POWDR loses in court, Vail will take over PCMR lease

[steamboat1]

Powdr's liability is limited to the extent of its equity interest in GPCC

We don't care about the Cummings - we care about how much this is going to effect Powdr and Killington.

No improvements this year because of this train wreck in Utah.

The Cummings will still have jets and yachts when this is done.

We just want 2 new lifts, a new base lodge, and some frigging pavement on the access road - less money than 1 jet.

Sorry, but this makes no sense at all.

The Vail/Talisker/PCMR suit is not a liability case. It is a landlord/tenant issue. POWDR stands to lose value in its real estate holdings, and a loss of future income from losing the lease to the ski area land. There is no large liability award looming.

What the Cummings do with their toys does not affect Killington. Do you sell your toys when a small project at work at a subsidiary goes bad?

And your 1 jet is more than 2 lifts, a base lodge and a mile of 4 lane road is way out of whack. Not that comparing a random list of capital investments to the price of a jet makes any sense either.

My understanding is there is plenty of liability ($$$) involved in this case. Vail is not able to use the land they leased. The value of the Park City side of the lease is estimated to be $15m annually (Canyons $10m). Then there's the loss of revenue to Vail estimated to be $40m annually, the Greater Park City Co. pocketed these revenues. The Greater Park City Co. could be held liable for these losses. At least that's how I understand it, I could be wrong.

[hillbangin]

Powdr's liability is limited to the extent of its equity interest in GPCC

We don't care about the Cummings - we care about how much this is going to effect Powdr and Killington.

No improvements this year because of this train wreck in Utah.

The Cummings will still have jets and yachts when this is done.

We just want 2 new lifts, a new base lodge, and some frigging pavement on the access road - less money than 1 jet.

Sorry, but this makes no sense at all.

The Vail/Talisker/PCMR suit is not a liability case. It is a landlord/tenant issue. POWDR stands to lose value in its real estate holdings, and a loss of future income from losing the lease to the ski area land. There is no large liability award looming.

What the Cummings do with their toys does not affect Killington. Do you sell your toys when a small project at work at a subsidiary goes bad?

And your 1 jet is more than 2 lifts, a base lodge and a mile of 4 lane road is way out of whack. Not that comparing a random list of capital investments to the price of a jet makes any sense either.

My understanding is there is plenty of liability ($$$) involved in this case. Vail is not able to use the land they leased. The value of the Park City side of the lease is estimated to be $15m annually (Canyons $10m). Then there's the loss of revenue to Vail estimated to be $40m annually, the Greater Park City Co. pocketed these revenues. The Greater Park City Co. could be held liable for these losses. At least that's how I understand it, I could be wrong.

Just to clarify -

The liability line was from another post - not mine

It's not a liability case - your right

BUTT - When Mike can't buy new lifts, pavement, and lodges because the POWDR gang won't give him any money because someone forgot to sign the lease - even though Mike/Killington had a good year - it does effect Killington. Killington and its customers lose.

And when the Cummings gang has enough money to throw down for Snowbird so Snowbird can get new lifts and redo the Cliff Lodge - the Cummings have money are buying toys they like - and not investing in toys they already bought - No?

And I know that a jet is more money than 2 lifts, a base lodge and some pavement. That's my point.

Lifts and Jets and Pavement are all right offs / investments to some degree so - Do you invest in Killington, buy Snowbird, or buy another jet for the grand kids?

Bottom line is not matter how this case ends - and whatever corporate structure POWDR is under to protect the Cummings - the Cummings have tons of dough - and Killington is not going to get the last 15M that it needs until the lawsuit is done.

[simpletwist]

meanwhile... Vail Resorts Commits $85 Million in Resort Improvements for 2014-15, Continuing To Change the Game for Skiers and Snowboarders.

http://news.vailresorts.com/corporate/v ... ements.htm" onclick="window.open(this.href);return false;

[Highway Star]

Powdr's liability is limited to the extent of its equity interest in GPCC

We don't care about the Cummings - we care about how much this is going to effect Powdr and Killington.

No improvements this year because of this train wreck in Utah.

The Cummings will still have jets and yachts when this is done.

We just want 2 new lifts, a new base lodge, and some frigging pavement on the access road - less money than 1 jet.

Sorry, but this makes no sense at all.

The Vail/Talisker/PCMR suit is not a liability case. It is a landlord/tenant issue. POWDR stands to lose value in its real estate holdings, and a loss of future income from losing the lease to the ski area land. There is no large liability award looming.

What the Cummings do with their toys does not affect Killington. Do you sell your toys when a small project at work at a subsidiary goes bad?

And your 1 jet is more than 2 lifts, a base lodge and a mile of 4 lane road is way out of whack. Not that comparing a random list of capital investments to the price of a jet makes any sense either.

My understanding is there is plenty of liability ($$$) involved in this case. Vail is not able to use the land they leased. The value of the Park City side of the lease is estimated to be $15m annually (Canyons $10m). Then there's the loss of revenue to Vail estimated to be $40m annually, the Greater Park City Co. pocketed these revenues. The Greater Park City Co. could be held liable for these losses. At least that's how I understand it, I could be wrong.

Just to clarify -

The liability line was from another post - not mine

It's not a liability case - your right

BUTT - When Mike can't buy new lifts, pavement, and lodges because the POWDR gang won't give him any money because someone forgot to sign the lease - even though Mike/Killington had a good year - it does effect Killington. Killington and its customers lose.

And when the Cummings gang has enough money to throw down for Snowbird so Snowbird can get new lifts and redo the Cliff Lodge - the Cummings have money are buying toys they like - and not investing in toys they already bought - No?

And I know that a jet is more money than 2 lifts, a base lodge and some pavement. That's my point.

Lifts and Jets and Pavement are all right offs / investments to some degree so - Do you invest in Killington, buy Snowbird, or buy another jet for the grand kids?

Bottom line is not matter how this case ends - and whatever corporate structure POWDR is under to protect the Cummings - the Cummings have tons of dough - and Killington is not going to get the last 15M that it needs until the lawsuit is done.

Not sure where you've been for the last two decades. Killington was a cash cow for ASC and now POWDR. Except for a really slow year in '07-'08, they have always been profitable to the tune of $10-15M per year. They simply won't bother making capital improvements (unless badly needed) or expansions to Killington when it is already highly profitable.

[Geoff]

Not sure where you've been for the last two decades. Killington was a cash cow for ASC and now POWDR. Except for a really slow year in '07-'08, they have always been profitable to the tune of $10-15M per year. They simply won't bother making capital improvements (unless badly needed) or expansions to Killington when it is already highly profitable.

You have no basis for making that claim since you have no idea what POWDR finance looks like. They almost certainly bought Killington from the Texas boys using debt financing. We have no idea what they paid, how much they borrowed, or what kind of interest rate they're paying. Are they making operating profit? Sure. After you pay the interest on the debt, is Killingon profitable? It's a private company. Nobody knows.

If you multiply that by all the resorts POWDR owns, it's likely a very huge pile of corporate debt. When you remove their largest ski area from the mix at an enormous capital loss, their books likely look awful. ...like ASC-level of awful.

[hillbangin]

Not sure where you've been for the last two decades. Killington was a cash cow for ASC and now POWDR. Except for a really slow year in '07-'08, they have always been profitable to the tune of $10-15M per year. They simply won't bother making capital improvements (unless badly needed) or expansions to Killington when it is already highly profitable.

You have no basis for making that claim since you have no idea what POWDR finance looks like. They almost certainly bought Killington from the Texas boys using debt financing. We have no idea what they paid, how much they borrowed, or what kind of interest rate they're paying. Are they making operating profit? Sure. After you pay the interest on the debt, is Killingon profitable? It's a private company. Nobody knows.

If you multiply that by all the resorts POWDR owns, it's likely a very huge pile of corporate debt. When you remove their largest ski area from the mix at an enormous capital loss, their books likely look awful. ...like ASC-level of awful.

Nobody knows is the answer - the only way you'll every know is if Killington is a stand alone public company and you can see the unfiltered books.

If it were such a good business - at $15M profit per year Killington would be worth a ton of money - and I don't think even in it's heyday it sold for that kind of multiplier?

And if it were that good a business - you would have a lot more buyers.

[Highway Star]

Not sure where you've been for the last two decades. Killington was a cash cow for ASC and now POWDR. Except for a really slow year in '07-'08, they have always been profitable to the tune of $10-15M per year. They simply won't bother making capital improvements (unless badly needed) or expansions to Killington when it is already highly profitable.

You have no basis for making that claim since you have no idea what POWDR finance looks like. They almost certainly bought Killington from the Texas boys using debt financing. We have no idea what they paid, how much they borrowed, or what kind of interest rate they're paying. Are they making operating profit? Sure. After you pay the interest on the debt, is Killingon profitable? It's a private company. Nobody knows.

If you multiply that by all the resorts POWDR owns, it's likely a very huge pile of corporate debt. When you remove their largest ski area from the mix at an enormous capital loss, their books likely look awful. ...like ASC-level of awful.

LOL. You obviously didn't read or don't remember the SEC filing for the sale of Killington to POWDR. Ski resorts typically sell for 6x-8x average yearly operating profit. POWDR has cut costs while increasing yield, and has rebuilt visits. Killington itself is profitable, in the amount that I stated.

Does POWDR have a ton of debt? I highly doubt it. It looks like Ian Cumming had a pile of cash in the mid-90's and wanted to go ski area shopping, picking up one major resort and 3 secondary resorts. The other resorts were each bought after gaps of several years, and at seemingly bargain prices. In fact, Alpine Meadows was sold off with the purchase of Killington, clearly to free up a bit of capital.

Powdr was founded in 1994 by Ian Cumming with the purchase of Park City Mountain Resort.[2] Later that year, the company expanded into California with the purchase of Alpine Meadows near Lake Tahoe.[3] In August 1995, the company continued its expansion in California with the purchase of the Boreal and Soda Springs ski areas.[4] In April 2001, Powdr acquired Mount Bachelor ski area from a group of shareholders.[5] The company bought Las Vegas Ski and Snowboard Resort in November 2003.[6] Killington and Pico were sold to Powdr by American Skiing Company in May 2007.[7]

In July 2007, Powdr sold Alpine Meadows to JMA Ventures.[8]

Powdr acquired Copper Mountain, Colorado in December 2009 from Intrawest.[9] Powdr acquired "World of Adventure Sports Presented by GoPro", an Emmy Award winning TV series on December 3, 2013.[10]

There is no mystery to POWDR's finances - they have a profitable business, are tightwads, and have deep pockets.

[newsman4033]

First post here. Some good reading.

Park City Mountain Resort generates a very significant percentage of Powdr's earnings. No two ways around it; there will be less cash available for major improvements in the future if Park City exits the Powdr portfolio.

That said, Powdr will still want to invest and grow. I believe the Woodward brand is currently viewed as having the best ROI potential, so many of the capital project investments in the next couple of years will be focused there. (Construction of Woodward Park City will begin soon, regardless of what happens with the ski area.) On the resort side, investments will also occur... but at a slower pace I think.

While Killington is the third-best performing Powdr resort in total revenue (behind Copper Mountain and Park City), Killington is the worst-performing Powdr resort in terms of operating profit margin. It does high volume and achieves high revenue numbers, but for a variety of reasons, Killington is a very expensive entity to operate. I fear that Powdr might shy away from investing more in Killington given its relatively low earnings margin and poor ROI to date, focusing instead on Copper Mountain and Mt. Bachelor - the resorts with a better ROI potential.

[Geoff]

LOL. You obviously didn't read or don't remember the SEC filing for the sale of Killington to POWDR.

True. But that's because such an SEC filing doesn't exist. ASC did not sell Killington to POWDR. ASC sold Killington to the Texas H.L. Hunt oil trust fund Eiger/E2M guys who were the bottom fishing buyer of last resort since nobody else wanted a deal where the ski business was decoupled from the developable land. The Texas boys stripped all the remaining land (on public record since the deeds are all public) and dumped the ski resort operation business on POWDR for some unknown price and perhaps with some kind of minority position on the land. Since all POWDR dealings were private, we'll never know.

[Geoff]

There is no mystery to POWDR's finances - they have a profitable business, are tightwads, and have deep pockets.

Highway Star is pulling random crap out of his butthole again. Ian Cumming has deep pockets. That doesn't mean that the ski business he assembled and handed off to his kid is particularly well capitalized. The news that Ian Cumming bought out Dick Bass at Snowbird and isn't folding it into POWDR is quite telling. Why throw good money after bad?

I would assume that POWDR has a huge amount of debt financing used to buy their ski resorts. The former CFO refers to $700 million in debt and equity financing on their LinkedIn page. That debt is secured by the value of the resorts. PCMR just vaporized and it would be hard to believe that the lender wouldn't call the loan. It's entirely possible that POWDR is now insolvent but we'll never know since it's a private corporation.

[Mistergiff]

There is no mystery to POWDR's finances - they have a profitable business, are tightwads, and have deep pockets.

Highway Star is pulling random crap out of his butthole again. Ian Cumming has deep pockets. That doesn't mean that the ski business he assembled and handed off to his kid is particularly well capitalized. The news that Ian Cumming bought out Dick Bass at Snowbird and isn't folding it into POWDR is quite telling. Why throw good money after bad?

I would assume that POWDR has a huge amount of debt financing used to buy their ski resorts. The former CFO refers to $700 million in debt and equity financing on their LinkedIn page. That debt is secured by the value of the resorts. PCMR just vaporized and it would be hard to believe that the lender wouldn't call the loan. It's entirely possible that POWDR is now insolvent but we'll never know since it's a private corporation.

Geoff brings up something I had not thought of. Lets go out on a limb and say this thought is correct, POWDR is basically insolvent. If dominoes start to fall and POWDR is forced to liquidate what happens to us poor schmucks who purchased season passes at early rates?

[Mister Moose]

Geoff brings up something I had not thought of. Lets go out on a limb and say this thought is correct, POWDR is basically insolvent. If dominoes start to fall and POWDR is forced to liquidate what happens to us poor schmucks who purchased season passes at early rates?

Not likely to affect the coming season, with a few caveats. The appeals will take a while. Hasn't been an issue in past ski resort sales, ie when ASC sold off under financial stress season passes sold were honored. (not so much lifetime season passes). In my non lawyer experience a season pass bought in advance is a form of deposit, and if so would be ahead of all other creditors, even secured creditors. (on one hand it could be construed as the purchase of a product, but there is no delivery. Also, judges tend to side with consumers) Once the resort opens it probably loses the deposit status, and if the area closed mid season you'd lose the rest of the season. Hard to imagine a creditor, or a creditor's committee, or a bankruptcy judge ordering the resort to close mid season. Pennies on the dollar is always better than no pennies at all. It is possible that one outcome next season is to put all resorts on a max cash plan, and this resort will slam shut the second revenue falls in early April.

If Geoff's theory is correct, and I was a big creditor, I'd call the loan now, rather than wait for it to get worse. If we don't hear about it in the next 6 months, that likely means there is some big guarantor, or they aren't that leveraged after all.

Never a dull moment at Killington.

[rogman]

POWDR may be insolvent (I doubt it), but Ian Cumming is not. It may need a cash infusion at some point to stave off creditors, but bankruptcy? Highly improbable.

[Highway Star]

LOL. You obviously didn't read or don't remember the SEC filing for the sale of Killington to POWDR.

True. But that's because such an SEC filing doesn't exist. ASC did not sell Killington to POWDR. ASC sold Killington to the Texas H.L. Hunt oil trust fund Eiger/E2M guys who were the bottom fishing buyer of last resort since nobody else wanted a deal where the ski business was decoupled from the developable land. The Texas boys stripped all the remaining land (on public record since the deeds are all public) and dumped the ski resort operation business on POWDR for some unknown price and perhaps with some kind of minority position on the land. Since all POWDR dealings were private, we'll never know.

I know that, and regardless, the filling dicussing Killington/Pico's numbers from that year, IN DETAIL, exists and can be reviewed by anyone.

Read it and weep........

http://www.sec.gov/Archives/edgar/data/ ... rch_051620" onclick="window.open(this.href);return false;

[Highway Star]

There is no mystery to POWDR's finances - they have a profitable business, are tightwads, and have deep pockets.

Highway Star is pulling random crap out of his butthole again. Ian Cumming has deep pockets. That doesn't mean that the ski business he assembled and handed off to his kid is particularly well capitalized. The news that Ian Cumming bought out Dick Bass at Snowbird and isn't folding it into POWDR is quite telling. Why throw good money after bad?

I would assume that POWDR has a huge amount of debt financing used to buy their ski resorts. The former CFO refers to $700 million in debt and equity financing on their LinkedIn page. That debt is secured by the value of the resorts. PCMR just vaporized and it would be hard to believe that the lender wouldn't call the loan. It's entirely possible that POWDR is now insolvent but we'll never know since it's a private corporation.

So, you're telling me that Ian Cumming, a very successful investor and businessman, has been losing money playing resort czar for the past 20 years? Take your head out of your butt.