Friday, October 4, 2013

Vail/Park City Mountain Resort legal battle - Vail prepares for battle



See below for an article in the continued drama between Vail Resorts / Canyons and Park City Mountain Resort. It appears as if Vail is ready for battle and not backing down any time soon. 




Vail Resorts prepares to go to war over Park City ski runs

BROOMFIELD, Colo. — Doing business in Utah will come at a price for Vail Resorts.

In its latest earnings report, the company (NYE: MTN) noted it is setting aside $5 million this year for a legal battle over a few thousand acres beneath Park City Mountain Resort.

Toronto-based Talisker Corp., which owns the land, is embroiled in a lease dispute with Park City Mountain Resort. After Talisker brought Vail Resorts in last spring to operate nearby Canyons ski resort, the Broomfield, Colo.-based juggernaut is now squarely in the fray.

Talisker is attempting to evict Park City Mountain Resort, contending that the lease expired, but Park City Mountain Resort executives counter that there were assurances the lease would be extended and, acting on good faith, Park City Mountain Resort poured money into infrastructure and other improvements.

Now it's Vail Resorts' problem as the company makes a push across the Colorado and California borders.

Over the next fiscal year, Vail Resorts expects $7.2 million in combined litigation and integration expenses.

But adding a Utah ski area to its expanding portfolio is strengthening the allure of its Epic Pass, which allows skiers and boarders access to 26 different resorts in five different states and four different countries.

"Since announcing the Canyons transaction in late May, we have seen a material acceleration in pass sales in the Tahoe and Utah markets as well as in our destination markets," Vail Resorts CEO Rob Katz said.

According to its latest earnings report, Vail Resorts' fourth-quarter revenue rang in at $112.3 million, down from $113.5 million in the same period the year prior, and its attributable net loss deepened to $59.9 million ($1.67 per diluted share) from last year's fourth-quarter shortfall of $53.8 million (or $1.50 per diluted share). But its net income for all of 2013 more than doubled to $37.7 million over what it saw in 2012.

Sales of passes through Sept. 22 — when almost 60 percent of total sales are made — for the upcoming ski season are up about 23 percent in sales dollars versus the same period last year, the report showed.

On the real estate front, Vail Resorts reported that it closed on 10 Ritz-Carlton Residence units, 12 One Ski Hill Place units and a $11.1 million land sale at the base of Breckenridge's Peak 8 in the last fiscal year. Vail Resorts' net cash flow from real estate transactions for 2013 was reported at $27.5 million.

"We reported record resort revenue and resort EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) that reflects higher overall visitation, improved pricing, increased average guest spend and strong pass sales," Katz said. "We generated significant real estate net cash flow driven by the increasing strength in resort real estate markets. We were successful in our acquisition strategy, completing our transaction for Canyons Resort in Park City, Utah, and acquiring Afton Alps in Minnesota and Mount Brighton in Michigan. We also launched the initial activities for Epic Discovery on Vail Mountain and made continued progress in the approval process for our broader summer plans across our resorts."

On Monday, Bank of America analyst Shaun C. Kelley reiterated a "buy" rating for Vail Resorts, and raised its price target from $72 to $76. Credit Suisse analysts, meanwhile, reiterated a “hold” rating and adjusted its price target to $71. Vail Resorts stock closed at $69.56 a share on Wednesday afternoon.
 
Heather Feldman
435-731-0803
heather@parkcityhousehunters.com

No comments: