S&P: Vail Resorts ratings unaffected by financial results

Standard & Poor's said Friday that Vail Resorts Inc.'s (BB-/Negative/--) weak financial results for fiscal year ended July 31 would not affect the company's ratings or outlook.

Weak financial performance was due to the war in Iraq and its subsequent effect on leisure travel and hotel stays, which more than offset a promising start during the early part of the 2002-2003 ski season.

S&P said hotel bookings at ski resorts and skier visitation during the latter half of the ski season were weak. Increased visits from Colorado Front Range residents partially buffered total visitation, but could not make up for the lower room nights stayed at ski resorts.

However, the current outlook for the upcoming 2003-2004 ski season is positive, the agency said. Hotel bookings, pricing, and season pass sales are up compared with the same period last year, and all of Vail's ski resorts are expected to open next week with an ample amount of snow.

Without further significant geo-political disturbance or backsliding of the economy, Vail should be able to achieve its fiscal 2004 EBITDA target of $133 million to $159 million, which is more in line with S&P's expectation for the ratings than fiscal 2003 earnings were. However, another weak ski season could precipitate either an outlook or ratings review.

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