Summary of Significant Accounting Policies

Basis of Presentation

Consolidated Condensed Financial Statements— In the opinion of the Company, the accompanying Consolidated Condensed Financial Statements reflect all adjustments necessary to state fairly the Company’s financial position, results of operations and cash flows for the interim periods presented. All such adjustments are of a normal recurring nature. Results for interim periods are not indicative of the results for the entire fiscal year. The accompanying Consolidated Condensed Financial Statements should be read in conjunction with the audited Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended July 31, 2013. Certain information and footnote disclosures, including significant accounting policies, normally included in fiscal year financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been condensed or omitted. The Consolidated Condensed Balance Sheet as of July 31, 2013 was derived from audited financial statements.

Revision of Consolidated Condensed Statements of Cash Flows for Accrued Liabilities for Purchases of Property, Plant and Equipment— The Company previously presented accounts payable and accrued liabilities related to purchases of property, plant and equipment on a gross basis in the Consolidated Condensed Statements of Cash Flows rather than on a net basis. The Company corrected its presentation of accounts payable and accrued liabilities related to purchases of property, plant and equipment to a net basis and has determined that the impact of these adjustments was not material to the Consolidated Statements of Cash Flows for all applicable prior interim and annual periods. In addition, these adjustments had no impact on the net change in cash and cash equivalents. For the six months ended January 31, 2013, the effect of this adjustment increased net cash provided by operating activities from $171.3 million to $175.6 million, with a corresponding increase in net cash used in investing activities from $73.6 million to $77.9 million. For the three months ended October 31, 2013 and 2012, the effect of this adjustment decreased net cash provided by operating activities from $29.3 million to $16.3 million and from $34.6 million to $24.8 million, respectively, with a corresponding decrease in net cash used in investing activities from $46.7 million to $33.7 million and from $35.7 million to $25.9 million, respectively (as previously reported in the quarterly report on Form 10-Q for the three months ended October 31, 2013).

Use of Estimates— The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the balance sheet date and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

Noncontrolling Interests in Consolidated Condensed Financial Statements— Net loss attributable to noncontrolling interests along with net income (loss) attributable to the stockholders of the Company are reported separately in the Consolidated Condensed Statement of Operations. Additionally, noncontrolling interests in the consolidated subsidiaries of the Company are reported as a separate component of equity in the Consolidated Condensed Balance Sheet, apart from the Company’s equity. The following table summarizes the changes in total stockholders’ equity (in thousands):



	For the Six Months Ended January 31,
	2014									2013
	Vail Resorts Stockholders’ Equity			Noncontrolling Interests			Total Stockholders' Equity			Vail Resorts Stockholders’ Equity			Noncontrolling Interests			Total Stockholders' Equity
Balance, beginning of period	$	823,868		$	14,001		$	837,869		$	802,311		$	14,017		$	816,328
Net loss	(14,113		)	(124		)	(14,237		)	(29		)	(45		)	(74		)
Stock-based compensation expense	7,054			—			7,054			6,631			—			6,631
Issuance of shares under share award plans, net of shares withheld for taxes	(4,877		)	—			(4,877		)	(3,792		)	—			(3,792		)
Tax benefit from share award plans	3,240			—			3,240			3,898			—			3,898
Cash dividends paid on common stock	(14,986		)	—			(14,986		)	(13,458		)	—			(13,458		)
Contributions from noncontrolling interests, net	—			113			113			—			116			116
Foreign currency translation adjustments, net of tax	(119		)	—			(119		)	453			—			453
Balance, end of period	$	800,067		$	13,990		$	814,057		$	796,014		$	14,088		$	810,102

Fair Value Instruments— The recorded amounts for cash and cash equivalents, trade receivables, other current assets, and accounts payable and accrued liabilities approximate fair value due to their short-term nature. The fair value of amounts outstanding under the Employee Housing Bonds (Note 4, Long-Term Debt) approximate book value due to the variable nature of the interest rate associated with that debt. The fair value of the 6.50% Senior Subordinated Notes due 2019 (“6.50% Notes”) (Note 4, Long-Term Debt) are based on quoted market prices (a Level 1 input). The fair value of the Canyons obligation (Note 4, Long-Term Debt) has been estimated using discounted cash flow analyses based on the discount rate established under the initial purchase accounting (Note 5, Acquisitions) (a Level 3 input). The fair value of the Company’s Industrial Development Bonds (Note 4, Long-Term Debt) and other long-term debt have been estimated using discounted cash flow analyses based on current borrowing rates for debt with similar remaining maturities and ratings (a Level 3 input). The estimated fair values of the 6.50% Notes, Canyons obligation, Industrial Development Bonds and other long-term debt as of January 31, 2014 are presented below (in thousands):



	January 31, 2014
	Carrying Value		Fair Value
6.50% Notes	$	390,000	$	411,450
Canyons obligation	$	309,093	$	309,093
Industrial Development Bonds	$	41,200	$	46,250
Other long-term debt	$	5,722	$	6,083