Vail Resorts mountain revenue for the second quarter of fiscal 2005 was $214.2 million, a 7.0% increase from $200.1 million for the comparable period last year. Mountain expense increased $7.5 million, or 6.0%, from $125.3 million to $132.8 million.

Lodging revenue for the quarter grew $3.4 million, or 8.5%, from $39.2 million to $42.6 million. Lodging expense increased $1.0 million, or 2.6%, from $39.6 million to $40.6 million.

Resort revenue, the combination of mountain and lodging revenues, rose $17.4 million, or 7.3%, from $239.4 million to $256.8 million. Resort expense increased 5.2% from $164.9 million to $173.4 million, up $8.5 million.

Real Estate revenue for the quarter rose $0.4 million to $7.9 million, and Real Estate expense increased $0.6 million to $6.7 million. Included in the second quarter Real Estate revenue for fiscal 2005 is $2.5 million of previously deferred land sale revenue associated with the December 2004 sale of the Company's investment in Bachelor Gulch Resort, LLC (“BG Resort”), the entity which owns the Ritz-Carlton, Bachelor Gulch.

Total revenue grew $17.7 million, or 7.2%, from $246.9 million to $264.6 million and total segment operating expense increased $9.2 million, or 5.4%, from $170.9 million to $180.1 million.

Income from operations for the quarter improved $14.0 million, or 30.0%, to $60.6 million, compared to $46.6 million for the same period last year. Included in the second quarter of fiscal 2004 was a $5.5 million mold remediation charge.

Reported EBITDA for the Mountain segment grew $6.7 million, or 8.9%, to $82.1 million compared to $75.4 million for the comparable period last year.

Reported EBITDA for the Lodging segment improved from a loss of $1.5 million in the second quarter of last year to a positive $1.3 million in the current year second quarter.

Second quarter Resort Reported EBITDA rose $9.4 million to $83.3 million, a 12.8% improvement over the $73.9 million reported for the comparable period last year.

Real Estate Reported EBITDA for the quarter fell $0.6 million to $1.1 million from $1.7 million last year, primarily due to the sale of higher margin properties during the second quarter of last year.

The Company reported second quarter fiscal 2005 net income of $32.2 million, or $0.89 per diluted share, compared to a net loss of $6.7 million, or a loss of $0.19 per diluted share, for the same period last year.

Excluding a $5.7 million gain on the previously announced sale of the Company's equity investment in BG Resort in fiscal 2005, the charges for early extinguishment of debt in both fiscal years, and the fiscal 2004 mold remediation charge, and using a normalized tax rate, the Company's second quarter net income would have been $28.4 million, or $0.79 per diluted share, for fiscal 2005, a 38.5% improvement as compared to net income of $20.5 million, or $0.58 per diluted share, in fiscal 2004.

Mountain revenue for the six months ended January 31, 2005 was $248.7 million, a 6.4% increase from $233.6 million for the comparable period last year. Mountain expense increased $10.0 million, or 5.4%, from $186.8 million to $196.8 million.

Lodging revenue for the six months grew $5.9 million, or 7.0%, from $83.0 million to $88.9 million. Lodging expense increased $3.0 million, or 3.8%, from $81.1 million to $84.1 million.

Resort revenue, the combination of Mountain and Lodging revenues, rose $20.9 million, or 6.6%, from $316.6 million to $337.5 million. Resort expense increased 4.9% to $280.9 million, up $13.1 million from the comparable period
last year.

Real Estate revenue for the six-month period fell $9.4 million from $34.4 million last year to $25.0 million this year, as expected, and Real Estate expense decreased $1.4 million from $18.2 million last year to $16.8 million this year. Included in the six month Real Estate revenue for fiscal 2005 is $2.5 million of previously deferred land sale revenue associated with the December 2004 sale of the Company's investment in BG Resort.

Total revenue grew $11.5 million, or 3.3%, to $362.5 million up from $351.0 million last year, and total segment operating expense increased $11.7 million, or 4.1%, to $297.7 million up from $286.0 million last year.

Income from operations for the six months improved $2.8 million, or 17.3%, to $19.0 million compared to $16.2 million for the same period last year. Included in the first six months of fiscal 2004 was a $5.5 million mold remediation charge.

Reported EBITDA for the Mountain segment improved $6.0 million, or 12.7%, to $53.4 million compared to $47.4 million for the comparable period last year.

Reported EBITDA for the Lodging segment improved from a loss of $1.0 million for the six-month period last year to positive $2.1 million in the current year.

Resort Reported EBITDA rose $9.1 million to $55.5 million, a 19.5% improvement over the $46.4 million reported for the six-month period last
year.

Real Estate Reported EBITDA for the six months decreased $10.4 million, as expected, to $8.2 million from $18.6 million for the same period a year ago.

The Company reported net income for the six months of $0.8 million, or $0.02 per diluted share, compared to a net loss of $32.1 million, or a loss of $0.91 per diluted share, for the same period last year.

Excluding the $5.7 million gain on sale of equity investment in fiscal 2005, the charges for early extinguishment of debt in both fiscal years, and the fiscal 2004 mold remediation charge, and using a normalized tax rate, the Company's six month net loss would have been $2.3 million, or a loss of $0.06 per diluted share, for fiscal 2005, a 58.4% improvement as compared to a net loss of $5.5 million, or $0.16 per diluted share, in fiscal 2004.

As noted above, the Company sold its interest in BG Resort in December 2004. Lodging Reported EBITDA and Resort Reported EBITDA included $0.8 million of equity investment loss in the second quarter of fiscal 2005 and $2.7 million of equity investment loss for the first six months of fiscal 2005, representing the Company's share of the LLC's earnings prior to the sale. Similarly, included in Lodging and Resort Reported EBITDA in fiscal 2004 was an equity investment loss of $1.2 million for the second quarter, $2.8 million for the first six months and $3.3 million for the full twelve months of fiscal 2004. Given the completed sale, no such losses will be reported for the remainder of fiscal 2005, full year fiscal 2006 or beyond.

Adam Aron, Vail Resorts Chairman and Chief Executive Officer, commented, “After our strong financial performance last year in fiscal 2004, we are understandably pleased to be announcing today that for the third year in a row, Vail Resorts has generated record second quarter Resort Revenue and record second quarter Resort Reported EBITDA. With meaningful revenue increases in our Mountain and Lodging segments coupled with continued thoughtful expense management, we were able to improve Resort Reported EBITDA by some 13% year-over-year, with margins improving by approximately 2 percentage points. All three of our major business segments are performing handsomely, and as a result it would appear that Vail Resorts is firing on all cylinders.”

“Thanks to increases in lift ticket pricing, favorable visitation mix changes, a modest growth in skier visits and robust ski school patronage, all five of our ski resorts performed very well during the quarter. Measured guest satisfaction rates continue to reflect our guests' intense affection for the high-quality customer experience we offer, which in turn has enabled us to post these strong financial results today,” said Aron.

He added, “Results from our lodging business also have been growing quite nicely. The successful second quarter sale of our investment in BG Resort as well as the third party sale of La Posada de Santa Fe (which the Company manages but does not own), both at attractive prices reflecting attractive multiples of earnings, are evidence of the embedded value of our RockResorts and other hotels. We continue to receive and evaluate offers from third parties to acquire certain of our hotels, which, if effected, could potentially unlock considerable shareholder value.”

“Additionally, our refinanced senior bank credit facility achieved this year, coupled with our refinanced senior subordinated notes achieved last year and our continued improved earnings, all translate to Vail Resorts featuring a much stronger balance sheet and credit profile,” Aron said.

Continued Aron, “Today, with approximately one month left in our ski season in Colorado and two months left at Heavenly, we are bullish about the remainder of the season. Our ski areas have received plenty of snowfall this year, and once again we had record season pass sales, with sales dollars up approximately 3% beyond even the record setting levels of last year. In addition, air, hotel and ski school advance bookings are all strong for the remainder of the ski season and lodging advance bookings for the fourth quarter also are encouraging.”

Aron added, “We are also pleased that February skier visits and revenue, which will be included in third quarter results, were strong compared to the same period last year. Of course, we don't know for certain what March and April will hold, and we are facing Sarbanes-Oxley 404 compliance costs. Taken together, we feel comfortable reiterating, at this time, the year-end Reported EBITDA guidance we provided in September for the Mountain, Lodging, Resort and Real Estate segments which call for another record setting year for Vail Resorts. Also, we are comfortable reiterating our net income guidance, to which would have to be added the sum of the second quarter gain on sale of equity investment and the second quarter loss on extinguishment of debt.”

The Company also announced today that its Board of Directors authorized approximately $65.4 million of resort-related capital expenditures for calendar 2005, plus approximately $2.9 million of “rollover” capital, which was budgeted but not completed in calendar 2004. This capital investment will allow the Company to maintain its high quality standards (including allowing for a repeat of Vail and Beaver Creek's dramatically increased grooming this ski season), as well as for incremental discretionary resort improvements at the Company's five ski resorts and throughout its hotels.

Highlights of these expenditures include three new high-speed chairlifts at the Beaver Creek, Breckenridge and Heavenly ski resorts; snowmaking upgrades at the Vail, Beaver Creek, Breckenridge and Keystone resorts; ski trail enhancements at Vail, Heavenly, Keystone and Breckenridge; restaurant and/or hotel renovations at Vail, Beaver Creek and Keystone; and upgrades to the central reservations, marketing database and ecommerce booking systems, among other projects.

Furthermore, as construction commences on the multi-year redevelopment at Vail, $138 million of real estate-related capital expenditures were also approved. However, net cash outlays for real estate are expected to be significantly less given the Company's belief that it will secure non-recourse financing for the major Vail projects in addition to the receipt of proceeds from real estate deposits and land sales. In addition to the Vail projects, the approved real estate capital includes ongoing projects in Beaver Creek, the new golf course community in Jackson Hole, phase II of the Mountain Thunder Lodge condominiums at Breckenridge and other projects throughout the Company's resorts.

Commenting on the capital expenditure announcement, Aron said, “Vail Resorts remains committed to providing a superb vacation experience at our ski resorts and hotel properties and enhancing the reputation for which we are known the world over.
Resort-related spending for calendar 2005 is on par with last year, and is more than ample to continue Vail Resorts' clear leadership position among mountain resort operators. New lifts, continued focus on grooming, high tech snowmaking and state-of-the-art website bookings and reservations systems will continue to enhance the premier experiences we offer visitors to our resorts. In addition, now that Vail's New Dawn is at hand, the anticipated real estate capital expenditures will literally transform and re-define the charm, amenities and appeal of our flagship resort, Vail.”


                              Vail Resorts, Inc.
               CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
                   (In thousands, except per share amounts)
                                 (Unaudited)

                                   Three Months Ended     Six Months Ended
                                       January 31,           January 31,
                                    2005        2004      2005        2004
     Net revenue:
       Mountain                   $214,166    $200,149  $248,659    $233,614
       Lodging                      42,589      39,243    88,864      83,032
       Real estate                   7,873       7,496    24,989      34,388
       Total net revenue           264,628     246,888   362,512     351,034
     Segment operating expense:
       Mountain                    132,849     125,325   196,811     186,778
       Lodging                      40,570      39,554    84,119      81,057
       Real estate                   6,714       6,065    16,775      18,189
     Total segment operating
      expense                      180,133     170,944   297,705     286,024
     Other operating income
      (expense):
       Gain on transfer of
        property                        --         233        --       2,147
       Depreciation and
        amortization               (23,273)    (22,568)  (44,348)    (42,933)
       Asset impairment charge          --        (933)       --        (933)
       Mold remediation charge          --      (5,500)       --      (5,500)
       Loss on disposal of
        fixed assets, net             (623)       (545)   (1,481)     (1,556)
     Income from operations         60,599      46,631    18,978      16,235
     Mountain equity investment
      income, net                      771         586     1,565         568
     Lodging equity investment
      loss, net                       (761)     (1,214)   (2,679)     (2,954)
     Real estate equity
      investment (loss)
      income, net                      (24)          3       (59)        206
     Investment income, net          1,174         328     1,301         893
     Interest expense              (10,809)    (12,857)  (21,385)    (26,266)
     Loss on extinguishment
      of debt                         (612)    (36,195)     (612)    (36,195)
     Gain on sale of
      equity investment              5,693          --     5,693          --
     Gain (loss) on put
      options, net                     975        (696)    1,188      (1,306)
     Other income (expense), net        84         (10)       52         (10)
     Minority interest in
      income of consolidated
      subsidiaries, net             (4,665)     (4,094)   (2,765)     (2,003)
       Income (loss) before
        (provision) benefit
        for income taxes            52,425      (7,518)    1,277     (50,832)
     (Provision) benefit for
      income taxes                 (20,184)        781      (492)     18,691
       Net income (loss)           $32,241     $(6,737)     $785    $(32,141)

     Per share amounts:
       Basic net income (loss)
        per share                    $0.91      $(0.19)    $0.02      $(0.91)
       Diluted net income (loss)
        per share                    $0.89      $(0.19)    $0.02      $(0.91)
     Other Data:
     Mountain Reported EBITDA      $82,088     $75,410   $53,413     $47,404
     Lodging Reported EBITDA         1,258      (1,525)    2,066        (979)
     Resort Reported EBITDA         83,346      73,885    55,479      46,425
     Real Estate Reported EBITDA    $1,135      $1,667    $8,155     $18,552


     Note:  Certain reclassifications have been made to the Consolidated
            Financial Statements as of and for the three and six months ended
            January 31, 2004 to conform to the current period presentation.



                              Vail Resorts, Inc.
               Resort Revenue by Business Line and Skier Visits
                                (in thousands)

                           Three Months Ended          Six Months Ended
                               January 31,                January 31,

                        2005      2004  %Change     2005      2004  %Change
     Business Line
     Lift tickets    $103,017   $96,655   6.6%   $103,056   $96,681   6.6%
     Ski school        27,092    25,022   8.3%     27,116    25,046   8.3%
     Dining            19,415    18,411   5.5%     23,401    22,325   4.8%
     Retail/rental     45,776    45,035   1.6%     62,975    62,075   1.4%
     Other             18,866    15,026  25.6%     32,111    27,487  16.8%
     Total Mountain
      Operating
      Revenue         214,166   200,149   7.0%    248,659   233,614   6.4%

     Total Lodging
      Operating
      Revenue          42,589    39,243   8.5%     88,864    83,032   7.0%

     Total Resort
      Revenue        $256,755  $239,392   7.3%   $337,523  $316,646   6.6%


                           Three Months Ended          Six Months Ended
                               January 31,                January 31,

                         2005      2004  %Change     2005      2004  %Change
     Skier Visits
     Vail                 679       698  (2.7)%       679       698  (2.7)%
     Breckenridge         677       657   3.0%        677       657   3.0%
     Heavenly             472       464   1.7%        472       464   1.7%
     Keystone             482       452   6.6%        482       452   6.6%
     Beaver Creek         354       349   1.4%        354       349   1.4%
     Total Skier
      Visits            2,664     2,620   1.7%      2,664     2,620   1.7%