Vail Resorts, Inc. announced Mountain revenue for the fiscal year ended July 31, 2005 was $540.9 million, a $39.9 million, or 8.0%, increase from $501.0 million for the comparable period last year. Mountain expense increased $23.0 million, or 6.2%, to $391.9 million.

Lodging revenue for the fiscal year grew $15.9 million, or 8.8%, to $196.4 million. Lodging expense increased $11.5 million, or 6.9%, to $177.5 million.

Resort revenue, the combination of Mountain and Lodging revenue, rose $55.8 million, or 8.2%, to $737.2 million, and Resort expense increased 6.4% to $569.4 million, up $34.5 million.

Real Estate revenue for the fiscal year grew $27.7 million to $72.8 million. Real Estate expense increased $41.5 million, as expected, to $58.3 million due primarily to the timing and mix of real estate projects, as well as the previously announced $15.1 million credit to operating expense in fiscal 2004 (which did not recur in fiscal 2005) associated with the Smith Creek Metropolitan District bond payoff.

Total revenue increased $83.4 million, or 11.5%, to $810.0 million, and total segment operating expense increased $76.0 million, or 13.8%, to $627.6 million.

Income from operations for the fiscal year improved $6.5 million, or 7.9%, to $88.3 million compared to $81.8 million for the same period last year.

Reported EBITDA for the Mountain segment improved $17.8 million, or 13.3%, to $151.3 million compared to $133.5 million for the comparable period last year.

Reported EBITDA for the Lodging segment improved from $11.1 million last year to $16.2 million, up 45.9%, in the current year. Included in fiscal 2005 was $2.7 million of equity investment loss attributed to BG Resort, LLC, the entity that owned the Ritz-Carlton, Bachelor Gulch, which represents a $0.6 million improvement over fiscal 2004. In December 2004 the company sold its 49% interest in BG Resort. Also included in fiscal 2005 was approximately $5.3 million of Lodging Reported EBITDA the Company does not expect to replicate in fiscal 2006 and beyond, exclusive of new management fee income, as a result of the recent sale in the fiscal fourth quarter of the Vail Marriott Mountain Resort & Spa and The Lodge at Rancho Mirage.

Resort Reported EBITDA rose $22.9 million to $167.5 million, a 15.8% improvement over $144.6 million of Resort Reported EBITDA for the same period last year.

Real Estate Reported EBITDA for the year decreased $16.5 million to $14.4 million from $30.9 million for the same period a year ago, as expected. Fiscal 2004 results included a reversal of a $15.1 million liability associated with the third quarter fiscal 2004 payoff of the SCMD bonds by the Bachelor Gulch Metropolitan District, which resulted in higher Real Estate Reported EBITDA in fiscal 2004 of that same amount. The fiscal 2004 Real Estate Reported EBITDA also included a $2.1 million net gain from the transfer of property.

Net income for the fiscal year was $23.1 million, or 64 cents per diluted share, compared to a net loss of $6.0 million, or a loss of 17 cents per diluted share, for the same period last year. Excluding the previously announced charges for early extinguishment of debt in both fiscal 2005 and fiscal 2004, the net loss from sale of businesses in fiscal 2005 and the fiscal 2004 mold remediation charge, the company's net income for fiscal 2005 would have been $27.4 million, or 75 cents per diluted share, using a normalized tax rate, compared to net income which would have been $20.4 million, or 58 cents per diluted share, in the prior fiscal year.

FOURTH QUARTER PERFORMANCE

Mountain revenue for the fourth quarter of fiscal 2005 was $35.4 million, a $1.4 million, or 4.1%, increase from $34.0 million for the comparable period last year. Mountain expense increased $6.6 million, or 11.8%, to $62.7 million.

Lodging revenue for the quarter grew $4.6 million, or 9.9%, to $51.2 million. Lodging expense increased $4.8 million, or 10.6%, to $50.2 million.

Resort revenue rose $6.0 million, or 7.4%, to $86.6 million. Resort expense increased $11.3 million, or 11.1%, to $112.9 million. Legal expense and costs associated with first-year compliance with section 404 of the Sarbanes-Oxley Act of 2002 and other regulatory matters represented a significant portion of the increase in fourth quarter expenses, and are expected to be reduced in fiscal 2006 and beyond.

Real Estate revenue for the quarter rose $26.9 million, or 407.6%, to $33.5 million. Real Estate expense increased $18.1 million to $25.3 million, or 251.4%, for the quarter.

Total revenue increased $32.9 million, or 37.8%, to $120.0 million, and total segment operating expense increased $29.5 million, or 27.1%, to $138.2 million.

Loss from operations for the quarter improved $3.9 million, or 8.9%, to a loss of $39.7 million compared to a loss of $43.6 million for the same period last year.

Reported EBITDA for the Mountain segment decreased $5.0 million, or 22.7%, to negative $27.0 million compared to negative $22.0 million for the comparable period last year.

Reported EBITDA for the Lodging segment improved $0.9 million, from $0.1 million in the fourth quarter of last year to $1.0 million in the current year fourth quarter. Included in the fourth quarter of fiscal 2004 was $1.1 million of equity investment loss attributed to BG Resort. In December 2004 the company sold its 49% interest in BG Resort.

Fourth quarter Resort Reported EBITDA fell $4.1 million to negative $26.0 million from negative $21.9 million in the comparable period last year.

Real Estate Reported EBITDA, which was $8.1 million for the quarter, improved $8.9 million compared to the fourth quarter last year.

The company reported a fourth quarter net loss of $36.4 million, or a loss of $1.00 per diluted share, compared to a net loss of $36.3 million, or a loss of $1.03 per diluted share, for the same period last year. Excluding the previously announced charges for early extinguishment of debt in fiscal 2004 and the net loss from sale of businesses in fiscal 2005, the company's net loss for the fourth quarter of fiscal 2005 would have been $27.7 million, or a loss of 76 cents per diluted share, using a normalized tax rate, compared to a net loss which would have been $31.7 million, or a loss of 90 cents per diluted share, in the prior fiscal year.

Adam Aron, chairman and CEO, commented, “Vail Resorts has just completed another highly successful year, registering record Resort revenue and record Resort Reported EBITDA, the latter up almost 16% year-over-year. We are delighted with the financial and qualitative performance of all three of our business segments in fiscal 2005. The success of our ski resorts this past year is evidenced by a 5% increase in skier visits coupled with a 4% increase in average realized lift ticket prices. These increases resulted in lift revenue improvement of 10% as well as significant revenue improvements from ancillary business including ski school, dining and retail/rental. Beaver Creek, Heavenly and Breckenridge experienced record skier visits, four of our five mountain resorts (Vail, Breckenridge, Keystone and Heavenly) logged over one million skier visits each, and all five of our ski resorts posted increased financial performance year-over-year.”

Aron continued, “Our Lodging business also experienced significant improvement, with Reported EBITDA growing by some 46% year-over-year. All year long we were pleased to see our lodging properties benefited from increased occupancies and average daily rates. Additionally, about a year ago, we articulated our strategy to capitalize on a frothy market for hotel transactions, and move towards owning fewer and managing more of our hotel properties. In June we closed on the sale of the Vail Marriott and in July we closed on the sale of The Lodge at Rancho Mirage, both at favorable valuations, maintaining management contracts on both properties. Including our sale, in December 2004, of our 49% interest in the entity that owns the Ritz-Carlton, Bachelor Gulch, in total Vail Resorts brought in an impressive $108 million in hotel sale proceeds in fiscal 2005, while foregoing less than $3 million in annual Lodging Reported EBITDA in future years, not considering the favorable impact of future management fee income.”

“Perhaps most intriguing of all, our Real Estate division made spectacular progress in fiscal 2005. Financial performance was as expected. More importantly, with Vail's New Dawn currently in progress and $155 million of Real Estate Held for Sale on our balance sheet, we are poised to generate significant real estate profits in the immediate future. We have binding contracts on all 67 condominiums at The Arrabelle at Vail Square, and on all 16 of the Gore Creek Place residences. It is an imprecise art to forecast the potential rise in construction costs due to the recent hurricanes in the Gulf Coast states. Even so, we still estimate that The Arrabelle and Gore Creek Place projects will generate income, before provision for taxes and before allocated corporate or Vail Resorts Development Company overhead, within the $80 to $92 million range we announced in June, albeit in the lower end of that range. In the fourth quarter of fiscal 2005, we also announced both The Ritz-Carlton Residences, Vail project, as well as the acquisition of two parcels of land to create a 6-acre development parcel in the Lionshead area of Vail. The Front Door project in Vail Village also looms large on the horizon. We expect these three projects in Vail to feature as much as 500,000 or more square feet of residential development opportunity. Recognizing the apparent demand for fine residential product in Vail, as was reflected at The Arrabelle's phenomenal success in January, these projects should be handsomely profitable. Recent and potential sales per square foot prices in Lionshead and in Vail Village far, far exceed current construction costs in Vail of $500 to $700 per square foot (excluding land, financing charges, sales and marketing expense, project management and overhead load, and the costs of providing public benefit related to these projects),” continued Aron.

Aron further added, “With the momentum we have been creating in all of our operating segments, we look to fiscal 2006 and beyond into the future with both enthusiasm and optimism. Early indications for fiscal 2006 are positive, including that dollar sales of season passes in Colorado for the 2005/2006 ski season are currently running up some 22% year-over-year and also that, in dollars, hotel bookings at our owned and managed Colorado hotels are up 2%. The absolute number of passengers currently booked into the Vail/Eagle airport is up 5%. Assuming a normal operating environment this coming ski season, we expect to see continued growth in Resort Reported EBITDA and anticipate having another profitable year in fiscal 2006. As such, we currently expect Mountain Reported EBITDA for fiscal 2006 to range from $163 million to $173 million, and Lodging Reported EBITDA should range from $8 to $16 million, with total Resort Reported EBITDA projected to be between $175 and $185 million. As for Real Estate, fiscal 2006 will be a year of construction, laying the groundwork for the company to realize significant cash flow and Reported EBITDA in future years. As such, at this time we are comfortable giving Real Estate Reported EBITDA guidance of $5 to $10 million for fiscal 2006 (although that figure will be a fraction of the expected performance in fiscal 2007, 2008, and 2009). We are also currently projecting net income in fiscal 2006 to range from $34 million to $43 million.”

Aron concluded, “All of these projected ranges are prior to the incremental charge in fiscal 2006 resulting from the expensing of stock based compensation pursuant to the adoption, in the first quarter of fiscal 2006, of FAS 123R. (We are currently evaluating the total impact of adopting 123R and will update guidance once these estimates are known.) Additionally, the Lodging guidance takes into account the loss of Reported EBITDA, net of ongoing management fee revenues, from the sale of two owned hotels near the end of fiscal 2005 and the anticipated sale of an additional hotel midway through fiscal 2006.”

                          VAIL RESORTS, INC.
                 CONSOLIDATED STATEMENTS OF OPERATIONS
               (In thousands, except per share amounts)
                              (Unaudited)

                               Three Months Ended  Twelve Months Ended
                                     July 31,            July 31,
                                  2005      2004      2005      2004
                                --------  --------  --------  --------
Net revenue:
  Mountain                     $ 35,371  $ 33,980  $540,855  $500,995
  Lodging                        51,202    46,582   196,351   180,525
  Real estate                    33,452     6,570    72,781    45,123
                                --------  --------  --------  --------
  Total net revenue             120,025    87,132   809,987   726,643
Segment operating expense:
  Mountain                       62,679    56,145   391,889   368,875
  Lodging                        50,187    45,405   177,469   165,983
  Real estate                    25,315     7,180    58,254    16,791
                                --------  --------  --------  --------
Total segment operating
 expense                        138,181   108,730   627,612   551,649
Other operating income
 (expense):
  Gain on transfer of
   property, net                     --        --        --     2,147
  Depreciation and
   amortization                 (20,580)  (21,039)  (89,968)  (86,377)
  Asset impairment charges         (977)     (175)   (2,550)   (1,108)
  Mold remediation charge            --        --        --    (5,500)
  Loss on disposal of fixed
   assets, net                       (9)     (778)   (1,528)   (2,345)
                                --------  --------  --------  --------
Income (loss) from operations   (39,722)  (43,590)   88,329    81,811
Mountain equity investment
 income, net                        300       154     2,303     1,376
Lodging equity investment
 loss, net                           --    (1,048)   (2,679)   (3,432)
Real estate equity investment
 income (loss), net                   5      (232)     (102)      460
Investment income, net              623       548     2,066     1,886
Interest expense                 (9,565)  (10,553)  (40,298)  (47,479)
Loss on extinguishment of debt       --      (886)     (612)  (37,084)
Loss from sale of businesses,
 net                            (13,043)       --    (7,353)       --
Gain (loss) on put options, net     417      (137)    1,158    (1,875)
Other income (expense), net          --      (169)       50      (179)
Minority interest in income of
 consolidated subsidiaries, net   1,742     2,181    (5,239)   (4,000)
                                --------  --------  --------  --------
  Income (loss) before
   (provision) benefit for
   income taxes                 (59,243)  (53,732)   37,623    (8,516)
Benefit (provision) for income
 taxes                           22,808    17,428   (14,485)    2,557
                                --------  --------  --------  --------
  Net income (loss)            $(36,435) $(36,304) $ 23,138  $ (5,959)
                                ========  ========  ========  ========

Per share amounts:
  Basic net income (loss) per
   share                       $  (1.00) $  (1.03) $   0.65  $  (0.17)
                                ========  ========  ========  ========
  Diluted net income (loss)
   per share                   $  (1.00) $  (1.03) $   0.64  $  (0.17)
                                ========  ========  ========  ========
Other Data:
Mountain Reported EBITDA       $(27,008) $(22,011) $151,269  $133,496
Lodging Reported EBITDA           1,015       129    16,203    11,110
Resort Reported EBITDA          (25,993)  (21,882)  167,472   144,606
Real Estate Reported EBITDA    $  8,142  $   (842) $ 14,425  $ 30,939