To a person who is not an accountant, earnings and income are used interchangeably. To an accountant, the term "earnings" is meaningless unless it is qualified by what type of earnings one is talking about. Things like depreciation and amortization are not cash expenses. They are "made up" expenses designed to reduce taxes, but eventually there is an expense involved. But they do reflect the reality of the business. If a resort buys a groomer for $300K and that groomer lasts 10 years before it dies and is no longer worth a penny, the resort can choose to treat the $300K cost of the groomer as an expense when it bought it or it can average the $300K cost over the expected 10 year life span of the equipment (note - it's not really that simple). The point is that the business really uses $30K worth of groomer cost per year. If a resort expensed that groomer in the year they bought it their income would be "artificially" low one year and higher in the rest. Now "artificial" to an accountant might be reality to you and me, but this approach is designed to reduce taxes and risk. If that resort buys their new groomer in a bad snow year with profits from the good snow year the previous season, they may not have enough profit for the $300K to be used to reduce taxes. Again this is an over simplification.
Now the question if what PCMR has been doing with its books is an interesting one. We've got lots of clues. I doubt the parent company has been loaning them money to jack up their interest expense because Vail has complained that PCMR executive salaries and dividend payments to the parent company have been "excessive" to the point where PCMR may not be able to fully pay the damage award. To the extent they can get away with this, that's a smart move. Money loaned from the parent to PCMR would be at risk of forfeiture to a damage award, The judge could decide to "undo" some of those "excessive" payments so that more money can flow to Vail/Talisker. But that would have to be argued over, The bond concept is intended to put a hard stop to those kinds of shenanigans by guaranteeing there will be enough cash to pay the damages bill. If the damages are $1-6M it seems evident that this would be pocket change for PCMR. If the damages are $120M, it appears that PCMR can not afford to pay that much without selling assets, a significant investment from the parent corp (does anyone believe a bank would loan them the money?).
In any case, it seems clear that PCMR has been deferring capital investments. I've seen the subtle effects of this when "my" (the one that i work for) own resort went bankrupt. It's hard to see things like lift towers not being repainted on schedule unless you know where to look. But when you see a new owner come in and all of a sudden the lift towers are brighter, the water bars are deeper, new carpet gets installed, the restrooms get renovated, etc. you come to understand that the new lift you could have gotten for all that money just got pissed away on little stuff that should have been done years ago. If Vail is looking at the books without normal capital investment the resort is going to look more profitable than it really is, If PCMR is looking at the books thinking about how much extra capital investment will be needed to "catch up" to what has not been done, the resort is going to look less profitable. Good luck sorting that out!