 2013 and 2012, respectively.

Mountain Reported EBITDA for the three months ended January 31,April 30, 2013 increased $20.2$23.6 million, or 16.8%13.8%, compared to the three months ended January 31, 2012. Our results for the three months ended January 31, 2013 reflect an increase in revenuesApril 30, 2012, and includes incremental EBITDA of $4.4 million from higher overall visitation due to more normal weather conditions, particularly at our Tahoe resorts, compared to the same period in the prior year. These results also benefited from a very strong Christmas and New Year holiday period, higher pricing, increase average guest spend on ancillary services and higher pass sales. However, our results were tempered by poor snowfall and unseasonably warm temperatures at our Colorado resorts which occurred from the start of the ski season to the pre-Christmas holiday period in December (the “Early Season”) which adversely impacted our skier visitation to our Colorado resorts. As a result, skier visitation to our Colorado resorts was down 4.4% for the three months ended January 31, 2013 compared to the same period in the prior year. Our Tahoe resorts experienced significantly better snowfall and weather conditions during the current year fiscal quarter compared to the same period in the prior year which resulted in an increase in skier visitation of 56.1% (including Kirkwood which was acquired in April 2012). Additionally, the acquisitions of Kirkwood Skiinfo (acquired on February 1,in April 2012), Afton Alps and Mount Brighton (acquired in December 2012) contributed incremental EBITDA of $3.6 million(the "Acquisitions"). Our results for the three months ended January 31,April 30, 2013 (the "Acquisitions").were positively impacted by increased skier visitation compared to the same period in the prior year at both our Colorado and Tahoe resorts, which included strong visitation during the peak Spring Break and the Easter holiday periods at our Colorado resorts and the addition of Kirkwood to our Tahoe resorts. However, our operating results were somewhat negatively impacted by dry conditions and warm temperatures experienced at our Tahoe resorts during the current year fiscal quarter slowing the strong momentum in skier visitation experienced during the first half of the ski season. Skier visitation to our Colorado and Tahoe resorts (including Kirkwood) was up 11.8% and 14.2%, respectively, for the three months ended April 30, 2013 compared to the same period in the prior year.

Total Mountain net revenue increased $45.8$47.4 million, or 14.5%13.4%, for the three months ended January 31,April 30, 2013 compared to the three months ended January 31,April 30, 2012, which includes incremental revenue from the Acquisitions in total of $15.6$13.4 million. Excluding these incremental revenues, revenue increased $30.2$34.0 million, or 9.5%9.6%, for the three months ended January 31,April 30, 2013 compared to the three months ended January 31,April 30, 2012. Lift revenue increased $22.0$26.5 million, or 14.3%14.0%, for the three months ended January 31,April 30, 2013 compared to the same period in the prior year, resulting from a $15.1$21.3 million, or 17.9%17.4%, increase in lift revenue excluding season pass revenue, as well as a $6.9$5.2 million, or 9.9%7.8%, increase in season pass revenue. The increase in lift revenue excluding season pass revenue was driven by an increase in visitation excluding season pass holders of 14.3%14.6%, and an increase in ETP excluding season pass holders, of $2.23,$1.78 or 3.1%2.3%. Excluding the Acquisitions, lift revenue excluding season pass holders increased $10.1$16.4 million, or 11.9%13.4%, and ETPdriven by a 7.1% increase in visitation excluding season pass holders increased $5.46,and an increase in ETP

5


excluding season pass holders of $4.51, or 7.6%, driven by price increases implemented during the current fiscal quarter.5.9%. The increase in season pass revenue was driven by a combination of both an increase in units sold and pricing. Total ETP increased $1.55,decreased $0.88, or 2.9%1.5%, due primarily to price increases in both our lead/window lift ticket products and season pass products, partially offset by slightly higher visitation from our season pass holders on a per pass basis.basis, mostly offset by price increases in both season passes and daily lift tickets.

Ski school revenue increased $4.5$6.5 million, or 12.0%13.8%, for the three months ended January 31,April 30, 2013 compared to the same period in the prior year, with our Colorado resorts ski school revenue increasing $4.3 million, or 10.7%, and our Tahoe resorts (including Kirkwood) ski school revenue increasing $2.8$2.0 million, or 51.1%, and our Colorado resorts ski school revenue increasing $1.4 million, or 4.4%30.1%, compared to the same period in the prior year. The increase in ski school revenue at our Colorado resorts was primarily due to an increase in skier visitation and higher pricing. Ski school revenue at our Tahoe resorts benefited from the increase in skier visitation at our Tahoe resorts (as discussed above) andprimarily from the addition of Kirkwood, as well as an increase in yield per skier visit of 9.2% at our Colorado resorts.visit. Excluding the Acquisitions, ski school revenue increased $3.5$5.6 million, or 9.5%11.8%, and yield per skier visit increased 2.5%.

Dining revenue increased $5.1$6.5 million, or 20.6%20.7%, for the three months ended January 31,April 30, 2013 compared to the same period in the prior year, and was primarily attributable to our TahoeColorado resorts (including Kirkwood) generating a $3.6$3.7 million, or 15.6%, increase in revenue due to increased skier visitation and higher yieldsan increase in yield per skier visit. Dining revenue at our ColoradoTahoe resorts increased $0.7$2.0 million, or 26.3%, driven by an increase inthe addition of Kirkwood and increased revenue at Heavenly which benefited from a higher yield per skier visit of 8.6%.visit. Excluding the Acquisitions, dining revenue increased $2.9$4.4 million, or 11.7%13.9%, and yield per skier visit increased 4.5%.

Retail/rental revenue increased $9.9$6.2 million, or 13.4%10.3%, for the three months ended January 31,April 30, 2013 compared to the same period in the prior year, which was driven by an increase in retail sales of $7.5$3.0 million, or 13.5%7.7%, as well as an increase in rental revenue of $2.4$3.2 million, or 13.3%15.1%. The increase in retail sales was generated primarily fromattributed to a $2.3 million increase in sales from our on-line retailer, and our Any Mountain stores (in the San Francisco bay area) along with our stores proximate to our TahoeColorado resorts, (including Kirkwood) which sales were up a combined $4.6 million which benefited from increased skier visitation and more normal weather conditions as discussed above. Additionally, our retail sales from our Colorado stores were essentially flat for the current period as compared to the same period in the prior year as strong holiday period sales offset lower sales volumes from the Early Season due to poor snowfalladdition of Kirkwood and highly unusual warm temperatures in Colorado as discussed above.Urban Ski Areas. The increase in rental revenue was driven bygenerated primarily from stores proximate to our Colorado resorts which increased a combined $1.1 million, and stores proximate to our Tahoe resorts (including Kirkwood) and Any Mountain stores (in the San Francisco bay area) which were upincreased a combined $1.7$0.9 million.


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Other revenue mainly consists of private club revenue (which includes both club dues and amortization of initiation fees), mountain activities revenue, marketing and internet advertising revenue, commercial leasing revenue, employee housing revenue, municipal services revenue and other recreation activity revenue. For the three months ended January 31,April 30, 2013, other revenue increased $4.4$1.8 million, or 16.5%6.7%, compared to the same period in the prior year, primarily due to incremental internet advertising revenue from Skiinfo of $1.9 million, an increase in marketingbase area services and parking revenue, primarily attributable to an increase in strategic alliance marketing revenue, increased employee housing revenuegroup events and additional revenue associated with other mountain recreation activity.activity, partially offset by a decline in internet advertising revenue.

Operating expense increased $25.5$23.7 million, or 13.0%12.9%, for the three months ended January 31,April 30, 2013 compared to the three months ended January 31,April 30, 2012, which includes incremental operating expense from the Acquisitions in total of $12.0$8.9 million and professional service fees associated with the Canyons Resort transaction of $2.6 million. Excluding these incremental expenses, operating expense increased $13.5$12.2 million, or 6.9%6.6%, for the three months ended January 31,April 30, 2013 compared to the three months ended January 31,April 30, 2012. Labor and labor-related benefits (excluding the Acquisitions) increased $5.6$4.9 million, or 7.7%6.7%, impacted byprimarily due to normal wage adjustments, and an increase inhigher bonus expense, increased staffing levels to support higher volumes primarily in mountain operations, ski school, and on-mountain dining operations.and higher store labor due primarily to new retail stores. Retail cost of sales increased $5.8$1.2 million, or 19.8%5.1%, primarily due to anon a 7.7% increase in overall retail sales including a higher mix of on-line sales and sales of hard goods which both produce lower margins.benefited from improved gross margins at stores proximate to our mountain resorts. General and administrative expense (excluding the Acquisitions) increased $1.5$2.7 million, or 4.7%9.5%, primarily due to higher Mountain segment component of allocated corporate costs including increased sales and marketing expense due to the timing of marketing campaigns and a shift in allocated corporate expenses to the Mountain segment, partially offset by lower employee medical costs.segment. Resort related fees (including Forest Services fees, other resort-related fees, credit card fees and commissions) increased $1.6 million, or 7.8%, due to overall increases in revenue upon which those fees are based. Other expense (excluding the Acquisitions)Acquisitions and Canyons Resort transaction costs) increased $0.9$2.6 million, or 2.1%6.7%, which was driven by higherincreased repairs and maintenance and variable operating expenses including food and beverage cost of sales, supplies expense and rent expense, partially offset by lower utilities expense.other operating expenses.

Mountain equity investment income, net primarily includes our share of income from the operations of a real estate brokerage joint venture.


Six
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Nine months ended January 31,April 30, 2013 compared to the sixnine months ended January 31,April 30, 2012

Mountain segment operating results for the sixnine months ended January 31,April 30, 2013 and 2012 are presented by category as follows (in thousands, except ETP):
 
Six Months Ended
January 31,
 
Percentage
Increase
(Decrease)
 
Nine Months Ended
April 30,
 
Percentage
Increase
(Decrease)
 2013 2012  2013 2012 
Net Mountain revenue:            
Lift tickets $175,658
 $153,699
 14.3 % $390,820
 $342,411
 14.1 %
Ski school 41,723
 37,252
 12.0 % 95,254
 84,292
 13.0 %
Dining 36,199
 30,369
 19.2 % 74,075
 61,757
 19.9 %
Retail/rental 110,473
 100,814
 9.6 % 176,802
 160,958
 9.8 %
Other 49,600
 43,474
 14.1 % 78,719
 70,776
 11.2 %
Total Mountain net revenue $413,653
 $365,608
 13.1 % $815,670
 $720,194
 13.3 %
Mountain operating expense:            
Labor and labor-related benefits $117,978
 $102,821
 14.7 % $201,350
 $176,775
 13.9 %
Retail cost of sales 51,435
 44,954
 14.4 % 75,230
 67,590
 11.3 %
Resort related fees 18,385
 17,826
 3.1 % 40,830
 38,648
 5.6 %
General and administrative 62,117
 57,406
 8.2 % 93,698
 85,397
 9.7 %
Other 78,630
 71,037
 10.7 % 125,390
 109,846
 14.2 %
Total Mountain operating expense $328,545
 $294,044
 11.7 % $536,498
 $478,256
 12.2 %
Mountain equity investment income, net 533
 608
 (12.3)% 799
 944
 (15.4)%
Mountain Reported EBITDA $85,641
 $72,172
 18.7 % $279,971
 $242,882
 15.3 %
            
Total skier visits 3,220
 2,900
 11.0 % 6,977
 6,142
 13.6 %
ETP $54.55
 $53.00
 2.9 % $56.02
 $55.75
 0.5 %

Certain Mountain segment operating expenses presented above for the sixnine months ended January 31,April 30, 2012 have been reclassified to conform to the current fiscal quarteryear-to-date presentation.

6


Mountain Reported EBITDA includes $4.9$7.0 million and $4.3$5.9 million of stock-based compensation expense for the sixnine months ended January 31,April 30, 2013 and 2012, respectively.
As our
Mountain Reported EBITDA for the nine months ended April 30, 2013 increased $37.1 million, or 15.3%, compared to the nine months ended April 30, 2012, and includes incremental EBITDA of $6.5 million from the acquisitions of Kirkwood (acquired in April 2012), Skiinfo (acquired in February 2012), Afton Alps and Mount Brighton (acquired in December 2012) (the "Acquisitions"). Our results for the nine months ended April 30, 2013 reflect an increase in revenues from higher overall visitation due to improved weather conditions during the 2012/2013 ski season compared to the 2011/2012 ski season. Our results also benefited from higher pricing, increased average guest spend on ancillary services and higher pass sales. Our Colorado resorts opened during our second fiscal quarter,experienced strong results from the peak holiday periods of Christmas through Spring Break and Easter compared to the prior year, however these results were tempered by poor snowfall and unseasonably warm temperatures which occurred from the start of the sixski season through the pre-Christmas holiday period which adversely impacted skier visitation to our Colorado resorts during this period. As such, skier visitation to our Colorado resorts increased 4.0% overall for the 2012/2013 ski season compared to the 2011/2012 ski season. Our Tahoe resorts experienced significantly better snowfall and weather conditions during first half of the 2012/2013 ski season which contributed to a significant increase in skier visitation to the Tahoe region combined with the addition of Kirkwood; however, the early momentum at our Tahoe resorts was slowed by dry conditions and warm temperatures experienced throughout the latter half of the 2012/2013 ski season. Overall, our Tahoe resorts saw an increase in skier visitation of 32.3% (including Kirkwood). Total mountain net revenue increased $95.5 million, or 13.3%, for the nine months ended January 31, 2013 and 2012 for lift ticket revenue and ski school revenue are the same as the three months ended January 31, 2013 and 2012.

Dining revenue for the six months ended January 31,April 30, 2013 compared to the sixnine months ended January 31,April 30, 2012 which includes incremental revenues from the Acquisitions of $30.1 million.
Lift revenue increased $5.8$48.4 million, or 19.2%14.1%, for the nine months ended April 30, 2013, compared to the same period in the prior year, resulting from a $36.4 million, or 17.6%, increase in lift revenue excluding season pass revenue, as well as a $12.0 million, or 8.9%, increase in season pass revenue. The increase in lift revenue excluding season pass revenue was driven by an increase in visitation excluding season pass holders of 14.5%, and an increase in ETP excluding season pass holders, of $2.01

7


or 2.7%. Excluding the Acquisitions, lift revenue excluding season pass holders increased $26.4 million, or 12.8%, driven by a 5.7% increase in visitation excluding season pass holders and an increase in ETP excluding season pass holders of $4.94, or 6.7%. The increase in season pass revenue was driven by a combination of both an increase in units sold and pricing. Total ETP was relatively flat compared to prior year due primarily attributable to price increases in both season passes and daily lift tickets offset by an increase in visitation from our season pass holders.
Ski school revenue for the nine months ended April 30, 2013 increased $11.0 million, or 13.0%, compared to the same period in the prior year, with our Colorado resorts ski school revenue increasing $5.7 million, or 7.9%, and our Tahoe resorts (including Kirkwood) generating a $4.0ski school revenue increasing $4.8 million, or 39.6%, compared to the same period in the prior year. Ski school revenue benefited from the increase in revenue primarily due to increased skier visitation and higher yields per skier visit. Dining revenue at both our Colorado and Tahoe resorts increased $1.1 million driven by(as discussed above) and an increase in yield per skier visit of 8.6%2.1%. Excluding the Acquisitions, ski school revenue increased $9.1 million, or 10.8%, and improved summer visitation.yield per skier visit increased 4.4%.
Dining revenue for the nine months ended April 30, 2013 compared to the nine months ended April 30, 2012, increased $12.3 million, or 19.9%, with our Tahoe resorts (including Kirkwood) generating a $5.9 million, or 40.4%, increase and our Colorado resorts providing a $4.8 million, or 10.2%, increase, both of which are primarily attributable to increased skier visitation and an increase in yield per skier visit. Excluding the Acquisitions, dining revenue increased $7.6 million, or 12.3%, and yield per skier visit increased 6.5% for the 2012/2013 ski season.

Retail/rental revenue increased $9.7$15.8 million, or 9.6%9.8%, for the sixnine months ended January 31,April 30, 2013 compared to the same period in the prior year, which was driven primarily by an increase in retail sales which were up $7.2of $10.2 million, or 9.0%8.5%, as well asand an increase in rental revenue of $2.4$5.6 million, or 12.2%13.7%. The increase in retail sales was primarily occurred at stores proximateattributed to our Tahoe resorts (including Kirkwood) and Any Mountain stores (in the San Francisco bay area) along with our stores proximate to our Tahoe resorts which were upsales increased a combined $4.7$5.3 million benefitingwhich benefited from increased skier visitation and more normal weather patterns,the addition of Kirkwood; stores proximate to our Colorado resorts which sales increased a combined $3.4 million; and an increase of $3.1 million in retail sales generated byfrom our on-line retailer and strong holiday period retail sales at our Colorado resort stores. These increases wereof $2.8 million; all of which was partially offset by lower retail sales declines occurring at our Colorado front range stores which were negatively impacted by lower sales at pre-ski season sales events compared to prior year record sales from our pre-ski season sales events, combined with unseasonably warmunfavorable weather and low Early Season snowfall.conditions during the early season. The increase in rental revenue was driven primarily by stores proximate to our Tahoe resorts (including Kirkwood) and Any Mountain stores (in the San Francisco bay area) which were upincreased a combined $1.7$2.6 million and stores proximate to our Colorado resorts which increased a combined $0.9 million.

Other revenue mainly consists of private club revenue (which includes both club dues and amortization of initiation fees), summer revenuevisitation and other mountain activities revenue, marketing and internet advertising revenue, commercial leasing revenue, employee housing revenue, municipal services revenue and other recreation activity revenue. For the sixnine months ended January 31,April 30, 2013, other revenue increased $6.1$7.9 million, or 14.1%11.2%, compared to the sixnine months ended January 31,April 30, 2012, primarily due to incremental internet advertising revenue from Skiinfo of $2.5$2.2 million, higheran increase in strategic alliance marketing revenue, an increase in cooperative marketing revenue largely due to timing of marketing campaigns, higherincreased employee housing revenue, an increase in summer activities revenue and increased municipal servicesadditional revenue (primarily transportation services provided on behalf of certain municipalities).associated with other mountain recreation activity.

Operating expense increased $34.5$58.2 million, or 11.7%12.2%, during the sixnine months ended January 31,April 30, 2013 compared to the sixnine months ended January 31,April 30, 2012, which includes incremental operating expense from the Acquisitions in total of $15.5$23.6 million and professional service fees associated with the Canyons Resort transaction of $2.6 million. Excluding these incremental expenses, operating expense increased $19.0$32.0 million, or 6.5%6.7%, for the sixnine months ended January 31,April 30, 2013 compared to the sixnine months ended January 31,April 30, 2012. Labor and labor-related benefits (excluding incremental expense from the Acquisitions) increased $8.3$13.2 million, or 8.0%7.5%, primarily due to normal wage adjustments, higher bonus expense, increased staffing levels to support higher volumes primarily in ski school, mountain operations, on-mountain dining, operations and summer operations and increased retailhigher store labor primarily due to new retail stores. Retail cost of sales increased $6.5$7.6 million, or 14.4%11.3%, primarily due to an increase in overall retail sales, including a higher mix of on-line sales and sales of hard goods which both producegenerates a lower margins.gross margin. General and administrative expense (excluding incremental expense from the Acquisitions) increased $2.5$5.4 million, or 4.4%6.3%, primarily due to a higher Mountain segment component of allocated corporate costs which includedincluding increased sales and marketing expenditures,expense and higher costs associated with employee housing, and a shift in allocated corporate expenses to the Mountain segment, partially offset by lower employee medical costs. Other expense (excluding theAcquisitions)Resort related fees (including Forest Services fees, other resort-related fees, credit card fees and commissions) increased $2.2 million, or 3.2%5.6%, due to overall increases in revenue upon which those fees are based. Other expense (excluding incremental expense from the Acquisitions and Canyons Resort transaction costs) increased $5.5 million, or 5.0%, which was driven by higher operating expenses including food and beverage cost of sales, rent expense, and supplies expense, partially offset by lower utilities expense.

Mountain equity investment income, net primarily includes our share of income from the operations of a real estate brokerage joint venture.


78


Lodging Segment

Three months ended January 31,April 30, 2013 compared to the three months ended January 31,April 30, 2012
Lodging segment operating results for the three months ended January 31,April 30, 2013 and 2012 are presented by category as follows (in thousands, except average daily rates (“ADR”) and revenue per available room (“RevPAR”)):
 
 
Three Months Ended
January 31,
 
Percentage
Increase
(Decrease)
 
Three Months Ended
April 30,
 
Percentage
Increase
(Decrease)
 2013 2012  2013 2012 
Lodging net revenue:            
Owned hotel rooms $8,906
 $8,691
 2.5 % $10,966
 $10,169
 7.8 %
Managed condominium rooms 14,605
 13,594
 7.4 % 16,110
 14,921
 8.0 %
Dining 5,492
 5,094
 7.8 % 6,044
 5,704
 6.0 %
Transportation 7,123
 7,089
 0.5 % 8,756
 8,097
 8.1 %
Other 7,880
 8,324
 (5.3)% 9,180
 9,439
 (2.7)%
 44,006
 42,792
 2.8 % 51,056
 48,330
 5.6 %
Payroll cost reimbursements 2,537
 5,514
 (54.0)% 2,778
 5,642
 (50.8)%
Total Lodging net revenue $46,543
 $48,306
 (3.6)% $53,834
 $53,972
 (0.3)%
Lodging operating expense:            
Labor and labor-related benefits $21,472
 $20,839
 3.0 % $21,384
 $21,059
 1.5 %
General and administrative 7,236
 7,630
 (5.2)% 7,553
 7,457
 1.3 %
Other 13,558
 13,110
 3.4 % 13,731
 12,945
 6.1 %
 42,266
 41,579
 1.7 % 42,668
 41,461
 2.9 %
Reimbursed payroll costs 2,537
 5,514
 (54.0)% 2,778
 5,642
 (50.8)%
Total Lodging operating expense $44,803
 $47,093
 (4.9)% $45,446
 $47,103
 (3.5)%
Lodging Reported EBITDA $1,740
 $1,213
 43.4 % $8,388
 $6,869
 22.1 %
            
Owned hotel statistics:            
ADR $232.85
 $223.98
 4.0 % $244.97
 $232.10
 5.5 %
RevPar $124.06
 $120.49
 3.0 % $157.73
 $140.14
 12.6 %
Managed condominium statistics:            
ADR $416.08
 $387.57
 7.4 % $382.80
 $376.71
 1.6 %
RevPar $122.84
 $121.65
 1.0 % $145.48
 $136.41
 6.6 %
Owned hotel and managed condominium statistics (combined):            
ADR $344.26
 $323.41
 6.4 % $330.70
 $321.48
 2.9 %
RevPar $123.16
 $121.33
 1.5 % $148.71
 $137.42
 8.2 %

Lodging Reported EBITDA includes $0.6$0.5 million and $0.4 million of stock-based compensation expense for the three months ended January 31,April 30, 2013 and 2012, respectively.

Total Lodging net revenue (excluding payroll cost reimbursements) for the three months ended January 31,April 30, 2013 increased $1.2$2.7 million, or 2.8%5.6%, as compared to the three months ended January 31,April 30, 2012. Revenue from owned hotel rooms increased $0.2$0.8 million, or 2.5%7.8%, for the three months ended January 31,April 30, 2013 as compared to the three months ended January 31,April 30, 2012, driven by a 4.0%5.5% increase in ADR partially offsetand a 4.0 percentage point increase in occupancy. Occupancy for owned properties was favorably impacted by lower overall transient guestincreased skier visitation due to the Early Season poor snowfall and warm temperatures experienced byat our Colorado resorts (as discussed in ourthe Mountain segment). Revenue from managed condominium rooms increased $1.0$1.2 million, or 7.4%8.0%, primarily driven by the addition of managed condominium rooms at Kirkwood, and an increase in transient guest visitation in the Tahoe region, which was favorably impacted by an increase in skier visitation at our Tahoe ski resorts (as discussedmanaged condominium rooms in the Mountain segment) and increases in ADR at our Keystone and Breckenridge resort properties.Colorado due to increased skier visitation.

Dining revenue for the three months ended January 31,April 30, 2013 increased $0.4$0.3 million, or 7.8%6.0%, compared to the three months ended January 31,April 30, 2012, primarily due to improved revenue at The Arrabelle's Tavern on the Square in Vail and an increase in group business at our Keystone resort. OtherTransportation revenue decreased $0.4for the three months ended April 30, 2013 increased $0.7 million, or 8.1%, as compared to the three months ended April 30, 2012, primarily due to the increased skier visitation to our Colorado

89


resorts which drove an 11.4% increase in total passengers compared to prior year. Other revenue decreased $0.3 million, or 5.3%2.7%, compared to the same period in the prior year primarily due to lower revenue from managed hotel properties as a result of the previously announced RockResorts reorganization plan,. partially offset by an increase in conference services provided to our group business at our Keystone resort.

Operating expense (excluding reimbursed payroll costs) increased $0.7$1.2 million, or 1.7%2.9%, for the three months ended January 31,April 30, 2013 compared to the three months ended January 31,April 30, 2012. Labor and labor-related benefits increased $0.6$0.3 million, or 3.0%1.5%, primarily due to normal wage increases and an increase in bonus expense, partially offset by lowerhigher staffing levels associated with decreased occupancy.increased occupancy, partially offset by a reduction in overhead labor costs associated with the RockResorts reorganization plan. General and administrative expense decreased $0.4increased $0.1 million, or 5.2%1.3%, primarily due to higher Lodging segment component of allocated corporate costs, mostly offset by savings from the RockResorts reorganization plan and lower employee medical costs, partially offset by higher Lodging segment component of corporate costs.plan. Other expense increased $0.4$0.8 million, or 3.4%6.1%, primarily due to higher variable operating costs including higher food and beverage cost of sales.sales and other operating expense (e.g. credit card fees, travel agent commissions, fuel and supplies-room amenities expense).

Revenue from payroll cost reimbursements and the corresponding reimbursed payroll costs relates to payroll costs at managed hotel properties where we are the employer and all payroll costs are reimbursed by the owners of the properties under contractual arrangements. Since the reimbursements are made based upon the costs incurred with no added margin, the revenue and corresponding expense have no effect on our Lodging Reported EBITDA. The decrease in revenue from payroll cost reimbursements and the corresponding reimbursed payroll costs for the three months ended January 31,April 30, 2013 compared to the three months ended January 31,April 30, 2012 was due to a reduction in the number of managed hotel properties as previously announced under the RockResorts reorganization plan.








































910


Six
Nine months ended January 31,April 30, 2013 compared to the sixnine months ended January 31,April 30, 2012
Lodging segment operating results for the sixnine months ended January 31,April 30, 2013 and 2012 are presented by category as follows (in thousands, except ADR and RevPAR”)):
 
 
Six Months Ended
January 31,
 
Percentage
Increase
(Decrease)
 
Nine Months Ended
April 30,
 
Percentage
Increase
(Decrease)
 2013 2012  2013 2012 
Lodging net revenue:            
Owned hotel rooms $22,600
 $20,723
 9.1 % $33,566
 $30,892
 8.7 %
Managed condominium rooms 20,419
 19,140
 6.7 % 36,529
 34,061
 7.2 %
Dining 16,102
 14,651
 9.9 % 22,146
 20,356
 8.8 %
Transportation 8,814
 8,791
 0.3 % 17,570
 16,888
 4.0 %
Golf 7,647
 7,573
 1.0 % 7,711
 7,636
 1.0 %
Other 17,752
 17,773
 (0.1)% 26,868
 27,149
 (1.0)%
 93,334
 88,651
 5.3 % 144,390
 136,982
 5.4 %
Payroll cost reimbursements 5,717
 13,249
 (56.8)% 8,495
 18,890
 (55.0)%
Total Lodging net revenue $99,051
 $101,900
 (2.8)% $152,885
 $155,872
 (1.9)%
Lodging operating expense:            
Labor and labor-related benefits $44,922
 $43,408
 3.5 % $66,306
 $64,467
 2.9 %
General and administrative 14,261
 15,158
 (5.9)% 21,814
 22,615
 (3.5)%
Other 31,709
 30,579
 3.7 % 45,440
 43,525
 4.4 %
 90,892
 89,145
 2.0 % 133,560
 130,607
 2.3 %
Reimbursed payroll costs 5,717
 13,249
 (56.8)% 8,495
 18,890
 (55.0)%
Total Lodging operating expense $96,609
 $102,394
 (5.6)% $142,055
 $149,497
 (5.0)%
Lodging Reported EBITDA $2,442
 $(494) 594.3 % $10,830
 $6,375
 69.9 %
            
Owned hotel statistics:            
ADR $198.83
 $202.64
 (1.9)% $212.16
 $211.46
 0.3 %
RevPar $117.46
 $109.56
 7.2 % $128.40
 $118.01
 8.8 %
Managed condominium statistics:            
ADR $338.20
 $323.70
 4.5 % $358.09
 $346.77
 3.3 %
RevPar $76.58
 $75.57
 1.3 % $98.92
 $95.77
 3.3 %
Owned hotel and managed condominium statistics (combined):            
ADR $262.07
 $259.87
 0.8 % $287.46
 $282.71
 1.7 %
RevPar $89.49
 $86.62
 3.3 % $107.75
 $102.62
 5.0 %
Lodging Reported EBITDA includes $1.0$1.4 million of stock-based compensation expense for both the sixnine months ended January 31,April 30, 2013 and 2012.
Total Lodging net revenue (excluding payroll cost reimbursements) for the sixnine months ended January 31,April 30, 2013 increased $4.7$7.4 million, or 5.3%5.4%, as compared to the sixnine months ended January 31,April 30, 2012, which increase includes $1.9 million of incremental revenue from Flagg Ranch for the six months ended January 31, 2013 (NPS(a NPS concessionaire contract that was awarded in November 2011). for the nine months ended April 30, 2013. Additionally, Flagg Ranch contributed $0.6 million of incremental EBITDA for the sixnine months ended January 31,April 30, 2013. Excluding the impact of Flagg Ranch, total Lodging net revenue (before payroll cost reimbursements) increased $2.8$5.5 million, or 3.1%4.0%, which is largely attributable to an increase in transient revenue at our Colorado mountain properties resulting from improved summer visitation and an increase in group business, especiallythe addition of managed condominium units at Keystone, an increase in transient guest visitation in the Tahoe region due to increased skier visitation,Kirkwood, partially offset by a decline in revenue at GTLC primarily due to adverse conditions from wild fires in the region during the three months ended October 31, 2012.

Revenue from owned hotel rooms increased $1.9$2.7 million, or 9.1%8.7%, for the sixnine months ended January 31,April 30, 2013 compared to the sixnine months ended January 31,April 30, 2012, which includes $1.0 million of incremental room revenue from Flagg Ranch for the sixnine months ending January 31,April 30, 2013. Owned room revenue was also positively impacted by our Colorado lodging properties, which revenue increased $1.2$2.0 million, resulting from improved summer visitation and an increase in transient guest visitation attributable to increased skier visits at our Colorado mountain resorts and an increase in group business primarily at our Keystone resort.during the 2012/2013 ski season. Partially offsetting the above

11


increase was a decrease in transient revenue of

10


$0.3 $0.3 million fromat GTLC for the three months ended October 31, 2012 compared to the same period in the prior year due to the adverse conditions caused by wild fires. Revenue from managed condominium rooms increased $1.3$2.5 million, or 6.7%7.2%, for the sixnine months ended January 31,April 30, 2013 compared to the sixnine months ended January 31,April 30, 2012, and was primarily attributable to the additional managed condominium units at Kirkwood, and an increase in transient guest visitation at our managed condominium rooms in Colorado and the Tahoe region which was favorably impacted by an increase indue to increased skier visitation at our Tahoe resorts (as discussed in the Mountain segment), and increases in ADR at our Keystone and Breckenridge resort properties.visitation.
Dining revenue for the sixnine months ended January 31,April 30, 2013 increased $1.5$1.8 million, or 9.9%8.8%, as compared to the sixnine months ended January 31,April 30, 2012, primarily due to an increase in group business at our Keystone resort resulting in a $0.8$0.9 million increase in revenue, increased dining revenue at The Arrabelle as well as at the DoubleTree in Breckenridge, and incremental dining revenue from Flagg Ranch. Transportation revenue increased $0.7 million, or 4.0%, during the nine months ended April 30, 2013 compared to the same period in the prior year, primarily due to the increase in skier visitation at our Colorado resorts which resulted in an increase in total passengers of 9.6%. Other revenue was impacted bydecreased $0.3 million, or 1.0%, as compared to the prior year due to lower revenue from managed hotel properties as a result of the previously announced prior year RockResorts reorganization plan, partially offset by an increase in conference services provided to our group business and an increase in retail and ancillary revenue resulting from the addition of Flagg Ranch.

Operating expense (excluding reimbursed payroll costs) increased $1.7$3.0 million, or 2.0%2.3%, for the sixnine months ended January 31,April 30, 2013 compared to the sixnine months ended January 31,April 30, 2012. Labor and labor-related benefits increased $1.5$1.8 million, or 3.5%2.9%, resulting from normal wage adjustments, an increase in contract labor associated with increased occupancy, increased conference services provided to our group business, and incremental labor costs associated with Kirkwood and Flagg Ranch of $0.4$0.9 million, and an increasepartially offset by a reduction in bonus expense.overhead labor associated with the RockResorts reorganization plan. Other expense increased $1.1$1.9 million, or 3.7%4.4%, primarily due to the additionincremental expenses associated with Kirkwood and Flagg Ranch of Flagg Ranch,$1.2 million, higher variable operating costs including higher food and beverage cost of sales, partially offset by a decrease in reimbursable costs (other than payroll) from managed hotel properties due to the RockResorts reorganization plan. General and administrative expense decreased $0.9$0.8 million, or 5.9%3.5%, for the sixnine months ended January 31,April 30, 2013 compared to the sixnine months ended January 31,April 30, 2012, as a result of the RockResorts reorganization plan, and lower employee medical costs, partially offset by higher Lodging segment component of allocated corporate costs.

Revenue from payroll cost reimbursement and the corresponding reimbursed payroll costs relates to payroll costs at managed hotel properties where we are the employer and all payroll costs are reimbursed by the owners of the properties under contractual arrangements. Since the reimbursements are made based upon the costs incurred with no added margin, the revenue and corresponding expense have no effect on our Lodging Reported EBITDA. The decrease in revenue from payroll cost reimbursements and the corresponding reimbursed payroll costs for the sixnine months ended January 31,April 30, 2013 compared to the sixnine months ended January 31,April 30, 2012 was due to a reduction in the number of managed hotel properties as previously announced under the RockResorts reorganization plan.

Real Estate Segment

Three months ended January 31,April 30, 2013 compared to the three months ended January 31,April 30, 2012
Real Estate segment operating results for the three months ended January 31,April 30, 2013 and 2012 are presented by category as follows (in thousands):
 
 
Three Months Ended
January 31,
 
Percentage
Increase
(Decrease)
 
Three Months Ended
April 30,
 
Percentage
Increase
(Decrease)
 2013 2012  2013 2012 
Total Real Estate net revenue $14,167
 $9,088
 55.9 % $13,840
 $12,587
 10.0 %
Real Estate operating expense:            
Cost of sales (including sales commission) 11,801
 6,676
 76.8 % 11,350
 10,055
 12.9 %
Other 4,938
 5,887
 (16.1)% 5,646
 6,014
 (6.1)%
Total Real Estate operating expense 16,739
 12,563
 33.2 % 16,996
 16,069
 5.8 %
Real Estate Reported EBITDA $(2,572) $(3,475) 26.0 % $(3,156) $(3,482) 9.4 %
Real Estate Reported EBITDA includes $0.4$0.3 million and $0.6$0.5 million of stock-based compensation expense for the three months ended January 31,April 30, 2013 and 2012, respectively.
Our Real Estate net revenue is primarily determined by the timing of closings and the mix of real estate sold in any given

12


period. Different types of projects have different revenue and profit margins; therefore, as the real estate inventory mix changes it can greatly impact Real Estate segment net revenue, operating expense and Real Estate Reported EBITDA.


11


Three months ended January 31,April 30, 2013

Real Estate segment net revenue for the three months ended January 31,April 30, 2013 was driven by the closing of four condominium units at The Ritz-Carlton Residences, Vail ($8.9 million of revenue with an average selling price per unit of $2.2 million and a price per square foot of $1,221) and threeseven condominium units at One Ski Hill Place ($3.37.5 million of revenue with an average selling price per unit of $1.1 million and an average price per square foot of $964)$871) and two condominium units at The Ritz-Carlton Residences, Vail ($5.3 million of revenue with an average selling price per unit of $2.6 million and a price per square foot of $1,219). The average price per square foot of both these projects is driven by their premier locations and the comprehensive and exclusive amenities related to these projects. In addition to the revenue generated by the closing of units as noted above, Real Estate net revenue also included $0.7$0.6 million of rental revenue from placing unsold units into our rental program.

Operating expense for the three months ended January 31,April 30, 2013 included cost of sales of $11.0$10.6 million resulting from the closing of four condominium units at The Ritz-Carlton Residences, Vail (cost per square foot of $1,007) and from the closing of threeseven condominium units at One Ski Hill Place (average cost per square foot of $808)$729) and from the closing of two condominium units at The Ritz-Carlton Residences, Vail (cost per square foot of $992). The cost per square foot for both these projects is reflective of the high-end features and amenities and high construction costs associated with mountain resort development.  Additionally, sales commissions of approximately $0.8 million were incurred commensurate with revenue recognized. Other operating expense of $4.9$5.6 million (including $0.4$0.3 million of stock-based compensation expense) was primarily comprised of general and administrative costs which includes marketing expense for the real estate available for sale (including those units that have not yet closed), carrying costs for units available for sale and overhead costs, such as labor and labor-related benefits and allocated corporate costs which were favorably impacted by a shift in allocated corporate costs to the Mountain and Lodging segments.

Three months ended January 31,April 30, 2012

Real Estate segment net revenue for the three months ended January 31,April 30, 2012 was driven primarily by the closing of four condominium units at One Ski Hill PlaceThe Ritz-Carlton Residences, Vail ($4.610.7 million of revenue with an average selling price per unit of $1.1$2.7 million and an average price per square foot of $939) and one condominium unit at The Ritz-Carlton Residences, Vail ($2.4 million of revenue and a price per square foot of $1,157)$1,112). The average price per square foot of both these projectsthis project is driven by theirits premier locationslocation and the comprehensive and exclusive amenities related to these projects.this project. In addition to the revenue generated by the closing of units as noted above, Real Estate net revenue also included $0.8$0.7 million of rental revenue from placing certain of our unsold units into our rental program.

Operating expense for the three months ended January 31,April 30, 2012 included cost of sales of $6.2$9.4 million primarily resulting from the closing of four condominium units at One Ski Hill Place (average cost per square foot of $778) and from the closing of one condominium unit at The Ritz-Carlton Residences, Vail (cost per square foot of $969)$934). The cost per square foot for both these projectsthis project is reflective of the high-end features and amenities and high construction costs associated with mountain resort development. Additionally, sales commissions of approximately $0.5$0.7 million were incurred commensurate with revenue recognized. Other operating expense of $5.9$6.0 million (including $0.6$0.5 million of stock-based compensation expense) was primarily comprised of general and administrative costs which includes marketing expense for the real estate available for sale (including those units that have not yet closed), carrying costs for units available for sale and overhead costs, such as labor and labor-related benefits and allocated corporate costs.

Six

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Nine months ended January 31,April 30, 2013 compared to the sixnine months ended January 31,April 30, 2012
Real Estate segment operating results for the sixnine months ended January 31,April 30, 2013 and 2012 are presented by category as follows (in thousands):
 
 
Six Months Ended
January 31,
 
Percentage
Increase
(Decrease)
 
Nine Months Ended
April 30,
 
Percentage
Increase
(Decrease)
 2013 2012  2013 2012 
Total Real Estate net revenue $26,097
 $22,197
 17.6 % $39,937
 $34,784
 14.8 %
Real Estate operating expense:            
Cost of sales (including sales commission) 22,234
 18,362
 21.1 % 33,585
 28,417
 18.2 %
Other 10,119
 12,048
 (16.0)% 15,764
 18,062
 (12.7)%
Total Real Estate operating expense 32,353
 30,410
 6.4 % 49,349
 46,479
 6.2 %
Real Estate Reported EBITDA $(6,256) $(8,213) 23.8 % $(9,412) $(11,695) 19.5 %
Real Estate Reported EBITDA includes $0.8$1.1 million and $1.5$2.0 million of stock-based compensation expense for the sixnine months ended January 31,April 30, 2013 and 2012, respectively.

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SixNine months ended January 31,April 30, 2013

Real Estate segment net revenue for the sixnine months ended January 31,April 30, 2013 was driven by the closing of eightten condominium units at The Ritz-Carlton Residences, Vail ($20.425.7 million of revenue with an average selling price per unit of $2.6 million and an average price per square foot of $1,189)$1,195) and threeten condominium units at One Ski Hill Place ($3.310.8 million of revenue with an average selling price per unit of $1.1 million and an average price per square foot of $964)$898). The average price per square foot of both these projects is driven by their premier locations and the comprehensive and exclusive amenities related to these projects. In addition to the revenue generated by the closing of units as noted above, Real Estate net revenue also included $0.7$1.4 million of rental revenue from placing unsold units into our rental program.

Operating expense for the sixnine months ended January 31,April 30, 2013 included cost of sales of $20.7$31.3 million resulting from the closing of eightten condominium units at The Ritz-Carlton Residences, Vail (average cost per square foot of $985)$987) and from the closing of threeten condominium units at One Ski Hill Place (average cost per square foot of $808)$751). The cost per square foot for both these projects is reflective of the high-end features and amenities and high construction costs associated with mountain resort development.  Additionally, sales commissions of approximately $1.5$2.3 million were incurred commensurate with revenue recognized. Other operating expense of $10.1$15.8 million (including $0.8$1.1 million of stock-based compensation expense) was primarily comprised of general and administrative costs which includes marketing expense for the real estate available for sale (including those units that have not yet closed), carrying costs for units available for sale and overhead costs, such as labor and labor-related benefits and allocated corporate costs which were favorably impacted by a shift in allocated corporate costs to the Mountain and Lodging segments.

SixNine months ended January 31,April 30, 2012

Real Estate segment net revenue for the sixnine months ended January 31,April 30, 2012 was driven primarily by the closing of fivenine condominium units at The Ritz-Carlton Residences, Vail ($11.722.4 million of revenue with an average selling price per unit of $2.3$2.5 million and an average price per square foot of $1,126)$1,119) and six condominium units at One Ski Hill Place ($7.9 million of revenue with an average selling price per unit of $1.3 million and an average price per square foot of $981). The average price per square foot of both these projects is driven by their premier locations and the comprehensive and exclusive amenities related to these projects. In addition to the revenue generated by the closing of units as noted above, Real Estate net revenue also included $0.8$1.5 million of rental revenue from placing certain of our unsold units into our rental program.

Operating expense for the sixnine months ended January 31,April 30, 2012 included cost of sales of $17.2$26.6 million primarily resulting from the closing of fivenine condominium units at The Ritz-Carlton Residences, Vail (average cost per square foot of $984)$960) and from the closing of six condominium units at One Ski Hill Place (average cost per square foot of $813). The cost per square foot for both these projects is reflective of the high-end features and amenities and high construction costs associated with mountain resort development. Additionally, sales commissions of approximately $1.2$1.8 million were incurred commensurate with revenue recognized. Other operating expense of $12.0$18.1 million (including $1.5$2.0 million of stock-based compensation expense) was primarily comprised of general and administrative costs which includes marketing expense for the real estate available for sale (including those units that have not yet closed), carrying costs for units available for sale and overhead costs, such as labor and labor-related benefits and allocated corporate costs.

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Other Items

In addition to segment operating results, the following material items contributed to our overall financial position.

Depreciation and amortization. Depreciation and amortization expense for the three and sixnine months ended January 31,April 30, 2013 increased $0.4$0.5 million and $3.1$3.6 million, respectively, compared to the same periods in the prior year, primarily due to an increase in the fixed asset base due to incremental capital expenditures and assets assumed in the Acquisitions.

Income taxes.  The effective tax rate provision/benefitprovision for the three and sixnine months ended January 31,April 30, 2013 was 38.0% and 86.8%37.8%, respectively, compared to the effective tax rate provision/benefitprovision for the three and sixnine months ended January 31,April 30, 2012 of 39.0%39.9% and 41.6%39.6%, respectively.  The interim period effective tax rate is primarily driven by the amount of anticipated pre-tax book income for the full fiscal year adjusted for items that are deductible/non-deductible for tax purposes only (i.e. permanent items). Additionally, we recorded a $0.3 million and a $0.4 million income tax benefit in the sixnine months ended January 31,April 30, 2013 and 2012, respectively, due primarily to a reversal of income tax contingencies resulting from the expiration of the statute of limitations and other discrete tax items.


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In 2005, we amended previously filed tax returns (for the tax years from 1997 through 2002) in an effort to remove restrictions under Section 382 of the Internal Revenue Code on approximately $73.8 million of NOLs relating to fresh start accounting from our reorganization in 1992. As a result, we requested a refund related to the amended returns in the amount of $6.2 million and have reduced our Federal tax liability in the amount of $19.6 million in subsequent tax returns. In 2006, the IRS completed its examination of our filing position in our amended returns and disallowed our request for refund and our position to remove the restriction on the NOLs. We appealed the examiner's disallowance of the NOLs to the Office of Appeals. In December 2008, the Office of Appeals denied our appeal, as well as a request for mediation. We disagreed with the IRS interpretation disallowing the utilization of the NOLs and in August 2009, filed a complaint in the United States District Court for the District of Colorado seeking recovery of $6.2 million in over payments that were previously denied by the IRS, plus interest. On July 1, 2011, the District Court granted us summary judgment, concluding that the IRS's decision disallowing the utilization of the NOLs was inappropriate.  The IRS is entitled to appeal the decision of the District Court to grant the motion for summary judgment and we do not know whether the IRS will do so or, if it does appeal, whether the appeal would be successful. However, at this point, the District Court proceedings have been stayed pending on-going settlement discussions between the parties. We are also a party to two related tax proceedings in the United States Tax Court regarding calculation of NOL carryover deductions for tax years 2006, 2007 and 2008. The two proceedings involve substantially the same issues as the litigation in the District Court wherein we disagree with the IRS as to the utilization of NOLs. At this time, however, it is uncertain whether or how the potential resolution of the District Court case may affect these Tax Court proceedings. The trial date for Tax Court proceedings has been continued pending on-going settlement discussions between the parties.

Since the legal proceeding surrounding the utilization of the NOLs have not been fully resolved, including a determination of the amount of refund and the possibility that the District Court's ruling may be appealed by the IRS, there remains considerable uncertainty of what portion, if any, of the NOLs will be realized, and as such, we have not reflected any of the benefits of the utilization of the NOLs within our financial statements. However, the range of potential reversal of other long-term liabilities and accrued interest and penalties that would be recorded as a benefit to our income tax provision is between zero and $27.6 million.


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Reconciliation of Non-GAAP Measures
The following table reconciles from segment Reported EBITDA to net income (loss) attributable to Vail Resorts, Inc. (in thousands):
 
 
Three Months Ended
January 31,
 
Six Months Ended
January 31,
 
Three Months Ended
April 30,
 
Nine Months Ended
April 30,
 2013 2012 2013 2012 2013 2012 2013 2012
Mountain Reported EBITDA $140,843
 $120,627
 $85,641
 $72,172
 $194,330
 $170,711
 $279,971
 $242,882
Lodging Reported EBITDA 1,740
 1,213
 2,442
 (494) 8,388
 6,869
 10,830
 6,375
Resort Reported EBITDA 142,583
 121,840
 88,083
 71,678
 202,718
 177,580
 290,801
 249,257
Real Estate Reported EBITDA (2,572) (3,475) (6,256) (8,213) (3,156) (3,482) (9,412) (11,695)
Total Reported EBITDA 140,011
 118,365
 81,827
 63,465
 199,562
 174,098
 281,389
 237,562
Depreciation and amortization (33,418) (33,050) (65,097) (61,980) (33,730) (33,266) (98,827) (95,245)
Loss on disposal of fixed assets, net (531) (919) (533) (1,033) (224) (90) (757) (1,123)
Investment income, net 99
 310
 153
 374
Investment income (loss), net 153
 (18) 306
 356
Interest expense, net (8,534) (8,542) (16,909) (16,783) (8,359) (8,443) (25,268) (25,226)
Income (loss) before (provision) benefit from income taxes 97,627
 76,164
 (559) (15,957)
(Provision) benefit from income taxes (37,098) (29,743) 485
 6,644
Net income (loss) 60,529
 46,421
 (74) (9,313)
Net loss (income) attributable to noncontrolling interests 22
 (32) 45
 (7)
Net income (loss) attributable to Vail Resorts, Inc. $60,551
 $46,389
 $(29) $(9,320)
Income before provision for income taxes 157,402
 132,281
 156,843
 116,324
Provision for income taxes (59,814) (52,753) (59,329) (46,108)
Net income 97,588
 79,528
 97,514
 70,216
Net loss attributable to noncontrolling interests 52
 41
 97
 34
Net income attributable to Vail Resorts, Inc. $97,640
 $79,569
 $97,611
 $70,250
The following table reconciles Net Debt to long-term debt (in thousands):
 

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 January 31, April 30,
 2013 2012 2013 2012
Long-term debt $489,497
 $490,302
 $489,240
 $489,757
Long-term debt due within one year 806
 1,058
 518
 1,119
Total debt 490,303
 491,360
 489,758
 490,876
Less: cash and cash equivalents 136,579
 95,642
 237,735
 147,110
Net Debt $353,724
 $395,718
 $252,023
 $343,766
LIQUIDITY AND CAPITAL RESOURCES
Significant Sources of Cash
Our second and third fiscal quarters historically result in seasonally high cash on hand as our ski resorts are generally open for ski operations from mid-November to mid-April, from which we have historically generated a significant portion of our operating cash flows for the fiscal year. Additionally, cash provided by operating activities can be significantly impacted by the timing or mix of closings on and investment in real estate development projects. In total, we generated $90.5$191.7 million and $25.5$77.0 million of cash during the sixnine months ended January 31,April 30, 2013 and 2012, respectively. We currently anticipate that Resort Reported EBITDA will continue to provide a significant source of future operating cash flows combined with proceeds from the remaining inventory of real estate available for sale from the completed Ritz-Carlton Residences, Vail and One Ski Hill Place at Breckenridge projects.

In addition to our $136.6$237.7 million of cash and cash equivalents at January 31,April 30, 2013, we have available $332.7$333.8 million for borrowing under our Credit Agreement (which represents the total commitment of $400.0 million less certain letters of credit outstanding of $67.3$66.2 million). We expect that our liquidity needs in the near term will be met by continued utilization of operating cash flows (primarily those generated in our second and third fiscal quarters), borrowings under the Credit Facility, if needed, and proceeds from future real estate closings. We believe the Credit Facility, which matures in 2016, provides adequate flexibility and is priced favorably with any new borrowings currently being priced at LIBOR plus 1.25%.

SixNine months ended January 31,April 30, 2013 compared to the sixnine months ended January 31,April 30, 2012
We generated $171.3$291.3 million of cash from operating activities during the sixnine months ended January 31,April 30, 2013, an increase of $33.9$57.3 million compared to $137.4$234.0 million of cash generated during the sixnine months ended January 31,April 30, 2012. The increase in operating cash flows was primarily a result of the increase in Resort Reported EBITDA for the sixnine months ended January 31, April 30,

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2013 compared to the sixnine months ended January 31,April 30, 2012, and an increase in proceeds from real estate closings that occurred in the sixnine months ended January 31,April 30, 2013, which generated $24.0$35.0 million in proceeds (net of sales commissions and deposits previously received) compared to $18.7$28.9 million in proceeds (net of sales commissions and deposits previously received) from real estate closings that occurred in the sixnine months ended January 31,April 30, 2012. Additionally, we generated $5.5 million of incremental cash flow from operations from increased pass salesdue to a net deduction in inventory balances of $7.4 million and advanced ticket sales.an increase in accounts payable of $6.2 million.

Cash used in investing activities for the sixnine months ended January 31,April 30, 2013 decreased by $20.1$47.9 million compared to the sixnine months ended January 31,April 30, 2012, due to a $39.3$42.5 million decrease in resort capital expenditures during the sixnine months ended January 31,April 30, 2013 compared to the sixnine months ended January 31,April 30, 2012, partially offset byas well as a decrease in cash used for the acquisitions of Afton Alps and Mount Brighton for a combined $20.0 million (netbusinesses of cash assumed) during the current fiscal year.$3.5 million.

Cash used in financing activities decreased $11.0$9.5 million during the sixnine months ended January 31,April 30, 2013, compared to the sixnine months ended January 31,April 30, 2012, due to the repurchase of common stock for $7.9 million during the sixnine months ended January 31,April 30, 2012 and an increase in proceeds from the exercise of stock options and tax benefits recognized on the vesting and exercise of stock awards of $5.6$4.9 million during the sixnine months ended January 31,April 30, 2013 compared to the sixnine months ended January 31,April 30, 2012, partially offset by an increase in the payment of cash dividends on common stock of $2.7$3.3 million during the sixnine months ended January 31,April 30, 2013 compared to the same period in the prior year.

Significant Uses of Cash
Our cash uses currently include providing for operating expenditures and capital expenditures for assets to be used in resort operations and to a substantially lesser degree future real estate development projects.

We have historically invested significant cash in capital expenditures for our resort operations, and we expect to continue to make significant investments in the future subject to operating performance particularly as it relates to discretionary projects. Current capital expenditure levels will primarily include investments that allow us to maintain our high quality standards, as well as certain incremental discretionary improvements at our ski resortsresorts/areas and throughout our owned hotels.  We evaluate

15


additional discretionary capital improvements based on an expected level of return on investment. We currently anticipate we will spend approximately $130 million to $140 million of resort capital expenditures for calendar year 2013 which includes incremental capital expenditures related to our new summer activities plan, Epic Discovery, Kirkwood and recently acquired Afton Alps and Mount Brighton.2013. Included in these capital expenditures are approximately $47 million to $52 million, which are necessary to maintain the appearance and level of service appropriate to our resort operations, including routine replacement of snow grooming equipment and rental fleet equipment. Approximately $13 million was spent for capital expenditures in calendar year 2013 as of April 30, 2013, leaving approximately $117 million to $127 million to spend in the remainder of calendar year 2013. Discretionary expenditures for calendar year 2013 include terrain expansion on Peak 6 at Breckenridge that includes the installation of two new chairlifts; a new on-mountain restaurant at Beaver Creek that more than doubles the existing restaurant's seating capacity; a new six-person chairlift at Vail; investment in energy efficient snowmaking equipment and technology; the final phase of renovations at the DoubleTree by Hilton in Breckenridge, an owned lodging property; among other projects. Also included in our calendar year 2013 plan is approximately $25 million of resort capital expenditures for the first phase of our new summer activities plans, Epic Discovery, at six of our resorts; and approximately $19$20 million of improvements at Afton Alps and Mount Brighton.our Urban Ski Areas. We currently plan to utilize cash on hand, borrowings available under our Credit Agreement and/or cash flow generated from future operations to provide the cash necessary to execute our capital plans.
Principal payments on the vast majority of our long-term debt ($487.9 million of the total $490.3$489.8 million debt outstanding as of January 31,April 30, 2013) are not due until fiscal 2019 and beyond. As of January 31,April 30, 2013 and 2012, total long-term debt (including long-term debt due within one year) was $490.3$489.8 million and $491.4$490.9 million, respectively. Net Debt (defined as long-term debt plus long-term debt due within one year less cash and cash equivalents) decreased from $395.7$343.8 million as of January 31,April 30, 2012 to $353.7$252.0 million as of January 31,April 30, 2013, primarily as a result of an increase in our cash and cash equivalents at January 31,April 30, 2013, compared to the prior year.

Our debt service requirements can be impacted by changing interest rates as we had $52.6 million of variable-rate debt outstanding as of January 31,April 30, 2013. A 100-basis point change in LIBOR would cause our annual interest payments to change by approximately $0.5 million. The fluctuation in our debt service requirements, in addition to interest rate changes, may be impacted by future borrowings under our Credit Agreement or other alternative financing arrangements we may enter into. Our long term liquidity needs are dependent upon operating results that impact the borrowing capacity under the Credit Agreement, which can be mitigated by adjustments to capital expenditures, flexibility of investment activities and the ability to obtain favorable future financing. We can respond to liquidity impacts of changes in the business and economic environment by managing our capital expenditures and the timing of new real estate development activity.

Our share repurchase program is conducted under authorizations made from time to time by our Board of Directors. Our Board of Directors initially authorized the repurchase of up to 3,000,000 shares of common stock (March 9, 2006) and later

17


authorized additional repurchases of up to 3,000,000 additional shares (July 16, 2008). During the sixnine months ended January 31,April 30, 2013 we did not repurchase any shares of common stock. Since inception of this stock repurchase program through January 31,April 30, 2013, we have repurchased 4,949,111 shares at a cost of approximately $193.2 million. As of January 31,April 30, 2013, 1,050,889 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 plan. Repurchases under these authorizations may be made from time to time at prevailing prices as permitted by applicable laws, and subject to market conditions and other factors. The timing as well as the number of shares that may be repurchased under the program will depend on a number of factors, including our future financial performance, our available cash resources and competing uses for cash that may arise in the future, the restrictions in our Credit Agreement and the Indenture governing the 6.50% Notes ("Indenture"), prevailing prices of our common stock and the number of shares that become available for sale at prices that we believe are attractive. These authorizations have no expiration date.

On June 7, 2011, our Board of Directors approved the commencement of a regular quarterly cash dividend on our common stock at an annual rate of $0.60 per share, subject to quarterly declaration, and on March 5, 2012 approved a 25% increase to our annual cash dividend to an annual rate of $0.75 per share, subject to quarterly declaration. During the six months ended January 31, 2013, the Company paid a cash dividend of $0.3750 per share ($13.5 million in the aggregate). Additionally, on March 4, 2013, our Board of Directors approved an approximate 10% increase to our annual cash dividend on our common stock commencing with the cash dividend payablepaid on April 9, 2013 to stockholders of record as of March 25, 2013. During the nine months ended April 30, 2013, the Company paid a cash dividend of $0.5825 per share ($20.9 million in the aggregate). On June 5, 2013 the Company's Board of Directors declared a quarterly cash dividend of $0.2075 per share payable on July 9, 2013 to stockholders of record as of June 24, 2013. The annual cash dividend is currently expected to be $0.83 per share (or $29.8 million annually based upon shares outstanding as of January 31,April 30, 2013), subject to quarterly declaration. Subject to the discretion of our Board of Directors, applicable law and contractual restrictions, we anticipate paying regular quarterly cash dividends on our common stock for the foreseeable future. The amount, if any, of the dividends to be paid in the future will depend upon our available cash on hand, anticipated cash needs, overall financial condition, restrictions contained in our Credit Agreement and the Indenture, future prospects for earnings and cash flows, as well as other factors considered relevant by our Board of Directors.

On May 29, 2013, we entered into a lease and ancillary transaction documents with Talikser pursuant to which we assumed resort operations of Canyons Resort which includes the ski area and related amenities. The lease between us and Talisker for Canyons Resort has an initial term of 50 years with six 50-year renewal options. The lease provides for $25 million in annual fixed payments, which increase each year by an inflation linked index of CPI less 1%, with a floor of 2% per annum. In addition, the lease includes participating contingent payments to Talisker of 42% of the amount by which EBITDA for the resort operations, as calculated under the lease, exceeds approximately $35 million, with such threshold amount increased by an inflation linked index and a 10% adjustment for any capital improvements or investments made under the lease by us. The inclusion of the ski terrain of Park City Mountain Resort in the lease would require no additional consideration from us, but the financial contribution, if any, of the additional ski terrain would be included as part of the calculation of EBITDA for the resort operations, and as a result, factor into the participating contingent payment component of the lease payment as described above.
Covenants and Limitations

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We must abide by certain restrictive financial covenants under our Credit Agreement and the Indenture. The most restrictive of those covenants include the following Credit Agreement covenants: Net Funded Debt to Adjusted EBITDA ratio and the Interest Coverage ratio (each as defined in the Credit Agreement). In addition, our financing arrangements, including the Indenture, limit our ability to make certain restricted payments, pay dividends on or redeem or repurchase stock, enter into certain investments, make certain affiliate transfers and may limit our ability to enter into certain mergers, consolidations or sales of assets and incur certain indebtedness. Our borrowing availability under the Credit Agreement is primarily determined by the Net Funded Debt to Adjusted EBITDA ratio, which is based on our segment operating performance, as defined in the Credit Agreement.
We were in compliance with all restrictive financial covenants in our debt instruments as of January 31,April 30, 2013. We expect that we will meet all applicable financial maintenance covenants in our Credit Agreement, including the Net Funded Debt to Adjusted EBITDA ratio throughout the year ending July 31, 2013. However, there can be no assurance that we will meet such financial covenants. If such covenants are not met, we would be required to seek a waiver or amendment from the banks participating in the Credit Agreement. There can be no assurance that such waiver or amendment would be granted, which could have a material adverse impact on our liquidity.
OFF BALANCE SHEET ARRANGEMENTS
We do not have off balance sheet transactions that are expected to have a material effect on our financial condition, revenue, expenses, results of operations, liquidity, capital expenditures or capital resources.


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FORWARD-LOOKING STATEMENTS
Except for any historical information contained herein, the matters discussed in this Form 10-Q contain certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements relate to analyses and other information available as of the date hereof, which are based on forecasts of future results and estimates of amounts not yet determinable. These statements also relate to our contemplated future prospects, developments and business strategies.
These forward-looking statements are identified by their use of terms and phrases such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “predict,” “project,” “will” and similar terms and phrases, including references to assumptions. Although we believe that our plans, intentions and expectations reflected in or suggested by such forward-looking statements are reasonable, we cannot assure you that such plans, intentions or expectations will be achieved. Important factors that could cause actual results to differ materially from our forward-looking statements include, but are not limited to:

prolonged weakness in general economic conditions, including adverse effects on the overall travel and leisure related industries;
unfavorable weather conditions or natural disasters;
adverse events that occur during our peak operating periods combined with the seasonality of our business;
competition in our mountain and lodging businesses;
our ability to grow our resort and real estate operations;
our ability to successfully initiate, complete and sell our real estate development projects and achieve the anticipated financial benefits from such projects;
further adverse changes in real estate markets;
continued volatility in credit markets;
our ability to obtain financing on terms acceptable to us to finance our future real estate development, capital expenditures and growth strategy;
our reliance on government permits or approvals for our use of Federal land or to make operational and capital improvements;
demand for planned summer activities and our ability to successfully obtain necessary approvals and construct the planned improvements;
adverse consequences of current or future legal claims;
our ability to hire and retain a sufficient seasonal workforce;
willingness of our guests to travel due to terrorism, the uncertainty of military conflicts or outbreaks of contagious diseases, and the cost and availability of travel options;
negative publicity which diminishes the value of our brands;
our ability to integrate and successfully realize anticipated benefits from the lease of acquisitions andCanyons Resort operations or future acquisitions;
the outcome of pending litigation regarding the ski terrain of Park City Mountain Resort;
adverse consequences on lease payment obligations for Canyons Resort due to increases in CPI; and
implications arising from new Financial Accounting Standards Board (“FASB”)/governmental legislation, rulings or interpretations.

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All forward-looking statements attributable to us or any persons acting on our behalf are expressly qualified in their entirety by these cautionary statements.
If one or more of these risks or uncertainties materialize, or if underlying assumptions prove incorrect, our actual results may vary materially from those expected, estimated or projected. Given these uncertainties, users of the information included in this Form 10-Q, including investors and prospective investors, are cautioned not to place undue reliance on such forward-looking statements. Actual results may differ materially from those suggested by the forward-looking statements that we make for a number of reasons including those described in this Form 10-Q and in Part I, Item 1A “Risk Factors” of the Form 10-K. All forward-looking statements are made only as of the date hereof. Except as may be required by law, we do not intend to update these forward-looking statements, even if new information, future events or other circumstances have made them incorrect or misleading.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
Interest Rate Risk. Our exposure to market risk is limited primarily to the fluctuating interest rates associated with variable rate indebtedness. At January 31,April 30, 2013, we had $52.6 million of variable rate indebtedness, representing approximately 11.0%10.7% of our total debt outstanding, at an average interest rate during both the three and sixnine months ended January 31,April 30, 2013 of 0.2% and 0.3%, respectively.. Based on variable-rate borrowings outstanding as of January 31,April 30, 2013, a 100-basis point (or 1.0%) change in LIBOR would result in our

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annual interest payments changing by $0.5 million. Our market risk exposure fluctuates based on changes in underlying interest rates.
ITEM 4. CONTROLS AND PROCEDURES.
Disclosure Controls and Procedures
Management of the Company, under the supervision and with participation of the Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), have evaluated the effectiveness of the Company’s disclosure controls and procedures as such term is defined in Rule 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the “Act”) as of the end of the period covered by this report on Form 10-Q.
Based upon their evaluation of the Company’s disclosure controls and procedures, the CEO and the CFO concluded that the disclosure controls are effective to provide reasonable assurance that information required to be disclosed by the Company in the reports that it files or submits under the Act is accumulated and communicated to management, including the CEO and CFO, as appropriate, to allow timely decisions regarding required disclosure and are effective to provide reasonable assurance that such information is recorded, processed, summarized and reported within the time periods specified by the SEC’s rules and forms.
The Company, including its CEO and CFO, does not expect that the Company’s controls and procedures will prevent or detect all error and all fraud. A control system, no matter how well conceived or operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met.
Changes in Internal Control over Financial Reporting
There were no changes in the Company’s internal control over financial reporting during the period covered by this Form 10-Q that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
PART II OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
Internal Revenue Service Litigation
On August 24, 2009, we filed a complaint in the United States District Court for the District of Colorado against the United States of America seeking a refund of approximately $6.2 million in Federal income taxes paid for the tax years ended December 31, 2000 and December 31, 2001. Our amended tax returns for those years included calculations of NOLs carried forward from prior years to reduce our tax years 2000 and 2001 tax liabilities. The IRS disallowed refunds associated with those NOL carry forwards and we disagreed with the IRS action disallowing the utilization of the NOLs. On July 1, 2011, the District Court granted us summary judgment, concluding that the IRS’s decision disallowing the utilization of the NOLs was inappropriate. The IRS is entitled to appeal the decision of the District Court to grant the motion for summary judgment and we do not know whether the IRS will do so or, if it does appeal, whether the appeal would be successful. However, at this point, the District Court proceedings have been continued pending on-going settlement discussions between the parties.

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We are also a party to two related tax proceedings in the United States Tax Court regarding calculation of NOL carryover deductions for tax years 2006, 2007, and 2008. The two proceedings involve substantially the same issues as the litigation in the District Court for tax years 2000 and 2001 wherein we disagreed with the IRS as to the utilization of NOLs. At this time, however, it is uncertain whether or how the potential resolution of the District Court case may affect these Tax Court proceedings. The trial date for the Tax Court proceedings has been continued pending on-going settlement discussions between the parties.
ITEM 1A. RISK FACTORS.
There have been no material changes from risk factors previously disclosed in Item 1A to Part I of our Form 10-K.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
None.
ITEM 4. MINE SAFETY DISCLOSURES.

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None.
ITEM 5. OTHER INFORMATION.
None.

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ITEM 6. EXHIBITS.
The following exhibits are either filed herewith or, if so indicated, incorporated by reference to the documents indicated in parentheses, which have previously been filed with the Securities and Exchange Commission.
 
Exhibit
Number
Description
Sequentially
Numbered Page
Description
Sequentially
Numbered Page
    
3.1Amended and Restated Certificate of Incorporation of Vail Resorts, Inc., dated January 5, 2005 (Incorporated by reference to Exhibit 3.1 on Form 10-Q of Vail Resorts, Inc. for the quarter ended January 31, 2005)(File No. 001-09614). Amended and Restated Certificate of Incorporation of Vail Resorts, Inc., dated January 5, 2005 (Incorporated by reference to Exhibit 3.1 on Form 10-Q of Vail Resorts, Inc. for the quarter ended January 31, 2005)(File No. 001-09614). 
    
3.2Certificate of Amendment of Amended and Restated Certificate of Incorporation of Vail Resorts, Inc., dated December 7, 2011. (Incorporated by reference to Exhibit 3.1 on Form 8-K of Vail Resorts, Inc. filed on December 8, 2011)(File No. 001-09614). Certificate of Amendment of Amended and Restated Certificate of Incorporation of Vail Resorts, Inc., dated December 7, 2011. (Incorporated by reference to Exhibit 3.1 on Form 8-K of Vail Resorts, Inc. filed on December 8, 2011)(File No. 001-09614). 
    
3.3Amended and Restated Bylaws of Vail Resorts, Inc., dated December 7, 2011. (Incorporated by reference to Exhibit 3.2 on Form 8-K of Vail Resorts, Inc. filed on December 8, 2011)(File No. 001-09614). Amended and Restated Bylaws of Vail Resorts, Inc., dated December 7, 2011. (Incorporated by reference to Exhibit 3.2 on Form 8-K of Vail Resorts, Inc. filed on December 8, 2011)(File No. 001-09614). 
    
4.1Supplemental Indenture, dated November 29, 2012, by and among Vail Resorts, Inc., as Issuer, the Guarantors named therein, as Guarantors, and The Bank of New York Mellon Trust Company, N.A., as Trustee.22
Supplemental Indenture, dated April 26, 2013, by and among Vail Resorts, Inc., as Issuer, the Guarantors named therein, as Guarantors, and The Bank of New York Mellon Trust Company, N.A., as Trustee.23
    
4.2Supplemental Indenture, dated January 24, 2013, by and among Vail Resorts, Inc., as Issuer, the Guarantors named therein, as Guarantors, and The Bank of New York Mellon Trust Company, N.A., as Trustee.29
10.1Amendment to Executive Employment Agreement, dated April 11, 2013, by and between Vail Resorts, Inc. and Robert A. Katz.30
  
10.2Amendment to Executive Employment Agreement, dated April 11, 2013, by and between Vail Holdings, Inc. and Blaise Carrig.31
  
10.3Amendment to Executive Employment Agreement, dated April 11, 2013, by and between Vail Holdings, Inc. and John McD. Garnsey.32
    
31.1Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.36
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.33
    
31.2Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.37
Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.34
    
32Certifications of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.38
Certifications of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.35
    
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The following information from the Company’s Quarterly Report on Form 10-Q for the three and six months ended January 31, 2013 formatted in eXtensible Business Reporting Language: (i) Consolidated Condensed Balance Sheets as of January 31, 2013 (unaudited), July 31, 2012, and January 31, 2012 (unaudited); (ii) Unaudited Consolidated Condensed Statements of Operations for the three and six months ended January 31, 2013 and January 31, 2012; (iii) Unaudited Consolidated Condensed Statements of Comprehensive Income (Loss) for the three and six months ended January 31, 2013 and January 31, 2012; (iv) Unaudited Consolidated Condensed Statements of Cash Flows for the six months ended January 31, 2013 and January 31, 2012; and (v) Notes to the Consolidated Condensed Financial Statements.
 The following information from the Company's Quarterly Report on Form 10-Q for the three and nine months ended April 30, 2013 formatted in eXtensible Business Reporting Language: (i) Consolidated Condensed Balance Sheets as of April 30, 2013 (unaudited), July 31, 2012, and April 30, 2012 (unaudited); (ii) Unaudited Consolidated Condensed Statements of Operations for the three and nine months ended April 30, 2013 and April 30, 2012; (iii) Unaudited Consolidated Condensed Statements of Comprehensive Income for the three and nine months ended April 30, 2013 and April 30, 2012; (iv) Unaudited Consolidated Condensed Statements of Cash Flows for the nine months ended April 30, 2013 and April 30, 2012; and (v) Notes to the Consolidated Condensed Financial Statements. 

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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 
Date: March 6, 2013 Vail Resorts, Inc.
   
Date: June 6, 2013By:/s/ Michael Z. Barkin
Michael Z. Barkin
Executive Vice President and Chief Financial Officer
(Principal Financial Officer and Duly Authorized Officer)
Date: June 6, 2013By:/s/ Mark L. Schoppet
  Mark L. Schoppet
  Senior Vice President, Controller and Chief Accounting Officer and Interim Chief Financial Officer
  (Principal Financial and Accounting Officer and Duly Authorized Officer)



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