Segment and Geographic Area Information

Segment Information

The Company has three reportable segments: Mountain, Lodging and Real Estate. The Company refers to “Resort” as the combination of the Mountain and Lodging segments. The Mountain segment includes the operations of the Company’s mountain resorts/ski areas and related ancillary activities. The Lodging segment includes the operations of the Company’s owned hotels, RockResorts, NPS concessionaire properties, condominium management, Colorado resort ground transportation operations and mountain resort golf operations. The Real Estate segment owns, develops and sells 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 or loss on sale of real property). 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.

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.

The Company utilizes Reported EBITDA in evaluating the 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 or loss 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,
	2018			2017			2016
Net revenue:
Lift tickets	$	880,293		$	818,341		$	658,047
Ski school	189,910			177,748			143,249
Dining	161,402			150,587			121,008
Retail/rental	296,466			293,428			241,134
Other	194,851			171,682			141,166
Total Mountain net revenue	1,722,922			1,611,786			1,304,604
Lodging	284,643			278,514			274,554
Resort	2,007,565			1,890,300			1,579,158
Real Estate	3,988			16,918			22,128
Total net revenue	$	2,011,553		$	1,907,218		$	1,601,286
Segment operating expense:
Mountain	$	1,132,840		$	1,047,331		$	881,472
Lodging	259,637			251,427			246,385
Resort	1,392,477			1,298,758			1,127,857
Real Estate, net	3,546			24,083			24,639
Total segment operating expense	$	1,396,023		$	1,322,841		$	1,152,496
Gain on sale of real property	$	515		$	6,766		$	5,295
Mountain equity investment income, net	$	1,523		$	1,883		$	1,283
Reported EBITDA:
Mountain	$	591,605		$	566,338		$	424,415
Lodging	25,006			27,087			28,169
Resort	616,611			593,425			452,584
Real Estate	957			(399		)	2,784
Total Reported EBITDA	$	617,568		$	593,026		$	455,368
Real estate held for sale and investment	$	99,385		$	103,405		$	111,088
Reconciliation to net income attributable to Vail Resorts, Inc.:
Total Reported EBITDA	$	617,568		$	593,026		$	455,368
Depreciation and amortization	(204,462		)	(189,157		)	(161,488		)
Change in fair value of contingent consideration	1,854			(16,300		)	(4,200		)
Loss on disposal of fixed assets and other, net	(4,620		)	(6,430		)	(5,418		)
Investment income and other, net	1,944			6,114			723
Foreign currency (loss) gain on intercompany loans	(8,966		)	15,285			—
Interest expense, net	(63,226		)	(54,089		)	(42,366		)
Income before benefit (provision) for income taxes	340,092			348,449			242,619
Benefit (provision) for income taxes	61,138			(116,731		)	(93,165		)
Net income	401,230			231,718			149,454
Net (income) loss attributable to noncontrolling interests	(21,332		)	(21,165		)	300
Net income attributable to Vail Resorts, Inc.	$	379,898		$	210,553		$	149,754

Geographic Information

Net revenue and property, plant and equipment, net by geographic region are as follows (in thousands).



	Year Ended July 31,
Net revenue	2018		2017		2016
U.S.	$	1,610,323	$	1,578,276	$	1,534,716
International (a)	401,230		328,942		66,570
Total net revenue	$	2,011,553	$	1,907,218	$	1,601,286

			As of July 31,
Property, plant and equipment, net			2018		2017
U.S.			$	1,210,169	$	1,260,220
International (a)			417,050		453,933
Total property, plant and equipment, net			$	1,627,219	$	1,714,154

(a) The only individual international country (i.e. except the U.S.) to account for more than 10% of the Company’s revenue and property plant and equipment, net was Canada. Canada accounted for $321.0 million and $257.8 million of revenue for the years ended July 31, 2018 and 2017, respectively, and for $316.8 million and $338.8 million of property, plant and equipment, net as of July 31, 2018 and 2017, respectively.