Vail Resorts to Invest $25 Million in Summer Amenities

In a significant vote of confidence in the allure of mountain sports, Vail Resorts Inc. unveiled a record capital spending budget for 2013,  that includes investing $25 million for the first phase of its new summer operations such as zip lines, mountain biking trails and other amenties. The company will also invest $10 million to expand snow making capability, build terrain parks and make other improvement at a recently acquired Michigan ski resort.

• Improvements at Afton Alps & Mt Brighton-The company is planning major enhancements and upgrades to the newly acquired Afton Alps near Minneapolis, Minn., and Mt. Brighton near Detroit, Mich.  The company plans to invest nearly $10 million at each resort to bring a completely new ski experience to these markets, which are home to more than 450,000 skiers and riders.  The company’s plans include (i) dramatic improvements in snowmaking to extend the season and provide a more consistent and high quality snow surface, (ii) the creation of state-of-the-art terrain parks with extensive new features, animation and dedicated lifts; (iii) upgrades to base area facilities; (iv) the addition of EpicMix, EpicMix Racing and lift ticket scanning to personalize the guest experience and better promote the company’s western resorts to these skiers; and (v) improvements to guest safety and quality across the ski areas.  These improvements are being announced along with new season pass plans for the resorts and a more dedicated sales effort in those markets to drive a stronger connection between those guests and the company’s Colorado and Tahoe resorts.  The company believes that following these plans, future capital spending at each resort will be more limited in scope.
  
• Peak 6 terrain expansion at Breckenridge-The Peak 6 terrain expansion includes two new chairlifts and 543 acres of new terrain, a 23 percent expansion to the resorts skiable acreage.  Peak 6 will offer an intermediate “bowl” skiing experience, with the opportunity for a wide variety of guests to ski this new high alpine area that sits above tree line.  Peak 6 will become another iconic feature of Breckenridge, and will better disperse skiers and improve the guest experience across the resort, which is perennially the #1 or #2 most visited mountain resort in the United States. 
  
• New Red Tail Camp restaurant at Beaver Creek-In advance of the 2015 World Alpine Ski Championships, the company is building a new 500 seat restaurant at Red Tail Camp, located at the finish of the men’s and women’s downhill courses, which more than doubles the existing restaurant’s capacity.  Red Tail Camp will offer gourmet dining options in an upscale cafeteria setting and will add a second high quality and high capacity dining venue for Beaver Creek, better positioning the resort for continued growth in visitation.  The new restaurant will follow on the success the company has had with the Tamarack Lodge at Heavenly, the Zephyr Lodge at Northstar and The 10th at Vail.  
  Replacing Vail’s Chair 4 (Mountain Top Express) with a high speed, six-person chairlift-Vail’s Mountain Top Express (#4) is one of the most recognized and highly utilized chairlifts in North America- serving both a critical skiing pod for the mountain and an important transportation lift from Lionshead and Vail Village to the Back Bowls and Blue Sky Basin.  The new six-person chairlift will increase capacity by 33 percent, dramatically reducing lift lines and building on this year’s success of the newly built Gondola One.  The new chair will continue to build upon Vail’s preeminent position in delivering the best experience in the ski industry worldwide.
  
• EpicMix Academy-EpicMix Academy will be the fourth generation of the groundbreaking and award-winning EpicMix application, following the introductions of EpicMix Photo and EpicMix Racing.  With EpicMix Academy, the company’s ski school instructors will be able to certify the attainment of certain skills and ski levels for any of the students in their classes.  Children and adults in both group and private ski lessons will be able to earn permanent recognition and review their accomplishments online.  Parents will be able to track the progress of their kids and the company’s ski schools will immediately know the ability level of every student before the start of each lesson.  EpicMix Academy will offer special certified digital pins, which can be easily shared through Facebook and Twitter along with pins for vertical feet, photos and racing medals.

 
Vail Resorts has historically invested significant cash in capital expenditures for resort operations and believes the calendar 2013 capital plan maintains the high-quality standards for which Vail Resorts is known and invests in improvements across the company’s resorts and new growth opportunities.  All discretionary capital improvements are evaluated based on an expected level of return on investment. The company plans to utilize cash on hand, borrowings available under its Credit Agreement and/or cash flow generated from future operations to provide the cash necessary to execute its capital plans.