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 April 30,						Nine Months Ended April 30,
	2019			2018			2019			2018
Net revenue:
Lift	$	526,881		$	452,723		$	999,124		$	860,103
Ski school	110,755			101,213			207,271			185,767
Dining	78,928			70,678			162,629			142,890
Retail/rental	114,082			104,162			285,860			265,015
Other	47,252			43,748			144,093			137,776
Total Mountain net revenue	877,898			772,524			1,798,977			1,591,551
Lodging	79,848			68,827			227,997			204,455
Total Resort net revenue	957,746			841,351			2,026,974			1,796,006
Real Estate	241			3,140			595			3,910
Total net revenue	$	957,987		$	844,491		$	2,027,569		$	1,799,916
Segment operating expense:
Mountain	$	410,254		$	363,878		$	1,056,625		$	936,567
Lodging	67,221			58,352			205,717			185,957
Resort	477,475			422,230			1,262,342			1,122,524
Real Estate, net	1,382			(597		)	4,141			2,301
Total segment operating expense	$	478,857		$	421,633		$	1,266,483		$	1,124,825
Gain on sale of real property	$	268		$	—		$	268		$	515
Mountain equity investment income, net	$	445		$	607		$	1,555		$	1,094
Reported EBITDA:
Mountain	$	468,089		$	409,253		$	743,907		$	656,078
Lodging	12,627			10,475			22,280			18,498
Resort	480,716			419,728			766,187			674,576
Real Estate	(873		)	3,737			(3,278		)	2,124
Total Reported EBITDA	$	479,843		$	423,465		$	762,909		$	676,700
Real estate held for sale and investment	$	101,251		$	99,623		$	101,251		$	99,623
Reconciliation to net income attributable to Vail Resorts, Inc.:
Total Reported EBITDA	$	479,843		$	423,465		$	762,909		$	676,700
Depreciation and amortization	(55,260		)	(54,104		)	(161,541		)	(154,132		)
Change in estimated fair value of contingent consideration	(1,567		)	2,454			(3,467		)	2,454
Gain (loss) on disposal of fixed assets and other, net	27			(3,230		)	505			(2,125		)
Investment income and other, net	1,727			736			2,697			1,516
Foreign currency loss on intercompany loans	(3,319		)	(9,502		)	(5,180		)	(6,511		)
Interest expense, net	(19,575		)	(15,648		)	(59,215		)	(46,795		)
Income before (provision) benefit from income taxes	401,876			344,171			536,708			471,107
(Provision) benefit from income taxes	(93,346		)	(71,896		)	(120,914		)	17,914
Net income	308,530			272,275			415,794			489,021
Net income attributable to noncontrolling interests	(16,396		)	(16,023		)	(25,106		)	(25,463		)
Net income attributable to Vail Resorts, Inc.	$	292,134		$	256,252		$	390,688		$	463,558