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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended October 31, 2022
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from              to             
Commission File Number: 001-09614
mtn-20221031_g1.jpg
Vail Resorts, Inc.
(Exact Name of Registrant as Specified in Its Charter)
Delaware51-0291762
(State or Other Jurisdiction of
Incorporation or Organization)
(I.R.S. Employer
Identification No.)
390 Interlocken Crescent
Broomfield,Colorado80021
(Address of Principal Executive Offices)(Zip Code)
(303) 404-1800
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading SymbolName of each exchange on which registered
Common Stock, $0.01 par valueMTNNew York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.      Yes      No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).      Yes      No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
 
Large accelerated filer   Accelerated filer 
Non-accelerated filer   Smaller reporting company 
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).      Yes     No
As of December 5, 2022, 40,323,914 shares of the registrant’s common stock were outstanding.



Table of Contents
 
PART IFINANCIAL INFORMATIONPage
Item 1.Financial Statements (unaudited).
Item 2.
Item 3.
Item 4.
PART IIOTHER INFORMATION
Item 1.
Item 1A.
Item 2.
Item 3.
Item 4.
Item 5.
Item 6.

1


Vail Resorts, Inc.
Consolidated Condensed Balance Sheets
(In thousands, except per share amounts)
(Unaudited)
October 31, 2022July 31, 2022October 31, 2021
Assets
Current assets:
Cash and cash equivalents$1,180,942 $1,107,427 $1,468,380 
Restricted cash20,121 18,680 14,482 
Trade receivables, net118,491 383,425 108,988 
Inventories, net139,926 108,723 103,697 
Other current assets162,187 173,277 82,307 
Total current assets1,621,667 1,791,532 1,777,854 
Property, plant and equipment, net (Note 7)
2,313,061 2,118,052 2,062,322 
Real estate held for sale or investment95,608 95,983 98,833 
Goodwill, net (Note 7)
1,688,731 1,754,928 1,790,531 
Intangible assets, net307,410 314,058 319,250 
Operating right-of-use assets192,230 192,070 204,476 
Other assets62,159 51,405 37,285 
Total assets$6,280,866 $6,318,028 $6,290,551 
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable and accrued liabilities (Note 7)
$1,190,522 $942,830 $1,109,652 
Income taxes payable84,372 104,275 43,377 
Long-term debt due within one year (Note 5)
67,811 63,749 114,795 
Total current liabilities1,342,705 1,110,854 1,267,824 
Long-term debt, net (Note 5)
2,769,698 2,670,300 2,704,583 
Operating lease liabilities176,585 174,567 192,328 
Other long-term liabilities234,301 246,359 243,307 
Deferred income taxes, net205,859 268,464 216,049 
Total liabilities4,729,148 4,470,544 4,624,091 
Commitments and contingencies (Note 9)
Stockholders’ equity:
Preferred stock, $0.01 par value, 25,000 shares authorized, no shares issued and outstanding
   
Common stock, $0.01 par value, 100,000 shares authorized, 46,789, 46,744 and 46,610 shares issued, respectively
468 467 466 
Exchangeable shares, $0.01 par value, 0, 3 and 34 shares issued and outstanding, respectively (Note 4)
   
Additional paid-in capital1,106,813 1,184,577 1,192,901 
Accumulated other comprehensive (loss) income(68,908)10,923 44,689 
Retained earnings705,923 895,889 598,826 
Treasury stock, at cost, 6,466, 6,466 and 6,161 shares, respectively (Note 11)
(479,417)(479,417)(404,411)
Total Vail Resorts, Inc. stockholders’ equity1,264,879 1,612,439 1,432,471 
Noncontrolling interests286,839 235,045 233,989 
Total stockholders’ equity 1,551,718 1,847,484 1,666,460 
Total liabilities and stockholders’ equity$6,280,866 $6,318,028 $6,290,551 
The accompanying Notes are an integral part of these unaudited consolidated condensed financial statements.
2


Vail Resorts, Inc.
Consolidated Condensed Statements of Operations
(In thousands, except per share amounts)
(Unaudited)
 
Three Months Ended October 31,
 20222021
Net revenue:
Mountain and Lodging services and other$210,386 $121,860 
Mountain and Lodging retail and dining 68,948 53,401 
Resort net revenue279,334 175,261 
Real Estate113315 
Total net revenue279,447 175,576 
Operating expense (exclusive of depreciation and amortization shown separately below):
Mountain and Lodging operating expense242,286 183,725 
Mountain and Lodging retail and dining cost of products sold35,085 24,229 
General and administrative98,799 77,234 
Resort operating expense376,170 285,188 
Real Estate operating expense1,382 1,470 
Total segment operating expense377,552 286,658 
Other operating (expense) income:
Depreciation and amortization(64,614)(61,489)
Gain on sale of real property 31 
Change in estimated fair value of contingent consideration (Note 8)
(636)(2,000)
(Loss) gain on disposal of fixed assets and other, net(6)8,867 
Loss from operations(163,361)(165,673)
Mountain equity investment income, net346 1,514 
Investment income and other, net2,886 499 
Foreign currency (loss) gain on intercompany loans (Note 5)
(6,135)831 
Interest expense, net(35,302)(39,545)
Loss before benefit from income taxes(201,566)(202,374)
Benefit from income taxes58,006 59,853 
Net loss(143,560)(142,521)
Net loss attributable to noncontrolling interests6,589 3,189 
Net loss attributable to Vail Resorts, Inc.$(136,971)$(139,332)
Per share amounts (Note 4):
Basic net loss per share attributable to Vail Resorts, Inc.$(3.40)$(3.44)
Diluted net loss per share attributable to Vail Resorts, Inc.$(3.40)$(3.44)
Cash dividends declared per share$1.91 $0.88 
The accompanying Notes are an integral part of these unaudited consolidated condensed financial statements.
3



Vail Resorts, Inc.
Consolidated Condensed Statements of Comprehensive Loss
(In thousands)
(Unaudited)

Three Months Ended October 31,
 20222021
Net loss$(143,560)$(142,521)
Foreign currency translation adjustments(117,808)15,137 
Change in estimated fair value of hedging instruments, net of tax8,007 4,345 
Comprehensive loss(253,361)(123,039)
Comprehensive loss attributable to noncontrolling interests36,559 597 
Comprehensive loss attributable to Vail Resorts, Inc.$(216,802)$(122,442)
The accompanying Notes are an integral part of these unaudited consolidated condensed financial statements.
4


Vail Resorts, Inc.
Consolidated Condensed Statements of Stockholders’ Equity
(In thousands)
(Unaudited)
Common StockAdditional Paid in CapitalAccumulated Other Comprehensive Income (Loss)Retained EarningsTreasury StockTotal Vail Resorts, Inc. Stockholders’ EquityNoncontrolling InterestsTotal Stockholders’ Equity
Vail ResortsExchangeable
Balance, July 31, 2021$466 $ $1,196,993 $27,799 $773,752 $(404,411)$1,594,599 $234,469 $1,829,068 
Comprehensive loss:
Net loss— — — — (139,332)— (139,332)(3,189)(142,521)
Foreign currency translation adjustments— — — 12,545 — — 12,545 2,592 15,137 
Change in estimated fair value of hedging instruments, net of tax— — — 4,345 — — 4,345 — 4,345 
Total comprehensive loss(122,442)(597)(123,039)
Stock-based compensation expense— — 6,425 — — — 6,425 — 6,425 
Issuance of shares under share award plans, net of shares withheld for employee taxes — (10,517)— — — (10,517)— (10,517)
Dividends (Note 4)
— — — — (35,594)— (35,594)— (35,594)
Contributions from noncontrolling interests, net— — — — — — — 117 117 
Balance, October 31, 2021$466 $ $1,192,901 $44,689 $598,826 $(404,411)$1,432,471 $233,989 $1,666,460 
Balance, July 31, 2022$467 $ $1,184,577 $10,923 $895,889 $(479,417)$1,612,439 $235,045 $1,847,484 
Comprehensive loss:
Net loss— — — — (136,971)— (136,971)(6,589)(143,560)
Foreign currency translation adjustments— — — (87,838)— — (87,838)(29,970)(117,808)
Change in estimated fair value of hedging instruments, net of tax— — — 8,007 — — 8,007 — 8,007 
Total comprehensive loss(216,802)(36,559)(253,361)
Stock-based compensation expense— — 6,345 — — — 6,345 — 6,345 
Issuance of shares under share award plans, net of shares withheld for employee taxes1 — (4,043)— — — (4,042)— (4,042)
Dividends (Note 4)
— — — — (77,018)— (77,018)— (77,018)
Cumulative effect of adoption of ASU 2020-06 (Notes 2 & 5)
— — (80,066)— 24,023 — (56,043)— (56,043)
Estimated acquisition date fair value of noncontrolling interests (Note 6)
— — — — — — — 91,524 91,524 
Distributions to noncontrolling interests, net— — — — — — — (3,171)(3,171)
Balance, October 31, 2022$468 $ $1,106,813 $(68,908)$705,923 $(479,417)$1,264,879 $286,839 $1,551,718 
The accompanying Notes are an integral part of these unaudited consolidated condensed financial statements.
5


Vail Resorts, Inc.
Consolidated Condensed Statements of Cash Flows
(In thousands)
(Unaudited)
Three Months Ended October 31,
 20222021
Cash flows from operating activities:
Net loss$(143,560)$(142,521)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization64,614 61,489 
Stock-based compensation expense6,345 6,425 
Deferred income taxes, net(58,006)(56,603)
Other non-cash expense (income), net8,615 (2,825)
Changes in assets and liabilities:
Trade receivables, net264,285 236,748 
Inventories, net(31,924)(23,105)
Accounts payable and accrued liabilities2,508 12,164 
Deferred revenue279,221 286,369 
Income taxes payable - other(20,460)(2,198)
Other assets and liabilities, net(38,647)(26,922)
Net cash provided by operating activities332,991 349,021 
Cash flows from investing activities:
Capital expenditures(124,099)(50,130)
Return of deposit for acquisition of business114,506  
Acquisition of business, net of cash acquired(38,567) 
Investments in short-term deposits(86,756) 
Other investing activities, net385 10,273 
Net cash used in investing activities(134,531)(39,857)
Cash flows from financing activities:
Repayments of borrowings under Vail Holdings Credit Agreement(15,625)(15,625)
Repayments of borrowings under Whistler Credit Agreement (23,145)
Employee taxes paid for share award exercises(4,043)(10,517)
Dividends paid(77,018)(35,594)
Other financing activities, net(7,942)147 
Net cash used in financing activities(104,628)(84,734)
Effect of exchange rate changes on cash, cash equivalents and restricted cash(18,876)(142)
Net increase in cash, cash equivalents and restricted cash74,956 224,288 
Cash, cash equivalents and restricted cash:
Beginning of period1,126,107 1,258,574 
End of period$1,201,063 $1,482,862 
Non-cash investing activities:
Accrued capital expenditures$21,069 $8,582 
The accompanying Notes are an integral part of these unaudited consolidated condensed financial statements.
6


Vail Resorts, Inc.
Notes to Consolidated Condensed Financial Statements
(Unaudited)

1.Organization and Business
Vail Resorts, Inc. (“Vail Resorts”) is organized as a holding company and operates through various subsidiaries. Vail Resorts and its subsidiaries (collectively, the “Company”) operate in three business segments: Mountain, Lodging and Real Estate. The Company refers to “Resort” as the combination of the Mountain and Lodging segments.
In the Mountain segment, the Company operates the following 41 destination mountain resorts and regional ski areas:

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*Denotes a destination mountain resort, which generally receives a meaningful portion of skier visits from long-distance travelers, as opposed to the Company’s regional ski areas, which tend to generate skier visits predominantly from their respective local markets.

Additionally, the Mountain segment includes ancillary services, primarily including ski school, dining and retail/rental operations, and for the Company’s Australian ski areas, including lodging and transportation operations.
In the Lodging segment, the Company owns and/or manages a collection of luxury hotels and condominiums under its RockResorts brand; other strategic lodging properties and a large number of condominiums located in proximity to the Company’s North American mountain resorts; National Park Service (“NPS”) concessioner properties including the Grand Teton Lodge Company (“GTLC”), which operates destination resorts in Grand Teton National Park; a Colorado resort ground transportation company and mountain resort golf courses.

Vail Resorts Development Company, a wholly-owned subsidiary, conducts the operations of the Company’s Real Estate segment, which owns, develops and sells real estate in and around the Company’s resort communities.
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The Company’s mountain business and its lodging properties at or around the Company’s mountain resorts are seasonal in nature, and typically experience their peak operating seasons primarily from mid-December through mid-April in North America and Europe. The peak operating season at the Company’s Australian resorts, NPS concessioner properties and golf courses generally occurs from June to early October.

2.     Summary of Significant Accounting Policies
Basis of Presentation
Consolidated Condensed Financial Statements — In the opinion of the Company, the accompanying Consolidated Condensed Financial Statements reflect all adjustments necessary to state fairly the Company’s financial position, results of operations and cash flows for the interim periods presented. All such adjustments are of a normal recurring nature. Results for interim periods are not indicative of the results for the entire fiscal year, particularly given the significant seasonality to the Company’s operating cycle. The accompanying Consolidated Condensed Financial Statements should be read in conjunction with the audited Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended July 31, 2022. Certain information and footnote disclosures, including significant accounting policies, normally included in fiscal year financial statements prepared in accordance with accounting principles generally accepted in the U.S. (“GAAP”) have been condensed or omitted. The Consolidated Condensed Balance Sheet as of July 31, 2022 was derived from audited financial statements.
Use of Estimates — The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the balance sheet date and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from those estimates.
Fair Value of Financial Instruments — The recorded amounts for cash and cash equivalents, restricted cash, trade receivables, other current assets, accounts payable and accrued liabilities approximate fair value due to their short-term nature. The fair value of amounts outstanding under the Company’s credit agreements and the Employee Housing Bonds (as defined in Note 5, Long-Term Debt) approximate book value due to the variable nature of the interest rate associated with the debt. The recorded amount outstanding under the Company’s NRP Loan (as defined in Note 5, Long-Term Debt), which was assumed by the Company during the three months ended October 31, 2022, approximates fair value as the debt obligation was recorded at estimated fair value in conjunction with the preliminary purchase accounting for the Andermatt-Sedrun acquisition (see Note 6, Acquisitions). The estimated fair values of the 6.25% Notes and the 0.0% Convertible Notes (each as defined in Note 5, Long-Term Debt) are based on quoted market prices (a Level 2 input). The estimated fair value of the EPR Secured Notes (as defined in Note 5, Long-Term Debt) has been estimated using analyses based on current borrowing rates for debt with similar remaining maturities and ratings (a Level 2 input). The carrying values, including any unamortized premium or discount, and estimated fair values of the 6.25% Notes, 0.0% Convertible Notes and EPR Secured Notes as of October 31, 2022 are presented below (in thousands):
October 31, 2022
Carrying ValueEstimated Fair Value
6.25% Notes$600,000 $598,302 
0.0% Convertible Notes$575,000 $513,101 
EPR Secured Notes$133,706 $156,893 
Recently Issued Accounting Standards
Adopted Standards
In March 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting.” The ASU provides optional transition guidance, for a limited time, to companies that have contracts, hedging relationships or other transactions that reference the London Inter-bank Offered Rate (“LIBOR”) or another reference rate which is expected to be discontinued because of reference rate reform. The amendments provide optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions if certain criteria are met. The amendments in this update are effective as of March 12, 2020 through December 31, 2022. The amendments in this update may be applied as of any date from the beginning of an interim period that includes or is subsequent to March 12, 2020, or prospectively from a date within an
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interim period that includes or is subsequent to March 12, 2020, up to the date that the financial statements are available to be issued. All other amendments should be applied on a prospective basis.
The Company is party to various interest rate swap agreements that hedge the variable interest rate component of underlying cash flows of $400.0 million in principal amount of its Vail Holdings Credit Agreement (as defined in Note 5, Long-Term Debt), which are designated as cash flow hedges. During the three months ended October 31, 2022, the Company entered into an amendment to its Vail Holdings Credit Agreement (the “Fifth Amendment”) to modify the calculation of interest under the Vail Holdings Credit Agreement from being calculated based on LIBOR to being calculated based on SOFR (see Note 5, Long-Term Debt, for additional information). In association with the Fifth Amendment, the interest rate swaps were also amended to transition from a hedge of LIBOR to a hedge of SOFR. The Company elected certain optional expedients provided by Topic 848, which allowed the Company to not apply certain modification accounting requirements or reassess the previous accounting designation of the interest rate swap agreements as cash flow hedges.
In August 2020, the FASB issued ASU 2020-06, “Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity” which simplifies the guidance in Accounting Standards Codifications (“ASC”) 470-20, “Debt – Debt with Conversion and Other Options.” The guidance removes certain accounting models which required separation of the embedded conversion features from the host contract for convertible instruments, requiring bifurcation only if the convertible debt feature qualifies as a derivative under ASC 815, “Derivatives and Hedging”, or for convertible debt issued at a substantial premium. The guidance also amends the guidance in ASC 815-40, “Derivatives and Hedging – Contracts in Entity’s Own Equity” for certain contracts in an entity’s own equity that are currently accounted for as derivatives. This standard is effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years (the Company’s first quarter of the fiscal year ending July 31, 2023). This standard allows for a modified retrospective or fully retrospective method of transition. The Company adopted ASU 2020-06 on August 1, 2022 using the modified retrospective method, and therefore prior period financial information has not been retrospectively adjusted and continues to be reported under the accounting standards in effect for those periods.
Upon adoption of the standard, the Company reclassified the previously bifurcated equity component of its 0.0% Convertible Notes (as defined in Note 5, Long-Term Debt) to long-term debt, net, as the convertible option on the 0.0% Convertible Notes does not qualify as a derivatives under ASC 815 nor were the 0.0% Convertible Notes issued at a substantial premium. This reclassification was partially offset by an increase to retained earnings for the previously recognized non-cash interest expense, net of tax that had been recorded as a result of amortization of the previously recorded debt discount. The adoption of this new guidance eliminates the recognition of non-cash interest expense to be recognized in future periods due to removal of the debt discount associated with the 0.0% Convertible Notes.
The impact of adoption of ASU 2020-06 on the Consolidated Condensed Balance Sheet as of adoption date was as follows (in thousands):
As of August 1, 2022
Balance SheetBalances without the Adoption of ASU 2020-06AdjustmentsBalances with the adoption of ASU 2020-06
Liabilities
Long term debt, net$2,670,300 $74,822 $2,745,122 
Deferred income taxes, net$268,464 $(18,779)$249,685 
Stockholders’ equity
Additional paid-in capital$1,184,577 $(80,066)$1,104,511 
Retained earnings$895,889 $24,023 $919,912 
ASU 2020-06 also prohibits the use of the treasury stock method for convertible instruments for the purposes of calculating diluted earnings per share (“EPS”) and instead requires application of the if-converted method. Under the if-converted method, diluted EPS will generally be calculated assuming that all of the convertible debt instruments were converted solely into shares of common stock at the beginning of the reporting period unless the result would be anti-dilutive. Pursuant to the terms of the 0.0% Convertible Notes, the principal amount of the 0.0% Convertible Notes is required to be paid in cash and only the premium due upon conversion, if any, is permitted to be settled in shares, cash or a combination of shares and cash. Consequently, for the Company the if-converted method would produce a similar result as the treasury stock method, which was utilized for the calculation of diluted EPS prior to the adoption of ASU 2020-06 for the 0.0% Convertible Notes.

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3.     Revenues
Disaggregation of Revenues
The following table presents net revenues disaggregated by segment and major revenue type for the three months ended October 31, 2022 and 2021 (in thousands):
Three Months Ended October 31,
 20222021
Mountain net revenue:
Lift$59,540 $14,329 
Ski School8,927 1,473 
Dining19,442 12,520 
Retail/Rental40,344 28,376 
Other73,464 52,602 
Total Mountain net revenue$201,717 $109,300 
Lodging net revenue:
Owned hotel rooms$23,565 $21,483 
Managed condominium rooms12,859 13,084 
Dining 16,829 10,275 
Golf5,890 5,109 
Other14,797 14,269 
73,940 64,220 
Payroll cost reimbursements3,677 1,741 
Total Lodging net revenue $77,617 $65,961 
Total Resort net revenue$279,334 $175,261 
Total Real Estate net revenue113 315 
Total net revenue$279,447 $175,576 

Contract Balances
Deferred revenue balances of a short-term nature were $787.5 million and $511.3 million as of October 31, 2022 and July 31, 2022, respectively. For the three months ended October 31, 2022, the Company recognized approximately $54.5 million of revenue that was included in the deferred revenue balance as of July 31, 2022. Deferred revenue balances of a long-term nature, comprised primarily of long-term private club initiation fee revenue, were $115.6 million and $117.2 million as of October 31, 2022 and July 31, 2022, respectively. As of October 31, 2022, the weighted average remaining period over which revenue for unsatisfied performance obligations on long-term private club contracts will be recognized was approximately 15 years. Trade receivables, net were $118.5 million and $383.4 million as of October 31, 2022 and July 31, 2022, respectively.

Costs to Obtain Contracts with Customers
As of October 31, 2022, $19.7 million of costs to obtain contracts with customers were recorded within other current assets on the Company’s Consolidated Condensed Balance Sheet. The amounts capitalized are subject to amortization generally beginning in the second quarter of fiscal 2023, commensurate with the revenue recognized for related pass products, and will be recorded within Mountain and Lodging operating expenses on the Company’s Consolidated Condensed Statement of Operations.

4.    Net Loss per Share
Earnings per Share
Basic EPS excludes dilution and is computed by dividing net loss attributable to Vail Resorts stockholders by the weighted-average shares outstanding during the period. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised, resulting in the issuance of shares of common stock that would then share in the earnings of Vail Resorts.
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In connection with the Company’s acquisition of Whistler Blackcomb in October 2016, the Company issued consideration in the form of shares of Vail Resorts common stock (the “Vail Shares”), redeemable preferred shares of the Company’s wholly-owned Canadian subsidiary Whistler Blackcomb Holdings Inc. (“Exchangeco”) or cash (or a combination thereof). Whistler Blackcomb shareholders elected to receive 3,327,719 Vail Shares and 418,095 shares of Exchangeco (the “Exchangeco Shares”). The Exchangeco Shares could be redeemed for Vail Shares at any time until October 2023 or until the Company elected to convert any remaining Exchangeco Shares to Vail Shares, which the Company had the ability to do once total Exchangeco Shares outstanding fell below 20,904 shares (or 5% of the total Exchangeco Shares originally issued). In July 2022, the number of outstanding Exchangeco Shares fell below such threshold and on August 25, 2022, the Company elected to redeem all outstanding Exchangeco Shares, effective September 26, 2022. As of October 31, 2022, all Exchangeco Shares have been exchanged for Vail Shares. Both Vail Shares and Exchangeco Shares have a par value of $0.01 per share, and Exchangeco Shares, while they were outstanding, were substantially the economic equivalent of the Vail Shares. The Company’s calculation of weighted-average shares outstanding includes the Exchangeco Shares.

Presented below is basic and diluted EPS for the three months ended October 31, 2022 and 2021 (in thousands, except per share amounts):
 Three Months Ended October 31,
 20222021
 BasicDilutedBasicDiluted
Net loss per share:
Net loss attributable to Vail Resorts$(136,971)$(136,971)$(139,332)$(139,332)
Weighted-average Vail Shares outstanding40,296 40,296 40,414 40,414 
Weighted-average Exchangeco Shares outstanding2 2 34 34 
Total Weighted-average shares outstanding40,298 40,298 40,448 40,448 
Effect of dilutive securities—  —  
Total shares40,298 40,298 40,448 40,448 
Net loss per share attributable to Vail Resorts$(3.40)$(3.40)$(3.44)$(3.44)

The Company computes the effect of dilutive securities using the treasury stock method and average market prices during the period. The number of shares issuable upon the exercise of share-based awards excluded from the calculation of diluted EPS because the effect of their inclusion would have been anti-dilutive totaled approximately 0.2 million and 0.5 million for the three months ended October 31, 2022 and 2021, respectively.

On December 18, 2020, the Company completed an offering of $575.0 million in aggregate principal amount of 0.0% Convertible Notes (as defined in Note 5, Long-Term Debt). The Company is required to settle the principal amount of the 0.0% Convertible Notes in cash and has the option to settle the conversion spread in cash or shares. The Company uses the if-converted method to calculate the impact of convertible instruments on diluted EPS when the instruments may be settled in cash or shares. If the conversion value of the 0.0% Convertible Notes exceeds their conversion price, then the Company will calculate its diluted EPS as if all the notes were converted into common stock at the beginning of the period. However, if reflecting the 0.0% Convertible Notes in diluted EPS in this manner is anti-dilutive, or if the conversion value of the notes does not exceed their conversion price for a reporting period, then the shares underlying the notes will not be reflected in the Company’s calculation of diluted EPS. For the three months ended October 31, 2022 and 2021, the price of Vail Shares did not exceed the conversion price and therefore there was no impact to diluted EPS during those periods.

Dividends
During the three months ended October 31, 2022 and 2021, the Company paid cash dividends of $1.91 and $0.88 per share, respectively ($77.0 million and $35.6 million, respectively, including cash dividends paid to Exchangeco shareholders). On December 7, 2022, the Company’s Board of Directors approved a cash dividend of $1.91 per share payable on January 10, 2023 to stockholders of record as of December 27, 2022.

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5.    Long-Term Debt
Long-term debt, net as of October 31, 2022, July 31, 2022 and October 31, 2021 is summarized as follows (in thousands):
MaturityOctober 31, 2022July 31, 2022October 31, 2021
Vail Holdings Credit Agreement term loan (a)
2026$1,062,500 $1,078,125 $1,125,000 
Vail Holdings Credit Agreement revolver (a)
2026   
6.25% Notes2025600,000 600,000 600,000 
0.0% Convertible Notes (b)
2026575,000 575,000 575,000 
Whistler Credit Agreement revolver (c)
202611,011 11,717 21,794 
EPR Secured Notes (d)
2034-2036
114,162 114,162 114,162 
EB-5 Development Notes2021  51,500 
NRP Loan (e)
203636,430 — — 
Employee housing bonds
2027-2039
52,575 52,575 52,575 
Canyons obligation2063359,052 357,607 353,266 
Other
2022-2036
36,587 17,860 17,772 
Total debt2,847,317 2,807,046 2,911,069 
Less: Unamortized premiums, discounts and debt issuance costs (b)
9,808 72,997 91,691 
Less: Current maturities (f)
67,811 63,749 114,795 
Long-term debt, net$2,769,698 $2,670,300 $2,704,583 

(a)On August 31, 2022, Vail Holdings, Inc. (“VHI”) entered into the Fifth Amendment to the Vail Holdings Credit Agreement, which extended the maturity date to September 23, 2026. Additionally, the Fifth Amendment contains customary LIBOR replacement language, including, but not limited to, the use of rates based on the secured overnight financing rate (“SOFR”). SOFR is a broad measure of the cost of borrowing cash in the overnight U.S. Treasury repo market and is administered by the Federal Reserve Bank of New York. The Fifth Amendment modified the calculation of interest under the Vail Holdings Credit Agreement from being calculated based on LIBOR to being calculated based on SOFR. No other material terms of the Vail Holdings Credit Agreement were amended.

The Company is party to various interest rate swap agreements which hedge the SOFR-based variable interest rate component of underlying cash flows of $400.0 million in principal amount of its Vail Holdings Credit Agreement until September 23, 2024. In association with the Fifth Amendment, these interest rate swaps were amended to transition from a hedge of LIBOR to a hedge of SOFR.

As of October 31, 2022, the Vail Holdings Credit Agreement consists of a $500.0 million revolving credit facility and a term loan facility with $1.1 billion outstanding. The term loan facility is subject to quarterly amortization of principal of approximately $15.6 million, in equal installments, for a total of 5% of principal payable in each year and the final payment of all amounts outstanding, plus accrued and unpaid interest due in September 2026. The proceeds of the loans made under the Vail Holdings Credit Agreement may be used to fund the Company’s working capital needs, capital expenditures, acquisitions, investments and other general corporate purposes, including the issuance of letters of credit. Borrowings under the Vail Holdings Credit Agreement, including the term loan facility, bear interest annually at SOFR plus a spread of 0.1% plus 1.25% as of October 31, 2022 (5.08% as of October 31, 2022). Interest rate margins may fluctuate based upon the ratio of the Company’s Net Funded Debt to Adjusted EBITDA on a trailing four-quarter basis. The Vail Holdings Credit Agreement also includes a quarterly unused commitment fee, which is equal to a percentage determined by the Net Funded Debt to Adjusted EBITDA ratio, as each such term is defined in the Vail Holdings Credit Agreement, multiplied by the daily amount by which the Vail Holdings Credit Agreement commitment exceeds the total of outstanding loans and outstanding letters of credit (0.25% as of October 31, 2022).

(b)The Company issued $575.0 million in aggregate principal amount of 0.0% Convertible Notes due 2026 (the “0.0% Convertible Notes) under an indenture dated December 18, 2020. Under previous accounting guidance, the Company bifurcated the proceeds of the 0.0% Convertible Notes by estimating the fair value of the 0.0% Convertible Notes at issuance and allocating that portion to long-term debt, net, with the excess being recorded within additional paid-in capital. The Company adopted ASU 2020-06 on August 1, 2022 using the modified retrospective method, and as a result, the Company reclassified the equity component of its 0.0% Convertible Notes to long-term debt, net, and will no longer record non-cash interest expense related to the amortization of the debt discount. Refer to Note 2, Summary of
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Significant Accounting Policies, for further information on ASU 2020-06. As of October 31, 2022, the conversion price of the 0.0% Convertible Notes, adjusted for cash dividends paid since the issuance date, was $395.11.

(c)Whistler Mountain Resort Limited Partnership (“Whistler LP”) and Blackcomb Skiing Enterprises Limited Partnership (“Blackcomb LP”), together “The WB Partnerships,” are party to a credit agreement, dated as of November 12, 2013 (as amended, the “Whistler Credit Agreement”), by and among Whistler LP, Blackcomb LP, certain subsidiaries of Whistler LP and Blackcomb LP party thereto as guarantors (the “Whistler Subsidiary Guarantors”), the financial institutions party thereto as lenders and The Toronto-Dominion Bank, as administrative agent. The Whistler Credit Agreement consists of a C$300.0 million revolving credit facility. As of October 31, 2022, all borrowings under the Whistler Credit Agreement were made in Canadian dollars and by way of the issuance of bankers’ acceptances plus 1.75% (approximately 5.98% as of October 31, 2022). The Whistler Credit Agreement also includes a quarterly unused commitment fee based on the Consolidated Total Leverage Ratio, which as of October 31, 2022 is equal to 0.39% per annum.

(d)On September 24, 2019, in conjunction with the acquisition of Peak Resorts, Inc. (”Peak Resorts”), the Company assumed various secured borrowings (the “EPR Secured Notes”) under the master credit and security agreements and other related agreements, as amended, (collectively, the “EPR Agreements”) with EPT Ski Properties, Inc. and its affiliates (“EPR”). The EPR Secured Notes include the following:
i.The Alpine Valley Secured Note. The $4.6 million Alpine Valley Secured Note provides for interest payments through its maturity on December 1, 2034. As of October 31, 2022, interest on this note accrued at a rate of 11.55%.
ii.The Boston Mills/Brandywine Secured Note. The $23.3 million Boston Mills/Brandywine Secured Note provides for interest payments through its maturity on December 1, 2034. As of October 31, 2022, interest on this note accrued at a rate of 11.24%.
iii.The Jack Frost/Big Boulder Secured Note. The $14.3 million Jack Frost/Big Boulder Secured Note provides for interest payments through its maturity on December 1, 2034. As of October 31, 2022, interest on this note accrued at a rate of 11.24%.
iv.The Mount Snow Secured Note. The $51.1 million Mount Snow Secured Note provides for interest payments through its maturity on December 1, 2034. As of October 31, 2022, interest on this note accrued at a rate of 12.14%.
v.The Hunter Mountain Secured Note. The $21.0 million Hunter Mountain Secured Note provides for interest payments through its maturity on January 5, 2036. As of October 31, 2022, interest on this note accrued at a rate of 8.88%.
In addition, Peak Resorts is required to maintain a debt service reserve account which amounts are applied to fund interest payments and other amounts due and payable to EPR. As of October 31, 2022, the Company had funded the EPR debt service reserve account in an amount equal to approximately $2.1 million, which was included in other current assets in the Company’s Consolidated Condensed Balance Sheet.

(e)On August 3, 2022 in conjunction with the acquisition of Andermatt-Sedrun (see Note 6, Acquisitions), the Company assumed the New Regional Policy loan between Andermatt-Sedrun and the Canton of Uri and Canton of Graubünden dated June 24, 2016 (the “NRP Loan”), with an initial principal balance of CHF 40.0 million. Amounts outstanding under the NRP Loan bear interest at 0.63% per annum until the maturity date, which is September 30, 2036, with semi-annual required payments of principal amortization and accrued interest. In addition, the NRP Loan agreement includes restrictive covenants requiring certain minimum financial results (as defined in the agreement).

(f)Current maturities represent principal payments due in the next 12 months.

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Aggregate maturities of debt outstanding as of October 31, 2022 reflected by fiscal year (August 1 through July 31) are as follows (in thousands):
Total
2023 (November 2022 through July 2023)$57,111 
202469,054 
2025668,394 
2026642,712 
2027855,036 
Thereafter555,010 
Total debt
$2,847,317 

The Company recorded interest expense of $35.3 million and $39.5 million for the three months ended October 31, 2022 and 2021, respectively, of which $1.6 million and $1.4 million, respectively, was amortization of deferred financing costs. The Company was in compliance with all of its financial and operating covenants required to be maintained under its debt instruments for all periods presented.

In connection with the acquisition of Whistler Blackcomb, VHI funded a portion of the purchase price through an intercompany loan to Whistler Blackcomb of $210.0 million, which was effective as of November 1, 2016, and requires foreign currency remeasurement to Canadian dollars, the functional currency for Whistler Blackcomb. As a result, foreign currency fluctuations associated with the loan are recorded within the Company’s results of operations. The Company recognized approximately $(6.1) million and $0.8 million, respectively, of non-cash foreign currency (losses) gains on the intercompany loan to Whistler Blackcomb for the three months ended October 31, 2022 and 2021 on the Company’s Consolidated Condensed Statements of Operations.

6.    Acquisitions
Andermatt-Sedrun
On August 3, 2022, through a wholly-owned subsidiary, the Company acquired a 55% controlling interest in Andermatt-Sedrun Sport AG (“Andermatt-Sedrun”) from Andermatt Swiss Alps AG (“ASA”). The consideration paid consisted of an investment of $114.4 million (CHF 110.0 million) into Andermatt-Sedrun for use in capital investments to enhance the guest experience on mountain (which was prepaid to fund the acquisition and was recorded in other current assets on the Company’s Consolidated Condensed Balance Sheet as of July 31, 2022) and $41.3 million (CHF 39.3 million) paid to ASA (which was paid on August 3, 2022, commensurate with closing). As of August 3, 2022 the total fair value of the consideration paid was $155.4 million (CHF 149.3 million).
Andermatt-Sedrun operates mountain and ski-related assets, including lifts, most of the restaurants and a ski school operation at the ski area. Ski operations are conducted on land owned by ASA as freehold or leasehold properties, land owned by Usern Corporation, land owned by the municipality of Tujetsch and land owned by private property owners. ASA retained a 40% ownership stake, with a group of existing shareholders comprising the remaining 5% ownership stake. ASA and the other noncontrolling economic interests contain certain protective rights pursuant to a shareholder agreement (the “Andermatt Agreement”) and no ability to participate in the day-to-day operations of Andermatt-Sedrun. The Andermatt Agreement provides that no dividend distributions be made by Andermatt-Sedrun until the end of the fiscal year ending July 31, 2026, after which time there shall be annual distributions of 50% of the available cash (as defined in the Andermatt Agreement) for the most recently completed fiscal year. In addition, the distribution rights are non-transferable and transfer of the noncontrolling interests are limited.
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The following summarizes the purchase consideration and the preliminary purchase price allocation to estimated fair values of the identifiable assets acquired and liabilities assumed at the date the transaction was effective (in thousands):
Acquisition Date Estimated Fair Value
Total cash consideration paid by Vail Resorts, Inc.$155,365 
Estimated fair value of noncontrolling interests91,524 
Total estimated purchase consideration$246,889 
Allocation of total estimated purchase consideration:
Current assets$119,867 
Property, plant and equipment176,805 
Goodwill1,363 
Identifiable intangible assets and other assets7,476 
Assumed long-term debt(44,130)
Other liabilities(14,492)
Net assets acquired$246,889 
Identifiable intangible assets acquired in the transaction were primarily related to a trade name. The process of estimating the fair value of the property, plant, and equipment includes the use of certain estimates and assumptions related to replacement cost and physical condition at the time of acquisition. The excess of the purchase price over the aggregate estimated fair values of the assets acquired and liabilities assumed was recorded as goodwill. The goodwill recognized is attributable primarily to expected synergies, the assembled workforce of the resorts and other factors, and is not expected to be deductible for income tax purposes. The operating results of Andermatt-Sedrun are reported within the Mountain segment prospectively from the date of acquisition.
Seven Springs Mountain Resort, Hidden Valley Resort & Laurel Mountain Ski Area
On December 31, 2021, the Company, through a wholly-owned subsidiary, acquired Seven Springs Mountain Resort, Hidden Valley Resort and Laurel Mountain Ski Area (together, the “Seven Springs Resorts”) in Pennsylvania from Seven Springs Mountain Resort, Inc. and its affiliates for a cash purchase price of approximately $116.5 million, after adjustments for certain agreed-upon terms, which the Company funded with cash on hand. The acquisition included the mountain operations of the resorts, including base area skier services (food and beverage, retail and rental, lift ticket offices and ski and snowboard school facilities), as well as a hotel, conference center and other related operations.
The following summarizes the purchase consideration and the preliminary purchase price allocation to estimated fair values of the identifiable assets acquired and liabilities assumed at the date the transaction was effective (in thousands):
Acquisition Date Estimated Fair Value
Current assets$2,932 
Property, plant and equipment118,415 
Goodwill4,991 
Identifiable intangible assets and other assets5,335 
Liabilities(15,172)
Net assets acquired$116,501 
Identifiable intangible assets acquired in the transaction were primarily related to advanced lodging bookings and trade names. The process of estimating the fair value of the property, plant, and equipment includes the use of certain estimates and assumptions related to replacement cost and physical condition at the time of acquisition. The excess of the purchase price over the aggregate estimated fair values of the assets acquired and liabilities assumed was recorded as goodwill. The goodwill recognized is attributable primarily to expected synergies, the assembled workforce of the resorts and other factors, and is not expected to be deductible for income tax purposes. The Company recognized $2.8 million of acquisition related expenses associated with the transaction within Mountain and Lodging operating expense for the year ended July 31, 2022. The operating results of the acquired resorts are reported within the Mountain and Lodging segments prospectively from the date of acquisition.
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The estimated fair values of assets acquired and liabilities assumed for Andermatt-Sedrun and the Seven Springs Resorts are preliminary and are based on the information that was available as of the respective acquisition dates. The Company believes that this information provides a reasonable basis for estimating the fair values of assets acquired and liabilities assumed; however, the Company is obtaining additional information necessary to finalize those estimated fair values. Therefore, the preliminary measurements of estimated fair values reflected are subject to change. The Company expects to finalize the valuation and complete the purchase consideration allocation no later than one year from the acquisition date.

7.    Supplementary Balance Sheet Information
The composition of property, plant and equipment follows (in thousands):
October 31, 2022July 31, 2022October 31, 2021
Land and land improvements$780,977 $763,432 $757,625 
Buildings and building improvements1,574,931 1,545,571 1,492,863 
Machinery and equipment1,594,588 1,505,236 1,422,110 
Furniture and fixtures316,350 307,867 309,119 
Software139,522 138,058 123,228 
Vehicles82,239 81,927 80,921 
Construction in progress221,990 127,282 113,854 
Gross property, plant and equipment4,710,597 4,469,373 4,299,720 
Accumulated depreciation(2,397,536)(2,351,321)(2,237,398)
Property, plant and equipment, net$2,313,061 $2,118,052 $2,062,322 

The composition of accounts payable and accrued liabilities follows (in thousands):
October 31, 2022July 31, 2022October 31, 2021
Trade payables$162,366 $151,263 $116,501 
Deferred revenue787,514 511,306 743,809 
Accrued salaries, wages and deferred compensation41,239 64,570 43,773 
Accrued benefits44,008 45,202 45,439 
Deposits35,491 37,731 43,875 
Operating lease liabilities35,331 34,218 36,036 
Other liabilities84,573 98,540 80,219 
Total accounts payable and accrued liabilities$1,190,522 $942,830 $1,109,652 

The changes in the net carrying amount of goodwill allocated between the Company’s segments for the three months ended October 31, 2022 are as follows (in thousands):
MountainLodgingGoodwill, net
Balance at July 31, 2022$1,709,922 $45,006 $1,754,928 
Acquisition1,363  1,363 
Effects of changes in foreign currency exchange rates(67,560) (67,560)
Balance at October 31, 2022$1,643,725 $45,006 $1,688,731 

8.    Fair Value Measurements
The Company utilizes FASB-issued fair value guidance that establishes how reporting entities should measure fair value for measurement and disclosure purposes. The guidance establishes a common definition of fair value applicable to all assets and liabilities measured at fair value and prioritizes the inputs into valuation techniques used to measure fair value. Accordingly, the Company uses valuation techniques which maximize the use of observable inputs and minimize the use of unobservable inputs when determining fair value. The three levels of the hierarchy are as follows:

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Level 1: Inputs that reflect unadjusted quoted prices in active markets that are accessible to the Company for identical assets or liabilities;

Level 2: Inputs include quoted prices for similar assets and liabilities in active and inactive markets or that are observable for the asset or liability either directly or indirectly; and

Level 3: Unobservable inputs which are supported by little or no market activity.

The table below summarizes the Company’s cash equivalents, other current assets, interest rate swaps and Contingent Consideration (defined below) measured at estimated fair value (all other assets and liabilities measured at fair value are immaterial) (in thousands).
 Estimated Fair Value Measurement as of October 31, 2022
DescriptionTotalLevel 1Level 2Level 3
Assets:
Money Market$509,165 $509,165 $— $— 
Commercial Paper$2,401 $— $2,401 $— 
Certificates of Deposit$106,790 $— $106,790 $— 
Interest Rate Swaps$22,991 $— $22,991 $— 
Liabilities:
Contingent Consideration $24,100 $— $— $24,100