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Segment Information
 12 Months Ended
Jul. 31, 2011
Segment Information  
Segment Information
14. 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 activities. The Lodging segment includes the operations of all of the Company's owned hotels, RockResorts, GTLC, 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.

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, and for the Real Estate segment, plus gain on sale of real property) 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 (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, net change in cash and cash equivalents or other financial statement data presented in the consolidated 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 plus gain on sale of real property. All segment expenses include an allocation of corporate administrative expense. Assets are not allocated between segments, or used to evaluate performance, except as shown in the table below. The accounting policies specific to each segment are the same as those described in Note 2, Summary of Significant Accounting Policies.

Following is key financial information by reportable segment which is used by management in evaluating performance and allocating resources (in thousands):

 

     Year Ended July 31,  
      2011      2010          2009      

Net revenue:

         

Lift tickets

    $ 342,514       $ 289,289       $ 276,542        

Ski school

      83,818         70,694         65,336        

Dining

      68,052         53,322         52,259        

Retail/rental

      174,339         154,846         147,415        

Other

      83,468         70,344         73,045        
   

Total Mountain net revenue

      752,191         638,495         614,597        

Lodging

      214,658         195,301         203,606        
   

Resort

      966,849         833,796         818,203        

Real estate

      200,197         61,007         186,150        
   

Total net revenue

    $ 1,167,046       $ 894,803       $   1,004,353        

Segment operating expense:

         

Mountain

    $ 540,366       $ 456,017       $ 451,025        

Lodging

      205,903         192,909         196,847        

Resort

      746,269        648,926        647,872        

Real estate

      205,232        71,402        142,070        

Total segment operating expense

    $ 951,501      $ 720,328     $ 789,942        

Gain on sale of real property

    $ --      $ 6,087      $ --        

Mountain equity investment income, net

    $ 1,342      $ 1,558      $ 817        

Reported EBITDA:

       

Mountain

    $ 213,167      $ 184,036      $ 164,389        

Lodging

      8,755        2,392        6,759        
   

Resort

      221,922        186,428        171,148        

Real estate

      (5,035 )      (4,308 )      44,080        
   

Total Reported EBITDA

    $ 216,887      $ 182,120      $ 215,228        

Real estate held for sale and investment

    $ 273,663      $ 422,164      $ 311,485        

Reconciliation to net income attributable to Vail Resorts, Inc.:

                         

Total Reported EBITDA

    $ 216,887      $ 182,120      $ 215,228        

Depreciation and amortization

      (117,957 )      (110,638 )      (107,213)       

Loss on disposal of fixed assets, net

      (555 )      (615 )      (1,064)       

Asset impairment charge

      (2,561 )      --        --        

Investment income, net

      719        445        1,793        

Interest expense, net

      (33,641 )      (17,515 )      (27,548)       

Loss on extinguishment of debt

      (7,372 )      --        --        

Income before provision for income taxes

      55,520        53,797        81,196        

Provision for income taxes

      (21,098 )      (18,022 )      (30,644)       
   

Net income

      34,422        35,775        50,552        

Net loss (income) attributable to noncontrolling interests

      67        (5,390 )      (1,602)       

Net income attributable to Vail Resorts, Inc.

    $   34,489      $   30,385      $   48,950