Summit County, CO Colorado

BROOMFIELD — Thursday, Vail Resorts Inc. (NYSE: MTN) announced a strong fiscal year ending July 31.

Net income improved by 34.2 percent over last fiscal year. Colorado was up 7 percent in destination skiers, due to the perception of better snow than most of the country. However, overall, visitation was down 1.1 percent, due to challenging Front Range weather and less actual snow in the mountains. Comparatively, Heavenly in California, showed a 12 percent decline in skier visits. In Colorado, ticket revenue was up 10.3 percent, while season pass sales were up 17.3 percent.

During the 2006-07 season, Breckenridge, Vail and Keystone were the three most visited ski resorts in the nation, with Heavenly and Beaver Creek ranking in the top 10. All five ski resorts also made the top 20 rankings in SKI Magazine.

Season pass sales are up 4 percent this year over last, with a total 16 percent increase in sales dollars, due to an 11 percent increase in pass price.

The resort made significant capital investment into its Vail Valley resorts, with a new children’s gondola called Buckaroo Express at Beaver Creek, and two new high-speed quads at Vail, replacing chairs 10 and 14 and allowing faster and more convenient access to its back bowls. Heavenly is also getting a new high speed quad and a zip line that soars visitors toward Lake Tahoe.

The numbers

Lodging reservations at all five mountains for this season are up 3 percent, with a 13 percent overall increase due to an increase in lodging prices. The Lodge at Vail is already sold out for the Christmas holiday. Overall, lodging revenue increased $6.6 million, or 4.3 percent for the fiscal year, to $162 million, from $155.8 million for the 2006 fiscal year. However, lodging expense increased $1.6 million, or 1.1 percent, to $144.3 million.

Resort revenue, or the combination of mountain and lodging revenue, increased $51.6 million, or 6.6 percent, to $827.8 million. But resort expense also increased to $21.2 million, or 3.6 percent, to $607 million.

Real estate revenue increased $50.1 million, or 80 percent, to $112.7 million. Real estate expense increased 103.2 percent to $115.2 million.

The future

“Fiscal 2008 will mark an exciting time for our company as we begin to transition from construction of our vertical real estate development projects to closing on these projects,” Vail Resorts’ CEO Rob Katz told analysts Thursday.

All of the units at both The Arrabelle and The Lodge at Vail Chalets are under contract, and in fiscal 2008, the company expects to close on all of The Arrabelle units and a portion of The Lodge at Vail Chalets, with the remainder closing in early fiscal 2009. The Arrabelle is set to open in January. With the marketing of The Ritz-Carlton Residences, Vail continues with 71 whole ownership units and 45 fractional ownership units. It currently has a total of 46 whole ownership units and 45 fractional units under contract, representing 66 percent of total expected revenue.

This winter, the company plans to begin marketing the first building of One Ski Hill Place at Breckenridge Peak 8. It is the first in a phased five- to six-building multi-use development, with the first building including 90 ski in, ski out residences.

“We expect to continue to drive year-over-year performance and are very optimistic for the upcoming season as we conclude another record fiscal year,” Katz said.

Katz estimates a full year resort reported EBITDA, the combination of mountain and lodging segments, to range from $239 to $249 million.

This fiscal year, total revenue increased $101.7 million, or 12.1 percent, to $950.5 million. Income from operations increased $22.9 million, or 21.7 percent.

“I am very pleased with our fiscal 2007 results,” Katz said. “Our seasonally low fourth quarter results were clearly in line with our expectations.”

At closing Wednesday, Vail Resorts’ stock was priced at $60.24. By 9 a.m. Mountain Standard Time, when the conference call was scheduled, the stock was already up to $62.53.

The company’s subsidiaries operate the mountain resorts of Vail, Beaver Creek, Breckenridge and Keystone in Colorado, Heavenly in California and Nevada, and the Grand Teton Lodge Company in Jackson Hole, Wyo. The company’s subsidiary, RockResorts, a luxury resort hotel company, manages properties across the United States and the Caribbean. Vail Resorts Development Company is the real estate planning, development and construction subsidiary of Vail Resorts, Inc.

<I> Kim Nicoletti can be reached at (970) 668-4651 or at knicoletti@summitdaily.com. </I>