MTN 2012.10.31 Q1


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

ý
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended October 31, 2012
 
¨
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from              to             
Commission File Number: 001-09614

Vail Resorts, Inc.
(Exact Name of Registrant as Specified in Its Charter)
 
Delaware
 
51-0291762
(State or Other Jurisdiction of
Incorporation or Organization)
 
(I.R.S. Employer
Identification No.)
 
 
390 Interlocken Crescent
Broomfield, Colorado
 
80021
(Address of Principal Executive Offices)
 
(Zip Code)
(303) 404-1800
(Registrant’s Telephone Number, Including Area Code)
 
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.    ý  Yes    ¨  No
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    ý  Yes    ¨  No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
 
Large accelerated filer
 
ý
  
Accelerated filer
 
¨
 
 
 
 
Non-accelerated filer
 
¨  (Do not check if a smaller reporting company)
  
Smaller reporting company
 
¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    ¨  Yes    ý  No
As of November 30, 2012, 35,878,874 shares of the registrant’s common stock were outstanding.



Table of Contents
 
 
 
 
PART I
FINANCIAL INFORMATION
 
 
 
 
Item 1.
Item 2.
Item 3.
Item 4.
 
 
 
PART II
OTHER INFORMATION
 
 
 
 
Item 1.
Item 1A.
Item 2.
Item 3.
Item 4.
Item 5.
Item 6.



PART I FINANCIAL INFORMATION
Item 1. Financial Statements — Unaudited
 

F-1




Vail Resorts, Inc.
Consolidated Condensed Balance Sheets
(In thousands, except share and per share amounts)
 
 
 
October 31, 2012 (Unaudited)
 
July 31, 2012
 
October 31, 2011 (Unaudited)
Assets
 
 
 
 
 
 
Current assets:
 
 
 
 
 
 
Cash and cash equivalents
 
$
43,985

 
$
46,053

 
$
44,738

Restricted cash
 
14,526

 
14,284

 
13,615

Trade receivables, net
 
29,721

 
65,743

 
29,627

Inventories, net
 
84,752

 
65,873

 
75,789

Other current assets
 
49,115

 
40,417

 
57,822

Total current assets
 
222,099

 
232,370

 
221,591

Property, plant and equipment, net (Note 6)
 
1,056,643

 
1,049,207

 
1,050,026

Real estate held for sale and investment
 
227,662

 
237,668

 
263,130

Goodwill, net
 
269,859

 
269,769

 
268,058

Intangible assets, net
 
91,619

 
92,070

 
91,360

Other assets
 
45,553

 
46,530

 
46,183

Total assets
 
$
1,913,435

 
$
1,927,614

 
$
1,940,348

Liabilities and Stockholders’ Equity
 
 
 
 
 
 
Current liabilities:
 
 
 
 
 
 
Accounts payable and accrued liabilities (Note 6)
 
$
318,258

 
$
227,538

 
$
316,592

Income taxes payable
 
17,026

 
20,721

 
19,568

Long-term debt due within one year (Note 4)
 
848

 
990

 
1,063

Total current liabilities
 
336,132

 
249,249

 
337,223

Long-term debt (Note 4)
 
489,525

 
489,775

 
490,377

Other long-term liabilities (Note 6)
 
231,800

 
232,869

 
236,275

Deferred income taxes
 
103,549

 
139,393

 
99,118

Commitments and contingencies (Note 9)
 

 

 

Stockholders’ equity:
 
 
 
 
 
 
Preferred stock, $0.01 par value, 25,000,000 shares authorized, no shares issued and outstanding
 
—

 
—

 
—

Common stock, $0.01 par value, 100,000,000 shares authorized, 40,826,977 (unaudited), 40,531,204 and 40,468,268 (unaudited) shares issued, respectively
 
408

 
405

 
405

Additional paid-in capital
 
589,763

 
586,691

 
578,403

Accumulated other comprehensive income (loss)
 
39

 
(255
)
 
—

Retained earnings
 
341,353

 
408,662

 
355,318

Treasury stock, at cost; 4,949,111 (unaudited), 4,949,111 and 4,468,181 (unaudited) shares, respectively (Note 11)
 
(193,192
)
 
(193,192
)
 
(170,696
)
Total Vail Resorts, Inc. stockholders’ equity
 
738,371

 
802,311

 
763,430

Noncontrolling interests
 
14,058

 
14,017

 
13,925

Total stockholders’ equity (Note 2)
 
752,429

 
816,328

 
777,355

Total liabilities and stockholders’ equity
 
$
1,913,435

 
$
1,927,614

 
$
1,940,348

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


F-2


Vail Resorts, Inc.
Consolidated Condensed Statements of Operations
(In thousands, except per share amounts)
(Unaudited)
 
 
 
Three Months Ended October 31,
 
 
2012
 
2011
Net revenue:
 
 
 
 
Mountain
 
$
51,912

 
$
49,670

Lodging
 
52,508

 
53,594

Real estate
 
11,930

 
13,109

Total net revenue
 
116,350

 
116,373

Segment operating expense (exclusive of depreciation and amortization shown separately below):
 
 
 
 
Mountain
 
107,548

 
98,555

Lodging
 
51,806

 
55,301

Real estate
 
15,614

 
17,847

Total segment operating expense
 
174,968

 
171,703

Other operating expense:
 
 
 
 
Depreciation and amortization
 
(31,679
)
 
(28,930
)
Loss on disposal of fixed assets, net
 
(2
)
 
(114
)
Loss from operations
 
(90,299
)
 
(84,374
)
Mountain equity investment income, net
 
434

 
430

Investment income, net
 
54

 
64

Interest expense, net
 
(8,375
)
 
(8,241
)
Loss before benefit from income taxes
 
(98,186
)
 
(92,121
)
Benefit from income taxes
 
37,583

 
36,387

Net loss
 
(60,603
)
 
(55,734
)
Net loss attributable to noncontrolling interests
 
23

 
25

Net loss attributable to Vail Resorts, Inc.
 
$
(60,580
)
 
$
(55,709
)
Per share amounts (Note 3):
 
 
 
 
Basic net loss per share attributable to Vail Resorts, Inc.
 
$
(1.70
)
 
$
(1.54
)
Diluted net loss per share attributable to Vail Resorts, Inc.
 
$
(1.70
)
 
$
(1.54
)
Cash dividends declared per share
 
$
0.1875

 
$
0.15

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


F-3



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

 
 
Three Months Ended October 31,
 
 
2012
 
2011
Net loss
 
$
(60,603
)
 
$
(55,734
)
Foreign currency translation adjustments
 
294

 
—

Comprehensive loss
 
(60,309
)
 
(55,734
)
Comprehensive loss attributable to noncontrolling interests
 
23

 
25

Comprehensive loss attributable to Vail Resorts, Inc.
 
$
(60,286
)
 
$
(55,709
)



F-4


Vail Resorts, Inc.
Consolidated Condensed Statements of Cash Flows
(In thousands)
(Unaudited)
 
 
 
Three Months Ended October 31,
 
 
2012
 
2011
Cash flows from operating activities:
 
 
 
 
Net loss
 
$
(60,603
)
 
$
(55,734
)
Adjustments to reconcile net loss to net cash provided by operating activities:
 
 
 
 
Depreciation and amortization
 
31,679

 
28,930

Cost of real estate sales
 
9,241

 
10,288

Stock-based compensation expense
 
3,472

 
4,032

Deferred income taxes, net
 
(37,583
)
 
(36,387
)
Other non-cash income, net
 
(2,712
)
 
(2,404
)
Changes in assets and liabilities:
 
 
 
 
Restricted cash
 
(237
)
 
(1,177
)
Trade receivables, net
 
35,223

 
29,991

Inventories, net
 
(18,879
)
 
(21,782
)
Investments in real estate
 
(477
)
 
(1,094
)
Accounts payable and accrued liabilities
 
85,627

 
87,453

Other assets and liabilities, net
 
(10,174
)
 
(3,781
)
Net cash provided by operating activities
 
34,577

 
38,335

Cash flows from investing activities:
 
 
 
 
Capital expenditures
 
(35,907
)
 
(51,003
)
Other investing activities, net
 
255

 
(136
)
Net cash used in investing activities
 
(35,652
)
 
(51,139
)
Cash flows from financing activities:
 
 
 
 
Repurchases of common stock
 
—

 
(7,869
)
Dividends paid
 
(6,729
)
 
(5,429
)
Other financing activities, net
 
5,704

 
697

Net cash used in financing activities
 
(1,025
)
 
(12,601
)
Effect of exchange rate changes on cash and cash equivalents
 
32

 
—

Net decrease in cash and cash equivalents
 
(2,068
)
 
(25,405
)
Cash and cash equivalents:
 
 
 
 
Beginning of period
 
46,053

 
70,143

End of period
 
$
43,985

 
$
44,738

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


F-5


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

1.
Organization and Business
Vail Resorts, Inc. (“Vail Resorts” or the “Parent Company”) is organized as a holding company and operates through various subsidiaries. Vail Resorts and its subsidiaries (collectively, the “Company”) currently operate in three business segments: Mountain, Lodging and Real Estate. In the Mountain segment, the Company operates the seven world-class ski resort properties of Vail, Breckenridge, Keystone and Beaver Creek mountain resorts in Colorado and Heavenly, Northstar, and Kirkwood mountain resorts in the Lake Tahoe area of California and Nevada, as well as ancillary services, primarily including ski school, dining and retail/rental operations. These resorts (with the exception of Northstar) operate primarily on Federal land under the terms of Special Use Permits granted by the USDA Forest Service (the “Forest Service”). In the Lodging segment, the Company owns and/or manages a collection of luxury hotels under its RockResorts brand, as well as other strategic lodging properties and a large number of condominiums located in proximity to the Company’s ski resorts, National Park Service (“NPS”) concessionaire properties including the Grand Teton Lodge Company (“GTLC”), which operates destination resorts in the Grand Teton National Park, Colorado Mountain Express (“CME”), a resort ground transportation company, and golf courses. Vail Resorts Development Company (“VRDC”), a wholly-owned subsidiary, conducts the operations of the Company’s Real Estate segment, which owns and develops real estate in and around the Company’s resort communities. The Company’s mountain business and its lodging properties at or around the Company’s ski resorts are seasonal in nature with peak operating seasons from mid-November through mid-April. The Company’s operations at its NPS concessionaire properties and its golf courses generally operate from mid-May through mid-October. The Company also has non-majority owned investments in various other entities, some of which are consolidated (see Note 7, Variable Interest Entities).
 
2.
Summary of Significant Accounting Policies
Basis of Presentation
Consolidated Condensed Financial Statements— In the opinion of the Company, the accompanying Consolidated Condensed Financial Statements reflect all adjustments necessary to state fairly the Company’s financial position, results of operations and cash flows for the interim periods presented. All such adjustments are of a normal recurring nature. Results for interim periods are not indicative of the results for the entire fiscal year. The accompanying Consolidated Condensed Financial Statements should be read in conjunction with the audited Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended July 31, 2012. Certain information and footnote disclosures, including significant accounting policies, normally included in fiscal year financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been condensed or omitted. The Consolidated Condensed Balance Sheet as of July 31, 2012 was derived from audited financial statements.
Presentation of Comprehensive Income — Effective August 1, 2012, the Company adopted Accounting Standard Update ("ASU") No. 2011-05 -“Comprehensive Income (Topic 220): Presentation of Comprehensive Income” which amends existing guidance by allowing two options for presenting the components of net income and other comprehensive income: (1) in a single continuous financial statement, a statement of comprehensive income or (2) in two separate but consecutive financial statements, an income statement followed by a separate statement of other comprehensive income. The Company also adopted ASU No. 2011-12—“Comprehensive Income (Topic 220): Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income in ASU No. 2011-05” which defers until further notice ASU No. 2011-05's requirement that items that are reclassified from other comprehensive income to net income be presented on the face of the financial statements. ASU No. 2011-05 required retrospective application. The adoption of these standards only amended presentation and disclosure requirements concerning comprehensive income; therefore, the adoption of these standards did not affect the Company’s financial position or results of operations. The Company elected to present the total of comprehensive income (loss), the components of net loss (i.e. statements of operations), and the components of other comprehensive income (loss) for both the three months ended October 31, 2012 and 2011, in two separate but consecutive statements.
Use of Estimates— The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the balance sheet date and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.



F-6


Noncontrolling Interests in Consolidated Financial Statements— Net loss attributable to noncontrolling interests along with net loss attributable to the stockholders of the Company are reported separately in the Consolidated Condensed Statement of Operations. Additionally, noncontrolling interests in the consolidated subsidiaries of the Company are reported as a separate component of equity in the Consolidated Condensed Balance Sheet, apart from the Company’s equity. The following table summarizes the changes in total stockholders’ equity (in thousands):
 
 
 
For the Three Months Ended October 31,
 
 
2012
 
2011
 
 
Vail Resorts
Stockholders’
Equity
 
Noncontrolling
Interests
 
Total
Stockholders' Equity
 
Vail Resorts
Stockholders’
Equity
 
Noncontrolling
Interests
 
Total
Stockholders' Equity
Balance, beginning of period
 
$
802,311

 
$
14,017

 
$
816,328

 
$
829,723

 
$
13,996

 
$
843,719

Net loss
 
(60,580
)
 
(23
)
 
(60,603
)
 
(55,709
)
 
(25
)
 
(55,734
)
Stock-based compensation expense
 
3,472

 
—

 
3,472

 
4,032

 
—

 
4,032

Issuance of shares under share award plans, net of shares withheld for taxes
 
(3,989
)
 
—

 
(3,989
)
 
(2,245
)
 
—

 
(2,245
)
Tax benefit from share award plans
 
3,592

 
—

 
3,592

 
927

 
—

 
927

Cash dividends paid on common stock
 
(6,729
)
 
—

 
(6,729
)
 
(5,429
)
 
—

 
(5,429
)
Repurchases of common stock
 
—

 
—

 
—

 
(7,869
)
 
—

 
(7,869
)
Contributions (distributions) from/to noncontrolling interests, net
 
—

 
64

 
64

 
—

 
(46
)
 
(46
)
Foreign currency translation adjustments
 
294

 
—

 
294

 
—

 
—

 
—

Balance, end of period
 
$
738,371

 
$
14,058

 
$
752,429

 
$
763,430

 
$
13,925

 
$
777,355

Fair Value Instruments— The recorded amounts for cash and cash equivalents, trade receivables, other current assets, and accounts payable and accrued liabilities approximate fair value due to their short-term nature. The fair value of amounts outstanding under the Employee Housing Bonds (Note 4, Long-Term Debt) approximate book value due to the variable nature of the interest rate associated with that debt. The fair value of the 6.50% Senior Subordinated Notes due 2019 (“6.50% Notes”) (Note 4, Long-Term Debt) are based on quoted market prices (a Level 1 input). The fair value of the Company’s Industrial Development Bonds (Note 4, Long-Term Debt) and other long-term debt have been estimated using discounted cash flow analyses based on current borrowing rates for debt with similar remaining maturities and ratings (a Level 3 input). The estimated fair values of the 6.50% Notes, Industrial Development Bonds and other long-term debt as of October 31, 2012 are presented below (in thousands):
 
 
 
October 31, 2012
 
 
Carrying
Value
 
Fair
Value
6.50% Notes
 
$
390,000

 
$
424,125

Industrial Development Bonds
 
$
41,200

 
$
47,434

Other long-term debt
 
$
6,598

 
$
7,324



3.
Net Loss Per Common Share
Basic earnings per share (“EPS”) excludes dilution and is computed by dividing net loss attributable to Vail Resorts stockholders by the weighted-average shares outstanding during the period. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised, resulting in the issuance of shares of common stock that would then share in the earnings of Vail Resorts. Presented below is basic and diluted EPS for the three months ended October 31, 2012 and 2011 (in thousands, except per share amounts):
 

F-7


 
 
Three Months Ended October 31,
 
 
2012
 
2011
 
 
Basic
 
Diluted
 
Basic
 
Diluted
Net loss per share:
 
 
 
 
 
 
 
 
Net loss attributable to Vail Resorts
 
$
(60,580
)
 
$
(60,580
)
 
$
(55,709
)
 
$
(55,709
)
Weighted-average shares outstanding
 
35,700

 
35,700

 
36,066

 
36,066

Effect of dilutive securities
 
—

 
—

 
—

 
—

Total shares
 
35,700

 
35,700

 
36,066

 
36,066

Net loss per share attributable to Vail Resorts
 
$
(1.70
)
 
$
(1.70
)
 
$
(1.54
)
 
$
(1.54
)

The Company computes the effect of dilutive securities using the treasury stock method and average market prices during the period. The number of shares issuable on the exercise of share based awards that were excluded from the calculation of diluted net loss per share because the effect of their inclusion would have been anti-dilutive totaled 1.4 million and 1.5 million for the three months ended October 31, 2012 and 2011, respectively.
On June 7, 2011 the Company’s Board of Directors approved the commencement of a regular quarterly cash dividend on the Company's common stock at an annual rate of $0.60 per share, subject to quarterly declaration. On March 5, 2012 the Company’s Board of Directors approved a 25% increase to the annual cash dividend to an annual rate of $0.75 per share, subject to quarterly declaration. The Company paid cash dividends of $0.1875 per share and $0.15 per share ($6.7 million and $5.4 million in the aggregate) during the three months ended October 31, 2012 and 2011, respectively. On November 30, 2012 the Company’s Board of Directors approved a quarterly cash dividend of $0.1875 per share payable on December 27, 2012 to stockholders of record as of December 19, 2012.
 
4.
Long-Term Debt
Long-term debt as of October 31, 2012, July 31, 2012 and October 31, 2011 is summarized as follows (in thousands):
 
 
 
Maturity (a)
 
October 31, 2012
 
July 31, 2012
 
October 31, 2011
Credit Facility Revolver
 
2016
 
$
—

 
$
—

 
$
—

Industrial Development Bonds
 
2020
 
41,200

 
41,200

 
41,200

Employee Housing Bonds
 
2027-2039
 
52,575

 
52,575

 
52,575

6.50% Notes
 
2019
 
390,000

 
390,000

 
390,000

Other
 
2013-2029
 
6,598

 
6,990

 
7,665

Total debt
 
 
 
490,373

 
490,765

 
491,440

Less: Current maturities (b)
 
 
 
848

 
990

 
1,063

Long-term debt
 
 
 
$
489,525

 
$
489,775

 
$
490,377

 
(a)
Maturities are based on the Company’s July 31 fiscal year end.
(b)
Current maturities represent principal payments due in the next 12 months.

Aggregate maturities for debt outstanding as of October 31, 2012 reflected by fiscal year are as follows (in thousands):
 
 
 
2013
$
624

2014
509

2015
533

2016
244

2017
257

Thereafter
488,206

 
 
Total debt
$
490,373

 
 

F-8


The Company incurred gross interest expense of $8.4 million for both the three months ended October 31, 2012 and 2011, respectively, of which $0.5 million was amortization of deferred financing costs. The Company had no capitalized interest during the three months ended October 31, 2012. The Company capitalized $0.1 million of interest during the three months ended October 31, 2011.
 
5.
Acquisitions

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

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


F-9


6.
Supplementary Balance Sheet Information
The composition of property, plant and equipment follows (in thousands):
 
 
October 31, 2012
 
July 31, 2012
 
October 31, 2011
 
 
 
 
 
 
 
Land and land improvements
 
$
282,161

 
$
281,729

 
$
271,777

Buildings and building improvements
 
838,745

 
838,780

 
802,431

Machinery and equipment
 
566,368

 
563,309

 
540,492

Furniture and fixtures
 
245,295

 
243,587

 
216,608

Software
 
85,122

 
81,659

 
66,577

Vehicles
 
46,972

 
44,798

 
41,111

Construction in progress
 
62,907

 
36,979

 
83,808

Gross property, plant and equipment
 
2,127,570

 
2,090,841

 
2,022,804

Accumulated depreciation
 
(1,070,927
)
 
(1,041,634
)
 
(972,778
)
Property, plant and equipment, net
 
$
1,056,643

 
$
1,049,207

 
$
1,050,026

The composition of accounts payable and accrued liabilities follows (in thousands): 
 
 
October 31, 2012
 
July 31, 2012
 
October 31, 2011
 
 
 
 
 
 
 
Trade payables
 
$
87,422

 
$
56,508

 
$
96,807

Deferred revenue
 
134,963

 
78,793

 
123,364

Accrued salaries, wages and deferred compensation
 
19,882

 
21,242

 
18,365

Accrued benefits
 
19,397

 
20,216

 
21,525

Deposits
 
9,633

 
12,031

 
9,163

Accrued interest
 
13,433

 
8,015

 
13,933

Other accruals
 
33,528

 
30,733

 
33,435

 
 
 
 
 
 
 
Total accounts payable and accrued liabilities
 
$
318,258

 
$
227,538

 
$
316,592

 
 
 
 
 
 
 

The composition of other long-term liabilities follows (in thousands):
 
 
October 31, 2012
 
July 31, 2012
 
October 31, 2011
 
 
 
 
 
 
 
Private club deferred initiation fee revenue
 
$
134,134

 
$
135,660

 
$
138,430

Unfavorable lease obligation, net
 
35,390

 
36,058

 
38,061

Other long-term liabilities
 
62,276

 
61,151

 
59,784

 
 
 
 
 
 
 
Total other long-term liabilities
 
$
231,800

 
$
232,869

 
$
236,275

 
 
 
 
 
 
 
 
7.    Variable Interest Entities
The Company is the primary beneficiary of four employee housing entities (collectively, the “Employee Housing Entities”), Breckenridge Terrace, LLC, The Tarnes at BC, LLC, BC Housing, LLC and Tenderfoot Seasonal Housing, LLC, which are variable interest entities (“VIEs”), and has consolidated them in its Consolidated Condensed Financial Statements. As a group, as of October 31, 2012, the Employee Housing Entities had total assets of $30.4 million (primarily recorded in property, plant and equipment, net) and total liabilities of $62.9 million (primarily recorded in long-term debt as “Employee Housing Bonds”). The Company’s lenders have issued letters of credit totaling $53.4 million under the Company's senior credit facility (“Credit Agreement”) related to Employee Housing Bonds. Payments under the letters of credit would be triggered in the event that one of the entities defaults on required payments. The letters of credit have no default provisions.

F-10


The Company is the primary beneficiary of Avon Partners II, LLC (“APII”), which is a VIE. APII owns commercial space and the Company currently leases substantially all of that space. APII had total assets of $4.6 million (primarily recorded in property, plant and equipment, net) and no debt as of October 31, 2012.
 
8.    Fair Value Measurements
The FASB issued fair value guidance that establishes how reporting entities should measure fair value for measurement and disclosure purposes. The guidance establishes a common definition of fair value applicable to all assets and liabilities measured at fair value and prioritizes the inputs into valuation techniques used to measure fair value. Accordingly, the Company uses valuation techniques which maximize the use of observable inputs and minimize the use of unobservable inputs when determining fair value. The three levels of the hierarchy are as follows:
Level 1: Inputs that reflect unadjusted quoted prices in active markets that are accessible to the Company for identical assets or liabilities;
Level 2: Inputs include quoted prices for similar assets and liabilities in active and inactive markets or that are observable for the asset or liability either directly or indirectly; and
Level 3: Unobservable inputs which are supported by little or no market activity.
The table below summarizes the Company’s cash equivalents measured at fair value (all other assets and liabilities measured at fair value are immaterial) (in thousands):
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fair Value Measurement as of October 31, 2012
 
Description
 
Balance at October 31, 2012
 
Level 1
 
Level 2
 
Level 3
 
 
Money Market
 
$
9,025

 
$
9,025

 
$
—

 
$
—

 
Commercial Paper
 
$
630

 
$
—

 
$
630

 
$
—

 
Certificates of Deposit
 
$
630

 
$
—

 
$
630

 
$
—

 
 
 
 
 
 
 
Fair Value Measurement as of July 31, 2012
 
Description
 
Balance at July 31, 2012
 
Level 1
 
Level 2
 
Level 3
 
Money Market
 
$
6,581

 
$
6,581

 
$
—

 
$
—

 
Commercial Paper
 
$
2,441

 
$
—

 
$
2,441

 
$
—

 
Certificates of Deposit
 
$
1,260

 
$
—

 
$
1,260

 
$
—

 
 
 
 
 
 
 
Fair Value Measurement as of October 31, 2011
 
Description
 
Balance at October 31, 2011
 
Level 1
 
Level 2
 
Level 3
 
US Treasury
 
$
8,385

 
$
8,385

 
$
—

 
$
—

 
Certificates of Deposit
 
$
2,807

 
$
—

 
$
2,807

 
$
—


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

9.    Commitments and Contingencies
Metropolitan Districts
The Company credit-enhances $8.0 million of bonds issued by Holland Creek Metropolitan District (“HCMD”) through an $8.1 million letter of credit issued under the Company’s Credit Agreement. HCMD’s bonds were issued and used to build infrastructure associated with the Company’s Red Sky Ranch residential development. The Company has agreed to pay capital improvement fees to Red Sky Ranch Metropolitan District (“RSRMD”) until RSRMD’s revenue streams from property taxes are sufficient to meet debt service requirements under HCMD’s bonds, and the Company has recorded a liability of $1.8 million primarily within “other long-term liabilities” in the accompanying Consolidated Condensed Balance Sheets, as of October 31, 2012, July 31, 2012 and October 31, 2011, respectively, with respect to the estimated present value of future

F-11


RSRMD capital improvement fees. The Company estimates that it will make capital improvement fee payments under this arrangement through the year ending July 31, 2028.
Guarantees/Indemnifications
As of October 31, 2012, the Company had various other letters of credit in the amount of $59.5 million, consisting primarily of $53.4 million in support of the Employee Housing Bonds and $4.3 million for workers’ compensation and general liability deductibles related to construction and development activities.
In addition to the guarantees noted above, the Company has entered into contracts in the normal course of business which include certain indemnifications under which it could be required to make payments to third parties upon the occurrence or non-occurrence of certain future events. These indemnities include indemnities to licensees in connection with the licensees’ use of the Company’s trademarks and logos, indemnities for liabilities associated with the infringement of other parties’ technology and software products, indemnities related to liabilities associated with the use of easements, indemnities related to employment of contract workers, the Company’s use of trustees, indemnities related to the Company’s use of public lands and environmental indemnifications. The duration of these indemnities generally is indefinite and generally do not limit the future payments the Company could be obligated to make.
As permitted under applicable law, the Company and certain of its subsidiaries indemnify their directors and officers over their lifetimes for certain events or occurrences while the officer or director is, or was, serving the Company or its subsidiaries in such a capacity. The maximum potential amount of future payments the Company could be required to make under these indemnification agreements is unlimited; however, the Company has a director and officer insurance policy that should enable the Company to recover a portion of any future amounts paid.

Unless otherwise noted, the Company has not recorded any significant liabilities for the letters of credit, indemnities and other guarantees noted above in the accompanying Consolidated Condensed Financial Statements, either because the Company has recorded on its Consolidated Condensed Balance Sheets the underlying liability associated with the guarantee, the guarantee is with respect to the Company’s own performance and is therefore not subject to the measurement requirements as prescribed by GAAP, or because the Company has calculated the fair value of the indemnification or guarantee to be immaterial based upon the current facts and circumstances that would trigger a payment under the indemnification clause. In addition, with respect to certain indemnifications it is not possible to determine the maximum potential amount of liability under these guarantees due to the unique set of facts and circumstances that are likely to be involved in each particular claim and indemnification provision. Historically, payments made by the Company under these obligations have not been material.
As noted above, the Company makes certain indemnifications to licensees in connection with their use of the Company’s trademarks and logos. The Company does not record any liabilities with respect to these indemnifications.
Self Insurance
The Company is self-insured for claims under its health benefit plans and for the majority of workers’ compensation claims, subject to a stop loss policy. The self-insurance liability related to workers’ compensation is determined actuarially based on claims filed. The self-insurance liability related to claims under the Company’s health benefit plans is determined based on analysis of actual claims. The amounts related to these claims are included as a component of accrued benefits in accounts payable and accrued liabilities (see Note 6, Supplementary Balance Sheet Information).
Legal
The Company is a party to various lawsuits arising in the ordinary course of business. Management believes the Company has adequate insurance coverage and/or has accrued for loss contingencies for all known matters that are deemed to be probable losses and estimable. As of October 31, 2012, July 31, 2012 and October 31, 2011, the accrual for the above loss contingencies was not material individually and in the aggregate.
 
10.    Segment Information
The Company has three reportable segments: Mountain, Lodging and Real Estate. The Mountain segment includes the operations of the Company’s ski resorts and related ancillary services. The Lodging segment includes the operations of all of the Company’s owned hotels, RockResorts, NPS concessionaire properties, condominium management, CME and golf operations. The Real Estate segment owns and develops real estate in and around the Company’s resort communities. The Company’s reportable segments, although integral to the success of the others, offer distinctly different products and services and require different types of management focus. As such, these segments are managed separately.

F-12


The Company reports its segment results using Reported EBITDA (defined as segment net revenue less segment operating expenses, plus or minus segment equity investment income or loss), which is a non-GAAP financial measure. The Company reports segment results in a manner consistent with management’s internal reporting of operating results to the chief operating decision maker (the Chief Executive Officer) for purposes of evaluating segment performance.
Reported EBITDA is not a measure of financial performance under GAAP. Items excluded from Reported EBITDA are significant components in understanding and assessing financial performance. Reported EBITDA should not be considered in isolation or as an alternative to, or substitute for, net income (loss), net change in cash and cash equivalents or other financial statement data presented in the Consolidated Condensed Financial Statements as indicators of financial performance or liquidity. Because Reported EBITDA is not a measurement determined in accordance with GAAP and thus is susceptible to varying calculations, Reported EBITDA as presented may not be comparable to other similarly titled measures of other companies.

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

F-13


The following table presents financial information by reportable segment which is used by management in evaluating performance and allocating resources (in thousands):
 
 
 
Three Months Ended October 31,
 
 
2012
 
2011
Net revenue:
 
 
 
 
Lift tickets
 
$
—

 
$
—

Ski school
 
—

 
—

Dining
 
6,373

 
5,647

Retail/rental
 
26,725

 
26,964

Other
 
18,814

 
17,059

Total Mountain net revenue
 
51,912

 
49,670

Lodging
 
52,508

 
53,594

Total Resort net revenue
 
104,420

 
103,264

Real estate
 
11,930

 
13,109

Total net revenue
 
$
116,350

 
$
116,373

Operating expense:
 
 
 
 
Mountain
 
$
107,548

 
$
98,555

Lodging
 
51,806

 
55,301

Total Resort operating expense
 
159,354

 
153,856

Real estate
 
15,614

 
17,847

Total segment operating expense
 
$
174,968

 
$
171,703

Mountain equity investment income, net
 
$
434

 
$
430

Reported EBITDA:
 
 
 
 
Mountain
 
$
(55,202
)
 
$
(48,455
)
Lodging
 
702

 
(1,707
)
Resort
 
(54,500
)
 
(50,162
)
Real estate
 
(3,684
)
 
(4,738
)
Total Reported EBITDA
 
$
(58,184
)
 
$
(54,900
)
 
 
 
 
 
Real estate held for sale and investment
 
$
227,662

 
$
263,130

 
 
 
 
 
Reconciliation to net loss attributable to Vail Resorts, Inc:
 
 
 
 
Total Reported EBITDA
 
$
(58,184
)
 
$
(54,900
)
Depreciation and amortization
 
(31,679
)
 
(28,930
)
Loss on disposal of fixed assets, net
 
(2
)
 
(114
)
Investment income, net
 
54

 
64

Interest expense, net
 
(8,375
)
 
(8,241
)
Loss before benefit from income taxes
 
(98,186
)
 
(92,121
)
Benefit from income taxes
 
37,583

 
36,387

Net loss
 
$
(60,603
)
 
$
(55,734
)
Net loss attributable to noncontrolling interests
 
23

 
25

Net loss attributable to Vail Resorts, Inc.
 
$
(60,580
)
 
$
(55,709
)


11.     Stock Repurchase Plan
On March 9, 2006, the Company’s Board of Directors approved the repurchase of up to 3,000,000 shares of common stock and on July 16, 2008 approved an increase of the Company’s common stock repurchase authorization by an additional 3,000,000 shares. The Company did not repurchase any shares of common stock during the three months ended October 31, 2012. Since inception of its stock repurchase program through October 31, 2012, the Company has repurchased 4,949,111 shares at a cost of approximately $193.2 million. As of October 31, 2012, 1,050,889 shares remained available to repurchase under the existing

F-14


repurchase authorization. Shares of common stock purchased pursuant to the repurchase program will be held as treasury shares and may be used for the issuance of shares under the Company’s employee share award plan.
 

12.    Guarantor Subsidiaries and Non-Guarantor Subsidiaries
The Company’s payment obligations under the 6.50% Notes (see Note 4, Long-Term Debt) are fully and unconditionally guaranteed on a joint and several, senior subordinated basis by substantially all of the Company’s consolidated subsidiaries (collectively, and excluding Non-Guarantor Subsidiaries (as defined below), the “Guarantor Subsidiaries”), except for Eagle Park Reservoir Company, Larkspur Restaurant & Bar, LLC, Black Diamond Insurance, Inc., Skiinfo AS and certain other insignificant entities (together, the “Non-Guarantor Subsidiaries”). APII and the Employee Housing Entities are included with the Non-Guarantor Subsidiaries for purposes of the consolidated financial information, but are not considered subsidiaries under the indenture governing the 6.50% Notes.
Presented below is the consolidated financial information of the Parent Company, the Guarantor Subsidiaries and the Non-Guarantor Subsidiaries. Financial information for the Non-Guarantor Subsidiaries is presented in the column titled “Other Subsidiaries.” Balance sheets are presented as of October 31, 2012, July 31, 2012, and October 31, 2011. Statements of operations, statements of comprehensive income (loss), and statements of cash flows are presented for the three months ended October 31, 2012 and 2011.
Investments in subsidiaries are accounted for by the Parent Company and Guarantor Subsidiaries using the equity method of accounting. Net income (loss) of Guarantor and Non-Guarantor Subsidiaries is, therefore, reflected in the Parent Company’s and Guarantor Subsidiaries’ investments in and advances to (from) subsidiaries. Net income (loss) of the Guarantor and Non-Guarantor Subsidiaries is reflected in Guarantor Subsidiaries and Parent Company as equity in consolidated subsidiaries. The elimination entries eliminate investments in Other Subsidiaries and intercompany balances and transactions for consolidated reporting purposes.

F-15


Supplemental Condensed Consolidating Balance Sheet
As of October 31, 2012
(in thousands)
(Unaudited)
 
 
 
Parent
Company
 
100%
Owned
Guarantor
Subsidiaries
 
Other
Subsidiaries
 
Eliminating
Entries
 
Consolidated
Current assets:
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
 
$
—

 
$
36,779

 
$
7,206

 
$
—

 
$
43,985

Restricted cash
 
—

 
13,578

 
948

 
—

 
14,526

Trade receivables, net
 
—

 
26,639

 
3,082

 
—

 
29,721

Inventories, net
 
—

 
84,548

 
204

 
—

 
84,752

Other current assets
 
25,782

 
22,827

 
506

 
—

 
49,115

Total current assets
 
25,782

 
184,371

 
11,946

 
—

 
222,099

Property, plant and equipment, net
 
—

 
1,008,799

 
47,844

 
—

 
1,056,643

Real estate held for sale and investment
 
—

 
227,662

 
—

 
—

 
227,662

Goodwill, net
 
—

 
268,058

 
1,801

 
—

 
269,859

Intangible assets, net
 
—

 
72,262

 
19,357

 
—

 
91,619

Other assets
 
6,836

 
42,299

 
5,877

 
(9,459
)
 
45,553

Investments in subsidiaries
 
1,684,088

 
(1,996
)
 
—

 
(1,682,092
)
 
—

Advances
 
(428,299
)
 
425,366

 
2,933

 
—

 
—

Total assets
 
$
1,288,407

 
$
2,226,821

 
$
89,758

 
$
(1,691,551
)
 
$
1,913,435

Current liabilities:
 
 
 
 
 
 
 
 
 
 
Accounts payable and accrued liabilities
 
$
12,906

 
$
297,715

 
$
7,637

 
$
—

 
$
318,258

Income taxes payable
 
17,026

 
—

 
—

 
—

 
17,026

Long-term debt due within one year
 
—

 
629

 
219

 
—

 
848

Total current liabilities
 
29,932

 
298,344

 
7,856

 
—

 
336,132

Long-term debt
 
390,000

 
41,787

 
57,738

 
—

 
489,525

Other long-term liabilities
 
28,050

 
202,602

 
10,607

 
(9,459
)
 
231,800

Deferred income taxes
 
102,054

 
—

 
1,495

 
—

 
103,549

Total Vail Resorts, Inc. stockholders’ equity (deficit)
 
738,371

 
1,684,088

 
(1,996
)
 
(1,682,092
)
 
738,371

Noncontrolling interests
 
—

 
—

 
14,058

 
—

 
14,058

Total stockholders’ equity
 
738,371

 
1,684,088

 
12,062

 
(1,682,092
)
 
752,429

Total liabilities and stockholders’ equity
 
$
1,288,407

 
$
2,226,821

 
$
89,758

 
$
(1,691,551
)
 
$
1,913,435



F-16


Supplemental Condensed Consolidating Balance Sheet
As of July 31, 2012
(in thousands)
 
 
 
Parent
Company
 
100%
Owned
Guarantor
Subsidiaries
 
Other
Subsidiaries
 
Eliminating
Entries
 
Consolidated
Current assets:
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
 
$
—

 
$
38,380

 
$
7,673

 
$
—

 
$
46,053

Restricted cash
 
—

 
13,300

 
984

 
—

 
14,284

Trade receivables, net
 
—

 
64,185

 
1,558

 
—

 
65,743

Inventories, net
 
—

 
65,673

 
200

 
—

 
65,873

Other current assets
 
24,458

 
15,522

 
437

 
—

 
40,417

Total current assets
 
24,458

 
197,060

 
10,852

 
—

 
232,370

Property, plant and equipment, net
 
—

 
1,000,767

 
48,440

 
—

 
1,049,207

Real estate held for sale and investment
 
—

 
237,668

 
—

 
—

 
237,668

Goodwill, net
 
—

 
268,058

 
1,711

 
—

 
269,769

Intangible assets, net
 
—

 
72,751

 
19,319

 
—

 
92,070

Other assets
 
7,113

 
42,939

 
5,937

 
(9,459
)
 
46,530

Investments in subsidiaries
 
1,775,195

 
(553
)
 
—

 
(1,774,642
)
 
—

Advances
 
(421,115
)
 
418,001

 
3,114

 
—

 
—

Total assets
 
$
1,385,651

 
$
2,236,691

 
$
89,373

 
$
(1,784,101
)
 
$
1,927,614

Current liabilities:
 
 
 
 
 
 
 
 
 
 
Accounts payable and accrued liabilities
 
$
6,542

 
$
215,308

 
$
5,688

 
$
—

 
$
227,538

Income taxes payable
 
20,721

 
—

 
—

 
—

 
20,721

Long-term debt due within one year
 
—

 
782

 
208

 
—

 
990

Total current liabilities
 
27,263

 
216,090

 
5,896

 
—

 
249,249

Long-term debt
 
390,000

 
41,817

 
57,958

 
—

 
489,775

Other long-term liabilities
 
28,104

 
203,589

 
10,635

 
(9,459
)
 
232,869

Deferred income taxes
 
137,973

 
—

 
1,420

 
—

 
139,393

Total Vail Resorts, Inc. stockholders’ equity (deficit)
 
802,311

 
1,775,195

 
(553
)
 
(1,774,642
)
 
802,311

Noncontrolling interests
 
—

 
—

 
14,017

 
—

 
14,017

Total stockholders’ equity
 
802,311

 
1,775,195

 
13,464

 
(1,774,642
)
 
816,328

Total liabilities and stockholders’ equity
 
$
1,385,651

 
$
2,236,691

 
$
89,373

 
$
(1,784,101
)
 
$
1,927,614



F-17


Supplemental Condensed Consolidating Balance Sheet
As of October 31, 2011
(in thousands)
(Unaudited) 
 
 
Parent
Company
 
100%
Owned
Guarantor
Subsidiaries
 
Other
Subsidiaries
 
Eliminating
Entries
 
Consolidated
Current assets:
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
 
$
—

 
$
38,060

 
$
6,678

 
$
—

 
$
44,738

Restricted cash
 
—

 
12,881

 
734

 
—

 
13,615

Trade receivables, net
 
—

 
28,664

 
963

 
—

 
29,627

Inventories, net
 
—

 
75,569

 
220

 
—

 
75,789

Other current assets
 
30,700

 
26,744

 
378

 
—

 
57,822

Total current assets
 
30,700

 
181,918

 
8,973

 
—

 
221,591

Property, plant and equipment, net
 
—

 
1,001,793

 
48,233

 
—

 
1,050,026

Real estate held for sale and investment
 
—

 
263,130

 
—

 
—

 
263,130

Goodwill, net
 
—

 
268,058

 
—

 
—

 
268,058

Intangible assets, net
 
—

 
73,205

 
18,155

 
—

 
91,360

Other assets
 
7,876

 
33,739

 
4,568

 
—

 
46,183

Investments in subsidiaries
 
1,633,628

 
(4,696
)
 
—

 
(1,628,932
)
 
—

Advances
 
(358,390
)
 
365,244

 
(6,854
)
 
—

 
—

Total assets
 
$
1,313,814

 
$
2,182,391

 
$
73,075

 
$
(1,628,932
)
 
$
1,940,348

Current liabilities:
 
 
 
 
 
 
 
 
 
 
Accounts payable and accrued liabilities
 
$
13,594

 
$
298,661

 
$
4,337

 
$
—

 
$
316,592

Income taxes payable
 
19,568

 
—

 
—

 
—

 
19,568

Long-term debt due within one year
 
—

 
855

 
208

 
—

 
1,063

Total current liabilities
 
33,162

 
299,516

 
4,545

 
—

 
337,223

Long-term debt
 
390,000

 
42,419

 
57,958

 
—

 
490,377

Other long-term liabilities
 
28,104

 
206,828

 
1,343

 
—

 
236,275

Deferred income taxes
 
99,118

 
—

 
—

 
—

 
99,118

Total Vail Resorts, Inc. stockholders’ equity (deficit)
 
763,430

 
1,633,628

 
(4,696
)
 
(1,628,932
)
 
763,430

Noncontrolling interests
 
—

 
—

 
13,925

 
—

 
13,925

Total stockholders’ equity
 
763,430

 
1,633,628

 
9,229

 
(1,628,932
)
 
777,355

Total liabilities and stockholders’ equity
 
$
1,313,814

 
$
2,182,391

 
$
73,075

 
$
(1,628,932
)
 
$
1,940,348



F-18


Supplemental Condensed Consolidating Statement of Operations
For the three months ended October 31, 2012
(in thousands)
(Unaudited)
 
 
 
Parent
Company
 
100% Owned
Guarantor
Subsidiaries
 
Other
Subsidiaries
 
Eliminating
Entries
 
Consolidated
Total net revenue
 
$
—

 
$
116,004

 
$
3,011

 
$
(2,665
)
 
$
116,350

Total operating expense
 
113

 
204,358

 
4,805

 
(2,627
)
 
206,649

Loss from operations
 
(113
)
 
(88,354
)
 
(1,794
)
 
(38
)
 
(90,299
)
Other expense, net
 
(6,610
)
 
(1,414
)
 
(335
)
 
38

 
(8,321
)
Equity investment income, net
 
—

 
434

 
—

 
—

 
434

Loss before benefit from income taxes
 
(6,723
)
 
(89,334
)
 
(2,129
)
 
—

 
(98,186
)
Benefit from income taxes
 
2,610

 
34,791

 
182

 
—

 
37,583

Net loss before equity in loss of consolidated subsidiaries
 
(4,113
)
 
(54,543
)
 
(1,947
)
 
—

 
(60,603
)
Equity in loss of consolidated subsidiaries
 
(56,467
)
 
(1,924
)
 
—

 
58,391

 
—

Net loss
 
(60,580
)
 
(56,467
)
 
(1,947
)
 
58,391

 
(60,603
)
Net loss attributable to noncontrolling interests
 
—

 
—

 
23

 
—

 
23

Net loss attributable to Vail Resorts, Inc.
 
$
(60,580
)
 
$
(56,467
)
 
$
(1,924
)
 
$
58,391

 
$
(60,580
)

Supplemental Condensed Consolidating Statement of Operations
For the three months ended October 31, 2011
(in thousands)
(Unaudited)
 
 
 
Parent
Company
 
100% Owned
Guarantor
Subsidiaries
 
Other
Subsidiaries
 
Eliminating
Entries
 
Consolidated
Total net revenue
 
$
—

 
$
117,034

 
$
2,066

 
$
(2,727
)
 
$
116,373

Total operating expense
 
128

 
200,266

 
3,042

 
(2,689
)
 
200,747

Loss from operations
 
(128
)
 
(83,232
)
 
(976
)
 
(38
)
 
(84,374
)
Other expense, net
 
(6,599
)
 
(1,283
)
 
(333
)
 
38

 
(8,177
)
Equity investment income, net
 
—

 
430

 
—

 
—

 
430

Loss before benefit from income taxes
 
(6,727
)
 
(84,085
)
 
(1,309
)
 
—

 
(92,121
)
Benefit from income taxes
 
3,044

 
33,343

 
—

 
—

 
36,387

Net loss before equity in loss of consolidated subsidiaries
 
(3,683
)
 
(50,742
)
 
(1,309
)
 
—

 
(55,734
)
Equity in loss of consolidated subsidiaries
 
(52,026
)
 
(1,284
)
 
—

 
53,310

 
—

Net loss
 
(55,709
)
 
(52,026
)
 
(1,309
)
 
53,310

 
(55,734
)
Net loss attributable to noncontrolling interests
 
—

 
—

 
25

 
—

 
25

Net loss attributable to Vail Resorts, Inc.
 
$
(55,709
)
 
$
(52,026
)
 
$
(1,284
)
 
$
53,310

 
$
(55,709
)


F-19


Consolidated Condensed Statements of Comprehensive Income (Loss)
For the three months ended October 31, 2012
(In thousands)
(Unaudited)

 
 
Parent
Company
 
100% Owned
Guarantor
Subsidiaries
 
Other
Subsidiaries
 
Eliminating
Entries
 
Consolidated
Net loss
 
$
(60,580
)
 
$
(56,467
)
 
$
(1,947
)
 
$
58,391

 
$
(60,603
)
Foreign currency translation adjustments
 
294

 
294

 
294

 
(588
)
 
294

Comprehensive loss
 
(60,286
)
 
(56,173
)
 
(1,653
)
 
57,803

 
(60,309
)
Comprehensive loss attributable to noncontrolling interests
 
—

 
—

 
23

 
—

 
23

Comprehensive loss attributable to Vail Resorts, Inc.
 
$
(60,286
)
 
$
(56,173
)
 
$
(1,630
)
 
$
57,803

 
$
(60,286
)


Consolidated Condensed Statements of Comprehensive Income (Loss)
For the three months ended October 31, 2011
(In thousands)
(Unaudited)

 
 
Parent
Company
 
100% Owned
Guarantor
Subsidiaries
 
Other
Subsidiaries
 
Eliminating
Entries
 
Consolidated
Net loss
 
$
(55,709
)
 
$
(52,026
)
 
$
(1,309
)
 
$
53,310

 
$
(55,734
)
Foreign currency translation adjustments
 
—

 
—

 
—

 
—

 
—

Comprehensive loss
 
(55,709
)
 
(52,026
)
 
(1,309
)
 
53,310

 
(55,734
)
Comprehensive loss attributable to noncontrolling interests