Vail Logs 21% Increase in Season Pass Sales, Reports Strong Early Ski Season Bookings

Broomfield, CO – Vail Resorts, Inc. (NYSE:MTN) today announced financial results for the first quarter of fiscal 2007 ended October 31, 2006, including a 21% increase in season pass sales over same period in the prior year and strong advance bookings for the 2006-07 ski and snowboard season. At the same time, the company announced the launch of membership sales for the Vail Mountain Club.

The quarter, which includes the months of August, September and October, is a traditionally slow period in the ski industry that nonetheless provides important insight into the financial success of the season ahead.

“The first fiscal quarter is a seasonally low quarter and historically a loss quarter, as none of our mountain resorts are open for winter business,” acknowledged Robert Katz, Chief Executive Officer of Vail Resorts. “This year’s first quarter was no exception with our financial performance essentially meeting our expectations. More importantly, the first quarter is critical as a ramp-up to the coming ski season and the metrics we have seen to date have been favorable.”

Katz pointed to several factors reinforcing this belief. “We have had strong openings at all of our mountain resorts with Keystone even opening ahead of schedule,” he explained. “As of today, the vast majority of our terrain is open at our Colorado resorts with Vail having over 4,000 acres currently open, including most of the Back Bowls as well as Blue Sky Basin. Our sales of season passes continued at a strong rate with sales to date increasing 12% in units and 21% in sales dollars over the same period last year,” sales that will be booked into Vail Resorts’ revenue during the ski season. “The Company’s marketing activities for the 2006/2007 ski season are paying off with bookings through our central reservations systems for our five mountain resorts up 15% in room nights and 24% in sales dollars.”

Katz took the opportunity to announce memberships in a new exclusive slopeside private club, the Vail Mountain Club, to be completed in 2008 as part of Vail’s Front Door project, mere steps from the Vista Bahn Express lift. The company is selling 150 full memberships, which include parking privileges, with a membership deposit of $250,000 and 300 social memberships, which do not include parking, with a membership deposit of $100,000. “Although we just began accepting deposits for this premier private club on December 6th, we already have sales commitments representing $15.2 million of total proceeds,” Katz advised.

Financial Results

Vail’s mountain revenue grew $5.9 million, or 14.6%, in the first quarter of fiscal 2007 to $46.2 million from $40.3 million for the comparable period last fiscal year. Mountain expense increased $7.2 million, or 10.0%, to $79.5 million. Reported EBITDA for the Mountain segment decreased $1.3 million, or 4.2%, to a loss of $32.5 million compared to a loss of $31.2 million for the comparable quarter last fiscal year.

Lodging revenue decreased by $1.3 million, or 3.2%, in the first quarter fiscal 2007 to $40.4 million from $41.8 million for the comparable period last fiscal year. Lodging expense decreased $1.3 million, or 3.4%, to $36.3 million. For the first quarter of fiscal 2006, the Lodging segment included revenue of $3.4 million and operating expense of $2.5 million related to Snake River Lodge & Spa (“SRL&S”), which was sold by the Company in January 2006; the Company subsequently obtained a long-term management contract for the hotel. Excluding the impact of the sale of SRL&S, Lodging revenue increased $2.0 million, or 5.3% and expenses increased $1.2 million, or 3.3%. Additionally, the Company recognized $2.4 million in revenue in the first quarter of fiscal 2007 associated with a termination fee pursuant to the terms of the management agreement at The Lodge at Rancho Mirage, in conjunction with the closing of the hotel as part of a redevelopment plan by the current hotel owner. Reported EBITDA for the Lodging segment was essentially flat at $4.1 million in the current and prior fiscal year first quarters.

Resort revenue, the combination of Mountain and Lodging revenues, increased $4.5 million, or 5.5%, in the first quarter of fiscal 2007 to $86.6 million from $82.0 million for the comparable period last fiscal year. Resort expense increased $5.9 million, or 5.4%, to $115.8 million. First quarter Resort Reported EBITDA decreased $1.4 million to a loss of $28.4 million, a 5.1% decline over the comparable period last fiscal year. Resort Reported EBITDA excluding stock-based compensation decreased $1.4 million, or 5.4%, to a loss of $27.1 million.

Real Estate revenue increased $23.5 million, or 693.5%, in the first quarter of fiscal 2007 to $26.9 million from $3.4 million for the comparable period last fiscal year. Real Estate expense increased 330.4% to $26.1 million. Real Estate Reported EBITDA for the quarter increased $3.4 million, or 130.8%, to $0.8 million compared to a loss of $2.6 million in the comparable period last fiscal year.

Total revenues increased $28.1 million, or 32.9%, in the first quarter of fiscal 2007 to $113.5 million from $85.4 million for the comparable period last fiscal year. Loss from operations for the quarter increased $1.0 million, or 2.0%, to a loss of $50.9 million. The Company recorded total pre-tax stock-based compensation expense of $2.0 million in the three months ended October 31, 2006, as compared to $1.7 million, for the three months ended October 31, 2005.

The Company reported a first quarter net loss of $35.8 million, or a loss of $0.93 per diluted share, compared to a net loss of $34.3 million, or a loss of $0.93 per diluted share, for the same period last fiscal year. Excluding stock-based compensation expense, the Company’s net loss for the first quarter of fiscal 2007 would have been $34.6 million, or a loss of $0.89 per diluted share compared to a loss of $33.2 million excluding stock-based compensation, or a loss of $0.90 per diluted share, for the same quarter last fiscal year.

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