Vail Resorts (MTN) released its financial statement for fiscal 2008 ended July 31 yesterday in which the company posted record revenue, EBITDA, and net income. The banner year was due to a large increase in real estate sales, late season snows, and an increase in foreign travel to Vail’s mountains, which include Vail, Beaver Creek, Breckenridge, Keystone, and Heavenly. However, the nation’s largest ski operator also warned it is forecasting a decrease in revenues for the 2008/09 season by between 4.6% and 13.3%, and that profits could fall by as much as 26-42% due to the current economic conditions.

While the economic horizon may be bleak, Vail’s income for ’07/08 rose by a staggering 48.2% to $91 million for the year, excluding a favorable one time legal settlement. Total Revenues jumped 22.5% to $1.15 billion. A large portion of this was due to MTN’s increasing focus on real estate, which shifted from a negative EBITDA of $2.5 million in 2007 to EBITDA of $45.9 million in 2008. But resort operations also fared well thanks to epic snow after Christmas at the company’s ski resorts in Colorado, California and Wyoming.

“We set new records for our fiscal 2008 Mountain, Resort and Real Estate revenue; Mountain, Resort and Real Estate Reported EBITDA and net income,” said CEO Robert Katz. “Our total skier visits were down 0.4% for the season; however, excluding the early season period from the beginning of the ski season until December 23, 2007, our total skier visits were up 4.1%.”

Katz said a 26% increase in international visitors, a 5.5% increase in effective ticket price, and a 7.7% increase in season pass revenues also gave a boost. Additionally, lodging revenue was up 8.3%. However, Katz foresees these trends reversing based on the economy.

“Given the early season indicators and the unprecedented uncertainty of the future economic climate, we think it is prudent at this time to forecast a decline in our fiscal 2009 guidance as compared to the record results we reported for fiscal 2008,” says Katz. “Based on our current estimates, we expect full year Resort Reported EBITDA, the combination of our Mountain and Lodging segments, to range from $200 million to $220 million and Resort Reported EBITDA excluding stock-based compensation expense to range from $206 million to $226 million.”

Here’s the full press release and financial statement:

BROOMFIELD, Colo., Sept. 25 /PRNewswire-FirstCall/ — Vail Resorts, Inc.
(NYSE: MTN) announced today financial results for the fiscal year ended July
31, 2008, including financial results for the fiscal fourth quarter.

The Company uses the terms “Reported EBITDA,” “Reported EBITDA excluding
stock-based compensation,” “net income excluding stock-based compensation” and
“Net Debt” when reporting financial results in accordance with Securities and
Exchange Commission rules regarding the use of non-GAAP financial measures.
The Company defines Reported EBITDA as segment net revenue less segment
operating expense plus segment equity investment income or loss and for the
Real Estate segment plus gain on sale of real property. The Company defines
Net Debt as long-term debt plus long-term debt due within one year less cash
and cash equivalents.

FISCAL YEAR 2008 PERFORMANCE

Mountain Segment

Mountain revenue increased $20.2 million, or 3.0%, for the fiscal year
ended July 31, 2008 (“fiscal 2008”), to $685.5 million from $665.4 million for
the fiscal year ended July 31, 2007 (“fiscal 2007”). Mountain operating
expense increased $7.7 million, or 1.7%, to $470.4 million. In fiscal 2008,
Mountain operating expense included approximately $2.0 million in legal fees
for litigation related to the Company’s attempted acquisition of The Canyons
ski resort. Mountain equity investment income, net increased $0.3 million.
Mountain Reported EBITDA increased $12.8 million, or 6.2%, to $220.6 million
in fiscal 2008 compared to $207.7 million in fiscal 2007.

Lodging Segment

Lodging revenue increased $7.6 million, or 4.7%, in fiscal 2008, to $170.1
million from $162.5 million in fiscal 2007. Fiscal 2007 included $5.4 million
of revenue primarily associated with the termination of the management
agreements at The Equinox and The Lodge at Rancho Mirage (each pursuant to the
terms of the management agreements). Excluding these termination fees,
Lodging revenue would have increased $13.0 million, or 8.3%. Lodging
operating expense increased $15.6 million, or 10.8%, to $159.8 million.
Fiscal 2008 Lodging operating expense included approximately $3.1 million of
start-up and pre-opening expenses related to The Arrabelle at Vail Square
hotel. Lodging Reported EBITDA decreased $8.0 million, or 43.8%, to $10.2
million in fiscal 2008 compared to $18.2 million in fiscal 2007.

Resort — Combination of Mountain and Lodging Segments

Resort revenue, the combination of Mountain and Lodging revenue, increased
$27.8 million, or 3.4%, in fiscal 2008 to $855.6 million from $827.8 million
in fiscal 2007. Resort operating expense increased $23.2 million, or 3.8%, to
$630.2 million. Resort equity investment income, net increased $0.3 million.
Resort Reported EBITDA increased $4.9 million, or 2.2%, to $230.8 million in
fiscal 2008 compared to $225.9 million in fiscal 2007. Resort Reported EBITDA
excluding stock-based compensation increased $5.1 million, or 2.2%, to $235.9
million in fiscal 2008 compared to $230.8 million in fiscal 2007.

Real Estate Segment

Real Estate revenue increased $183.9 million, or 163.1%, in fiscal 2008,
to $296.6 million from $112.7 million in fiscal 2007. Real Estate operating
expense increased $136.1 million, or 118.2%, to $251.3 million. Gain on sale
of real property increased $0.7 million. Real Estate Reported EBITDA
increased $48.4 million, or 1,950.8%, to $45.9 million in fiscal 2008 compared
to a loss of $2.5 million in fiscal 2007.

Total Performance

Total revenue increased $211.6 million, or 22.5%, to $1.15 billion in
fiscal 2008 from $940.5 million in fiscal 2007. Income from operations
increased $47.8 million, or 37.3%, to $176.0 million in fiscal 2008.

The Company reported net income of $102.9 million, or $2.64 per diluted
share, in fiscal 2008, compared to net income of $61.4 million, or $1.56 per
diluted share, in fiscal 2007. Included in fiscal 2008 results is the receipt
of the final cash settlement from Cheeca Holdings, LLC of which $11.9 million
(net of final attorney’s fees and on a pre-tax basis) was included in contract
dispute credit (charges), net. Excluding stock-based compensation expense,
the Company’s fiscal 2008 net income would have been $108.1 million, or $2.78
per diluted share, compared to net income of $65.8 million excluding
stock-based compensation, or $1.67 per diluted share, in fiscal 2007. The
Company recorded total pre-tax stock-based compensation expense of $8.3
million and $7.0 million in fiscal 2008 and 2007, respectively.

FOURTH QUARTER PERFORMANCE

Mountain Segment

Mountain revenue decreased $0.9 million, or 2.4%, in the fourth quarter of
fiscal 2008 to $37.5 million from $38.5 million in the fourth quarter of
fiscal 2007. Mountain operating expense decreased $1.9 million, or 2.7%, to
$68.4 million. Mountain equity investment income, net increased $0.7 million.
Mountain Reported EBITDA improved by $1.7 million, or 5.6%, to a loss of $29.1
million in the fourth quarter of fiscal 2008 compared to a loss of $30.8
million in the fourth quarter of fiscal 2007.

Lodging Segment

Lodging revenue increased $2.7 million, or 6.0%, in the fourth quarter of
fiscal 2008 to $48.3 million from $45.6 million in the fourth quarter of
fiscal 2007. Lodging operating expense increased $0.3 million, or 0.6%, to
$46.3 million. Lodging Reported EBITDA increased $2.4 million, or 587.5%, to
$2.0 million in the fourth quarter of fiscal 2008 compared to a loss of $0.4
million in the fourth quarter of fiscal 2007.

Resort — Combination of Mountain and Lodging Segments

Resort revenue, the combination of Mountain and Lodging revenue, increased
$1.8 million, or 2.1%, in the fourth quarter of fiscal 2008 to $85.9 million
from $84.1 million in the fourth quarter of fiscal 2007. Resort operating
expense decreased $1.7 million, or 1.4%, to $114.7 million. Resort equity
investment income, net increased $0.7 million. Resort Reported EBITDA
improved by $4.2 million, or 13.4%, to a loss of $27.1 million in the fourth
quarter of fiscal 2008 compared to a loss of $31.2 million in the fourth
quarter of fiscal 2007. Resort Reported EBITDA excluding stock-based
compensation improved $4.5 million, or 15.0%, to a loss of $25.7 million in
the fourth quarter of fiscal 2008 compared to a loss of $30.2 million in the
fourth quarter of fiscal 2007.

Real Estate Segment

Real Estate revenue increased $172.2 million, or 1,384.3%, in the fourth
quarter of fiscal 2008 to $184.6 million from $12.4 million in the fourth
quarter of fiscal 2007. Real Estate operating expense increased $133.0
million, or 991.3%, to $146.5 million. Real Estate Reported EBITDA increased
$39.1 million, or 3,975.3%, to $38.1 million compared to a loss of $1.0
million in the fourth quarter of fiscal 2007.

Total Performance

Total revenue increased $173.9 million, or 180.2%, in the fourth quarter
of fiscal 2008 to $270.5 million from $96.5 million in the fourth quarter of
fiscal 2007. Loss from operations for the quarter decreased $39.0 million, or
71.2%, to a loss of $15.8 million, from a loss of $54.9 million in the fourth
quarter of fiscal 2007.

The Company reported a fourth quarter fiscal 2008 net loss of $11.1
million, or $0.29 per diluted share, compared to net loss of $34.3 million, or
$0.88 per diluted share, in the fourth quarter of fiscal 2007. Excluding
stock-based compensation expense, the Company’s net loss for the fourth
quarter of fiscal 2008 would have been $9.7 million, or $0.26 per diluted
share, compared to net loss of $33.4 million excluding stock-based
compensation, or $0.85 per diluted share, in the fourth quarter of fiscal
2007. The Company recorded total pre-tax stock-based compensation expense of
$2.2 million and $1.5 million in the three months ended July 31, 2008 and July
31, 2007, respectively.

Business Commentary and Outlook

Robert Katz, chief executive officer, commented, “I am pleased with our
results for fiscal 2008, which were achieved despite challenging early season
conditions and overall deterioration in the macro-economic environment.
Results for our seasonally low fourth quarter were as expected for our Resort
business, while our real estate results were impacted by a timing shift of
having one of The Lodge at Vail Chalets (‘Chalets’) close in August, just
after our fiscal year-end, as opposed to in the fiscal fourth quarter. We set
new records for our fiscal 2008 Mountain, Resort and Real Estate revenue;
Mountain, Resort and Real Estate Reported EBITDA and net income. Our Mountain
segment revenue for fiscal 2008 grew 3.0% on a ‘same store’ basis with
approximately 64% of the ‘same store’ revenue growth flowing through to
Mountain Reported EBITDA, driving a 100 basis point increase in Mountain
Reported EBITDA margin to 32.2%. Our total skier visits were down 0.4% for
the season; however, excluding the early season period from the beginning of
the ski season until December 23, 2007, our total skier visits were up 4.1%,
including the impact of season passholders who skied on average 9.7 days over
the course of the season, up 0.4 days per passholder from the previous season.
The favorable Mountain results were also driven by a 5.6% increase in
effective ticket price (‘ETP’) and a 7.7% increase in season pass revenue.
Twenty six percent of lift ticket revenue was derived from season pass
revenue, which continues to provide stability to our Mountain revenue. In
addition, our overall performance was positively impacted by an estimated 26%
growth in international guest visitation. The growth in ETP, season pass
revenue and international visitors mitigated the impact of the U.S. economic
weakness we began to see in the second half of the season.”

Katz added, “Our Lodging segment on a ‘same store’ basis for the year
reported a 5.7% increase in revenue per available room due to strong peak
period demand, driving an 8.3% increase in Lodging revenue, excluding $5.4
million of revenue associated with the prior year’s termination fees. These
Lodging results were achieved, despite overcoming similar challenges as faced
by our Mountain segment. In addition, our Real Estate segment in fiscal 2008
benefited from the closings of 64 Arrabelle units and five Chalets driving a
$48.4 million increase in Real Estate Reported EBITDA and marked a record year
as we transitioned from the construction phase to the closing phase of these
two projects.”

Highlighting what’s new for the upcoming 2008/2009 ski season, Katz said,
“We are excited to unveil our newest resort improvements this winter as we
continue to lead our industry in investing in the guest experience we provide
at all of our properties, with $105 million to $115 million expected to be
invested in calendar year 2008. Importantly, this excludes all of our
investment in real estate and our investment in real estate related resort
depreciable assets, such as the Arrabelle hotel and the new spa at the Lodge
at Vail, which are dramatically improving the base areas of our world-class
resorts. The largest capital investment project for the 2008/2009 ski season
is the new state-of-the-art, eight passenger gondola in Keystone, which will
include relocating the base station into River Run Village, adding a
mid-station and enhancing the skier plaza area. At Beaver Creek, following on
the heels of last season’s highly successful new Buckaroo Express Gondola, the
resort will open a new children’s ski school center, The Ranch, at the top of
the Buckaroo Express Gondola, which will revolutionize the way our guests
learn to ski and snowboard. Also at Beaver Creek, The Osprey, formerly the
Inn at Beaver Creek, is undergoing a $7 million transformation this
summer/fall and scheduled to be relaunched as RockResorts’ newest addition in
time for Christmas 2008. This luxury, boutique hotel, the nearest hotel to a
chairlift in North America, will have a more contemporary design and will
feature 41 rooms situated in the heart of the village of the world-class
Beaver Creek Resort. New snowmaking at Peak 7 in Breckenridge and re-grading
and snowmaking for the main trail connecting California and Nevada at Heavenly
will also await guests this winter. These are just a few of the many great
additions that will welcome our guests back for the 2008/2009 ski season.”

Katz added, “Looking ahead to the 2008/2009 ski season, our new Epic
Season Pass, which will be used by guests for the first time this upcoming ski
season, has already made quite a splash since its introduction this past
spring. The Epic Season Pass allows guests unlimited skiing at all of our
resorts and Arapahoe Basin and is valid on all of the most coveted holidays,
all for a price of $579 for adults and $279 for kids. The Epic Season Pass,
which must be purchased by November 15, 2008, allows us to offer our guests a
true value this season. As a complement to the Epic Season Pass, we have also
introduced an unlimited ski/snowboard rental option starting at $359 for the
season, which eliminates the added airline costs and hassles of transporting,
storing and carrying equipment on your vacation. Finally, we have launched
our ‘Holidays on Us’ promotion, which allows guests to stay for free at any of
our owned or managed lodging properties for the night of any of the best
holidays, subject to certain restrictions. As you can see, we are committed
to making a vacation with our resorts more accessible this season.”

“Turning to our season pass sales and lodging bookings for the upcoming
season,” Katz continued, “we have certainly begun to see the impact of the
current economic softness during these unprecedented times. Whether these
results represent guests delaying their purchases or are signs of a visitation
decline for the upcoming season is not something we can discern yet, as we
certainly have less visibility into these early season indicators. This
year’s Colorado season pass sales, including Epic Season Passes sold to
Colorado ‘Front Range’ customers, are up 0.2% in sales dollars, while down
8.4% in units over the prior year; including Heavenly sales are down 1.5% in
sales dollars and 10.0% in units. At this point, these results historically
represent 65% of the ultimate total sales of season passes for the year. As
we have previously disclosed, given the Epic Season Pass is a new product, we
will discuss total Epic Season Pass sales results after the selling period
expires in November. Advance bookings through our central reservations and
directly at our owned and managed properties are down 13.0% in sales dollars
and down 17.7% in room nights over the same period last year. It is critical
to remember that bookings to date represent only approximately 15-20% of the
ultimate total room nights for the season we historically have booked through
these channels.”

On the Company’s real estate projects, Katz commented, “Fiscal 2008 marked
a milestone for Vail Resorts as we neared completion on both the Arrabelle and
Chalets projects. In fiscal 2008, we closed on 64 Arrabelle units with the
remaining two Arrabelle units expected to close in fiscal 2009. On the Chalet
project, we closed five of the expected six Chalets in July of fiscal 2008,
with the sixth Chalet closing a few weeks after our fiscal year-end, in August
2008. In fiscal 2009, including the August closing, we expect to close the
remaining eight Chalets. At our Crystal Peak Lodge development on Peak 7 in
Breckenridge, we currently have all 45 units under contract and will be
working to close all of the Crystal Peak Lodge units during fiscal 2009. On
our latest project, the RockResorts branded One Ski Hill Place, which we
brought to market in December 2007, at the base of Peak 8 in Breckenridge, we
have released 70 units of the total 88 units; and we currently have 50 units
under contract. On the Ritz-Carlton Residences, Vail, we have 47 units under
contract as well as the 45 additional units we sold to Ritz-Carlton for use in
their club program, representing 79% of total units under construction.”
Addressing the current environment for real estate, Katz commented, “We still
remain very enthusiastic about the quality, progress and strategic nature of
all of our real estate projects. Clearly, we are in an unprecedented
environment for real estate and related financings, marked by significant
volatility and uncertainty. While we believe that our resort communities are
ultimately more resilient, the severity of the current downturn could
certainly have an impact on the amount and timing of revenue from our
projects, which would affect the projections for project profit we previously
disclosed. At this point we do not expect to continually update our
projections for the individual projects as market conditions continue to
fluctuate, but may readdress them as the volatility subsides and we get closer
to project deliveries.”

As an update on the Vail Mountain Club, Katz said, “We are very pleased
with the progress of the Vail Mountain Club. Since introduction, we have sold
386, or 97% of the available memberships, including 186 full memberships,
which include parking privileges, and an additional 200 social memberships,
which exclude parking privileges, with the total full and social sold
memberships representing $69.7 million of proceeds when paid in full. The
private club experience is certainly a unique opportunity for our guests to
see what makes our resorts truly unique and creates a long-term relationship
between our guests and resorts for many years to come.”

“Maybe most importantly,” Katz continued, “we are very fortunate that we
have a strong balance sheet as we ended the fiscal year with $162 million of
cash and cash equivalents on hand, Net Debt of less than one and a half times
trailing twelve months Total Reported EBITDA and a $400 million Senior Credit
Facility with no revolver borrowings, currently priced at LIBOR plus 50 basis
points. This provides our Company significant financial flexibility to
continue to invest in the experience we provide our guests and remain
opportunistic during these challenging times.”

Katz added, “We would like to take this opportunity to announce our
guidance for fiscal 2009. We have extraordinary, world-class resorts and a
unique customer demographic, but we are certainly not immune to the dramatic
challenges facing the economy today. It is important to note that at this
point in time it is very difficult to fully predict the impact to our business
of the current economic state as well as what that state will be as we go into
our ski season. However, given the early season indicators and the
unprecedented uncertainty of the future economic climate, we think it is
prudent at this time to forecast a decline in our fiscal 2009 guidance as
compared to the record results we reported for fiscal 2008. Based on our
current estimates, we expect full year Resort Reported EBITDA, the combination
of our Mountain and Lodging segments, to range from $200 million to $220
million and Resort Reported EBITDA excluding stock-based compensation expense
to range from $206 million to $226 million. The Resort guidance includes a
range for Mountain Reported EBITDA of $182 million to $200 million and
Mountain Reported EBITDA excluding stock-based compensation expense of $186
million to $204 million, while we expect Lodging Reported EBITDA to range from
$14 million to $24 million and Lodging Reported EBITDA excluding stock-based
compensation expense expected to range from $16 million to $26 million. The
Lodging segment guidance includes approximately $5 million to $7 million from
the planned Colorado Mountain Express acquisition, expected to close just
prior to the beginning of the ski season. Real Estate Reported EBITDA is
expected to range from $34 million to $40 million and Real Estate Reported
EBITDA excluding stock-based compensation expense is expected to range from
$38 million to $44 million. Based on our current estimates, we expect net
income to range from $60 million to $76 million and net income excluding
stock-based compensation expense to range from $66 million to $82 million.”

Katz concluded, “In addition, during the fourth quarter, we announced a
three million share increase to our previously announced share repurchase
program and continued repurchases under the program, resulting in the
repurchase of 1,497,875 shares at an average price of $39.22 for a total
amount of $58.7 million in the quarter. Since the inception of this program
in fiscal 2006, the Company has repurchased 3,004,108 shares at an average
price of $41.76 for a total amount of approximately $125.5 million, with
2,995,892 shares remaining available under the existing repurchase
authorization. Our purchases under this program are reviewed with our Board
quarterly and are based on a number of factors as we evaluate the appropriate
uses of our excess cash.”

CONFERENCE CALL

For further discussion of the contents of this press release, please
listen to our live webcast today at 11:00 am ET, available at
http://www.vailresorts.com in the Investor Relations section.

ANNUAL REPORT ON FORM 10-K

The Company today will file its Annual Report on Form 10-K for the fiscal
year ended July 31, 2008, with the Securities and Exchange Commission, which
report will be made available on the Company’s website in the SEC Filings
section in the Investor Relations section of our website at
http://www.vailresorts.com. Additionally, stockholders may receive a hard
copy of the Annual Report on Form 10-K, which includes the Company’s audited
financial statements, free of charge upon request. Written requests should be
sent to the attention of the Corporate Secretary at Vail Resorts, Inc., 390
Interlocken Crescent, Broomfield, Colorado 80021.

Vail Resorts, Inc. is the leading mountain resort operator in the United
States. The Company’s subsidiaries operate the mountain resort properties at
the Vail, Beaver Creek, Breckenridge and Keystone mountain resorts in
Colorado, the Heavenly Ski Resort in the Lake Tahoe area of California and
Nevada and the Grand Teton Lodge Company in Jackson Hole, Wyoming. The
Company’s subsidiary, RockResorts, a luxury resort hotel company, manages
casually elegant properties across the United States and the Caribbean. Vail
Resorts Development Company is the real estate planning, development and
construction subsidiary of Vail Resorts, Inc. Vail Resorts is a publicly held
company traded on the New York Stock Exchange (NYSE: MTN). The Vail Resorts
company website is http://www.vailresorts.com and consumer website is
http://www.snow.com.

Statements in this press release, other than statements of historical
information, are forward looking statements that are made pursuant to the safe
harbor provisions of the Private Securities Litigation Reform Act of 1995.
Such forward-looking statements are subject to certain risks and uncertainties
that could cause actual results to differ materially from those projected.
Readers are cautioned not to place undue reliance on these forward-looking
statements, which speak only as of the date hereof. Such risks and
uncertainties include but are not limited to: downturn in general economic
conditions, including adverse affects on the overall travel and leisure
related industries; terrorist acts upon the United States; threat of or actual
war; unfavorable weather conditions; our ability to obtain financing on terms
acceptable to us to finance our real estate investments, capital expenditures
and growth strategy; our ability to continue to grow our resort and real
estate operations; competition in our mountain and lodging businesses; our
ability to hire and retain a sufficient seasonal workforce; our ability to
successfully initiate and/or complete real estate development projects and
achieve the anticipated financial benefits from such projects; adverse changes
in real estate markets; implications arising from new Financial Accounting
Standards Board (“FASB”)/governmental legislation, rulings or interpretations;
our reliance on government permits or approvals for our use of Federal land or
to make operational improvements; our ability to integrate and successfully
operate future acquisitions; and adverse consequences of current or future
legal claims. All forward-looking statements attributable to us or any
persons acting on our behalf are expressly qualified in their entirety by
these cautionary statements. All guidance and forward-looking statements in
this press release are made as of the date hereof and we do not undertake any
obligation to update any forecast or forward-looking statements, except as may
be required by law. Investors are also directed to other risks discussed in
documents filed by the Company with the Securities and Exchange Commission.

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

Three Months Ended
July 31,
2008 2007
Net revenue:
Mountain $37,549$38,475
Lodging 48,323 45,604
Real estate184,587 12,436
Total net revenue270,459 96,515
Segment operating expense:
Mountain68,421 70,353
Lodging 46,300 46,019
Real estate146,454 13,420
Total segment operating expense 261,175129,792

Other operating expense:
Depreciation and amortization (23,941) (20,807)
Relocation and separation charges –(32)
Loss on disposal of fixed assets, net (1,167) (751)
Loss from operations (15,824) (54,867)
Mountain equity investment income, net 1,797 1,068
Investment income, net 589 3,588
Interest expense, net (7,047)(7,739)
Loss on sale of business, net –(38)
Contract dispute charges– (181)
Minority interest in loss of consolidated
subsidiaries, net 2,548 1,903
Loss before benefit for income taxes (17,937) (56,266)
Benefit for income taxes 6,814 21,944
Net loss$(11,123) $(34,322)

Per share amounts:
Basic net loss per share$(0.29)$(0.88)
Diluted net loss per share $(0.29)$(0.88)

Other Data:
Mountain Reported EBITDA$(29,075) $(30,810)
Mountain Reported EBITDA excluding stock-based
compensation $(28,090) $(30,051)
Lodging Reported EBITDA $2,023 $(415)
Lodging Reported EBITDA excluding stock-based
compensation $2,377 $(183)
Resort Reported EBITDA $(27,052) $(31,225)
Resort Reported EBITDA excluding stock-based
compensation $(25,713) $(30,234)
Real Estate Reported EBITDA $38,133 $(984)
Real Estate Reported EBITDA excluding
stock-based compensation$39,013 $(451)

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

Twelve Months Ended
July 31,
2008 2007
Net revenue:
Mountain $685,533 $665,377
Lodging170,057162,451
Real estate296,566112,708
Total net revenue 1,152,156940,536
Segment operating expense:
Mountain 470,362462,708
Lodging159,832144,252
Real estate251,338115,190
Total segment operating expense 881,532722,150
Other operating income (expense):
Gain on sale of real property 709 —
Depreciation and amortization (93,794) (87,664)
Relocation and separation charges — (1,433)
Loss on disposal of fixed assets, net (1,534)(1,083)
Income from operations 176,005128,206
Mountain equity investment income, net 5,390 5,059
Investment income, net 8,285 12,403
Interest expense, net (30,667) (32,625)
Loss on sale of businesses, net — (639)
Contract dispute credit (charges), net 11,920 (4,642)
Gain on put options, net–690
Minority interest in income of consolidated
subsidiaries, net (4,920)(7,801)
Income before provision for income taxes 166,013100,651
Provision for income taxes (63,086) (39,254)
Net income $102,927$61,397
Per share amounts:
Basic net income per share $2.67 $1.58
Diluted net income per share $2.64 $1.56

Other Data:
Mountain Reported EBITDA$220,561 $207,728
Mountain Reported EBITDA excluding stock-based
compensation $224,395 $211,552
Lodging Reported EBITDA $10,225$18,199
Lodging Reported EBITDA excluding stock-based
compensation$11,519$19,290
Resort Reported EBITDA $230,786 $225,927
Resort Reported EBITDA excluding stock-based
compensation $235,914 $230,842
Real Estate Reported EBITDA $45,937$(2,482)
Real Estate Reported EBITDA excluding
stock-based compensation$49,073 $(399)

Vail Resorts, Inc.
Resort Revenue by Business Line and Skier Visits
(In thousands)
(Unaudited)

Three Twelve
Months Ended Percentage Months Ended Percentage
July 31, Increase July 31,Increase
2008 2007 (Decrease) 2008 2007 (Decrease)
Business Line
Lift tickets $123 $– n/a $301,914 $286,997 5.2%
Ski school —- –% 81,38478,848 3.2%
Dining 4,504 4,675(3.7)%62,50659,653 4.8%
Retail/rental 18,92119,332(2.1)% 168,765 160,542 5.1%
Other 14,00114,468(3.2)%70,96479,337 (10.6)%
Total Mountain
Revenue $37,549 $38,475(2.4)% $685,533 $665,377 3.0%

Total Lodging
Revenue $48,323 $45,604 6.0% $170,057 $162,451 4.7%

Total Resort
Revenue $85,872 $84,079 2.1% $855,590 $827,828 3.4%

Three Twelve
Months Ended Percentage Months Ended Percentage
July 31, Increase July 31, Increase
2008 2007 (Decrease)2008 2007 (Decrease)
Skier Visits
Vail—- –% 1,570 1,608(2.4)%
Breckenridge—- –% 1,630 1,650(1.2)%
Keystone—- –% 1,129 1,171(3.6)%
Heavenly 5– n/a948 900 5.3%
Beaver Creek—- –%918 890 3.1%
Total Skier Visits 5– n/a 6,195 6,219(0.4)%

Effective Ticket
Price $24.60 $– n/a $48.74$46.15 5.6%

Key Balance Sheet Data
(In thousands)
(Unaudited)

As of July 31,
2008 2007
Real estate held for sale and investment$249,305 $357,586
Total stockholders’ equity 728,756714,039

Long-term debt 541,350593,733
Long-term debt due within one year15,355377
Total debt 556,705594,110
Less: cash and cash equivalents 162,345230,819
Net debt $394,360 $363,291

Reconciliation of Non-GAAP Financial Measures

Resort, Mountain, Lodging and Real Estate Reported EBITDA and Resort,
Mountain, Lodging and Real Estate Reported EBITDA excluding stock-based
compensation have been presented herein as measures of the Company’s financial
operating performance. Reported EBITDA, Reported EBITDA excluding stock-based
compensation and Net Debt (defined as long-term debt plus long-term debt due
within one year less cash and cash equivalents) are not measures of financial
performance or liquidity under accounting principles generally accepted in the
United States of America (“GAAP”), and they might not be comparable to
similarly titled measures of other companies. Reported EBITDA, Reported
EBITDA excluding stock-based compensation and Net Debt should not be
considered in isolation or as an alternative to, or substitute for, measures
of financial performance or liquidity prepared in accordance with GAAP
including net income, net change in cash and cash equivalents or other
financial statement data. The Company believes that Reported EBITDA and
Reported EBITDA excluding stock-based compensation are indicative measures of
the Company’s operating performance, and each similar to performance metrics
generally used by investors to evaluate companies in the resort and lodging
industries. The Company primarily uses Reported EBITDA excluding stock-based
compensation targets in evaluating performance. The Company believes that Net
Debt is an important measurement as it is an indicator of the Company’s
ability to obtain additional capital resources for its future cash needs.

Presented below is a reconciliation of Reported EBITDA and Reported EBITDA
excluding stock-based compensation to net income (loss) for the Company
calculated in accordance with GAAP for the three and twelve months ended July
31, 2008 and 2007.

(In thousands)
Three Months Ended
July 31,
(Unaudited)
2008 2007
Mountain revenue, net$37,549$38,475
Mountain operating expense excluding
stock-based compensation(67,436) (69,594)
Mountain equity investment income, net 1,797 1,068
Mountain Reported EBITDA excluding
stock-based compensation (28,090) (30,051)
Mountain stock-based compensation (985) (759)
Mountain Reported EBITDA (29,075) (30,810)

Lodging revenue, net 48,323 45,604
Lodging operating expense excluding
stock-based compensation(45,946) (45,787)
Lodging Reported EBITDA excluding
stock-based compensation2,377 (183)
Lodging stock-based compensation(354) (232)
Lodging Reported EBITDA 2,023 (415)

Resort Reported EBITDA* (27,052) (31,225)
Resort Reported EBITDA excluding stock-based
compensation* (25,713) (30,234)

Real Estate revenue, net 184,587 12,436
Real Estate operating expense excluding
stock-based compensation (145,574) (12,887)
Real Estate Reported EBITDA excluding
stock-based compensation 39,013 (451)
Real Estate stock-based compensation(880) (533)
Real Estate Reported EBITDA 38,133 (984)
Total Reported EBITDA 11,081(32,209)
Depreciation and amortization(23,941) (20,807)
Relocation and separation charges –(32)
Loss on disposal of fixed assets, net (1,167) (751)
Investment income, net 589 3,588
Interest expense, net (7,047)(7,739)
Loss on sale of business, net –(38)
Contract dispute charges — (181)
Minority interest in loss of consolidated
subsidiaries, net 2,548 1,903
Loss before benefit for income taxes (17,937) (56,266)
Benefit for income taxes 6,814 21,944
Net loss$(11,123) $(34,322)

* Resort represents the sum of Mountain and Lodging

(In thousands)
Twelve Months Ended
July 31,
(Unaudited)
2008 2007
Mountain revenue, net $685,533 $665,377
Mountain operating expense excluding
stock-based compensation (466,528) (458,884)
Mountain equity investment income, net 5,390 5,059
Mountain Reported EBITDA excluding
stock-based compensation 224,395211,552
Mountain stock-based compensation (3,834)(3,824)
Mountain Reported EBITDA 220,561207,728

Lodging revenue, net 170,057162,451
Lodging operating expense excluding
stock-based compensation (158,538) (143,161)
Lodging Reported EBITDA excluding
stock-based compensation 11,519 19,290
Lodging stock-based compensation (1,294)(1,091)
Lodging Reported EBITDA 10,225 18,199

Resort Reported EBITDA* 230,786225,927
Resort Reported EBITDA excluding stock-based
compensation* 235,914230,842

Real Estate revenue, net 296,566112,708
Real Estate operating expense excluding
stock-based compensation (248,202) (113,107)
Gain on sale of real property709 —
Real Estate Reported EBITDA excluding
stock-based compensation 49,073 (399)
Real Estate stock-based compensation (3,136)(2,083)
Real Estate Reported EBITDA 45,937 (2,482)
Total Reported EBITDA276,723223,445
Depreciation and amortization(93,794) (87,664)
Relocation and separation charges — (1,433)
Loss on disposal of fixed assets, net (1,534)(1,083)
Investment income, net 8,285 12,403
Interest expense, net(30,667) (32,625)
Loss on sale of businesses, net — (639)
Contract dispute credit (charges), net11,920 (4,642)
Gain on put options, net –690
Minority interest in income of consolidated
subsidiaries, net(4,920)(7,801)
Income before provision for income taxes 166,013100,651
Provision for income taxes (63,086) (39,254)
Net income $102,927$61,397

* Resort represents the sum of Mountain and Lodging

Presented below is a reconciliation of Total Reported EBITDA to net income
for the Company calculated in accordance with GAAP for the twelve months ended
July 31, 2008. Also presented is a reconciliation of Net Debt to Long-term
Debt and the calculation of Net Debt to Total Reported EBITDA.

(In thousands)
Twelve
Months Ended
July 31,
2008

Mountain Reported EBITDA$220,561
Lodging Reported EBITDA 10,225
Resort EBITDA* 230,786
Real Estate Reported EBITDA 45,937
Total Reported EBITDA 276,723
Depreciation and amortization(93,794)
Loss on disposal of fixed assets, net (1,534)
Investment income, net 8,285
Interest expense, net(30,667)
Contract dispute credit, net 11,920
Minority interest in income of consolidated
subsidiaries, net(4,920)
Income before provision for income taxes 166,013
Provision for income taxes (63,086)
Net income $102,927

* Resort represents the sum of Mountain and Lodging

(In thousands)
As of
July 31,
2008

Long-term debt $541,350
Long-term debt due within one year15,355
Total debt 556,705
Less: cash and cash equivalents 162,345
Net debt $394,360

Net debt to Total Reported EBITDA 1.43

Presented below is a reconciliation of net income (loss) excluding
stock-based compensation, tax effected, to net income (loss) of the Company
calculated in accordance with GAAP for the three and twelve months ended July
31, 2008 and 2007. Also presented is a reconciliation of net income (loss)
per diluted share excluding stock-based compensation, tax effected, to net
income (loss) per diluted share of the Company calculated in accordance with
GAAP for the three and twelve months ended July 31, 2008 and 2007. The
Company has presented these non-GAAP measures as it believes that this
presentation provides a more comparable measure of the Company’s historical
results from ongoing operations for the three and twelve months ended July 31,
2008 and July 31, 2007 to prior periods.

Three Months
Ended July 31,
(Unaudited)
(In thousands, except per share amounts) 2008 2007
Net loss excluding stock-based compensation $(9,745) $(33,370)
Stock-based compensation expense, before
benefit from income taxes (2,219)(1,524)
Adjustment for benefit from income taxes 841572
Net loss$(11,123) $(34,322)

Diluted net loss per share excluding
stock-based compensation $(0.26)$(0.85)
Stock-based compensation expense per diluted
common share, before provision from income
taxes (0.06) (0.04)
Adjustment for benefit from income taxes, per
diluted common share 0.02 0.01
Diluted net loss per share$(0.29)$(0.88)

Twelve Months
Ended July 31,
(Unaudited)
(In thousands, except per share amounts) 2008 2007
Net income excluding stock-based compensation $108,057$65,767
Stock-based compensation expense, before
provision for income taxes (8,264)(6,998)
Adjustment for benefit from income taxes 3,134 2,628
Net income $102,927$61,397

Diluted net income per share excluding
stock-based compensation $2.78 $1.67
Stock-based compensation expense per diluted
common share, before provision for income
taxes (0.21) (0.18)
Adjustment for benefit from income taxes, per
diluted common share 0.08 0.07
Diluted net income per share $2.64 $1.56

A reconciliation of the low and high ends of the forecasted guidance range
given for Reported EBITDA and Reported EBITDA excluding stock-based
compensation for the Company’s fiscal year ending July 31, 2009 is presented
below.

(In thousands)
For the Year Ending
July 31, 2009
Low End High End
Range Range
Resort Reported EBITDA excluding stock-based
compensation(1)$206,000 $226,000
Resort segment stock-based compensation (6,000)(6,000)
Resort Reported EBITDA(1)200,000220,000
Real Estate Reported EBITDA excluding
stock-based compensation 38,000 44,000
Real Estate segment stock-based compensation(4,000)(4,000)
Real Estate Reported EBITDA 34,000 40,000
Total Reported EBITDA 234,000260,000
Depreciation and amortization (105,000) (105,000)
Loss on disposal of fixed assets, net (2,400)(2,400)
Investment income 5,000 5,000
Interest expense, net(28,200) (28,000)
Minority interest in income of consolidated
subsidiaries, net(4,900)(5,800)
Income before provision for income taxes 98,500123,800
Provision for income taxes (38,400) (48,300)
Net income $60,100$75,500

(1) Resort represents the sum of Mountain and Lodging. The Company
provides Reported EBITDA ranges for the Mountain and Lodging
segments, as well as for the two combined. Readers are cautioned to
recognize that the low end of the expected ranges provided for the
Lodging and Mountain segments, while possible, do not sum to the low
end of the Resort Reported EBITDA range provided because we do not
necessarily expect or assume that we will actually hit the low end
of both ranges, as the actual Resort Reported EBITDA will depend on
the actual mix of the Lodging and Mountain components. Similarly,
the high end of the ranges for the Lodging and Mountain segments do
not sum to the high end of the Resort range.

A reconciliation of the low and high ends of the forecasted guidance range
given for net income excluding stock-based compensation for the Company’s
fiscal year ending July 31, 2009 is presented below.

(In thousands)
For the Year Ending
July 31, 2009
Low End High End
Range Range
Net income excluding stock-based compensation$66,200$81,600
Stock-based compensation expense, before
benefit from income taxes (10,000) (10,000)
Adjustment for benefit from income taxes 3,900 3,900
Net income $60,100$75,500

SOURCE Vail Resorts, Inc.