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Growth Conference
Jeff Jones
Chief Financial Officer
The Company uses the terms “Reported EBITDA” and “Net Debt” when
reporting financial results in accordance with Securities and Exchange
Commission rules regarding the use of non-GAAP financial measures. The
Company defines Reported EBITDA as segment net revenue less segment
operating expense plus or minus segment equity investment income or loss
and for the Real Estate segment plus gain on sale of real property. The
Company defines Net Debt as long-term debt plus long-term debt due within
one year less cash and cash equivalents.
2
Caution on Forward Looking Statements
Except for any historical information contained herein, the matters discussed in this presentation contain certain
forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These
statements relate to analyses and other information, which are based on forecasts of future results and estimates
of amounts not yet determinable. These statements also relate to our future prospects, developments and
business strategies.
These forward-looking statements are identified by their use of terms and phrases such as "anticipate," "believe,"
"could," "estimate," "expect," "intend," "may," "plan," "predict," "project," "will" and similar terms and phrases,
including references to assumptions. Although we believe that our plans, intentions and expectations reflected in
or suggested by such forward-looking statements are reasonable, we cannot assure you that such plans, intentions
or expectations will be achieved. Important factors that could cause actual results to differ materially from our
forward-looking statements include, but are not limited to: prolonged downturn in general economic conditions,
including continued adverse affects on the overall travel and leisure related industries; unfavorable weather
conditions or natural disasters; competition in our mountain and lodging businesses; our ability to grow our resort
and real estate operations; our ability to successfully complete real estate development projects and achieve the
anticipated financial benefits from such projects; further adverse changes in real estate markets; continued
volatility in credit markets; our ability to obtain financing on terms acceptable to us to finance our real estate
development, capital expenditures and growth strategy; our reliance on government permits or approvals for our
use of Federal land or to make operational improvements; adverse consequences of current or future legal claims;
our ability to hire and retain a sufficient seasonal workforce; willingness of our guests to travel due to terrorism,
the uncertainty of military conflicts or outbreaks of contagious diseases, and the cost and availability of travel
options; negative publicity or unauthorized use of our trademarks which diminishes the value of our brands; our
ability to integrate and successfully operate future acquisitions; and implications arising from new Financial
Accounting Standards Board (“FASB”)/governmental legislation, rulings or interpretations. All forward-looking
statements attributable to us or any persons acting on our behalf are expressly qualified in their entirety by these
cautionary statements. All forward-looking statements attributable to us or any persons acting on our behalf are
expressly qualified in their entirety by these cautionary statements. All guidance and forward-looking statements
in this presentation are made as of the date hereof and we do not undertake any obligation to update any forecast
or forward-looking statements, except as may be required by law. Investors are also directed to other risks
discussed in documents filed by the Company with the Securities and Exchange Commission.
If one or more of these risks or uncertainties materialize, or if underlying assumptions prove incorrect, our actual
results may vary materially from those expected, estimated or projected. Given these uncertainties, users of the
information included in this presentation, including investors and prospective investors, are cautioned not to place
undue reliance on such forward-looking statements. 3
About Vail Resorts
4
Three Integrated and Interdependent Segments
Mountain
Five world-class mountain resorts: Vail, Breckenridge, Keystone, Heavenly and
Beaver Creek
5 of the top 10 most visited resorts in the U.S. including the #1 and #2 most
visited
Ancillary businesses including ski school, dining (90+ restaurants), retail/rental
(150+ locations), commercial leasing and private clubs
Lodging
RockResorts: 8 hotels (4 owned, 4 managed) with several more under
construction
13 non-RockResorts hotels including those in Grand Teton Lodge Company, a
summer destination resort
Approximately 3,900 owned and managed hotel/condominium rooms
Colorado Mountain Express, a resort ground transportation business
6 golf courses in Colorado and Jackson Hole, Wyoming
Real Estate
Vertical real estate development at the base of our mountain resorts
Real estate held for sale as of 7/31/09 of $311.5 million
5
Keys to Our Business Model
7
FY2010 Guidance
FY2010 Guidance Range FY2009
(in thousands) Low End High End Actual
(1)
Mountain Reported EBITDA $ 170,000 $ 180,000 $ 164,389
(2)
Lodging Reported EBITDA 5,000 11,000 6,759
(3)
Resort Reported EBITDA 178,000 188,000 171,148
(4)
Real Estate Reported EBITDA (8,000) - 44,080
Total Reported EBITDA 170,000 188,000 215,228
Depreciation and amortization (111,000) (111,000) (107,213)
Loss on disposal of fixed assets, net (1,100) (1,100) (1,064)
Investment income 800 850 1,793
Interest expense, net (17,000) (17,000) (27,548)
Minority interest in income of consolidated subsidiaries, net na na (1,602)
Income before provision for income taxes 41,700 59,750 79,594
Provision for income taxes (16,050) (23,000) (30,644)
Net income $ 25,650 $ 36,750 $ 48,950
(1) Mountain Reported EBITDA includes approximately $5 million of stock-based compensation in FY10 guidance, $4.8 million in FY09 actual.
(2) Lodging Reported EBITDA includes approximately $2 million of stock-based compensation in FY10 guidance, $1.8 million in FY09 actual.
(3) Resort represents the sum of Mountain and Lodging. The Company provides Reported EBITDA ranges for the Mountain and Lodging segments,
as well as for the two combined. Readers are cautioned to recognize that the low end of the expected ranges provided for the Lodging and Mountain
segments, while possible, do not sum to the low end of the Resort Reported EBITDA range provided because we do not necessarily expect or assume
that we will actually hit the low end of both ranges, as the actual Resort Reported EBITDA will depend on the actual mix of the Lodging and Mountain
components. Similarly, the high end of the ranges for the Lodging and Mountain segments do not sum to the high end of the Resort Reported
EBITDA range.
(4) Real Estate Reported EBITDA includes approximately $4 million of stock-based compensation in FY guidance, $4.1 million in FY09 actual. 8
Growth Strategy - Opportunities
Organic Strategic
Lift ticket revenue RockResorts
Season pass sales (net of cannibalization)
“Paid” skier visits Mountain resorts
Ancillary Mountain business Complementary businesses
Yields
New products / offerings
Outdoors / travel
9
FY2009 Financial Results and Ski Season Metrics
10
Fiscal Year 2009 Financial Highlights
Delivered solid results given the unprecedented economic
environment
Key Mountain segment metrics remained relatively
consistent over the course of the 2008/2009 ski season
Lower destination visitation and guest spend
Strength of the season pass program partially mitigated
economic impacts
09/10 season pass sales carrying momentum into FY10
Lodging segment experienced a much closer-in booking
window
RevPAR down to prior year, but outperformed industry comp set
Cost savings measures
Insulated bottom line from impact of the downturn in travel & leisure
Still had improved company-wide guest satisfaction scores
Successful real estate project closings
Solid balance sheet 11
Economic Environment During 08/09 Ski Season
13,000
61.4
58.5
12,000
54.8
Dow Jones Industrial Average
9.8%
11,000 9.5%
Unemployment
8.9% 53.1
Rate 49.3
10,000
8.1%
9,000
40.8
8,000 6.8% Dow
37.4
6.2%
7,000
CCI
6,000
25.3
5,000
Aug-10 Sep-28 Nov-16 Jan-4 Feb-22 Apr-12 May-31 Jul 20 Sept 7
2008 2009
Dec. 07 – Mar. 08 Ranges:
CCI: 65.9 – 90.6
Dow: 11,740 – 13,727
12
Source: Dow Jones & Company, U.S. Bureau of Labor Statistics and The Conference Board
Visitation Metrics
(Visits in 000's) FY2009 FY2008 % Var
0.0 %
(1.0)%
(2.0)%
(3.0)%
(3.5)%
(4.0)%
(5.0)%
(6.0)%
(6.5)%
(7.0)%
(6.9)%
(7.6)%
(8.0)%
Vail Resorts' Colorado Utah Resorts Colorado Ski Country Aspen Ski Company
Resorts Member Resorts
(Non-Vail Resorts)
14
Season Pass Mix of Lift Revenue
Season passes continue to be a larger percentage of total lift ticket
revenue with pass revenue up y-o-y 21.7% in 08/09
Number of season passes sold up 12.2%
• Epic Season Pass has grown this mix significantly (nearly 60,000 Epic Season Passes sold in first
year of this new pass)
Effective season pass price up 8.3%
Season pass average usage up - 10.6 times in 08/09 vs. 9.7 times in 07/08
Lower visitation excluding season pass holders has also contributed to the mix
shift in FY09
Total Lift Revenue Total Lift Revenue Total Lift Revenue
$56m
$78m
Pass Revenue
Pass Revenue $94m
24%
26% Pass Revenue
34%
Paid Ticket Revenue Paid Ticket
Paid Ticket Revenue Revenue
76% 74% 66%
16
Ancillary Mountain Segment Revenue
17
New Ski School Initiatives
18
New Dining Initiatives
19
Lodging Segment Snapshot
20
Cost Savings Measures
Announced two rounds of cost savings initiatives
during FY09, while not detracting from guest
experience
Round 1
• Suspension of 401K match
• Targeted staff reductions
• Consolidating purchasing activities
• Reducing outside third party fees and other operating
expenses
Pass Revenue
25%
Round 2 - targeted at reducing labor costs
• Company-wide wage reduction plan
– Effective in April 2009
– Salaries reduced from 2.5% for seasonal employees to
10% for executives
– CEO took zero pay for one year from April 2009
– All affected full-time, year-round employees received
stock grants
• Elimination of selected positions and the conversion of
certain employees from year-round to seasonal
Full year impact of savings in FY10
Company-wide overall guest satisfaction scores
improved over the prior year 21
FY09 Real Estate Accomplishments
22
Real Estate Projects Under Construction
Pass Revenue
25%
Spent to date as of July 31, 2009:
approximately $245 million
Remaining development costs
expected to be spent as of July 31,
2009: approximately $190 million to
$210 million
To be funded with cash on hand, cash
generated from operations and
revolver, as necessary
Total expected cost per square foot of
One Ski Hill Place $962 and Ritz-
Carlton Residences, Vail of $1,148 23
Capitalization
24
Significant Available Liquidity
Solid capital structure and balance sheet position, which
offers greater flexibility during these times of economic
uncertainty
Net debt to LTM Total Reported EBITDA of less than 2x
at July 31, 2009
No revolver borrowings currently under the Company’s
$400 million Senior Credit Facility, which matures in
2012 ($95 million of Letters of Credit outstanding)
Virtually no principal maturities due on any of our debt
through 2014
Strong free cash flow generation from Resort business
Well positioned to weather the current economic
environment, while completing existing real estate
project development 25
Capital Investments
26
Summary
27
Reconciliation of Non-GAAP
Financial Measures
28
Reconciliation of Non-GAAP Financial Measures
(In thousands)
(Unaudited)
Twelve Months Ended
July 31,
2009 2008
(In thousands)
As of July 31,
2009
30