Delaware
|
51-0291762
|
|
(State
or Other Jurisdiction of Incorporation or Organization)
|
(I.R.S.
Employer Identification No.)
|
|
390
Interlocken Crescent, Suite 1000
Broomfield,
Colorado
|
80021
|
|
(Address
of Principal Executive Offices)
|
(Zip
Code)
|
(303)
404-1800
|
(Registrant’s
Telephone Number, Including Area
Code)
|
Table
of Contents
|
||
PART
I
|
FINANCIAL
INFORMATION
|
|
Item
1.
|
F-1
|
|
Item
2.
|
1
|
|
Item
3.
|
12
|
|
Item
4.
|
12
|
|
PART
II
|
OTHER
INFORMATION
|
|
Item
1.
|
12
|
|
Item
1A.
|
13
|
|
Item
2.
|
13
|
|
Item
3.
|
13
|
|
Item
4.
|
13
|
|
Item
5.
|
14
|
|
Item
6.
|
14
|
PART
I
|
FINANCIAL
INFORMATION
|
|
Item
1.
|
||
F-2
|
||
F-3
|
||
F-4
|
||
F-5
|
||
F-6
|
January
31,
|
July
31,
|
January
31,
|
||||||||||
2008
|
2007
|
2007
|
||||||||||
(Unaudited)
|
(Unaudited)
|
|||||||||||
Assets
|
||||||||||||
Current
assets:
|
||||||||||||
Cash
and cash equivalents
|
$
|
274,433
|
$
|
230,819
|
$
|
254,866
|
||||||
Restricted
cash
|
56,286
|
54,749
|
26,792
|
|||||||||
Trade
receivables, net
|
44,756
|
43,557
|
43,728
|
|||||||||
Inventories,
net
|
51,513
|
48,064
|
49,825
|
|||||||||
Other
current assets
|
52,603
|
34,448
|
38,918
|
|||||||||
Total
current assets
|
479,591
|
411,637
|
414,129
|
|||||||||
Property,
plant and equipment, net (Note 5)
|
983,858
|
885,926
|
868,185
|
|||||||||
Real
estate held for sale and investment
|
381,379
|
357,586
|
293,219
|
|||||||||
Goodwill,
net
|
142,011
|
141,699
|
135,811
|
|||||||||
Intangible
assets, net
|
72,658
|
73,507
|
73,715
|
|||||||||
Other
assets
|
42,318
|
38,768
|
47,557
|
|||||||||
Total
assets
|
$
|
2,101,815
|
$
|
1,909,123
|
$
|
1,832,616
|
||||||
Liabilities
and Stockholders’ Equity
|
||||||||||||
Current
liabilities:
|
||||||||||||
Accounts
payable and accrued expenses (Note 5)
|
$
|
412,872
|
$
|
281,779
|
$
|
305,690
|
||||||
Income
taxes payable
|
30,810
|
37,441
|
9,103
|
|||||||||
Long-term
debt due within one year (Note 4)
|
100,710
|
377
|
440
|
|||||||||
Total
current liabilities
|
544,392
|
319,597
|
315,233
|
|||||||||
Long-term
debt (Note 4)
|
554,411
|
593,733
|
551,866
|
|||||||||
Other
long-term liabilities (Note 5)
|
167,020
|
181,830
|
185,849
|
|||||||||
Deferred
income taxes
|
86,303
|
72,213
|
83,967
|
|||||||||
Commitments
and contingencies (Note 9)
|
||||||||||||
Put
option liabilities (Note 8)
|
--
|
--
|
1,245
|
|||||||||
Minority
interest in net assets of consolidated subsidiaries
|
28,805
|
27,711
|
36,035
|
|||||||||
Stockholders’
equity:
|
||||||||||||
Preferred
stock, $0.01 par value, 25,000,000 shares authorized, zero shares issued
and outstanding
|
--
|
--
|
--
|
|||||||||
Common
stock, $0.01, 100,000,000 shares authorized, 39,883,167 (unaudited),
39,747,976 and 38,802,817 (unaudited) shares issued as of January 31,
2008, July 31, 2007 and January 31, 2007, respectively
|
399
|
397
|
395
|
|||||||||
Additional
paid-in capital
|
540,377
|
534,370
|
522,941
|
|||||||||
Retained
earnings
|
231,824
|
205,118
|
160,931
|
|||||||||
Treasury
stock (Note 11)
|
(51,716
|
)
|
(25,846)
|
(25,846
|
)
|
|||||||
Total
stockholders’ equity
|
720,884
|
714,039
|
658,421
|
|||||||||
Total
liabilities and stockholders’ equity
|
$
|
2,101,815
|
$
|
1,909,123
|
$
|
1,832,616
|
Three
Months Ended
|
||||||||
January
31,
|
||||||||
2008
|
2007
|
|||||||
Net
revenue:
|
||||||||
Mountain
|
$
|
279,722
|
$
|
272,026
|
||||
Lodging
|
34,827
|
32,796
|
||||||
Real
estate
|
45,471
|
56,216
|
||||||
Total
net revenue
|
360,020
|
361,038
|
||||||
Segment
operating expense:
|
||||||||
Mountain
|
163,188
|
159,871
|
||||||
Lodging
|
36,782
|
30,757
|
||||||
Real
estate
|
44,409
|
50,391
|
||||||
Total
segment operating expense
|
244,379
|
241,019
|
||||||
Other
operating income (expense):
|
||||||||
Gain
on sale of real property
|
709
|
--
|
||||||
Depreciation
and amortization
|
(23,621
|
)
|
(21,759
|
)
|
||||
Relocation
and separation charges (Note 7)
|
--
|
(500
|
)
|
|||||
Loss
on disposal of fixed assets, net
|
(157
|
)
|
(10
|
)
|
||||
Income
from operations
|
92,572
|
97,750
|
||||||
Mountain
equity investment income, net
|
926
|
1,496
|
||||||
Investment
income
|
2,019
|
2,417
|
||||||
Interest
expense, net
|
(7,535
|
)
|
(7,911
|
)
|
||||
Contract
dispute charges (Note 9)
|
--
|
(672
|
)
|
|||||
Minority
interest in income of consolidated subsidiaries, net
|
(4,910
|
)
|
(6,152
|
)
|
||||
Income
before provision for income taxes
|
83,072
|
86,928
|
||||||
Provision
for income taxes
|
(31,753
|
)
|
(33,902
|
)
|
||||
Net
income
|
$
|
51,319
|
$
|
53,026
|
||||
Per
share amounts (Note 3):
|
||||||||
Basic
net income per share
|
$
|
1.32
|
$
|
1.37
|
||||
Diluted
net income per share
|
$
|
1.31
|
$
|
1.35
|
Six
Months Ended
|
||||||||
January
31,
|
||||||||
2008
|
2007
|
|||||||
Net
revenue:
|
||||||||
Mountain
|
$
|
322,258
|
$
|
318,189
|
||||
Lodging
|
78,144
|
73,204
|
||||||
Real
estate
|
57,504
|
83,138
|
||||||
Total
net revenue
|
457,906
|
474,531
|
||||||
Segment
operating expense:
|
||||||||
Mountain
|
244,136
|
239,358
|
||||||
Lodging
|
78,018
|
67,106
|
||||||
Real
estate
|
51,322
|
76,509
|
||||||
Total
segment operating expense
|
373,476
|
382,973
|
||||||
Other
operating income (expense):
|
||||||||
Gain
on sale of real property
|
709
|
--
|
||||||
Depreciation
and amortization
|
(44,383
|
)
|
(43,344
|
)
|
||||
Relocation
and separation charges (Note 7)
|
--
|
(1,235
|
)
|
|||||
Loss
on disposal of fixed assets, net
|
(391
|
)
|
(91
|
)
|
||||
Income
from operations
|
40,365
|
46,888
|
||||||
Mountain
equity investment income, net
|
2,895
|
2,331
|
||||||
Investment
income
|
5,237
|
4,481
|
||||||
Interest
expense, net
|
(15,179
|
)
|
(16,847
|
)
|
||||
Contract
dispute credit (charges), net (Note 9)
|
11,920
|
(4,276
|
)
|
|||||
Minority
interest in income of consolidated subsidiaries, net
|
(2,847
|
)
|
(4,363
|
)
|
||||
Income
before provision for income taxes
|
42,391
|
28,214
|
||||||
Provision
for income taxes
|
(15,685
|
)
|
(11,004
|
)
|
||||
Net
income
|
$
|
26,706
|
$
|
17,210
|
||||
Per
share amounts (Note 3):
|
||||||||
Basic
net income per share
|
$
|
0.69
|
$
|
0.44
|
||||
Diluted
net income per share
|
$
|
0.68
|
$
|
0.44
|
Six
Months Ended
|
||||||||
January
31,
|
||||||||
2008
|
2007
|
|||||||
Cash
flows from operating activities:
|
||||||||
Net
income
|
$
|
26,706
|
$
|
17,210
|
||||
Adjustments
to reconcile net income to net cash provided by operating
activities:
|
||||||||
Depreciation
and amortization
|
44,383
|
43,344
|
||||||
Non-cash
cost of real estate sales
|
35,757
|
59,370
|
||||||
Non-cash
stock-based compensation expense
|
4,057
|
3,724
|
||||||
Deferred
income taxes, net
|
12,560
|
9,505
|
||||||
Minority
interest in income of consolidated subsidiaries, net
|
2,847
|
4,363
|
||||||
Other
non-cash income, net
|
(3,464
|
)
|
(1,227
|
)
|
||||
Changes
in assets and liabilities:
|
||||||||
Restricted
cash
|
(1,537
|
)
|
(6,470
|
)
|
||||
Accounts
receivable, net
|
(6,824
|
)
|
(7,721
|
)
|
||||
Inventories,
net
|
(3,449
|
)
|
(7,547
|
)
|
||||
Investments
in real estate
|
(112,718
|
)
|
(88,567
|
)
|
||||
Accounts
payable and accrued expenses
|
75,837
|
85,760
|
||||||
Deferred
real estate deposits
|
23,128
|
(4,192
|
)
|
|||||
Other
assets and liabilities, net
|
(12,190
|
)
|
767
|
|||||
Net
cash provided by operating activities
|
85,093
|
108,319
|
||||||
Cash
flows from investing activities:
|
||||||||
Capital expenditures
|
(91,177
|
)
|
(62,058
|
)
|
||||
Other investing activities, net
|
3,029
|
354
|
||||||
Net cash used in investing activities
|
(88,148
|
)
|
(61,704
|
)
|
||||
Cash
flows from financing activities:
|
||||||||
Repurchases of common stock
|
(25,870
|
)
|
(15,007
|
)
|
||||
Proceeds from borrowings under Non-Recourse Real Estate
Financings
|
85,984
|
33,067
|
||||||
Payments of Non-Recourse Real Estate Financings
|
(25,201
|
)
|
(1,493
|
)
|
||||
Proceeds from borrowings under other long-term debt
|
64,145
|
48,012
|
||||||
Payments of other long-term debt
|
(64,447
|
)
|
(58,508
|
)
|
||||
Proceeds from exercise of stock options
|
1,162
|
6,803
|
||||||
Other financing activities, net
|
10,896
|
3,583
|
||||||
Net cash provided by financing activities
|
46,669
|
16,457
|
||||||
Net
increase in cash and cash equivalents
|
43,614
|
63,072
|
||||||
Cash
and cash equivalents:
|
||||||||
Beginning of period
|
230,819
|
191,794
|
||||||
End of period
|
$
|
274,433
|
$
|
254,866
|
||||
Cash
paid for interest, net of amounts capitalized
|
$
|
7,633
|
$
|
13,596
|
||||
Taxes
paid, net
|
6,473
|
6,482
|
Three
Months Ended January 31,
|
||||||||||||||||
2008
|
2007
|
|||||||||||||||
Basic
|
Diluted
|
Basic
|
Diluted
|
|||||||||||||
Net
income per share:
|
||||||||||||||||
Net
income
|
$
|
51,319
|
$
|
51,319
|
$
|
53,026
|
$
|
53,026
|
||||||||
Weighted-average
shares outstanding
|
38,796
|
38,796
|
38,753
|
38,753
|
||||||||||||
Effect
of dilutive securities
|
--
|
349
|
--
|
486
|
||||||||||||
Total
shares
|
38,796
|
39,145
|
38,753
|
39,239
|
||||||||||||
Net
income per share
|
$
|
1.32
|
$
|
1.31
|
$
|
1.37
|
$
|
1.35
|
Six
Months Ended January 31,
|
|||||||||||||||
2008
|
2007
|
||||||||||||||
Basic
|
Diluted
|
Basic
|
Diluted
|
||||||||||||
Net
income per share:
|
|||||||||||||||
Net
income
|
$
|
26,706
|
$
|
26,706
|
$
|
17,210
|
$
|
17,210
|
|||||||
Weighted-average
shares outstanding
|
38,883
|
38,883
|
38,734
|
38,734
|
|||||||||||
Effect
of dilutive securities
|
--
|
388
|
--
|
465
|
|||||||||||
Total
shares
|
38,883
|
39,271
|
38,734
|
39,199
|
|||||||||||
Net
income per share
|
$
|
0.69
|
$
|
0.68
|
$
|
0.44
|
$
|
0.44
|
January
31,
|
July
31,
|
January
31,
|
|||||
Maturity
(a)
|
2008
|
2007
|
2007
|
||||
Credit
Facility Revolver
|
2012
|
$
|
--
|
$
|
--
|
$
|
--
|
SSV
Facility
|
2011
|
--
|
--
|
--
|
|||
Industrial
Development Bonds
|
2009-2020
|
57,700
|
57,700
|
57,700
|
|||
Employee
Housing Bonds
|
2027-2039
|
52,575
|
52,575
|
52,575
|
|||
Non-Recourse
Real Estate Financings (b)
|
2009-2010
|
147,665
|
86,882
|
44,931
|
|||
6.75%
Senior Subordinated Notes ("6.75% Notes")
|
2014
|
390,000
|
390,000
|
390,000
|
|||
Other
|
2008-2029
|
7,181
|
6,953
|
7,100
|
|||
Total
debt
|
655,121
|
594,110
|
552,306
|
||||
Less: Current
maturities (c)
|
100,710
|
377
|
440
|
||||
Long-term
debt
|
$
|
554,411
|
$
|
593,733
|
$
|
551,866
|
(a)
|
Maturities
are based on the Company's July 31 fiscal year end.
|
(b)
|
As
of January 31, 2008 Non-Recourse Real Estate Financings consist of
borrowings under the original $175 million construction agreement for
Arrabelle at Vail Square, LLC (“Arrabelle”) of $85.3 million and under the
original $123 million construction agreement for The Chalets at The Lodge
at Vail, LLC (“Chalets”) of $62.3 million. As of July 31, 2007
Non-Recourse Real Estate Financings included borrowings of $60.5 million
under the construction agreement for Arrabelle and $26.4 million under the
construction agreement for the Chalets. As of January 31, 2007
Non-Recourse Real Estate Financings consisted of borrowings only under the
construction agreement for Arrabelle. Borrowings under the
Non-Recourse Real Estate Financings are due upon the earlier of either the
closing of the applicable Arrabelle and Chalets real estate units (of
which the amount due is determined by the amount of proceeds received upon
closing) or the stated maturity date. The investments in the Arrabelle and
Chalets real estate developments, a portion of which will be converted to
proceeds upon closing of units, are recorded in Real Estate Held for Sale
and Investment.
|
(c)
|
Current
maturities represent principal payments due in the next 12
months.
|
Non-Recourse
Real
Estate
Financings
|
All
Other
|
Total
|
||||
2008
|
$
|
--
|
$
|
164
|
$
|
164
|
2009
|
85,316
|
15,355
|
100,671
|
|||
2010
|
62,349
|
345
|
62,694
|
|||
2011
|
--
|
1,824
|
1,824
|
|||
2012
|
--
|
297
|
297
|
|||
Thereafter
|
--
|
489,471
|
489,471
|
|||
Total
debt
|
$
|
147,665
|
$
|
507,456
|
$
|
655,121
|
January
31,
|
July
31,
|
January
31,
|
|||||||||||
2008
|
2007
|
2007
|
|||||||||||
Land
and land improvements
|
$
|
252,552
|
$
|
249,291
|
$
|
247,997
|
|||||||
Buildings
and building improvements
|
650,694
|
553,958
|
538,426
|
||||||||||
Machinery
and equipment
|
459,427
|
420,514
|
422,119
|
||||||||||
Furniture
and fixtures
|
127,515
|
114,615
|
124,201
|
||||||||||
Software
|
34,933
|
27,756
|
33,263
|
||||||||||
Vehicles
|
28,170
|
27,179
|
27,121
|
||||||||||
Construction
in progress
|
47,408
|
71,666
|
41,035
|
||||||||||
Gross
property, plant and equipment
|
1,600,699
|
1,464,979
|
1,434,162
|
||||||||||
Accumulated
depreciation
|
(616,841
|
)
|
(579,053
|
)
|
(565,977
|
)
|
|||||||
Property,
plant and equipment, net
|
$
|
983,858
|
$
|
885,926
|
$
|
868,185
|
January
31,
|
July
31,
|
January
31,
|
|||||||||||
2008
|
2007
|
2007
|
|||||||||||
Trade
payables
|
$
|
90,948
|
$
|
67,517
|
$
|
87,619
|
|||||||
Real
estate development payables
|
36,981
|
30,582
|
16,099
|
||||||||||
Deferred
revenue
|
70,684
|
36,179
|
66,627
|
||||||||||
Deferred
real estate and other deposits
|
109,137
|
51,351
|
27,071
|
||||||||||
Accrued
salaries, wages and deferred compensation
|
25,552
|
30,721
|
34,709
|
||||||||||
Accrued
benefits
|
26,205
|
23,810
|
26,704
|
||||||||||
Accrued
interest
|
14,634
|
14,710
|
14,614
|
||||||||||
Liabilities
to complete real estate projects, short term
|
7,808
|
8,500
|
5,262
|
||||||||||
Other
accruals
|
30,923
|
18,409
|
26,985
|
||||||||||
Total
accounts payable and accrued expenses
|
$
|
412,872
|
$
|
281,779
|
$
|
305,690
|
January
31,
|
July
31,
|
January
31,
|
|||||||||||
2008
|
2007
|
2007
|
|||||||||||
Private
club deferred initiation fee revenue
|
$
|
93,217
|
$
|
94,205
|
$
|
94,110
|
|||||||
Deferred
real estate deposits
|
34,316
|
54,363
|
62,774
|
||||||||||
Private
club initiation deposits
|
24,711
|
17,767
|
9,330
|
||||||||||
Other
long-term liabilities
|
14,776
|
15,495
|
19,635
|
||||||||||
Total
other long-term liabilities
|
$
|
167,020
|
$
|
181,830
|
$
|
185,849
|
Three
Months Ended
|
Six
Months Ended
|
|||||||||||||||||
January
31,
|
January
31,
|
|||||||||||||||||
2008
|
2007
|
2008
|
2007
|
|||||||||||||||
Net
revenue
|
||||||||||||||||||
Lift
tickets
|
$
|
133,998
|
$
|
128,617
|
$
|
133,998
|
$
|
128,617
|
||||||||||
Ski
school
|
35,155
|
34,198
|
35,155
|
34,198
|
||||||||||||||
Dining
|
22,895
|
22,468
|
27,658
|
26,354
|
||||||||||||||
Retail/rental
|
66,771
|
63,291
|
90,311
|
87,809
|
||||||||||||||
Other
|
20,903
|
23,452
|
35,136
|
41,211
|
||||||||||||||
Total Mountain
net revenue
|
279,722
|
272,026
|
322,258
|
318,189
|
||||||||||||||
Lodging
|
34,827
|
32,796
|
78,144
|
73,204
|
||||||||||||||
Resort
|
314,549
|
304,822
|
400,402
|
391,393
|
||||||||||||||
Real
Estate
|
45,471
|
56,216
|
57,504
|
83,138
|
||||||||||||||
Total
net revenue
|
$
|
360,020
|
$
|
361,038
|
$
|
457,906
|
$
|
474,531
|
||||||||||
Operating
expense:
|
||||||||||||||||||
Mountain
|
$
|
163,188
|
$
|
159,871
|
$
|
244,136
|
$
|
239,358
|
||||||||||
Lodging
|
36,782
|
30,757
|
78,018
|
67,106
|
||||||||||||||
Resort
|
199,970
|
190,628
|
322,154
|
306,464
|
||||||||||||||
Real
estate
|
44,409
|
50,391
|
51,322
|
76,509
|
||||||||||||||
Total
segment operating expense
|
$
|
244,379
|
$
|
241,019
|
$
|
373,476
|
$
|
382,973
|
||||||||||
Gain
on sale of real property
|
$
|
709
|
$ |
--
|
$
|
709
|
$
|
--
|
||||||||||
Mountain
equity investment income, net
|
$
|
926
|
$
|
1,496
|
$
|
2,895
|
$
|
2,331
|
||||||||||
Reported
EBITDA:
|
||||||||||||||||||
Mountain
|
$
|
117,460
|
$
|
113,651
|
$
|
81,017
|
$
|
81,162
|
||||||||||
Lodging
|
(1,955
|
)
|
2,039
|
126
|
6,098
|
|||||||||||||
Resort
|
115,505
|
115,690
|
81,143
|
87,260
|
||||||||||||||
Real
Estate
|
1,771
|
5,825
|
6,891
|
6,629
|
||||||||||||||
Total
Reported EBITDA
|
$
|
117,276
|
$
|
121,515
|
$
|
88,034
|
$
|
93,889
|
||||||||||
Real
estate held for sale and investment
|
$
|
381,379
|
$
|
293,219
|
$
|
381,379
|
$
|
293,219
|
||||||||||
Reconciliation
to net income:
|
||||||||||||||||||
Total
Reported EBITDA
|
$
|
117,276
|
$
|
121,515
|
$
|
88,034
|
$
|
93,889
|
||||||||||
Depreciation
and amortization
|
(23,621
|
)
|
(21,759
|
)
|
(44,383
|
)
|
(43,344
|
)
|
||||||||||
Relocation
and separation charges
|
--
|
(500
|
)
|
--
|
(1,235
|
)
|
||||||||||||
Loss
on disposal of fixed assets, net
|
(157
|
)
|
(10
|
)
|
(391
|
)
|
(91
|
)
|
||||||||||
Investment
income
|
2,019
|
2,417
|
5,237
|
4,481
|
||||||||||||||
Interest
expense, net
|
(7,535
|
)
|
(7,911
|
)
|
(15,179
|
)
|
(16,847
|
)
|
||||||||||
Contract
dispute (charges) credit, net
|
--
|
(672
|
)
|
11,920
|
(4,276
|
)
|
||||||||||||
Minority
interest in income of consolidated subsidiaries, net
|
(4,910
|
)
|
(6,152
|
)
|
(2,847
|
)
|
(4,363
|
)
|
||||||||||
Income
before provision for income taxes
|
83,072
|
86,928
|
42,391
|
28,214
|
||||||||||||||
Provision
for income taxes
|
(31,753
|
)
|
(33,902
|
)
|
(15,685
|
)
|
(11,004
|
)
|
||||||||||
Net
income
|
$
|
51,319
|
$
|
53,026
|
$
|
26,706
|
$
|
17,210
|
Supplemental
Condensed Consolidating Balance Sheet
|
||||||||||||||||
As
of January 31, 2008
|
||||||||||||||||
(in
thousands)
|
||||||||||||||||
(Unaudited)
|
||||||||||||||||
100%
Owned
|
||||||||||||||||
Parent
|
Guarantor
|
Other
|
Eliminating
|
|||||||||||||
Company
|
Subsidiaries
|
Subsidiaries
|
Entries
|
Consolidated
|
||||||||||||
Current
assets:
|
||||||||||||||||
Cash
and cash equivalents
|
$
|
--
|
$
|
268,224
|
$
|
6,209
|
$
|
--
|
$
|
274,433
|
||||||
Restricted
cash
|
--
|
16,818
|
39,468
|
--
|
56,286
|
|||||||||||
Trade
receivables, net
|
--
|
34,825
|
9,931
|
--
|
44,756
|
|||||||||||
Inventories,
net
|
--
|
10,169
|
41,344
|
--
|
51,513
|
|||||||||||
Other
current assets
|
16,585
|
25,267
|
10,751
|
--
|
52,603
|
|||||||||||
Total
current assets
|
16,585
|
355,303
|
107,703
|
--
|
479,591
|
|||||||||||
Property,
plant and equipment, net
|
--
|
886,695
|
97,163
|
--
|
983,858
|
|||||||||||
Real
estate held for sale and investment
|
--
|
90,456
|
290,923
|
--
|
381,379
|
|||||||||||
Goodwill,
net
|
--
|
123,034
|
18,977
|
--
|
142,011
|
|||||||||||
Intangible
assets, net
|
--
|
56,779
|
15,879
|
--
|
72,658
|
|||||||||||
Other
assets
|
4,291
|
27,110
|
10,917
|
--
|
42,318
|
|||||||||||
Investments
in subsidiaries and advances to (from) parent
|
1,221,672
|
282,398
|
(5,755
|
)
|
(1,498,315
|
)
|
--
|
|||||||||
Total
assets
|
$
|
1,242,548
|
$
|
1,821,775
|
$
|
535,807
|
$
|
(1,498,315
|
)
|
$
|
2,101,815
|
|||||
Current
liabilities:
|
||||||||||||||||
Accounts
payable and accrued expenses
|
$
|
12,462
|
$
|
237,602
|
$
|
162,808
|
$
|
--
|
$
|
412,872
|
||||||
Income
taxes payable
|
30,810
|
--
|
--
|
--
|
30,810
|
|||||||||||
Long-term
debt due within one year
|
--
|
15,039
|
85,671
|
--
|
100,710
|
|||||||||||
Total
current liabilities
|
43,272
|
252,641
|
248,479
|
--
|
544,392
|
|||||||||||
Long-term
debt
|
390,000
|
42,710
|
121,701
|
--
|
554,411
|
|||||||||||
Other
long-term liabilities
|
2,089
|
104,143
|
60,788
|
--
|
167,020
|
|||||||||||
Deferred
income taxes
|
86,303
|
--
|
--
|
--
|
86,303
|
|||||||||||
Minority
interest in net assets of consolidated subsidiaries
|
--
|
--
|
--
|
28,805
|
28,805
|
|||||||||||
Total
stockholders' equity
|
720,884
|
1,422,281
|
104,839
|
(1,527,120
|
)
|
720,884
|
||||||||||
Total
liabilities and stockholders' equity
|
$
|
1,242,548
|
$
|
1,821,775
|
$
|
535,807
|
$
|
(1,498,315
|
)
|
$
|
2,101,815
|
Supplemental
Condensed Consolidating Balance Sheet
|
||||||||||||||||||||
As
of July 31, 2007
|
||||||||||||||||||||
(in
thousands)
|
||||||||||||||||||||
100%
Owned
|
||||||||||||||||||||
Parent
|
Guarantor
|
Other
|
Eliminating
|
|||||||||||||||||
Company
|
Subsidiaries
|
Subsidiaries
|
Entries
|
Consolidated
|
||||||||||||||||
Current
assets:
|
||||||||||||||||||||
Cash
and cash equivalents
|
$
|
--
|
$
|
225,952
|
$
|
4,867
|
$
|
--
|
$
|
230,819
|
||||||||||
Restricted
cash
|
--
|
11,437
|
43,312
|
--
|
54,749
|
|||||||||||||||
Trade
receivables, net
|
--
|
41,804
|
1,753
|
--
|
43,557
|
|||||||||||||||
Inventories,
net
|
--
|
9,805
|
38,259
|
--
|
48,064
|
|||||||||||||||
Other
current assets
|
15,056
|
13,545
|
5,847
|
--
|
34,448
|
|||||||||||||||
Total
current assets
|
15,056
|
302,543
|
94,038
|
--
|
411,637
|
|||||||||||||||
Property,
plant and equipment, net
|
--
|
784,458
|
101,468
|
--
|
885,926
|
|||||||||||||||
Real
estate held for sale and investment
|
--
|
86,837
|
270,749
|
--
|
357,586
|
|||||||||||||||
Goodwill,
net
|
--
|
123,033
|
18,666
|
--
|
141,699
|
|||||||||||||||
Intangible
assets, net
|
--
|
57,087
|
16,420
|
--
|
73,507
|
|||||||||||||||
Other
assets
|
4,646
|
24,225
|
9,897
|
--
|
38,768
|
|||||||||||||||
Investments
in subsidiaries and advances to (from) parent
|
1,206,709
|
337,716
|
(82,219
|
)
|
(1,462,206
|
)
|
--
|
|||||||||||||
Total
assets
|
$
|
1,226,411
|
$
|
1,715,899
|
$
|
429,019
|
$
|
(1,462,206
|
)
|
$
|
1,909,123
|
|||||||||
Current
liabilities:
|
||||||||||||||||||||
Accounts
payable and accrued expenses
|
$
|
12,718
|
$
|
161,456
|
$
|
107,605
|
$
|
--
|
$
|
281,779
|
||||||||||
Income
taxes payable
|
37,441
|
--
|
--
|
--
|
37,441
|
|||||||||||||||
Long-term
debt due within one year
|
--
|
49
|
328
|
--
|
377
|
|||||||||||||||
Total
current liabilities
|
50,159
|
161,505
|
107,933
|
--
|
319,597
|
|||||||||||||||
Long-term
debt
|
390,000
|
57,724
|
146,009
|
--
|
593,733
|
|||||||||||||||
Other
long-term liabilities
|
--
|
108,582
|
73,248
|
--
|
181,830
|
|||||||||||||||
Deferred
income taxes
|
72,213
|
--
|
--
|
--
|
72,213
|
|||||||||||||||
Minority
interest in net assets of consolidated subsidiaries
|
--
|
--
|
--
|
27,711
|
27,711
|
|||||||||||||||
Total
stockholders’ equity
|
714,039
|
1,388,088
|
101,829
|
(1,489,917
|
)
|
714,039
|
||||||||||||||
Total
liabilities and stockholders’ equity
|
$
|
1,226,411
|
$
|
1,715,899
|
$
|
429,019
|
$
|
(1,462,206
|
)
|
$
|
1,909,123
|
Supplemental
Condensed Consolidating Balance Sheet
|
||||||||||||||||||||
As
of January 31, 2007
|
||||||||||||||||||||
(in
thousands)
(Unaudited)
|
||||||||||||||||||||
100%
Owned
|
||||||||||||||||||||
Parent
|
Guarantor
|
Other
|
Eliminating
|
|||||||||||||||||
Company
|
Subsidiaries
|
Subsidiaries
|
Entries
|
Consolidated
|
||||||||||||||||
Current
assets:
|
||||||||||||||||||||
Cash
and cash equivalents
|
$
|
--
|
$
|
247,083
|
$
|
7,783
|
$
|
--
|
$
|
254,866
|
||||||||||
Restricted
cash
|
--
|
25,404
|
1,388
|
--
|
26,792
|
|||||||||||||||
Trade
receivables, net
|
--
|
37,578
|
6,150
|
--
|
43,728
|
|||||||||||||||
Inventories,
net
|
--
|
9,034
|
40,791
|
--
|
49,825
|
|||||||||||||||
Other
current assets
|
13,338
|
23,509
|
2,071
|
--
|
38,918
|
|||||||||||||||
Total
current assets
|
13,338
|
342,608
|
58,183
|
--
|
414,129
|
|||||||||||||||
Property,
plant and equipment, net
|
--
|
784,486
|
83,699
|
--
|
868,185
|
|||||||||||||||
Real
estate held for sale and investment
|
--
|
118,917
|
174,302
|
--
|
293,219
|
|||||||||||||||
Goodwill,
net
|
--
|
118,475
|
17,336
|
--
|
135,811
|
|||||||||||||||
Intangible
assets, net
|
--
|
57,168
|
16,547
|
--
|
73,715
|
|||||||||||||||
Other
assets
|
5,001
|
26,948
|
15,608
|
--
|
47,557
|
|||||||||||||||
Investments
in subsidiaries and advances to (from) parent
|
1,059,064
|
(535,123
|
)
|
(64,043
|
)
|
(459,898
|
)
|
--
|
||||||||||||
Total
assets
|
$
|
1,077,403
|
$
|
913,479
|
$
|
301,632
|
$
|
(459,898
|
)
|
$
|
1,832,616
|
|||||||||
Current
liabilities:
|
||||||||||||||||||||
Accounts
payable and accrued expenses
|
$
|
19,866
|
$
|
231,873
|
$
|
53,951
|
$
|
--
|
$
|
305,690
|
||||||||||
Income
taxes payable
|
9,103
|
--
|
--
|
--
|
9,103
|
|||||||||||||||
Long-term
debt due within one year
|
--
|
35
|
405
|
--
|
440
|
|||||||||||||||
Total
current liabilities
|
28,969
|
231,908
|
54,356
|
--
|
315,233
|
|||||||||||||||
Long-term
debt
|
390,000
|
57,727
|
104,139
|
--
|
551,866
|
|||||||||||||||
Other
long-term liabilities
|
13
|
124,415
|
61,421
|
--
|
185,849
|
|||||||||||||||
Deferred
income taxes
|
--
|
83,946
|
21
|
--
|
83,967
|
|||||||||||||||
Put
option liabilities
|
--
|
1,245
|
--
|
--
|
1,245
|
|||||||||||||||
Minority
interest in net assets of consolidated subsidiaries
|
--
|
--
|
36,035
|
--
|
36,035
|
|||||||||||||||
Total
stockholders’ equity
|
658,421
|
414,238
|
45,660
|
(459,898
|
)
|
658,421
|
||||||||||||||
Total
liabilities and stockholders’ equity
|
$
|
1,077,403
|
$
|
913,479
|
$
|
301,632
|
$
|
(459,898
|
)
|
$
|
1,832,616
|
Supplemental
Condensed Consolidating Statement of Operations
|
|||||||||||||||||||
For
the three months ended January 31, 2008
|
|||||||||||||||||||
(in
thousands)
|
|||||||||||||||||||
(Unaudited)
|
|||||||||||||||||||
100%
Owned
|
|||||||||||||||||||
Parent
|
Guarantor
|
Other
|
Eliminating
|
||||||||||||||||
Company
|
Subsidiaries
|
Subsidiaries
|
Entries
|
Consolidated
|
|||||||||||||||
Total
net revenue
|
$
|
--
|
$
|
255,493
|
$
|
106,965
|
$
|
(2,438
|
)
|
$
|
360,020
|
||||||||
Total
operating expense
|
122
|
182,166
|
87,560
|
(2,400
|
)
|
267,448
|
|||||||||||||
(Loss)
income from operations
|
(122
|
)
|
73,327
|
19,405
|
(38
|
)
|
92,572
|
||||||||||||
Other
(expense) income, net
|
(6,758
|
)
|
2,078
|
(874
|
)
|
38
|
(5,516
|
)
|
|||||||||||
Equity
investment income, net
|
--
|
926
|
--
|
--
|
926
|
||||||||||||||
Minority
interest in income of
consolidated
subsidiaries, net
|
--
|
--
|
--
|
(4,910
|
)
|
(4,910
|
)
|
||||||||||||
(Loss)
income before income taxes
|
(6,880
|
)
|
76,331
|
18,531
|
(4,910
|
)
|
83,072
|
||||||||||||
Benefit
(provision) for income taxes
|
2,719
|
(34,472
|
)
|
--
|
--
|
(31,753
|
)
|
||||||||||||
Net
(loss) income before equity in income
|
|||||||||||||||||||
(loss)
of consolidated subsidiaries
|
(4,161
|
)
|
41,859
|
18,531
|
(4,910
|
)
|
51,319
|
||||||||||||
Equity
in income (loss) of
consolidated
subsidiaries
|
55,480
|
--
|
--
|
(55,480
|
)
|
--
|
|||||||||||||
Net
income (loss)
|
$
|
51,319
|
$
|
41,859
|
$
|
18,531
|
$
|
(60,390
|
)
|
$
|
51,319
|
Supplemental
Condensed Consolidating Statement of Operations
|
|||||||||||||||||||
For
the three months ended January 31, 2007
|
|||||||||||||||||||
(in
thousands)
|
|||||||||||||||||||
(Unaudited)
|
|||||||||||||||||||
100%
Owned
|
|||||||||||||||||||
Parent
|
Guarantor
|
Other
|
Eliminating
|
||||||||||||||||
Company
|
Subsidiaries
|
Subsidiaries
|
Entries
|
Consolidated
|
|||||||||||||||
Total
net revenue
|
$
|
--
|
$
|
259,244
|
$
|
104,346
|
$
|
(2,552
|
)
|
$
|
361,038
|
||||||||
Total
operating expense
|
4,584
|
181,996
|
79,260
|
(2,552
|
)
|
263,288
|
|||||||||||||
(Loss)
income from operations
|
(4,584
|
)
|
77,248
|
25,086
|
--
|
97,750
|
|||||||||||||
Other
(expense) income, net
|
(6,751
|
)
|
1,584
|
(999
|
)
|
--
|
(6,166
|
)
|
|||||||||||
Equity
investment income, net
|
--
|
1,496
|
--
|
--
|
1,496
|
||||||||||||||
Minority
interest in income of
consolidated
subsidiaries, net
|
--
|
--
|
(6,152
|
)
|
--
|
(6,152
|
)
|
||||||||||||
(Loss)
income before income taxes
|
(11,335
|
)
|
80,328
|
17,935
|
--
|
86,928
|
|||||||||||||
Benefit
(provision) for income taxes
|
4,420
|
(38,400
|
)
|
78
|
--
|
(33,902
|
)
|
||||||||||||
Net
(loss) income before equity in income
|
|||||||||||||||||||
(loss)
of consolidated subsidiaries
|
(6,915
|
)
|
41,928
|
18,013
|
--
|
53,026
|
|||||||||||||
Equity
in income (loss) of
consolidated
subsidiaries
|
59,941
|
--
|
--
|
(59,941
|
)
|
--
|
|||||||||||||
Net
income (loss)
|
$
|
53,026
|
$
|
41,928
|
$
|
18,013
|
$
|
(59,941
|
)
|
$
|
53,026
|
Supplemental
Condensed Consolidating Statement of Operations
|
|||||||||||||||||||
For
the six months ended January 31, 2008
|
|||||||||||||||||||
(in
thousands)
|
|||||||||||||||||||
(Unaudited)
|
|||||||||||||||||||
100%
Owned
|
|||||||||||||||||||
Parent
|
Guarantor
|
Other
|
Eliminating
|
||||||||||||||||
Company
|
Subsidiaries
|
Subsidiaries
|
Entries
|
Consolidated
|
|||||||||||||||
Total
net revenue
|
$
|
--
|
$
|
330,263
|
$
|
132,901
|
$
|
(5,258
|
)
|
$
|
457,906
|
||||||||
Total
operating expense
|
(68
|
)
|
300,432
|
122,359
|
(5,182
|
)
|
417,541
|
||||||||||||
Income
(loss) from operations
|
68
|
29,831
|
10,542
|
(76
|
)
|
40,365
|
|||||||||||||
Other
(expense) income, net
|
(13,518
|
)
|
17,586
|
(2,166
|
)
|
76
|
1,978
|
||||||||||||
Equity
investment income, net
|
--
|
2,895
|
--
|
--
|
2,895
|
||||||||||||||
Minority
interest in income of
consolidated
subsidiaries, net
|
--
|
--
|
--
|
(2,847
|
)
|
(2,847
|
)
|
||||||||||||
(Loss)
income before income taxes
|
(13,450
|
)
|
50,312
|
8,376
|
(2,847
|
)
|
42,391
|
||||||||||||
Benefit
(provision) for income taxes
|
5,313
|
(20,998
|
)
|
--
|
--
|
(15,685
|
)
|
||||||||||||
Net
(loss) income before equity in income
|
|||||||||||||||||||
(loss)
of consolidated subsidiaries
|
(8,137
|
)
|
29,314
|
8,376
|
(2,847
|
)
|
26,706
|
||||||||||||
Equity
in income (loss) of consolidated subsidiaries
|
34,843
|
--
|
--
|
(34,843
|
)
|
--
|
|||||||||||||
Net
income (loss)
|
$
|
26,706
|
$
|
29,314
|
$
|
8,376
|
$
|
(37,690
|
)
|
$
|
26,706
|
Supplemental
Condensed Consolidating Statement of Operations
|
|||||||||||||||||||
For
the six months ended January 31, 2007
|
|||||||||||||||||||
(in
thousands)
|
|||||||||||||||||||
(Unaudited)
|
|||||||||||||||||||
100%
Owned
|
|||||||||||||||||||
Parent
|
Guarantor
|
Other
|
Eliminating
|
||||||||||||||||
Company
|
Subsidiaries
|
Subsidiaries
|
Entries
|
Consolidated
|
|||||||||||||||
Total
net revenue
|
$
|
--
|
$
|
335,205
|
$
|
143,641
|
$
|
(4,315
|
)
|
$
|
474,531
|
||||||||
Total
operating expense
|
7,579
|
303,372
|
121,007
|
(4,315
|
)
|
427,643
|
|||||||||||||
(Loss)
income from operations
|
(7,579
|
)
|
31,833
|
22,634
|
--
|
46,888
|
|||||||||||||
Other
expense, net
|
(13,508
|
)
|
(1,089
|
)
|
(2,045
|
)
|
--
|
(16,642
|
)
|
||||||||||
Equity
investment income, net
|
--
|
2,331
|
--
|
--
|
2,331
|
||||||||||||||
Minority
interest in income of
consolidated
subsidiaries, net
|
--
|
--
|
(4,363
|
)
|
--
|
(4,363
|
)
|
||||||||||||
(Loss)
income before income taxes
|
(21,087
|
)
|
33,075
|
16,226
|
--
|
28,214
|
|||||||||||||
Benefit
(provision) for income taxes
|
8,223
|
(19,350
|
)
|
123
|
--
|
(11,004
|
)
|
||||||||||||
Net
(loss) income before equity in income
|
|||||||||||||||||||
(loss)
of consolidated subsidiaries
|
(12,864
|
)
|
13,725
|
16,349
|
--
|
17,210
|
|||||||||||||
Equity
in income (loss) of consolidated
subsidiaries
|
30,074
|
--
|
--
|
(30,074
|
)
|
--
|
|||||||||||||
Net
income (loss)
|
$
|
17,210
|
$
|
13,725
|
$
|
16,349
|
$
|
(30,074
|
)
|
$
|
17,210
|
Supplemental
Condensed Consolidating Statement of Cash Flows
|
|||||||||||||||||
For
the six months ended January 31, 2008
|
|||||||||||||||||
(in
thousands)
|
|||||||||||||||||
(Unaudited)
|
|||||||||||||||||
100%
Owned
|
|||||||||||||||||
Parent
|
Guarantor
|
Other
|
|||||||||||||||
Company
|
Subsidiaries
|
Subsidiaries
|
Consolidated
|
||||||||||||||
Net
cash provided by (used in) operating activities
|
$
|
105
|
$
|
108,407
|
$
|
(23,419
|
)
|
$
|
85,093
|
||||||||
Cash
flows from investing activities:
|
|||||||||||||||||
Capital
expenditures
|
--
|
(61,973
|
)
|
(29,204
|
)
|
(91,177
|
)
|
||||||||||
Other
investing activities, net
|
--
|
3,121
|
(92
|
)
|
3,029
|
||||||||||||
Net
cash used in investing activities
|
--
|
(58,852
|
)
|
(29,296
|
)
|
(88,148
|
)
|
||||||||||
Cash
flows from financing activities:
|
|||||||||||||||||
Repurchases
of common stock
|
(25,870
|
)
|
--
|
--
|
(25,870
|
)
|
|||||||||||
Net
proceeds from borrowings under long-term debt
|
--
|
819
|
59,662
|
60,481
|
|||||||||||||
Proceeds
from exercise of stock options
|
1,162
|
--
|
--
|
1,162
|
|||||||||||||
Other
financing activities, net
|
1,476
|
15,025
|
(5,605
|
)
|
10,896
|
||||||||||||
Advances
from (to) affiliates
|
23,127
|
(23,127
|
)
|
--
|
--
|
||||||||||||
Net
cash (used in) provided by financing activities
|
(105
|
)
|
(7,283
|
)
|
54,057
|
46,669
|
|||||||||||
Net
increase in cash and cash equivalents
|
--
|
42,272
|
1,342
|
43,614
|
|||||||||||||
Cash
and cash equivalents:
|
|||||||||||||||||
Beginning
of period
|
--
|
225,952
|
4,867
|
230,819
|
|||||||||||||
End
of period
|
$
|
--
|
$
|
268,224
|
$
|
6,209
|
$
|
274,433
|
Supplemental
Condensed Consolidating Statement of Cash Flows
|
|||||||||||||||||
For
the six months ended January 31, 2007
|
|||||||||||||||||
(in
thousands)
|
|||||||||||||||||
(Unaudited)
|
|||||||||||||||||
100%
Owned
|
|||||||||||||||||
Parent
|
Guarantor
|
Other
|
|||||||||||||||
Company
|
Subsidiaries
|
Subsidiaries
|
Consolidated
|
||||||||||||||
Net
cash (used in) provided by operating activities
|
$
|
(35,705
|
)
|
$
|
160,969
|
$
|
(16,945
|
)
|
$
|
108,319
|
|||||||
Cash
flows from investing activities:
|
|||||||||||||||||
Capital
expenditures
|
--
|
(42,349
|
)
|
(19,709
|
)
|
(62,058
|
)
|
||||||||||
Other
investing activities, net
|
--
|
2,578
|
(2,224
|
)
|
354
|
||||||||||||
Net
cash used in investing activities
|
--
|
(39,771
|
)
|
(21,933
|
)
|
(61,704
|
)
|
||||||||||
Cash
flows from financing activities:
|
|||||||||||||||||
Repurchases
of common stock
|
--
|
(15,007
|
)
|
--
|
(15,007
|
)
|
|||||||||||
Proceeds
from borrowings under long-term debt
|
--
|
1,645
|
79,434
|
81,079
|
|||||||||||||
Payments
of long-term debt
|
--
|
(5,662
|
)
|
(54,339
|
)
|
(60,001
|
)
|
||||||||||
Proceeds
from exercise of stock options
|
6,803
|
--
|
--
|
6,803
|
|||||||||||||
Other
financing activities, net
|
3,432
|
(2,604
|
)
|
2,755
|
3,583
|
||||||||||||
Advances
from (to) affiliates
|
25,470
|
(32,485
|
)
|
7,015
|
--
|
||||||||||||
Net
cash provided by (used in) financing activities
|
35,705
|
(54,113
|
)
|
34,865
|
16,457
|
||||||||||||
Net
increase (decrease) in cash
and
cash equivalents
|
--
|
67,085
|
(4,013
|
)
|
63,072
|
||||||||||||
Cash
and cash equivalents:
|
|||||||||||||||||
Beginning
of period
|
--
|
179,998
|
11,796
|
191,794
|
|||||||||||||
End
of period
|
$
|
--
|
$
|
247,083
|
$
|
7,783
|
$
|
254,866
|
·
|
The
timing and amount of snowfall has an impact on skier visits. To
mitigate this impact, the Company focuses efforts on sales of season
passes prior to the beginning of the season to In-State skiers, who are
the most weather sensitive visitors to the Company’s ski
resorts. Additionally, the Company has invested in snowmaking
upgrades in an effort to address the inconsistency of early season
snowfall where possible. Season pass revenue, although
primarily collected prior to the ski season, is recognized in the
Consolidated Condensed Statements of Operations throughout the ski
season. Total season pass sales as of January 31, 2008 for the
2007/2008 ski season have increased by 8.3% over total sales for the
entire 2006/2007 ski season. Deferred revenue related to season
pass sales was $36.0 million and $34.5 million as of January 31, 2008 and
2007, respectively, which will be recognized as lift revenue during the
Company’s third fiscal quarter ending April 30,
2008.
|
·
|
The
economic downturn currently affecting the U.S. economy could have a
negative impact on overall trends in the travel
industry. Consequently, the Company’s visitation (particularly
Destination guests) to its resorts and/or the amount the Company’s guests
spend at its resorts may be negatively impacted by the weaker U.S.
economy, in addition to potential lowered demand for the Company’s real
estate projects.
|
·
|
Real
Estate Reported EBITDA is highly dependent on, among other things, the
timing of closings on real estate under contract. Changes to
the anticipated timing of closing on one or more real estate projects
could materially impact Real Estate Reported EBITDA for a particular
quarter or fiscal year. Additionally, the magnitude of real
estate projects currently under development or contemplated could result
in a significant increase in Real Estate Reported EBITDA as these projects
close. For example, the Company closed on 12 of the 67 units at
The Arrabelle at Vail Square (“Arrabelle”) during the three months ended
January 31, 2008 and expects to close on the remaining condominium units
during the current fiscal year. The Company expects to close on
The Lodge at Vail Chalets during the fourth fiscal quarter in the current
fiscal year and the first half of the year ending July 31,
2009. The Company has entered into definitive sales contracts
with a value of approximately $398 million related to these projects of
which $34.5 million of revenue was recognized in the three months ended
January 31, 2008 as a result of closing the 12 units at Arrabelle along
with the associated cost of sales. Additionally, the Company
placed in service during the three months ended January 31, 2008 a new
RockResorts hotel, commercial space and certain skier services
facilities. The Company will also place in service two private
mountain clubs, spas and guest suites related to these real estate
developments.
|
·
|
The
Company has several real estate projects across its resorts under
development and has identified additional projects for
development. While the current instability in the capital
markets and slowdown in the national real estate market have not, to date,
materially impacted the Company’s real estate development, the Company
does have elevated risk associated with the selling and/or financing
(including an expected increase to pricing spreads on non-recourse
financings) of its real estate projects as a result of the current
economic climate. These risks surrounding the Company’s real
estate developments are mitigated by the fact that the Company’s projects
include a relatively low number of luxury and ultra luxury units situated
at the base of its resorts, which are unique due to the relatively low
supply of developable land. Additionally, the Company’s real
estate projects must meet the Company’s high pre-sale requirements, which
include substantial non-refundable deposits, before significant
development begins. The Company has not experienced any
cancellations on its existing sales contracts to date; however, there is
no guarantee that a sustained downward trend in the capital and real
estate markets would not materially impact the Company’s real estate
development activities or operating
results.
|
·
|
The
Company had $274.4 million in cash and cash equivalents as of January 31,
2008 with no borrowings under the revolver component of its credit
facilities and expects to generate additional cash from operations,
including future closures on real estate vertical development
projects. The Company is currently evaluating how to utilize
its excess cash, including any combination of the following strategic
options: increase real estate investment for further
development; increase resort capital expenditures; pursue strategic
acquisitions; repurchase additional common stock of the Company (see Note
11, Stock Repurchase Plan, of the Notes to Consolidated Condensed
Financial Statements for more information regarding the Company’s stock
repurchase plan); pay cash dividends; or pay off outstanding
debt. The Company believes its debt generally has favorable
fixed interest rates and is long-term in nature. Additionally,
the Company’s Fourth Amended and Restated Credit Agreement, dated as of
January 28, 2005, as amended, between The Vail Corporation (a wholly owned
subsidiary of the Company), Bank of America, N.A. as administrative agent
and the Lenders party thereto (the “Credit Agreement”) underlying the
Company’s senior credit facility (the “Credit Facility”) and the
Indenture, dated as of January 29, 2004 among the Company, the guarantors
therein and the Bank of New York, as Trustee (“Indenture”), governing the
Senior Subordinated Notes due 2014 (“6.75% Notes”), limit the Company’s
ability to pay dividends, repurchase stock and pay off certain of its
debt, including its 6.75% Notes.
|
·
|
During
the fourth quarter of the fiscal year ended July 31, 2007, the Company
entered into an agreement with Peninsula Advisors, LLC (“Peninsula”) for
the negotiation and mutual acquisition of The Canyons ski resort (“The
Canyons”) and the land underlying The Canyons. On July 15,
2007, American Skiing Company (“ASC”) entered into an agreement to sell
The Canyons to Talisker Corporation and Talisker Canyons Finance Company,
LLC (together “Talisker”). On July 27, 2007, the Company filed
a complaint in the District Court in Colorado against Peninsula and
Talisker claiming, among other things, breach of contract by Peninsula and
intentional interference with contractual relations and prospective
business relations by Talisker and seeking damages, specific performance
and injunctive relief. On October 19, 2007, the Company’s
request for a preliminary injunction to prevent the closing of the
acquisition by Talisker of The Canyons from ASC was denied. On
November 8, 2007, Talisker filed an answer to the Company's complaint
along with three counterclaims. On November 12, 2007, Peninsula
filed a motion to dismiss and for partial summary judgment. The
Company believes that these counter claims and motions are without
merit. The Company is unable to predict the ultimate outcome of
the above described actions. The Company incurred legal
expenses related to The Canyons litigation of approximately $2.0 million
in the six months ended January 31,
2008.
|
Three
Months Ended
|
Six
Months Ended
|
|||||||||||||||||
January
31,
|
January
31,
|
|||||||||||||||||
2008
|
2007
|
2008
|
2007
|
|||||||||||||||
Mountain
Reported EBITDA
|
$
|
117,460
|
$
|
113,651
|
$
|
81,017
|
$
|
81,162
|
||||||||||
Lodging
Reported EBITDA
|
(1,955
|
)
|
2,039
|
126
|
6,098
|
|||||||||||||
Resort
Reported EBITDA
|
115,505
|
115,690
|
81,143
|
87,260
|
||||||||||||||
Real
Estate Reported EBITDA
|
1,771
|
5,825
|
6,891
|
6,629
|
||||||||||||||
Total
Reported EBITDA
|
117,276
|
121,515
|
88,034
|
93,889
|
||||||||||||||
Income
before provision for income taxes
|
83,072
|
86,928
|
42,391
|
28,214
|
||||||||||||||
Net
income
|
$
|
51,319
|
$
|
53,026
|
$
|
26,706
|
$
|
17,210
|
Three
Months Ended
|
Percentage
|
||||||||
January
31,
|
Increase
|
||||||||
2008
|
2007
|
(Decrease)
|
|||||||
Lift
tickets
|
$
|
133,998
|
$
|
128,617
|
4.2
|
%
|
|||
Ski
school
|
35,155
|
34,198
|
2.8
|
%
|
|||||
Dining
|
22,895
|
22,468
|
1.9
|
%
|
|||||
Retail/rental
|
66,771
|
63,291
|
5.5
|
%
|
|||||
Other
|
20,903
|
23,452
|
(10.9
|
)%
|
|||||
Total
Mountain net revenue
|
279,722
|
272,026
|
2.8
|
%
|
|||||
Total
Mountain operating expense
|
163,188
|
159,871
|
2.1
|
%
|
|||||
Mountain
equity investment income, net
|
926
|
1,496
|
(38.1
|
)%
|
|||||
Total
Mountain Reported EBITDA
|
$
|
117,460
|
$
|
113,651
|
3.4
|
%
|
|||
Total
skier visits
|
2,799
|
2,912
|
(3.9
|
)%
|
|||||
ETP
|
$
|
47.87
|
$
|
44.17
|
8.4
|
%
|
Six
Months Ended
|
Percentage
|
||||||||
January
31,
|
Increase
|
||||||||
2008
|
2007
|
(Decrease)
|
|||||||
Lift
tickets
|
$
|
133,998
|
$
|
128,617
|
4.2
|
%
|
|||
Ski
school
|
35,155
|
34,198
|
2.8
|
%
|
|||||
Dining
|
27,658
|
26,354
|
4.9
|
%
|
|||||
Retail/rental
|
90,311
|
87,809
|
2.8
|
%
|
|||||
Other
|
35,136
|
41,211
|
(14.7
|
)%
|
|||||
Total
Mountain net revenue
|
322,258
|
318,189
|
1.3
|
%
|
|||||
Total
Mountain operating expense
|
244,136
|
239,358
|
2.0
|
%
|
|||||
Mountain
equity investment income, net
|
2,895
|
2,331
|
24.2
|
%
|
|||||
Total
Mountain Reported EBITDA
|
$
|
81,017
|
$
|
81,162
|
(0.2
|
)%
|
|||
Total
skier visits
|
2,799
|
2,912
|
(3.9
|
)%
|
|||||
ETP
|
$
|
47.87
|
$
|
44.17
|
8.4
|
%
|
Three
Months Ended
|
Percentage
|
|||||||||
January
31,
|
Increase
|
|||||||||
2008
|
2007
|
(Decrease)
|
||||||||
Total
Lodging net revenue
|
$
|
34,827
|
$
|
32,796
|
6.2
|
%
|
||||
Total
Lodging operating expense
|
36,782
|
30,757
|
19.6
|
%
|
||||||
Total
Lodging Reported EBITDA
|
$
|
(1,955
|
)
|
$
|
2,039
|
(195.9
|
)
|
%
|
||
ADR
|
$
|
290.21
|
$
|
263.14
|
10.3
|
%
|
||||
RevPAR
|
$
|
137.13
|
$
|
127.41
|
7.6
|
%
|
Six
Months Ended
|
Percentage
|
|||||||||
January
31,
|
Increase
|
|||||||||
2008
|
2007
|
(Decrease)
|
||||||||
Total
Lodging net revenue
|
$
|
78,144
|
$
|
73,204
|
6.7
|
%
|
||||
Total
Lodging operating expense
|
78,018
|
67,106
|
16.3
|
%
|
||||||
Total
Lodging Reported EBITDA
|
$
|
126
|
$
|
6,098
|
(97.9
|
)
|
%
|
|||
ADR
|
$
|
223.91
|
$
|
210.00
|
6.6
|
%
|
||||
RevPAR
|
$
|
97.66
|
$
|
88.62
|
10.2
|
%
|
Three
Months Ended
|
||||||||||
January
31,
|
Percentage
|
|||||||||
2008
|
2007
|
Decrease
|
||||||||
Total
Real Estate net revenue
|
$
|
45,471
|
$
|
56,216
|
(19.1
|
)
|
%
|
|||
Total
Real Estate operating expense
|
44,409
|
50,391
|
(11.9
|
)
|
%
|
|||||
Gain
on sale of real property
|
709
|
--
|
--
|
%
|
||||||
Total
Real Estate Reported EBITDA
|
$
|
1,771
|
$
|
5,825
|
(69.6
|
)
|
%
|
Six
Months Ended
|
Percentage
|
|||||||||
January
31,
|
Increase
|
|||||||||
2008
|
2007
|
(Decrease)
|
||||||||
Total
Real Estate net revenue
|
$
|
57,504
|
$
|
83,138
|
(30.8
|
)
|
%
|
|||
Total
Real Estate operating expense
|
51,322
|
76,509
|
(32.9
|
)
|
%
|
|||||
Gain
on sale of real property
|
709
|
--
|
--
|
%
|
||||||
Total
Real Estate Reported EBITDA
|
$
|
6,891
|
$
|
6,629
|
4.0
|
%
|
Three
Months Ended
|
Six
Months Ended
|
|||||||||||||||||
January
31,
|
January
31,
|
|||||||||||||||||
2008
|
2007
|
2008
|
2007
|
|||||||||||||||
Mountain
Reported EBITDA
|
$
|
117,460
|
$
|
113,651
|
$
|
81,017
|
$
|
81,162
|
||||||||||
Lodging
Reported EBITDA
|
(1,955
|
)
|
2,039
|
126
|
6,098
|
|||||||||||||
Resort
Reported EBITDA
|
115,505
|
115,690
|
81,143
|
87,260
|
||||||||||||||
Real
Estate Reported EBITDA
|
1,771
|
5,825
|
6,891
|
6,629
|
||||||||||||||
Total
Reported EBITDA
|
117,276
|
121,515
|
88,034
|
93,889
|
||||||||||||||
Depreciation
and amortization
|
(23,621
|
)
|
(21,759
|
)
|
(44,383
|
)
|
(43,344
|
)
|
||||||||||
Relocation
and separation charges
|
--
|
(500
|
)
|
--
|
(1,235
|
)
|
||||||||||||
Loss
on disposal of fixed assets, net
|
(157
|
)
|
(10
|
)
|
(391
|
)
|
(91
|
)
|
||||||||||
Investment
income
|
2,019
|
2,417
|
5,237
|
4,481
|
||||||||||||||
Interest
expense, net
|
(7,535
|
)
|
(7,911
|
)
|
(15,179
|
)
|
(16,847
|
)
|
||||||||||
Contract
dispute (charges) credit, net
|
--
|
(672
|
)
|
11,920
|
(4,276
|
)
|
||||||||||||
Minority
interest in income of consolidated subsidiaries, net
|
(4,910
|
)
|
(6,152
|
)
|
(2,847
|
)
|
(4,363
|
)
|
||||||||||
Income
before provision for income taxes
|
83,072
|
86,928
|
42,391
|
28,214
|
||||||||||||||
Provision
for income taxes
|
(31,753
|
)
|
(33,902
|
)
|
(15,685
|
)
|
(11,004
|
)
|
||||||||||
Net
income
|
$
|
51,319
|
$
|
53,026
|
$
|
26,706
|
$
|
17,210
|
January
31,
|
||||||
2008
|
2007
|
|||||
Long-term
debt
|
$
|
554,411
|
$
|
551,866
|
||
Long-term
debt due within one year
|
100,710
|
440
|
||||
Total
debt
|
655,121
|
552,306
|
||||
Less:
cash and cash equivalents
|
274,433
|
254,866
|
||||
Net
debt
|
$
|
380,688
|
$
|
297,440
|
·
|
economic
downturns;
|
·
|
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;
|
·
|
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.
|
Period
|
Total
Number of Shares Purchased
|
Average
Price Paid per Share
|
Total
Number of Shares Purchased as Part of Publicly Announced Plans or Programs
(1)
|
Maximum
Number of Shares that May Yet Be Purchased Under the Plans or Programs
(1)
|
||||||||
November
1, 2007 - November 30, 2007
|
273,879
|
$
|
50.81
|
273,879
|
1,820,117
|
|||||||
December
1, 2007 - December 31, 2007
|
5,200
|
49.50
|
5,200
|
1,814,917
|
||||||||
January
1, 2008 - January 31, 2008
|
--
|
--
|
--
|
1,814,917
|
||||||||
Total
|
279,079
|
$
|
50.78
|
279,079
|
(1)
|
On
March 9, 2006, the Company's Board of Directors approved the repurchase of
up to 3,000,000 shares of common stock. Acquisitions under the
share repurchase program will be made from time to time at prevailing
prices as permitted by applicable laws, and subject to market conditions
and other factors. The stock repurchase program may be
discontinued at any time.
|
Director
|
For
|
Withheld
|
|
Roland
A. Hernandez
|
34,432,637
|
3,205,703
|
|
Thomas
D. Hyde
|
37,237,458
|
400,882
|
|
Robert
A. Katz
|
37,237,278
|
401,062
|
|
Richard
D. Kincaid
|
37,238,678
|
399,662
|
|
Joe
R. Micheletto
|
37,237,018
|
401,322
|
|
John
F. Sorte
|
36,971,420
|
666,920
|
|
William
P. Stiritz
|
37,237,295
|
401,045
|
For
|
Against
|
Abstain
|
Broker Non-Vote
|
|
34,618,815
|
526,549
|
6,900
|
2,486,076
|
For
|
Against
|
Abstain
|
Broker Non-Vote
|
|
37,269,877
|
367,414
|
1,049
|
--
|
Exhibit
Number
|
Description
|
Sequentially
Numbered Page
|
3.1
|
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).
|
|
3.2
|
Amended
and Restated By-Laws (incorporated by reference to Exhibit 3.1 on Form 8-K
of Vail Resorts, Inc. filed on September 28, 2007).
|
|
4.1(a)
|
Indenture,
dated as of January 29, 2004, among Vail Resorts, Inc., the guarantors
therein and the Bank of New York as Trustee (Including Exhibit A, Form of
Global Note) (incorporated by reference to Exhibit 4.1 on Form 8-K of Vail
Resorts, Inc. filed on February 2, 2004).
|
|
4.1(b)
|
Supplemental
Indenture, dated as of March 10, 2006 to Indenture dated as of January 29,
2004 among Vail Resorts, Inc., as Issuer, the Guarantors named therein, as
Guarantors, and The Bank of New York, as Trustee (incorporated by
reference to Exhibit 10.34 on Form 10-Q of Vail Resorts, Inc. for the
quarter ended January 31, 2006).
|
|
4.1(c)
|
Form
of Global Note (incorporated by reference to Exhibit 4.1 on Form 8-K of
Vail Resorts, Inc. filed February 2, 2004).
|
|
10.1
|
Agreement,
dated January 7, 2008, by and among Vail Associates, Inc., William A.
Jensen and Intrawest ULC.
|
16
|
31.1
|
Certifications
of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002.
|
25
|
31.2
|
Certifications
of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002.
|
26
|
32
|
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.
|
27
|
Date: March
10, 2008
|
Vail
Resorts, Inc.
|
|
By:
|
/s/ Jeffrey W. Jones
|
|
Jeffrey
W. Jones
|
||
Senior
Executive Vice President and
|
||
Chief
Financial Officer
|
||
(Chief
Accounting Officer and
|
||
Duly
Authorized Officer)
|