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 condensed 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 following table presents financial information by reportable segment, which is used by management in evaluating performance and allocating resources (in thousands):



	Three Months Ended January 31,						Six Months Ended January 31,
	2019			2018			2019			2018
Net revenue:
Lift	$	447,558		$	381,912		$	472,243		$	407,380
Ski school	92,244			80,116			96,516			84,554
Dining	65,409			53,910			83,701			72,212
Retail/rental	128,436			115,446			171,778			160,853
Other	42,426			39,518			96,841			94,028
Total Mountain net revenue	776,073			670,902			921,079			819,027
Lodging	73,249			63,539			148,149			135,628
Total Resort net revenue	849,322			734,441			1,069,228			954,655
Real Estate	256			134			354			770
Total net revenue	$	849,578		$	734,575		$	1,069,582		$	955,425
Segment operating expense:
Mountain	$	424,008		$	365,605		$	646,371		$	572,689
Lodging	67,492			59,871			138,496			127,605
Resort	491,500			425,476			784,867			700,294
Real Estate	1,389			1,207			2,759			2,898
Total segment operating expense	$	492,889		$	426,683		$	787,626		$	703,192
Gain on sale of real property	$	—		$	515		$	—		$	515
Mountain equity investment income (loss), net	$	160		$	(35	)	$	1,110		$	487
Reported EBITDA:
Mountain	$	352,225		$	305,262		$	275,818		$	246,825
Lodging	5,757			3,668			9,653			8,023
Resort	357,982			308,930			285,471			254,848
Real Estate	(1,133		)	(558		)	(2,405		)	(1,613		)
Total Reported EBITDA	$	356,849		$	308,372		$	283,066		$	253,235
Real estate held for sale and investment	$	101,730		$	103,212		$	101,730		$	103,212
Reconciliation to net income attributable to Vail Resorts, Inc.:
Total Reported EBITDA	$	356,849		$	308,372		$	283,066		$	253,235
Depreciation and amortization	(55,238		)	(51,404		)	(106,281		)	(100,028		)
Change in estimated fair value of contingent consideration	(700		)	—			(1,900		)	—
Gain on disposal of fixed assets and other, net	1,097			538			478			1,105
Investment income and other, net	507			397			970			780
Foreign currency gain (loss) on intercompany loans	450			10,337			(1,861		)	2,991
Interest expense, net	(21,002		)	(15,973		)	(39,640		)	(31,147		)
Income before (provision) benefit from income taxes	281,963			252,267			134,832			126,936
(Provision) benefit from income taxes	(63,973		)	(3,594		)	(27,568		)	89,810
Net income	217,990			248,673			107,264			216,746
Net income attributable to noncontrolling interests	(11,641		)	(12,982		)	(8,710		)	(9,440		)
Net income attributable to Vail Resorts, Inc.	$	206,349		$	235,691		$	98,554		$	207,306