PRNewswire-FirstCall VAIL, Colo. Nov. 13 :

Vail Resorts, Inc. announced today financial results for the fourth
quarter and fiscal year ended July 31, 2003. The Company has historically
used EBITDA when reporting its financial results for each of its
reportable segments: mountain, lodging, resort (the combination of
mountain and lodging) and real estate. EBITDA was defined by the Company
as segment net revenue less segment operating expense plus segment equity
income. In conjunction with the recently adopted Securities and Exchange
rules regarding the use of non-GAAP financial measures, the Company will
henceforth use the term “Reported EBITDA” when reporting financial
results. The Company defines Reported EBITDA in the same manner in which
it historically defined EBITDA.
Mountain revenue for the fourth quarter of fiscal 2003 was $34.8 million,
a 9.3% increase from $31.9 million for the comparable period last year.
Lodging revenue for the fourth quarter fell $1.4 million, or 3.5%, to
$39.3 million.
Resort revenue, the combination of mountain and lodging revenues, rose
$1.6 million, or 2.2%, to $74.1 million. Real estate revenue for the
fourth quarter fell $4.5 million to $5.0 million, and total revenue
declined $3.0 million, or 3.6%, to $79.1 million.
Loss from operations for the fourth quarter increased $7.7 million, or
16.8%, to a loss of $53.6 million compared to a loss of $45.9 million for
the same period last year.
Reported EBITDA for the mountain segment decreased 5.7% to a loss of $27.1
million compared to a loss of $25.7 million for the comparable period last
year.
Reported EBITDA for the lodging segment decreased $2.8 million to a loss
of $4.1 million for the quarter; $2.2 million of the decrease was
attributed to the Ritz-Carlton, Bachelor Gulch, which opened in November
of fiscal 2003. As the Company uses the equity method of accounting for
the Ritz-Carlton, Bachelor Gulch, included in the fourth quarter loss is
$0.6 million of depreciation and $0.9 million of interest expense.

Fourth quarter Resort Reported EBITDA was a loss of $31.2 million, a 16.0%
decrease from the comparable period last year, and “same-store” Resort
Reported EBITDA, excluding the Ritz-Carlton, fell 7.7% versus the fourth
quarter in fiscal 2002.

Real Estate Reported EBITDA for the quarter declined $2.3 million to a
loss of $1.0 million from a profit of $1.8 million in the same quarter a
year ago, due to the timing of real estate closings. Fourth quarter net loss increased $0.4 million to a loss of $33.7 million,
or $0.96 per diluted share, compared to a loss of $33.3 million, or $0.95
per diluted share, for the same period last year.

Mountain revenue for the fiscal year ended July 31, 2003 was $470.1
million, a 17.4% increase from $400.5 million for the comparable period
last year. Excluding the acquisition of the Heavenly Ski Resort, the
fiscal year “same-store” mountain revenue rose 2.6% compared to the same
period last year.
Lodging revenue for the fiscal year rose $8.9 million, or 5.9%, to $159.8
million, and excluding the fiscal 2002 acquisitions, “same-store” lodging
revenue declined 1.9% compared to the same period last year.
Resort revenue increased $78.6 million, or 14.3%, to $630.0 million.
Excluding the fiscal 2002 acquisitions, “same-store” resort revenue
increased 1.6% compared to the same period last year.
Real estate revenue for the period rose $16.5 million to $80.4 million, a
25.9% increase compared to the same period last year, and total revenue
rose $95.1 million, or 15.5%, to $710.4 million.

Income from operations for the fiscal year decreased $14.6 million, or
29.7%, to $34.5 million compared to the same period last year.
Mountain Reported EBITDA increased $7.0 million, or 7.6%, to $100.4
million. Excluding the Heavenly acquisition, “same-store” Reported EBITDA
for the mountain segment fell 13.0% compared to the same period last year.
Lodging Reported EBITDA decreased $10.4 million, or 76.3%, to $3.2 million
for the year, with $5.8 million of the decrease attributed to the Ritz-
Carlton, Bachelor Gulch, including $1.5 million of depreciation and $1.8
million of interest expense. Excluding the Ritz-Carlton and the
acquisitions made in fiscal 2002, Reported EBITDA for the lodging segment
fell 16.2%.
Resort Reported EBITDA for the year was $103.6 million, a 3.1% decrease
from the comparable period last year, and “same-store” Resort Reported
EBITDA (excluding Heavenly, the fiscal 2002 lodging acquisitions, and the
Ritz- Carlton) fell 13.3% versus the prior year.
Real Estate Reported EBITDA for the fiscal year rose $2.4 million, or
16.0%, to $17.7 million.
Net loss for the year was $8.5 million, or a loss of $0.24 per diluted
share, compared to net income of $7.1 million, or income of $0.20 per
diluted share, for the same period last year.

Adam Aron, Chairman and Chief Executive Officer, commented, “Obviously,
Vail Resorts` financial results for fiscal 2003 are very disappointing.
Several factors combined to generate Vail Resorts` first net loss in ten
years and the first since becoming a public company in 1997. Far and away,
the biggest problem we had to address in fiscal 2003 was the build up to
and actual war with Iraq during our most profitable months, as well as the
war`s aftermath, which taken together depressed the Company`s mountain and
lodging revenues from January through fiscal year-end in July. Also
notable are: pre- opening startup expenses and first year net losses of
approximately $6 million associated with the Ritz-Carlton, Bachelor Gulch;
approximately $3 million in severance expense resulting from our efforts
to streamline the Company`s costs; an increase in workers compensation
expenses and reserves; the national rise in employee health care costs
from which we are not immune; and a surprising court ruling, which we have
appealed, in litigation concerning undeveloped land near Vail Mountain,
causing the Company to take a $4.8 million asset impairment charge.”

Aron added, “Even so, Vail Resorts made notable progress in fiscal 2003.
Highlights in our mountain division include Beaver Creek having a record
ski season with over 718,000 skier visits up from 658,000 in the prior
year, primarily due to the November 2002 opening of the impressive new
Ritz-Carlton, Bachelor Gulch. Also, as we said earlier in the year,
Heavenly performed much better than expected, even with the challenges
presented by world events. Heavenly`s skier visits rose by more than
125,000 and confirmed our judgement in acquiring Lake Tahoe`s leading ski
resort in May of 2002 on favorable terms. As for lodging, the Vail
Marriott underwent an extensive renovation and esthetics upgrade. And,
revenues markedly improved at the Snake River Lodge and Spa as a result of
its comprehensive renovation in fiscal 2002. Our real estate group had
another record financial year. It also submitted formal plans for approval
to the town of Vail for `Vail`s New Dawn,` the long awaited re-development
for a refined Vail Village and a new Lionshead. Additionally, we received
final zoning approval for a new residential base village at Breckenridge`s
Peak 7 and Peak 8.”

Aron said, “We continue to believe that Vail Resorts is very well
positioned for 2004 and beyond. Our confidence stems from improving
economic conditions, the hope that new military conflict does not erupt,
and the inherent consumer appeal of our ski resorts, luxury hotels and new
real estate developments. We are always proud when others recognize the
excellence of our resorts. SKI Magazine, in October 2003 in its annual
readers` poll, once again selected Vail as the number one ski resort in
North America. Breckenridge, Keystone and Heavenly each moved up four
spots in the rankings, such that three of our five resorts now rank in
North America`s top ten, and all five of our resorts rank in the top 15.
Similarly, our lodging group fared well. Conde Nast Traveler, in its 2003
annual Gold List readers poll, praised three of our 10 RockResorts as well
as our Grand Teton Lodge Company`s Jenny Lake Lodge. As for the efforts of
our real estate group, Golf Magazine, in its March 2003 editor`s picks,
named Red Sky Ranch one of the ten best new golf courses to open in the
United States in the past year.”
“Looking to fiscal 2004, we proceed with optimism that the outbreak and
aftermath of war with Iraq will not scar our fiscal 2004 financial
results, and that the underlying national economy is picking up strength.
We are heartened that cold temperatures and natural snowfall have arrived,
as but one example with almost three feet of fresh snow at Beaver Creek
since November first. We are similarly comforted that year-to-date
revenues booked into our central reservations system across all five of
our ski resorts combined are up 8% versus this time last year, and
bookings for the Christmas holidays look especially bright for Vail and
Breckenridge, the two most visited of our resorts. Similarly, air bookings
into the Vail Valley`s Eagle County airport are also encouraging, up 3%
year-over-year so far. This is all particularly positive news, considering
we had a strong early season last year, while our weakness in bookings
occurred last year deeper into the ski season as talk of war escalated.
Also, Colorado Front Range advance season pass sales, which account for
approximately 20% of annual lift ticket revenues for our four Colorado
resorts, have also been robust this year, up 5%. And finally, and perhaps
of greatest importance, in June we announced that our management group has
worked diligently to identify year-over-year expense reduction initiatives
totaling more than $25 million that we believe will be realized in the
2004 fiscal year, all the while preserving Vail Resorts` longstanding
commitment to providing an exceptional guest experience,” added Aron.

Aron further stated, “For these reasons, we are upbeat about the potential
growth in the financial results for our mountain and lodging segments in
fiscal 2004. Of course, this assumes normal snowfall, no new significant
war or terrorism activity, and no additional adverse conclusions to
matters in litigation.”

Aron concluded by saying, “As such, we currently expect Mountain Reported
EBITDA for fiscal 2004 to range from $120 million to $130 million and
Lodging Reported EBITDA to range from $6 to $12 million, with total Resort
Reported EBITDA between $130 and $140 million. We also anticipate another
good year in our real estate operations and are comfortable giving
guidance of $13 to $19 million for Real Estate Reported EBITDA in fiscal
2004. We are also currently projecting positive net income in fiscal 2004,
ranging from $2 million to $10 million.”
For further discussion of the contents of this press release, as well as
the Company`s press release also issued today concerning prior year
earnings, please listen to our live webcast today at 11:30 am EST,
available on http://www.vailresorts.com/. In order to access the non-GAAP
financial information that will be referenced on the call, click on the
Regulation G Compliance section under the Investor Relations tab on
http://www.vailresorts.com/.

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