Heavenly Skiers Visits Up, Vail Earnings Down

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The parent company of Heavenly Ski Resort plans another $10 million worth of upgrades to its lone property outside Colorado.

Vail Resorts Inc. pledged to invest $40 million over five years when it bought Heavenly two years ago. With the additional $10 million, it will have committed $25 million.

Vail Resorts reported on Wednesday that it lost $6.7 million in the quarter that ended Jan. 31 compared with net income of $16.7 million a year earlier or a loss of 19 cents a share compared with 47 cents in the same quarter of 2003.

It attributed the loss to debt restructuring and a $5.5 million pretax mold remediation charge for one of the Colorado employee housing facilities.

The report said skier visits to Heavenly were up 21.5 percent from the previous second quarter. About 464,000 skiers hit the slopes at the resort straddling the California-Nevada line compared with 382,000 the previous year.

"Simply put, the Heavenly purchase has been nothing less than a triumph for Vail Resorts," Adam Aron, Vail Resorts' chief executive officer, told investors and analysts in a conference call.

He said planned improvements include the replacement of the Waterfall and Powderbowl chairlifts with a highspeed, six-person lift and covering the patio at the East Peak Lodge, plus wind screens and heat lamps.

In its earnings statement, Vail Resorts said net revenues were down about $1 million to $247.2 million, due to a decline in real estate revenue.

Along with the mold remediation, Vail refinanced certain senior subordinated debt due to mature in 2009 during the quarter and issued $390 million of new debt maturing in 2014, giving the company lower interest rates and an extension on long-term investment capital.

Bear Stearns analysts said Vail's overall results were above their expectations. Shares lost 30 cents to close at $17.05 on the New York Stock Exchange.

In addition to Heavenly, Vail Resorts owns four ski resorts in Colorado plus the Grand Teton Lodge Co. in Jackson Hole, Wyo. and 10 RockResorts luxury hotels around the country.


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