Vail Resorts Q2 Profit Increases

(RTTNews) - Vail Resorts Inc. (MTN) reported that its net income attributable to the company for the second quarter of fiscal 2015 significantly increased to $115.8 million or $3.10 per share from $59.3 million or $1.60 per share in the second fiscal quarter of the prior year.

During the fiscal quarter the Company completed a comprehensive settlement agreement with the Internal Revenue Service ("IRS") regarding court proceedings related to net operating loss ("NOL") carryforwards. The Company recorded an income tax benefit of $23.8 million related to the utilization of the NOLs for the fiscal quarter ended January 31, 2015.

Total net revenue increased $77.5 million, or 17.1%, to $530.2 million for the three months ended January 31, 2015 compared to the same period in the prior year.

Analysts polled by Thomson Reuters expected the company to report earnings of $2.30 per share and revenues of $533.83 million for the quarter. Analysts' estimates typically exclude special items.

Net income attributable to Vail Resorts, Inc. is now expected to be in a range of $109 million to $127 million in fiscal 2015, including the $16.4 million non-cash gain ($10.1 million tax-effected) related to the Park City litigation settlement and the IRS settlement on the utilization of NOL carryforwards which results in a $23.8 million income tax benefit.

It expects fiscal 2015 Real Estate Reported EBITDA to be negative $10 million to negative $6 million.

The company's Board of Directors approved a 50% increase in the quarterly cash dividend to $0.6225 per share from $0.4150 per share beginning with the dividend payable on April 15, 2015 to stockholders of record as of March 31, 2015.

The company announced that it intends to redeem the outstanding $215.0 million aggregate principal amount of its 6.50% Notes, together with the $41.2 million aggregate principal amount of 6.95% Eagle County Industrial Development Bonds in May 2015. As a result, the Company expects to pay approximately $8.6 million in early redemption premiums, which will be recorded, along with a write-off of unamortized debt issuance costs, as a loss on extinguishment of debt in the fourth quarter fiscal 2015.

The Company plans to amend its existing credit facility to provide for a $250.0 million term loan facility and use borrowings from the term loan facility and cash on hand to fund the redemptions. The Company anticipates this will save approximately $12 million in pre-tax annual interest expense at current rates.

The company also announced its plan to spend approximately $10 million in calendar year 2015 for the first major construction efforts for Epic Discovery summer activities. The summer capital will be focused on a mountain coaster, canopy tours and summer tubing at Vail for which the Company has received the necessary US Forest Service approvals. In addition, the capital will be used to construct kids' activities on private land at Breckenridge and for significant planning investments for the next phase of construction in 2016 at Vail, Breckenridge and Heavenly.