Segment Information

9 Months Ended

Apr. 30, 2020

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 other indicators of financial performance or liquidity presented in the Consolidated Condensed Financial Statements, such as net income or net change in cash and cash equivalents.

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 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 April 30,						Nine Months Ended April 30,
	2020			2019			2020			2019
Net revenue:
Lift	$	374,818		$	526,881		$	900,995		$	999,124
Ski school	76,563			110,755			187,840			207,271
Dining	61,632			78,928			158,980			162,629
Retail/rental	78,133			114,082			259,761			285,860
Other	44,158			47,252			154,105			144,093
Total Mountain net revenue	635,304			877,898			1,661,681			1,798,977
Lodging	58,385			79,848			220,030			227,997
Total Resort net revenue	693,689			957,746			1,881,711			2,026,974
Real Estate	398			241			4,784			595
Total net revenue	$	694,087		$	957,987		$	1,886,495		$	2,027,569
Segment operating expense:
Mountain	$	333,785		$	410,254		$	1,068,479		$	1,056,625
Lodging	55,460			67,221			208,545			205,717
Total Resort operating expense	389,245			477,475			1,277,024			1,262,342
Real Estate	1,128			1,382			7,926			4,141
Total segment operating expense	$	390,373		$	478,857		$	1,284,950		$	1,266,483
Gain on sale of real property	$	—		$	268		$	207		$	268
Mountain equity investment (loss) income, net	$	(90	)	$	445		$	1,270		$	1,555
Reported EBITDA:
Mountain	$	301,429		$	468,089		$	594,472		$	743,907
Lodging	2,925			12,627			11,485			22,280
Resort	304,354			480,716			605,957			766,187
Real Estate	(730		)	(873		)	(2,935		)	(3,278		)
Total Reported EBITDA	$	303,624		$	479,843		$	603,022		$	762,909
Real estate held for sale and investment	$	96,565		$	101,251		$	96,565		$	101,251
Reconciliation from net income attributable to Vail Resorts, Inc. to Total Reported EBITDA:
Net income attributable to Vail Resorts, Inc.	$	152,546		$	292,134		$	252,441		$	390,688
Net income attributable to noncontrolling interests	7,285			16,396			14,579			25,106
Net income	159,831			308,530			267,020			415,794
Provision for income taxes	26,440			93,346			47,190			120,914
Income before provision for income taxes	186,271			401,876			314,210			536,708
Depreciation and amortization	64,730			55,260			186,387			161,541
Asset impairments	28,372			—			28,372			—
Change in estimated fair value of contingent consideration	(8,000		)	1,567			(5,264		)	3,467
Loss (gain) on disposal of fixed assets and other, net	380			(27		)	(1,178		)	(505		)
Investment income and other, net	(361		)	(1,727		)	(999		)	(2,697		)
Foreign currency loss on intercompany loans	7,753			3,319			8,191			5,180
Interest expense, net	24,479			19,575			73,303			59,215
Total Reported EBITDA	$	303,624		$	479,843		$	603,022		$	762,909