Segment Information

The Company has three reportable segments: Mountain, Lodging and Real Estate. The Company refers to “Resort” as the combination of the Mountain and Lodging segments. The Mountain segment includes the operations of the Company’s mountain resorts/ski areas and related ancillary activities. The Lodging segment includes the operations of the Company’s owned hotels, RockResorts, NPS concessionaire properties, condominium management, Colorado resort ground transportation operations and mountain resort golf operations. The Real Estate segment owns, develops and sells real estate in and around the Company’s resort communities. The Company’s reportable segments, although integral to the success of the others, offer distinctly different products and services and require different types of management focus. As such, these segments are managed separately.

The Company reports its segment results using Reported EBITDA (defined as segment net revenue less segment operating expenses, plus or minus segment equity investment income or loss, and for the Real Estate segment, plus gain or loss on sale of real property). The Company reports segment results in a manner consistent with management’s internal reporting of operating results to the chief operating decision maker (Chief Executive Officer) for purposes of evaluating segment performance.

Items excluded from Reported EBITDA are significant components in understanding and assessing financial performance. Reported EBITDA should not be considered in isolation or as an alternative to, or substitute for, net income, net change in cash and cash equivalents or other financial statement data presented in the consolidated condensed financial statements as indicators of financial performance or liquidity.

The Company utilizes Reported EBITDA in evaluating the performance of the Company and in allocating resources to its segments. Mountain Reported EBITDA consists of Mountain net revenue less Mountain operating expense plus or minus Mountain equity investment income or loss. Lodging Reported EBITDA consists of Lodging net revenue less Lodging operating expense. Real Estate Reported EBITDA consists of Real Estate net revenue less Real Estate operating expense plus gain or loss on sale of real property. All segment expenses include an allocation of corporate administrative expense. Assets are not allocated between segments, or used to evaluate performance, except as shown in the table below.

The following table presents financial information by reportable segment, which is used by management in evaluating performance and allocating resources (in thousands):



	Three Months Ended October 31,
	2018			2017
Net revenue:
Lift	$	24,685		$	25,468
Ski school	4,272			4,438
Dining	18,292			18,302
Retail/rental	43,342			45,407
Other	54,415			54,510
Total Mountain net revenue	145,006			148,125
Lodging	74,900			72,089
Total Resort net revenue	219,906			220,214
Real Estate	98			636
Total net revenue	$	220,004		$	220,850
Segment operating expense:
Mountain	$	222,363		$	207,084
Lodging	71,004			67,734
Resort	293,367			274,818
Real Estate, net	1,370			1,691
Total segment operating expense	$	294,737		$	276,509
Mountain equity investment income, net	$	950		$	522
Reported EBITDA:
Mountain	$	(76,407	)	$	(58,437	)
Lodging	3,896			4,355
Resort	(72,511		)	(54,082		)
Real Estate	(1,272		)	(1,055		)
Total Reported EBITDA	$	(73,783	)	$	(55,137	)
Real estate held for sale and investment	$	101,743		$	102,697
Reconciliation to net loss attributable to Vail Resorts, Inc.:
Total Reported EBITDA	$	(73,783	)	$	(55,137	)
Depreciation and amortization	(51,043		)	(48,624		)
Change in estimated fair value of contingent consideration	(1,200		)	—
(Loss) gain on disposal of fixed assets and other, net	(619		)	567
Investment income and other, net	463			383
Foreign currency loss on intercompany loans	(2,311		)	(7,346		)
Interest expense, net	(18,638		)	(15,174		)
Loss before benefit from income taxes	(147,131		)	(125,331		)
Benefit from income taxes	36,405			93,404
Net loss	(110,726		)	(31,927		)
Net loss attributable to noncontrolling interests	2,931			3,542
Net loss attributable to Vail Resorts, Inc.	$	(107,795	)	$	(28,385	)