Park City/Talisker-Vail Lawsuit

[thetrailboss]

Vail also really badly wanted an in with the Utah market. Hence, Canyons/PCMR. They are this close ----> <---- to getting it all.....

 

[Highway Star]

I am well aware of what the lawsuit is about - and that it is not about Killington. I trusted that you were intelligent enough to understand that the discussion had gone beyond the scope of the pending lawsuit. My apologies for not clarifying that for you. I also understand that you've been seeking an excuse to be belligerent and didn't have the patience to wait for a good opportunity.

You make an extremely strong claim, regarding Vail's interest in Killington.......based on....nothing?

Why don't you go off and read one of Vail's annual reports, before making wild claims...? Here's the link!

http://files.shareholder.com/downlo...95C900/2013_Proxy_Statement_and_10-K_Wrap.pdf

So, lets cut to the important parts:

Mountain Segment

Our portfolio of world-class ski resorts and urban ski areas currently includes:

• Vail Mountain (“Vail Mountain”) - the single most visited ski resort in the United States for the 2012/2013 ski season and the single largest ski mountain in the United States. Vail Mountain offers some of the most expansive and varied
terrain in North America with approximately 5,300 skiable acres including seven world renowned back bowls and the
resort's rustic Blue Sky Basin.

• Breckenridge Ski Resort (“Breckenridge”) - the second most visited ski resort in the United States for the 2012/2013 ski season and host of the highest chairlift in North America, the Imperial Express SuperChair, reaching 12,840 feet
and offering above tree line expert terrain. Breckenridge is well known for its historic town, vibrant nightlife and
progressive and award-winning pipes and parks.

• Keystone Resort (“Keystone”) - the fourth most visited ski resort in the United States for the 2012/2013 ski season and home to the highly renowned A51 Terrain Park as well as the largest area of night skiing in Colorado. Keystone also
offers guests a unique skiing opportunity through guided snow cat ski tours accessing five bowls. Keystone is a
premier destination for families with its “Kidtopia” program focused on providing activities for kids on and off the
slopes.

• Beaver Creek Resort (“Beaver Creek”) - the fifth most visited ski resort in the United States for the 2012/2013 ski season. Beaver Creek is a European -style resort with multiple villages and also includes a world renowned children's
ski school program focused on providing a first-class experience with unique amenities such as a dedicated children's
gondola. Beaver Creek also annually hosts the only North American men's World Cup downhill races.

• Heavenly Mountain Resort (“Heavenly”) - the sixth most visited ski resort in the United States for the 2012/2013 ski season and the second largest ski resort in the United States with over 4,800 skiable acres. Heavenly, located near the
South Shore of Lake Tahoe, straddles the border of California and Nevada and offers unique and spectacular views of
Lake Tahoe. Heavenly boasts the largest snowmaking capacity in the Lake Tahoe region and offers great nightlife
including its proximity to several casinos.

• Northstar Resort (“Northstar”) - Northstar is located near the North Shore of Lake Tahoe and offers over 3,000 skiable acres. Northstar is host to a modern base area village featuring unique shops and restaurants, a conference center, a
9,000 square-foot skating rink and on-site lodging and is the premier luxury resort destination near Lake Tahoe.

• Kirkwood Mountain Resort (“Kirkwood”) - Kirkwood is located southwest of South Lake Tahoe and offers a unique location atop the Sierra Crest with elevations ranging 7,800 to 9,800 feet. Kirkwood is recognized by skiers and
snowboarders as offering some of the best high alpine advanced terrain in North America with 2,000 feet of vertical
drop and over 2,300 acres of terrain.

• Canyons Resort ("Canyons") - Canyons (transaction entered into in May 2013) is the largest ski resort in Utah offering over 4,000 skiable acres and features a modern base area located less than 35 miles from the Salt Lake City
International Airport. The resort has benefited from $75 million in recent resort improvements and offers guests an
outstanding ski experience and is adjacent to the historic downtown of Park City and all of its distinctive restaurants
and nightlife.

• Urban ski areas - Afton Alps Ski Area ("Afton Alps") (acquired in December 2012) is the largest ski area near a major city in the Midwest (33 miles from the Minneapolis-St. Paul metropolitan area) and offers 48 trails on 300 skiable
acres, with night skiing, riding and tubing. Mount Brighton Ski Area ("Mt. Brighton") (acquired in December 2012) is
located 43 miles from Detroit and offers 26 trails on 130 skiable acres offering night skiing and riding.

Ski Industry/Market

There are approximately 760 ski areas in North America and approximately 478 in the United States, ranging from small ski
area operations that service day skiers to large resorts that attract both day skiers and destination resort guests looking for a
comprehensive vacation experience. One of the primary ski industry statistics for measuring performance is “skier visit,”
which represents a person utilizing a ticket or pass to access a mountain resort for any part of one day, and includes both paid
and complimentary access. During the 2012/2013 ski season, combined skier visits for all ski areas in the United States were
approximately 56.9 million and all North American skier visits were approximately 75.5 million. Our ski resorts and ski areas
had approximately 7.0 million skier visits during the 2012/2013 ski season, or approximately 12.3% of United States skier
visits, and an approximate 9.3% share of the North American market's skier visits. Our principal markets are Colorado and the
Lake Tahoe region.

Lodging Segment

Our Lodging segment includes the following operations:

• RockResorts -- a luxury hotel management company with a current portfolio of six properties, including four
Company-owned hotels and two managed resort properties with locations in Colorado and Jamaica;

• Five additional Company-owned hotels, management of the Vail Marriott Mountain Resort & Spa (“Vail Marriott”),
Mountain Thunder Lodge, Crystal Peak Lodge, Austria Haus Hotel, Grand Summit Hotel, Silverado Lodge, Sundial
Lodge and condominium management operations, which are in and around our ski resorts in the Colorado, Lake Tahoe
and Park City, Utah regions;

• Two National Park Service (“NPS”) concessionaire properties - (1) GTLC, a summer destination resort with three
resort properties in the Grand Teton National Park, and (2) Headwaters Lodge & Cabins at Flagg Ranch (“Flagg
Ranch”), and is located between Yellowstone National Park and Grand Teton National Park;

• CME -- a resort ground transportation company in Colorado; and

• Five Company-owned mountain resort golf courses in Colorado, one in Wyoming and one operated in Lake Tahoe,
California.

The Lodging segment currently includes approximately 5,100 owned and managed hotel and condominium rooms. Our resort
hotels collectively offer a wide range of services to guests.

Real Estate Segment

We have extensive holdings of real property at our resorts throughout Summit and Eagle Counties in Colorado. Our real estate
operations, through Vail Resorts Development Company (“VRDC”), a wholly-owned subsidiary, include the planning,
oversight, infrastructure improvement, development, marketing and sale of our real property holdings. In addition to the cash
flow generated from real estate development sales, these development activities benefit our Mountain and Lodging segments
through (1) the creation of additional resort lodging and other resort related facilities and venues (primarily restaurants, spas,
commercial space, private mountain clubs, skier services facilities and parking structures) that provide us with the opportunity
to create new sources of recurring revenue, enhance the guest experience at our resorts and expand our destination bed base; (2) the ability to control the architectural themes of our resorts; and (3) the expansion of our property management and commercial
leasing operations.

In recent years we have primarily focused on projects in our Real Estate segment that involve significant vertical development.
Over the past several years our completed projects include The Ritz-Carlton Residences, Vail, One Ski Hill Place in
Breckenridge, the Arrabelle at Vail Square, Vail's Front Door, Crystal Peak Lodge at Breckenridge, and Gore Creek Place in
Vail's Lionshead Village. We attempt to mitigate the risk associated with vertical development by often utilizing guaranteed
maximum price construction contracts (although certain construction costs may not be covered by contractual limitations), pre-
selling a portion of the project, requiring significant non-refundable deposits from buyers, and potentially obtaining non-
recourse financing for certain projects (although our last two major vertical development projects have not incurred any direct
third party financing).

Currently, VRDC's principal activities include the marketing and selling of remaining condominium units that are available for
sale, which primarily relate to The Ritz-Carlton Residences, Vail, and One Ski Hill Place in Breckenridge; planning for future
real estate development projects, including zoning and acquisition of applicable permits; and the purchase of selected strategic
land parcels for future development. Although we continue to undertake preliminary planning and design work on future
projects, we currently do not plan to undertake significant development activities on new projects until the current economic
environment for real estate improves. We believe that, due to our low carrying cost of real estate land investments combined
with the absence of third party debt associated with our real estate investments, we are well situated to time the launch of future
projects with a more favorable economic environment.

[FONT=sans-serif]Year Ended July 31,[/FONT][FONT=sans-serif]
2013[/FONT][FONT=serif](1)[/FONT]        [FONT=sans-serif]2012[/FONT][FONT=serif](1)            [/FONT][FONT=sans-serif]2011[/FONT][FONT=serif](1)             [/FONT][FONT=sans-serif]2010[/FONT][FONT=serif](1)            [/FONT][FONT=sans-serif]2009[/FONT][FONT=serif](1)[/FONT]
[FONT=sans-serif]Statement of Operations Data:[/FONT]
[FONT=serif]Net revenue:[/FONT]  (Thousands)
[FONT=serif]Mountain[/FONT]
[FONT=serif]$867,514           $766,608            $752,191          $638,495             $614,597[/FONT]
[FONT=serif]Lodging[/FONT]
[FONT=serif]210,974              210,623             214,658              195,301              203,606[/FONT]
[FONT=serif]Real estate[/FONT]
[FONT=serif]42,309                47,163             200,197                61,007              186,150[/FONT]
[B][FONT=serif]Total net revenue[/FONT]
[FONT=serif]1,120,797        1,024,394       1,167,046         894,803           1,004,353[/FONT][/B]
[FONT=serif]Segment operating expense:[/FONT]
[FONT=serif]Mountain[/FONT]
[FONT=serif]639,706              568,578             540,366              456,017              451,025[/FONT]
[FONT=serif]Lodging[/FONT]
[FONT=serif]198,813              204,270             205,903              192,909              196,847[/FONT]
[FONT=serif]Real estate[/FONT]
[FONT=serif]58,090                63,170             205,232                71,402              142,070[/FONT]
[FONT=serif]Total segment operating expense[/FONT]
[FONT=serif]896,609              836,018             951,501              720,328              789,942[/FONT]
[FONT=serif]Depreciation and amortization[/FONT]
[FONT=serif](132,688)          [/FONT][FONT=serif](127,581[/FONT][FONT=serif])[/FONT]      [FONT=serif](117,957)            [/FONT][FONT=serif](110,638[/FONT][FONT=serif])[/FONT]       [FONT=serif](107,213[/FONT][FONT=serif])[/FONT]
[FONT=serif]Gain on sale of real property[/FONT]
[FONT=serif]6,675                       —                      —                  6,087                       —[/FONT]
[FONT=serif]Mountain equity investment income, net[/FONT]
[FONT=serif]891                     878                 1,342                  1,558                     817[/FONT]
[FONT=serif]Investment income, net[/FONT]
[FONT=serif]351                     469                    719                     445                  1,793[/FONT]
[FONT=serif]Interest expense, net[/FONT]
[FONT=serif](38,966)[/FONT]       [FONT=serif](33,586[/FONT][FONT=serif])[/FONT]      [FONT=serif](33,641[/FONT][FONT=serif])[/FONT]         [FONT=serif](17,515)           [/FONT][FONT=serif](27,548[/FONT][FONT=serif])[/FONT]
[FONT=serif]Loss on extinguishment of debt[/FONT]
[FONT=serif](7,372[/FONT])
[FONT=serif]Income before provision for income taxes[/FONT]
[FONT=serif]59,229                27,092               55,520                53,797                81,196[/FONT]
[FONT=serif]Net income[/FONT]
[FONT=serif]37,610                16,391               34,422                35,775                50,552[/FONT]
[FONT=serif]Net loss (income) attributable to[/FONT][FONT=serif]noncontrolling interests[/FONT]
[FONT=serif]133                       62                      67                     [/FONT][FONT=serif](5,390[/FONT][FONT=serif])               [/FONT][FONT=serif](1,602[/FONT][FONT=serif])[/FONT]
[FONT=serif]Net income attributable to Vail Resorts, Inc.[/FONT]
[FONT=serif]$37,743             $16,453             $34,489              $30,385                $48,950[/FONT]

[FONT=sans-serif]Other Data:[/FONT]
[FONT=sans-serif]Mountain[/FONT]
[FONT=serif]Skier visits[/FONT]
[FONT=serif](2)[/FONT]
[FONT=serif]6,977                  6,144                 6,991                  6,010                  5,864[/FONT]
[B][FONT=serif]ETP [/FONT](ticket yield per visit)[/B]
[FONT=serif]$56.02              $55.75                $48.99                $48.13                $47.16[/FONT]
[FONT=sans-serif]Lodging[/FONT]
[FONT=serif]ADR[/FONT] (average room price)
[FONT=serif]$264.36           $260.04              $245.03             $237.57               $230.48[/FONT]

Taking revenue divided by visits, Vail resorts brings in about $160 per skier visit. This is more than double what Killington's last published figures from 2007, about $74...btw. They make an operating profit of about $32 per visit, which isn't really that huge - even using conservative figures, PCMR's profits are likely higher.

Where does Killington fit into this? I highly doubt they are lusting after it. Operating profit per skier visit are well under Vail's average, at around $10-15. This makes it very hard to cover any debt payments while still reinvesting in the mountain. Killington really needs about $50M+ of investment to bring it up to par with the standards set by other Vail resorts - new lifts, lodges, upscale lodging, and the interconnect.

The only thing that would drive Vail to be interested is that they would gain ~800,000 skier visits, adding yet another possibly top 10 resort to their portfolio, and it's action as a feeder resort from passholders taking trips to their western resorts. All the develop-able land is owned by Texas guys, so maybe its available in a package deal.

Lets say this feeder effect results in a massive 62,500 additional visits to its western resorts. That's $2M in operating profit. Killington's operating profit is about $10M. So, they pick up $12M operating profit, or an increase of about 5%.

Is that worth their time? Is it worth the needed capital improvements? Is it possible to cover the resulting debt? Can they get the real estate and are they interested in developing it? Nope.

While it would be great and I sure wish it would happen, somehow, I HIGHLY DOUBT IT.

 

[skiNEwhere]

Wow, that's some good info :-o

I'd like to know how Vail resorts chose Afton Alps and Mt Brighton to add to the Epic pass. If they chose it based on the proximity to a large metro area (Minneapolis and Detroit, respectively), then I don't see why they couldn't (not saying "wouldn't) buy Killington. Although if all they want is close proximity to Boston, they'd be better off buying Wachusett honestly.

 

[VTKilarney]

Highway Star, I just want to say how much you have made my day by your post. When I have enough time I will try to get out a response. I can assure you, however, that I won't be spending as much time as you feel the need to spend on me. But I am flattered for sure.

 

[Highway Star]

Highway Star, I just want to say how much you have made my day by your post. When I have enough time I will try to get out a response. I can assure you, however, that I won't be spending as much time as you feel the need to spend on me. But I am flattered for sure.

Vail acquiring Killington has been brought up by many people in recent days, so I felt the need to discuss it. I'm not really responding to you, you're still an idiot.

 

[moresnow]

Vail acquiring Killington has been brought up by many people in recent days, so I felt the need to discuss it. I'm not really responding to you, you're still an idiot.

Can you guys feel the love here? Can you?

I can.

 

[VTKilarney]

Vail acquiring Killington has been brought up by many people in recent days, so I felt the need to discuss it. I'm not really responding to you, you're still an idiot.

You quoted me and responded to the quote. So, yes, you really were responding to me. You are so cute when you lie over trivial things. And I certainly was flattered by your response. Now I know how Justin Bieber feels when some lonely fan pays him all sorts of attention. It feels pretty cool. You wouldn't have dug through all of that data for just anyone, so I thank you for doing so. It meant a lot to me.

 

[skiNEwhere]

This was kind of amusing but is getting old......

Can you two hug and make up?

 

[VTKilarney]

I've previously stated that I am willing to extend an olive branch. You'll have to focus your energy on Highway Star since he has lacked the discipline to accept my offer.

 

[Highway Star]

I've previously stated that I am willing to extend an olive branch. You'll have to focus your energy on Highway Star since he has lacked the discipline to accept my offer.

You quoted me and responded to the quote. So, yes, you really were responding to me. You are so cute when you lie over trivial things. And I certainly was flattered by your response. Now I know how Justin Bieber feels when some lonely fan pays him all sorts of attention. It feels pretty cool. You wouldn't have dug through all of that data for just anyone, so I thank you for doing so. It meant a lot to me.

 

[VTKilarney]

Well, skiNEwhere, there is your answer. :roll:

 

[thetrailboss]

Re: Vail

Based on those reports, they have the 1, 2, 4, 5, and 6th top resorts for visits. My question is, who is 3rd?

 

[Domeskier]

Re: Vail

Based on those reports, they have the 1, 2, 4, 5, and 6th top resorts for visits. My question is, who is 3rd?

Appears to be Mammoth.

 

[Domeskier]

I don't see why they couldn't (not saying "wouldn't) buy Killington.

Probably don't want another feeder hill in their portfolio!!

 

[skiNEwhere]

Probably don't want another feeder hill in their portfolio!!

I don't know if you would quantify killington as a "feeder hill."
Way too big and far from boston

 

[mbedle]

I don't know if you would quantify killington as a "feeder hill."
Way too big and far from boston

I got to agree with that - I wouldn't call Killington or any of the other larger resorts in the northeast feeder hills.

 

[trackbiker]

I don't know if you would quantify killington as a "feeder hill."
Way too big and far from boston

I got to agree with that - I wouldn't call Killington or any of the other larger resorts in the northeast feeder hills.

I think you guys missed the joke and who it was aimed at. :wink:

Good one, Domeskier.

 

[Domeskier]

I think you guys missed the joke and who it was aimed at. :wink:

Good one, Domeskier.

Thank you, thank you - you're too kind.

 

[skiNEwhere]

Xanadu. The ultimate feeder hill?

 

[mbedle]

Thank you, thank you - you're too kind.

I missed it!!!!! I can't keep up with you guys. lol