SEC again checking Vail Resorts’ accounting
December 12, 2003
Federal securities regulators are taking another, formal look at Vail Resorts’ accounting practices.
The agency routinely investigates companies that have restated earnings and it’s the second time Vail Resorts has been scrutinized by the agency. Vail Resorts officials declined Friday afternoon.
The Securities and Exchange Commission, which regulates publicly-traded companies, issued a subpoena in November following a $3.3 million restatement of earnings by the company in October.
A week after the restatement, which delayed release of the year-end financial report by three weeks, Vail Resorts announced it had reassigned its chief financial officer. Those restated earnings spanned 1999 until 2001.
The agency is examining the accounting practices and financial restatements made by the company for its 2003 fiscal year, which ended July 31.
In February, after an inquiry by the company, the agency investigated the company’s accounting for private-club initiation fees, causing the company to prorate the value of those fees over the life of a membership.
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In its 2003 year-end financial report, the company lost of $14 million – $8.5 million after taxes – on revenues of $710 million. It was the first loss suffered by the company in a decade.
That loss was attributed to the war in Iraq, which started in March, when 25 percent of the company’s ski business occurs. Tourism and travel declined precipitously with the onset of the war.
Vail Resorts is the largest domestic operater of ski resorts. It operates Vail, Beaver Creek, Keystone and Breckenridge in the Rocky Mountains and Heavenly at Lake Tahoe. Vail Resorts also owns the Grand Teton Lodge Co. in Jackson Wyoming and has an interest in 10 RockResorts luxury hotels across the country.
Thursday the company reported it had an expected seasonal loss of $25.4 million on $103.6 million in revenue and expenses of $134 million for the quarter ended Oct. 31.
At close of trading Friday, Vail Resorts’ stock was at $17.46, up 2.7 percent.
Cliff Thompson can be reached at 970-949-0555 x450 or firstname.lastname@example.org