Acquisitions

12 Months Ended

Jul. 31, 2011

Acquisitions

Acquisitions

5.         Acquisitions

Northstar-at-Tahoe

On October 25, 2010, the Company acquired for cash 100% of the capital stock of BCRP Inc. and the membership interest of Northstar Group Commercial Properties LLC (together, with their subsidiaries "Northstar-at-Tahoe") that operate the Northstar-at-Tahoe mountain resort in North Lake Tahoe, California from Booth Creek Resort Properties LLC and other sellers for a total consideration of $60.5 million, net of cash acquired. Northstar-at-Tahoe is a year round mountain resort providing a comprehensive offering of recreational activities, including both snow sports and summer activities. Additionally, Northstar-at-Tahoe operates a base area village at the resort, including the subleasing of commercial retail space and condominium property management.

The following summarizes the preliminary estimated fair values of the identifiable assets acquired and liabilities assumed at the acquisition date (in thousands).

	Estimates of Acquisition Date Fair Value
Accounts receivable	$	2,499
Inventory		1,894
Other assets		1,422
Property, plant and equipment		9,612
Deferred income tax assets, net		15,429
Intangible assets		2,470
Goodwill		85,446
Total identifiable assets acquired	$	118,772
Accounts payable and accrued liabilities	$	6,671
Deferred revenue		5,281
Capital lease obligations		2,892
Unfavorable lease obligations, net		43,400
Total liabilities assumed	$	58,244
Total purchase price	$	60,528

The operations of Northstar-at-Tahoe are conducted on land and with operating assets owned by CNL Lifestyle Properties, Inc. primarily under operating lease agreements which were assumed by the Company. Under the terms of the leases, the Company estimates that it will be required to pay above market rates in the aggregate through the remainder of the initial lease term expiring in fiscal 2027. The Company has recorded a net unfavorable lease obligation for these leases that will be amortized as an adjustment to lease expense over the remaining initial lease term.

The excess of the purchase price over the aggregate fair values of assets acquired and liabilities assumed was recorded as goodwill. The goodwill recognized is attributable primarily to expected synergies, the assembled workforce of Northstar-at-Tahoe and other factors. None of the goodwill is expected to be deductible for income tax purposes. The intangible assets have a weighted-average amortization period of 4.6 years. The operating results of Northstar-at-Tahoe have contributed $67.9 million of net revenue for the year ended July 31, 2011. Additionally, the Company has recognized $4.1 million of acquisition related expenses in the Consolidated Statements of Operations for the year ended July 31, 2011.

The following presents the unaudited pro forma consolidated financial information of the Company as if the acquisition of Northstar-at-Tahoe was completed on August 1, 2009. The following unaudited pro forma financial information includes adjustments for (i) depreciation and interest expense for capital leases on acquired property, plant and equipment and amortization of intangible assets recorded at the date of acquisition; (ii) straight-line expense recognition of minimum future lease payments from the date of acquisition, including the amortization of the net unfavorable lease obligations; and (iii) acquisition related costs. This unaudited pro forma financial information is presented for informational purposes only and does not purport to be indicative of the results of future operations or the results that would have occurred had the acquisition taken place on August 1, 2009 (in thousands, except per share amounts).

		Year Ended July 31,
		2011		2010
Pro forma net revenue	$		1,171,459	$	959,453
Pro forma net income attributable to Vail Resorts, Inc.	$		33,231	$	34,485
Pro forma basic net income per share attributable to Vail Resorts, Inc.	$		0.92	$	0.95
Pro forma diluted net income per share attributable to Vail Resorts, Inc.	$		0.90	$	0.94

Mountain News Corporation

On May 28, 2010, the Company acquired the capital stock of Mountain News Corporation ("Mountain News"), which owns and operates several websites focused on the ski and snowboarding industry, for total consideration of $16.5 million. The purchase price was allocated to tangible and identifiable intangible assets acquired based on their fair values at the acquisition date. The Company allocated the purchase price and recorded $12.9 million in goodwill, $1.2 million in indefinite- lived intangible assets, $2.6 million in fixed assets, $1.7 million in other intangibles (with a weighted-average amortization period of 6.4 years) and assumed liabilities of $0.9 million on the date of acquisition. The operating results of Mountain News are allocated to the Company's Mountain segment.

Colorado Mountain Express

On November 1, 2008, the Company acquired substantially all of the assets of CME, a resort ground transportation business, for a total consideration of $38.2 million, as well as $0.9 million to reimburse the seller for certain new capital expenditures as provided for in the purchase agreement. The purchase price was allocated to tangible and identifiable intangible assets acquired based on their fair values at the acquisition date. The Company allocated the purchase price and recorded $25.7 million in goodwill, $4.3 million in indefinite- lived intangible assets, $6.1 million of fixed assets and $3.2 million of other intangibles (with a weighted-average amortization period of 8.3 years) on the date of acquisition. The operating results of CME are reported within the Lodging segment.