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 ~~January~~October 31, 2023


☐			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

Vail Resorts, Inc.

(Exact Name of Registrant as Specified in Its Charter)


Delaware		51-0291762
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)

390 Interlocken Crescent
Broomfield,	Colorado	80021
(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 class	Trading Symbol	Name of each exchange on which registered
Common Stock, $0.01 par value	MTN	New 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 ~~March 6,~~December 4, 2023, ~~40,330,446~~37,966,630 shares of the registrant’s common stock were outstanding.

Table of Contents



PART I	FINANCIAL INFORMATION	Page

Item 1.	Financial Statements (unaudited).
	Consolidated Condensed Balance Sheets as of ~~January~~ October 31, ~~202~~3 ,2023, July 31, ~~2022~~2023 and ~~January~~October 31, 20 2 22022	2
	Consolidated Condensed Statements of Operations for the Three ~~and Six~~ Months Ended ~~January~~October 31 ~~31, 202~~3 , 2023 and 20 2 22022	3
	Consolidated Condensed Statements of Comprehensive ~~Income~~Loss for the Three ~~and Six~~ Months Ended ~~January~~October 31, ~~202~~3 2023 and 20 2 22022	4
	Consolidated Condensed Statements of Stockholders’ Equity for the Three anMon ~~d Six~~ths ~~Months~~ Ended ~~January~~October 31, ~~31, 202~~3 2023 and 20 2 22022	5
	Consolidated Condensed Statements of Cash Flows for the ~~Six~~Three Months Ended ~~January~~ October 31 ~~202~~3 , 2023 and 20 2 22022	76
	Notes to Consolidated Condensed Financial Statements	87
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	2319
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	4231
Item 4.	Controls and Procedures	4332

PART II	OTHER INFORMATION

Item 1.	Legal Proceedings	4333
Item 1A.	Risk Factors	4333
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	4333
Item 3.	Defaults Upon Senior Securities	4333
Item 4.	Mine Safety Disclosures	4333
Item 5.	Other Information	4333
Item 6.	Exhibits	4434

Vail Resorts, Inc.

Consolidated Condensed Balance Sheets

(In thousands, except per share amounts)

(Unaudited)


		January 31, 2023		July 31, 2022		January 31, 2022			October 31, 2023		July 31, 2023		October 31, 2022
Assets	Assets							Assets
Current assets:	Current assets:							Current assets:
Cash and cash equivalents	Cash and cash equivalents	$	1,295,252	$	1,107,427	$	1,407,019	Cash and cash equivalents	$	728,859	$	562,975	$	1,180,942
Restricted cash	Restricted cash	24,103		18,680		15,643		Restricted cash	11,532		10,118		20,121
Trade receivables, net	Trade receivables, net	160,393		383,425		167,088		Trade receivables, net	105,546		381,067		118,491
Inventories, net	Inventories, net	122,088		108,723		104,573		Inventories, net	157,707		132,548		139,926
Other current assets	Other current assets	158,295		173,277		73,104		Other current assets	130,861		121,403		162,187
Total current assets	Total current assets	1,760,131		1,791,532		1,767,427		Total current assets	1,134,505		1,208,111		1,621,667
Property, plant and equipment, net (Note 7)	Property, plant and equipment, net (Note 7)	2,421,395		2,118,052		2,190,332		Property, plant and equipment, net (Note 7)	2,344,601		2,371,557		2,313,061
Real estate held for sale or investment	Real estate held for sale or investment	90,354		95,983		95,331		Real estate held for sale or investment	86,465		90,207		95,608
Goodwill, net (Note 7)	Goodwill, net (Note 7)	1,723,019		1,754,928		1,764,106		Goodwill, net (Note 7)	1,668,028		1,720,344		1,688,731
Intangible assets, net	Intangible assets, net	310,666		314,058		318,078		Intangible assets, net	300,457		309,345		307,410
Operating right-of-use assets	Operating right-of-use assets	200,667		192,070		198,672		Operating right-of-use assets	187,128		192,289		192,230
Other assets	Other assets	58,730		51,405		35,796		Other assets	38,832		55,901		62,159
Total assets	Total assets	$	6,564,962	$	6,318,028	$	6,369,742	Total assets	$	5,760,016	$	5,947,754	$	6,280,866
Liabilities and Stockholders’ Equity	Liabilities and Stockholders’ Equity							Liabilities and Stockholders’ Equity
Current liabilities:	Current liabilities:							Current liabilities:
Accounts payable and accrued liabilities (Note 7)	Accounts payable and accrued liabilities (Note 7)	$	1,144,795	$	942,830	$	1,067,137	Accounts payable and accrued liabilities (Note 7)	$	1,276,525	$	978,021	$	1,190,522
Income taxes payable	Income taxes payable	73,559		104,275		24,153		Income taxes payable	16,663		83,514		84,372
Long-term debt due within one year (Note 5)	Long-term debt due within one year (Note 5)	69,582		63,749		63,746		Long-term debt due within one year (Note 5)	69,659		69,160		67,811
Total current liabilities	Total current liabilities	1,287,936		1,110,854		1,155,036		Total current liabilities	1,362,847		1,130,695		1,342,705
Long-term debt, net (Note 5)	Long-term debt, net (Note 5)	2,789,827		2,670,300		2,695,589		Long-term debt, net (Note 5)	2,732,037		2,750,675		2,769,698
Operating lease liabilities	Operating lease liabilities	184,298		174,567		188,797		Operating lease liabilities	165,462		168,326		176,585
Other long-term liabilities	Other long-term liabilities	237,478		246,359		254,209		Other long-term liabilities	285,454		286,261		234,301
Deferred income taxes, net	Deferred income taxes, net	288,072		268,464		282,427		Deferred income taxes, net	286,036		276,137		205,859
Total liabilities	Total liabilities	4,787,611		4,470,544		4,576,058		Total liabilities	4,831,836		4,612,094		4,729,148
Commitments and contingencies (Note 9)	Commitments and contingencies (Note 9)							Commitments and contingencies (Note 9)
Stockholders’ equity:	Stockholders’ equity:							Stockholders’ equity:
Preferred stock, $0.01 par value, 25,000 shares authorized, no shares issued and outstanding	Preferred stock, $0.01 par value, 25,000 shares authorized, no shares issued and outstanding	—		—		—		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, 46,795, 46,744 and 46,713 shares issued, respectively		468		467		467
Exchangeable shares, $0.01 par value, 0, 3 and 33 shares issued and outstanding, respectively (Note 4)		—		—		—
Common stock, $0.01 par value, 100,000 shares authorized, 46,851, 46,798 and 46,789 shares issued, respectively								Common stock, $0.01 par value, 100,000 shares authorized, 46,851, 46,798 and 46,789 shares issued, respectively	469		468		468

Additional paid-in capital	Additional paid-in capital	1,112,519		1,184,577		1,172,595		Additional paid-in capital	1,126,033		1,124,433		1,106,813
Accumulated other comprehensive (loss) income		(8,565)		10,923		10,418
Accumulated other comprehensive loss								Accumulated other comprehensive loss	(78,376)		(10,358)		(68,908)
Retained earnings	Retained earnings	837,573		895,889		786,473		Retained earnings	619,727		873,710		705,923
Treasury stock, at cost, 6,466, 6,466 and 6,161 shares, respectively (Note 11)		(479,417)		(479,417)		(404,411)
Treasury stock, at cost, 8,885, 8,648 and 6,466 shares, respectively (Note 11)								Treasury stock, at cost, 8,885, 8,648 and 6,466 shares, respectively (Note 11)	(1,034,822)		(984,306)		(479,417)
Total Vail Resorts, Inc. stockholders’ equity	Total Vail Resorts, Inc. stockholders’ equity	1,462,578		1,612,439		1,565,542		Total Vail Resorts, Inc. stockholders’ equity	633,031		1,003,947		1,264,879
Noncontrolling interests	Noncontrolling interests	314,773		235,045		228,142		Noncontrolling interests	295,149		331,713		286,839
Total stockholders’ equity	Total stockholders’ equity	1,777,351		1,847,484		1,793,684		Total stockholders’ equity	928,180		1,335,660		1,551,718
Total liabilities and stockholders’ equity	Total liabilities and stockholders’ equity	$	6,564,962	$	6,318,028	$	6,369,742	Total liabilities and stockholders’ equity	$	5,760,016	$	5,947,754	$	6,280,866

The accompanying Notes are an integral part of these unaudited consolidated condensed financial statements.

Vail Resorts, Inc.

Consolidated Condensed Statements of Operations

(In thousands, except per share amounts)

(Unaudited)


		Three Months Ended January 31,				Six Months Ended January 31,					Three Months Ended October 31,
		2023		2022		2023		2022			2023		2022
Net revenue:	Net revenue:									Net revenue:
Mountain and Lodging services and other	Mountain and Lodging services and other	$	901,837	$	770,300	$	1,112,223	$	892,160	Mountain and Lodging services and other	$	182,834	$	210,386
Mountain and Lodging retail and dining	Mountain and Lodging retail and dining	192,182		136,055		261,130		189,456		Mountain and Lodging retail and dining	71,442		68,948
Resort net revenue	Resort net revenue	1,094,019		906,355		1,373,353		1,081,616		Resort net revenue	254,276		279,334
Real Estate	Real Estate	7,699		180		7,812		495		Real Estate	4,289		113
Total net revenue	Total net revenue	1,101,718		906,535		1,381,165		1,082,111		Total net revenue	258,565		279,447
Operating expense (exclusive of depreciation and amortization shown separately below):	Operating expense (exclusive of depreciation and amortization shown separately below):									Operating expense (exclusive of depreciation and amortization shown separately below):
Mountain and Lodging operating expense	Mountain and Lodging operating expense	507,216		364,336		749,502		548,061		Mountain and Lodging operating expense	255,576		242,286
Mountain and Lodging retail and dining cost of products sold	Mountain and Lodging retail and dining cost of products sold	75,431		53,715		110,516		77,944		Mountain and Lodging retail and dining cost of products sold	31,295		35,085
General and administrative	General and administrative	116,616		91,261		215,415		168,495		General and administrative	108,025		98,799
Resort operating expense	Resort operating expense	699,263		509,312		1,075,433		794,500		Resort operating expense	394,896		376,170
Real Estate operating expense	Real Estate operating expense	6,310		1,511		7,692		2,981		Real Estate operating expense	5,181		1,382
Total segment operating expense	Total segment operating expense	705,573		510,823		1,083,125		797,481		Total segment operating expense	400,077		377,552
Other operating (expense) income:	Other operating (expense) income:									Other operating (expense) income:
Depreciation and amortization	Depreciation and amortization	(65,989)		(62,070)		(130,603)		(123,559)		Depreciation and amortization	(66,728)		(64,614)
Gain on sale of real property	Gain on sale of real property	757		931		757		962		Gain on sale of real property	6,285		—
Change in estimated fair value of contingent consideration (Note 8)	Change in estimated fair value of contingent consideration (Note 8)	(1,100)		(16,780)		(1,736)		(18,780)		Change in estimated fair value of contingent consideration (Note 8)	(3,057)		(636)
(Loss) gain on disposal of fixed assets and other, net		(1,780)		7,347		(1,786)		16,214
Income from operations		328,033		325,140		164,672		159,467
Loss on disposal of fixed assets and other, net										Loss on disposal of fixed assets and other, net	(2,043)		(6)
Loss from operations										Loss from operations	(207,055)		(163,361)
Mountain equity investment income, net	Mountain equity investment income, net	42		818		388		2,332		Mountain equity investment income, net	859		346
Investment income and other, net	Investment income and other, net	7,108		257		9,994		756		Investment income and other, net	3,684		2,886
Foreign currency gain (loss) on intercompany loans (Note 5)		2,338		(2,870)		(3,797)		(2,039)
Foreign currency loss on intercompany loans (Note 5)										Foreign currency loss on intercompany loans (Note 5)	(4,965)		(6,135)
Interest expense, net	Interest expense, net	(38,370)		(37,366)		(73,672)		(76,911)		Interest expense, net	(40,730)		(35,302)
Income before (provision for) benefit from income taxes		299,151		285,979		97,585		83,605
(Provision for) benefit from income taxes		(79,032)		(52,049)		(21,026)		7,804
Net income		220,119		233,930		76,559		91,409
Net income attributable to noncontrolling interests		(11,440)		(10,539)		(4,851)		(7,350)
Net income attributable to Vail Resorts, Inc.		$	208,679	$	223,391	$	71,708	$	84,059
Loss before benefit from income taxes										Loss before benefit from income taxes	(248,207)		(201,566)
Benefit from income taxes										Benefit from income taxes	65,160		58,006
Net loss										Net loss	(183,047)		(143,560)
Net loss attributable to noncontrolling interests										Net loss attributable to noncontrolling interests	7,535		6,589
Net loss attributable to Vail Resorts, Inc.										Net loss attributable to Vail Resorts, Inc.	$	(175,512)	$	(136,971)
Per share amounts (Note 4):	Per share amounts (Note 4):									Per share amounts (Note 4):
Basic net income per share attributable to Vail Resorts, Inc.		$	5.17	$	5.51	$	1.78	$	2.08
Diluted net income per share attributable to Vail Resorts, Inc.		$	5.16	$	5.47	$	1.77	$	2.06
Basic net loss per share attributable to Vail Resorts, Inc.										Basic net loss per share attributable to Vail Resorts, Inc.	$	(4.60)	$	(3.40)
Diluted net loss per share attributable to Vail Resorts, Inc.										Diluted net loss per share attributable to Vail Resorts, Inc.	$	(4.60)	$	(3.40)
Cash dividends declared per share	Cash dividends declared per share	$	1.91	$	0.88	$	3.82	$	1.76	Cash dividends declared per share	$	2.06	$	1.91

The accompanying Notes are an integral part of these unaudited consolidated condensed financial statements.

Vail Resorts, Inc.

Consolidated Condensed Statements of Comprehensive ~~Income~~Loss

(In thousands)

(Unaudited)

Three Months Ended January 31, Six Months Ended January 31,
2023 2022 2023 2022
Net income $ 220,119 $ 233,930 $ 76,559 $ 91,409
Foreign currency translation adjustments 82,468 (48,857) (35,340) (33,720)
Change in estimated fair value of hedging instruments, net of tax (2,787) 4,483 5,220 8,828
Comprehensive income 299,800 189,556 46,439 66,517
Comprehensive (income) loss attributable to noncontrolling interests (30,778) (436) 5,781 161
Comprehensive income attributable to Vail Resorts, Inc. $ 269,022 $ 189,120 $ 52,220 $ 66,678


	Three Months Ended October 31,
	2023		2022
Net loss	$	(183,047)	$	(143,560)
Foreign currency translation adjustments	(92,094)		(117,808)
Change in estimated fair value of hedging instruments, net of tax	(2,470)		8,007
Comprehensive loss	(277,611)		(253,361)
Comprehensive loss attributable to noncontrolling interests	34,081		36,559
Comprehensive loss attributable to Vail Resorts, Inc.	$	(243,530)	$	(216,802)

The accompanying Notes are an integral part of these unaudited consolidated condensed financial statements.

Vail Resorts, Inc.

Consolidated Condensed Statements of Stockholders’ Equity

(In thousands)

(Unaudited)
Common Stock Additional Paid in Capital Accumulated Other Comprehensive Income (Loss) Retained Earnings Treasury Stock Total Vail Resorts, Inc. Stockholders’ Equity Noncontrolling Interests Total Stockholders’ Equity
Vail Resorts Exchangeable
Balance, October 31, 2021 $ 466 $ — $ 1,192,901 $ 44,689 $ 598,796 $ (404,411) $ 1,432,441 $ 233,989 $ 1,666,430
Comprehensive income:
Net income — — — — 223,391 — 223,391 10,539 233,930
Foreign currency translation adjustments — — — (38,754) — — (38,754) (10,103) (48,857)
Change in estimated fair value of hedging instruments, net of tax — — — 4,483 — — 4,483 — 4,483
Total comprehensive income 189,120 436 189,556
Stock-based compensation expense — — 6,479 — — — 6,479 — 6,479
Issuance of shares under share award plans, net of shares withheld for employee taxes 1 — (26,785) — — — (26,784) — (26,784)
Dividends (Note 4) — — — — (35,714) — (35,714) — (35,714)
Distributions to noncontrolling interests, net — — — — — — — (6,283) (6,283)
Balance, January 31, 2022 $ 467 $ — $ 1,172,595 $ 10,418 $ 786,473 $ (404,411) $ 1,565,542 $ 228,142 $ 1,793,684
Balance, October 31, 2022 $ 468 $ — $ 1,106,813 $ (68,908) $ 705,923 $ (479,417) $ 1,264,879 $ 286,839 $ 1,551,718
Comprehensive income:
Net income — — — — 208,679 — 208,679 11,440 220,119
Foreign currency translation adjustments — — — 63,130 — — 63,130 19,338 82,468
Change in estimated fair value of hedging instruments, net of tax — — — (2,787) — — (2,787) — (2,787)
Total comprehensive income 269,022 30,778 299,800
Stock-based compensation expense — — 6,844 — — — 6,844 — 6,844
Issuance of shares under share award plans, net of shares withheld for employee taxes — — (1,138) — — — (1,138) — (1,138)
Dividends (Note 4) — — — — (77,029) — (77,029) — (77,029)
Distributions to noncontrolling interests, net — — — — — — — (2,844) (2,844)
Balance, January 31, 2023 $ 468 $ — $ 1,112,519 $ (8,565) $ 837,573 $ (479,417) $ 1,462,578 $ 314,773 $ 1,777,351


		Common Stock				Additional Paid in Capital		Accumulated Other Comprehensive Income (Loss)		Retained Earnings		Treasury Stock		Total Vail Resorts, Inc. Stockholders’ Equity		Noncontrolling Interests		Total Stockholders’ Equity			Common Stock		Additional Paid in Capital	Accumulated Other Comprehensive Income (Loss)		Retained Earnings		Treasury Stock		Total Vail Resorts, Inc. Stockholders’ Equity		Noncontrolling Interests		Total Stockholders’ Equity
		Vail Resorts		Exchangeable																	Vail Resorts
Balance, July 31, 2021		$	466	$	—	$	1,196,993	$	27,799	$	773,752	$	(404,411)	$	1,594,599	$	234,469	$	1,829,068
Comprehensive income:
Net income		—		—		—		—		84,059		—		84,059		7,350		91,409
Balance, July 31, 2022																				Balance, July 31, 2022	$	467		$	1,184,577	$	10,923	$	895,889	$	(479,417)	$	1,612,439	$	235,045	$	1,847,484
Comprehensive loss:																				Comprehensive loss:
Net loss																				Net loss	—			—		—		(136,971)		—		(136,971)		(6,589)		(143,560)
Foreign currency translation adjustments	Foreign currency translation adjustments	—		—		—		(26,209)		—		—		(26,209)		(7,511)		(33,720)		Foreign currency translation adjustments	—			—		(87,838)		—		—		(87,838)		(29,970)		(117,808)
Change in estimated fair value of hedging instruments, net of tax	Change in estimated fair value of hedging instruments, net of tax	—		—		—		8,828		—		—		8,828		—		8,828		Change in estimated fair value of hedging instruments, net of tax	—			—		8,007		—		—		8,007		—		8,007
Total comprehensive income														66,678		(161)		66,517
Total comprehensive loss																				Total comprehensive loss												(216,802)		(36,559)		(253,361)

Stock-based compensation expense	Stock-based compensation expense	—		—		12,904		—		—		—		12,904		—		12,904		Stock-based compensation expense	—			6,345		—		—		—		6,345		—		6,345
Issuance of shares under share award plans, net of shares withheld for employee taxes	Issuance of shares under share award plans, net of shares withheld for employee taxes	1		—		(37,302)		—		—		—		(37,301)		—		(37,301)		Issuance of shares under share award plans, net of shares withheld for employee taxes	1			(4,043)		—		—		—		(4,042)		—		(4,042)

Dividends (Note 4)	Dividends (Note 4)	—		—		—		—		(71,338)		—		(71,338)		—		(71,338)		Dividends (Note 4)	—			—		—		(77,018)		—		(77,018)		—		(77,018)
Cumulative effect of adoption of ASU 2020-06																				Cumulative effect of adoption of ASU 2020-06	—			(80,066)		—		24,023		—		(56,043)		—		(56,043)
Estimated acquisition date fair value of noncontrolling interests (Note 6)																				Estimated acquisition date fair value of noncontrolling interests (Note 6)	—			—		—		—		—		—		91,524		91,524
Distributions to noncontrolling interests, net	Distributions to noncontrolling interests, net	—		—		—		—		—		—		—		(6,166)		(6,166)		Distributions to noncontrolling interests, net	—			—		—		—		—		—		(3,171)		(3,171)
Balance, January 31, 2022		$	467	$	—	$	1,172,595	$	10,418	$	786,473	$	(404,411)	$	1,565,542	$	228,142	$	1,793,684
Balance, October 31, 2022																				Balance, October 31, 2022	$	468		$	1,106,813	$	(68,908)	$	705,923	$	(479,417)	$	1,264,879	$	286,839	$	1,551,718

Balance, July 31, 2022		$	467	$	—	$	1,184,577	$	10,923	$	895,889	$	(479,417)	$	1,612,439	$	235,045	$	1,847,484
Comprehensive income:
Net income		—		—		—		—		71,708		—		71,708		4,851		76,559
Balance, July 31, 2023																				Balance, July 31, 2023	$	468		$	1,124,433	$	(10,358)	$	873,710	$	(984,306)	$	1,003,947	$	331,713	$	1,335,660
Comprehensive loss:																				Comprehensive loss:
Net loss																				Net loss	—			—		—		(175,512)		—		(175,512)		(7,535)		(183,047)
Foreign currency translation adjustments	Foreign currency translation adjustments	—		—		—		(24,708)		—		—		(24,708)		(10,632)		(35,340)		Foreign currency translation adjustments	—			—		(65,548)		—		—		(65,548)		(26,546)		(92,094)
Change in estimated fair value of hedging instruments		—		—		—		5,220		—		—		5,220		—		5,220
Total comprehensive income														52,220		(5,781)		46,439
Change in estimated fair value of hedging instruments, net of tax																				Change in estimated fair value of hedging instruments, net of tax	—			—		(2,470)		—		—		(2,470)		—		(2,470)
Total comprehensive loss																				Total comprehensive loss												(243,530)		(34,081)		(277,611)
Stock-based compensation expense	Stock-based compensation expense	—		—		13,189		—		—		—		13,189		—		13,189		Stock-based compensation expense	—			6,796		—		—		—		6,796		—		6,796
Issuance of shares under share award plans, net of shares withheld for employee taxes	Issuance of shares under share award plans, net of shares withheld for employee taxes	1		—		(5,181)		—		—		—		(5,180)		—		(5,180)		Issuance of shares under share award plans, net of shares withheld for employee taxes	1			(5,196)		—		—		—		(5,195)		—		(5,195)
Repurchases of common stock (Note 11)																				Repurchases of common stock (Note 11)	—			—		—		—		(50,516)		(50,516)		—		(50,516)
Dividends (Note 4)																				Dividends (Note 4)	—			—		—		(78,471)		—		(78,471)		—		(78,471)

Dividends		—		—		—		—		(154,047)		—		(154,047)		—		(154,047)
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	Distributions to noncontrolling interests, net	—		—		—		—		—		—		—		(6,015)		(6,015)		Distributions to noncontrolling interests, net	—			—		—		—		—		—		(2,483)		(2,483)
Balance, January 31, 2023		$	468	$	—	$	1,112,519	$	(8,565)	$	837,573	$	(479,417)	$	1,462,578	$	314,773	$	1,777,351
Balance, October 31, 2023																				Balance, October 31, 2023	$	469		$	1,126,033	$	(78,376)	$	619,727	$	(1,034,822)	$	633,031	$	295,149	$	928,180

The accompanying Notes are an integral part of these unaudited consolidated condensed financial statements.

Vail Resorts, Inc.

Consolidated Condensed Statements of Cash Flows

(In thousands)

(Unaudited)


		Six Months Ended January 31,					Three Months Ended October 31,
		2023		2022			2023		2022
Cash flows from operating activities:	Cash flows from operating activities:					Cash flows from operating activities:
Net income		$	76,559	$	91,409
Adjustments to reconcile net income to net cash provided by operating activities:
Net loss						Net loss	$	(183,047)	$	(143,560)
Adjustments to reconcile net loss to net cash provided by operating activities:						Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization	Depreciation and amortization	130,603		123,559		Depreciation and amortization	66,728		64,614

Stock-based compensation expense	Stock-based compensation expense	13,189		12,904		Stock-based compensation expense	6,796		6,345
Deferred income taxes, net		19,947		9,214
Change in estimated fair value of contingent consideration		1,736		18,780
Benefit from income taxes						Benefit from income taxes	(65,160)		(58,006)

Other non-cash expense (income), net		866		(602)

Other non-cash expense, net						Other non-cash expense, net	8,217		8,615
Changes in assets and liabilities:	Changes in assets and liabilities:					Changes in assets and liabilities:
Trade receivables, net	Trade receivables, net	226,796		178,252		Trade receivables, net	272,313		264,285
Inventories, net	Inventories, net	(12,962)		(23,627)		Inventories, net	(26,789)		(31,924)
Accounts payable and accrued liabilities	Accounts payable and accrued liabilities	96,247		89,502		Accounts payable and accrued liabilities	(773)		2,508
Deferred revenue	Deferred revenue	104,996		147,614		Deferred revenue	308,950		279,221

Income taxes payable	Income taxes payable	(31,166)		(7,581)		Income taxes payable	(17,052)		(20,460)
Other assets and liabilities, net	Other assets and liabilities, net	(21,318)		(28,095)		Other assets and liabilities, net	(41,684)		(38,647)
Net cash provided by operating activities	Net cash provided by operating activities	605,493		611,329		Net cash provided by operating activities	328,499		332,991
Cash flows from investing activities:	Cash flows from investing activities:					Cash flows from investing activities:
Capital expenditures	Capital expenditures	(206,554)		(128,854)		Capital expenditures	(53,379)		(124,099)
Return of deposit for acquisition of business	Return of deposit for acquisition of business	114,506		—		Return of deposit for acquisition of business	—		114,506
Acquisition of businesses, net of cash acquired		(38,567)		(118,099)
Acquisition of business, net of cash acquired						Acquisition of business, net of cash acquired	—		(38,567)
Investments in short-term deposits	Investments in short-term deposits	(86,756)		—		Investments in short-term deposits	—		(86,756)
Maturity of short-term deposits						Maturity of short-term deposits	52,437		—

Other investing activities, net	Other investing activities, net	11,346		21,421		Other investing activities, net	6,507		385
Net cash used in investing activities		(206,025)		(225,532)
Net cash provided by (used in) investing activities						Net cash provided by (used in) investing activities	5,565		(134,531)
Cash flows from financing activities:	Cash flows from financing activities:					Cash flows from financing activities:

Repayments of borrowings under Vail Holdings Credit Agreement	Repayments of borrowings under Vail Holdings Credit Agreement	(31,250)		(31,250)		Repayments of borrowings under Vail Holdings Credit Agreement	(15,625)		(15,625)
Repayments of borrowings under Whistler Credit Agreement		—		(23,145)
Repayment of EB-5 Development Notes		—		(51,500)

Employee taxes paid for share award exercises	Employee taxes paid for share award exercises	(5,181)		(37,302)		Employee taxes paid for share award exercises	(5,195)		(4,043)
Dividends paid	Dividends paid	(154,047)		(71,338)		Dividends paid	(78,471)		(77,018)

Repurchases of common stock						Repurchases of common stock	(50,000)		—
Other financing activities, net	Other financing activities, net	(10,899)		(6,158)		Other financing activities, net	(4,317)		(7,942)
Net cash used in financing activities	Net cash used in financing activities	(201,377)		(220,693)		Net cash used in financing activities	(153,608)		(104,628)
Effect of exchange rate changes on cash, cash equivalents and restricted cash	Effect of exchange rate changes on cash, cash equivalents and restricted cash	(4,843)		(1,016)		Effect of exchange rate changes on cash, cash equivalents and restricted cash	(13,158)		(18,876)
Net increase in cash, cash equivalents and restricted cash	Net increase in cash, cash equivalents and restricted cash	193,248		164,088		Net increase in cash, cash equivalents and restricted cash	167,298		74,956
Cash, cash equivalents and restricted cash:	Cash, cash equivalents and restricted cash:					Cash, cash equivalents and restricted cash:
Beginning of period	Beginning of period	1,126,107		1,258,574		Beginning of period	573,093		1,126,107
End of period	End of period	$	1,319,355	$	1,422,662	End of period	$	740,391	$	1,201,063

Non-cash investing activities:	Non-cash investing activities:					Non-cash investing activities:
Accrued capital expenditures	Accrued capital expenditures	$	49,091	$	17,388	Accrued capital expenditures	$	38,275	$	21,069

The accompanying Notes are an integral part of these unaudited consolidated condensed financial statements.

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~~reportable 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:

*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, 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~~The Company’s Real Estate segment ~~which~~primarily owns, develops and sells real estate in and around the Company’s resort communities.

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.~~2023. 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~~2023 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 six months ended January 31, 2023 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~~and the NRP Loan (both as defined in Note 5, Long-Term Debt) ~~has~~have been estimated using analyses based on current borrowing rates for comparable debt instruments with similar ~~remaining maturities and ratings~~maturity dates (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 and NRP Loan as of ~~January~~October 31, 2023 are presented below (in thousands):

January 31, 2023
Carrying Value Estimated Fair Value
6.25% Notes $ 600,000 $ 604,062
0.0% Convertible Notes $ 575,000 $ 547,339
EPR Secured Notes $ 133,305 $ 161,156

~~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 of ASU 2020-04 were effective as of March 12, 2020. In December 2022, the FASB issued ASU 2022-06, “Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848,” which extended the effective date of the provisions of ASU 2020-04 to December 31, 2024. 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 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.


	October 31, 2023
	Carrying Value		Estimated Fair Value
6.25% Notes	$	600,000	$	596,022
0.0% Convertible Notes	$	575,000	$	501,883
EPR Secured Notes	$	132,102	$	158,129
NRP Loan	$	34,489	$	28,359

The ~~Company is party~~carrying values for all other financial instruments not included in the above table approximate their respective fair value due to ~~various interest rate swap agreements that hedge~~their short-term nature or the variable nature of their associated 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 six months ended January 31, 2023, 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). Subsequent to 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 rules which required separation of the embedded conversion features from the host contract for convertible instruments. The updated guidance requires 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 Sheet Balances without the Adoption of ASU 2020-06 Adjustments Balances 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.rates.

108

3. Revenues

Disaggregation of Revenues

The following table presents net revenues disaggregated by segment and major revenue type for the three ~~and six~~ months ended ~~January~~October 31, 2023 and 2022 (in thousands):


		Three Months Ended January 31,				Six Months Ended January 31,					Three Months Ended October 31,
		2023		2022		2023		2022			2023		2022
Mountain net revenue:	Mountain net revenue:									Mountain net revenue:
Lift	Lift	$	592,603	$	521,582	$	652,143	$	535,911	Lift	$	45,390	$	59,540
Ski School	Ski School	123,451		92,072		132,378		93,545		Ski School	7,178		8,927
Dining	Dining	85,828		54,049		105,270		66,569		Dining	18,077		19,442
Retail/Rental	Retail/Rental	159,932		126,831		200,276		155,207		Retail/Rental	33,474		40,344
Other	Other	51,628		39,841		125,092		92,443		Other	68,336		73,464
Total Mountain net revenue	Total Mountain net revenue	$	1,013,442	$	834,375	$	1,215,159	$	943,675	Total Mountain net revenue	$	172,455	$	201,717
Lodging net revenue:	Lodging net revenue:									Lodging net revenue:
Owned hotel rooms	Owned hotel rooms	$	13,479	$	13,584	$	37,044	$	35,067	Owned hotel rooms	$	25,177	$	23,565
Managed condominium rooms	Managed condominium rooms	31,336		33,125		44,195		46,209		Managed condominium rooms	12,003		12,859
Dining	Dining	13,184		8,375		30,013		18,650		Dining	18,083		16,829
Transportation		5,888		5,766		7,348		7,559

Golf	Golf	—		—		5,939		5,118		Golf	6,376		5,890
Other	Other	11,700		9,269		24,988		21,736		Other	16,723		14,797
		75,587		70,119		149,527		134,339			78,362		73,940
Payroll cost reimbursements	Payroll cost reimbursements	4,990		1,861		8,667		3,602		Payroll cost reimbursements	3,459		3,677
Total Lodging net revenue	Total Lodging net revenue	$	80,577	$	71,980	$	158,194	$	137,941	Total Lodging net revenue	$	81,821	$	77,617
Total Resort net revenue	Total Resort net revenue	$	1,094,019	$	906,355	$	1,373,353	$	1,081,616	Total Resort net revenue	$	254,276	$	279,334
Total Real Estate net revenue	Total Real Estate net revenue	7,699		180		7,812		495		Total Real Estate net revenue	4,289		113
Total net revenue	Total net revenue	$	1,101,718	$	906,535	$	1,381,165	$	1,082,111	Total net revenue	$	258,565	$	279,447

Contract Balances

Deferred revenue balances of a short-term nature were ~~$619.5~~$872.4 million and ~~$511.3~~$572.6 million as of ~~January~~October 31, 2023 and July 31, ~~2022,~~2023, respectively. For the three ~~and six~~ months ended ~~January~~October 31, 2023, the Company recognized approximately ~~$220.1~~$56.5 million ~~and $274.6 million, respectively,~~ of revenue that was included in the deferred revenue balance as of July 31, ~~2022.~~2023. Deferred revenue balances of a long-term nature, comprised primarily of long-term private club initiation fee revenue, were ~~$113.3~~$107.9 million, ~~$117.2~~$109.7 million and ~~$120.6~~$115.6 million as of ~~January~~October 31, 2023, July 31, ~~2022~~2023 and ~~January~~October 31, 2022, respectively. As of ~~January~~October 31, 2023, 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 $160.4 million and $383.4 million as of January 31, 2023 and July 31, 2022, respectively.~~

Costs to Obtain Contracts with Customers

~~As of January 31, 2023, $13.0 million of costs~~Costs to obtain contracts with customers ~~were~~are recorded within other current assets on the Company’s Consolidated Condensed Balance ~~Sheet.~~Sheets, and were $21.8 million, $5.1 million and $19.7 million as of October 31, 2023, July 31, 2023 and October 31, 2022, respectively. The amounts capitalized are subject to amortization generally beginning in the second quarter of each fiscal ~~2023,~~year, commensurate with the recognition of revenue ~~recognized~~ for related pass ~~products. The Company recorded amortization of $12.3 million for these costs during both the three~~products, and ~~six months ended January 31, 2023, which was~~will be recorded within Mountain and Lodging operating ~~expenses~~expense on the Company’s Consolidated Condensed ~~Statement~~Statements of Operations.

4. Net ~~Income~~Loss per Share

Earnings per Share

Basic EPS excludes dilution and is computed by dividing net ~~income~~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.

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”~~Exchangeco Shares”) 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, effectiveEffective September 26, ~~2022. As of January 31, 2023,~~2022, all Exchangeco Shares ~~have~~had 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~~as of October 31, 2022 included the Exchangeco ~~Shares.~~Shares, but there were no Exchangeco Shares that remained outstanding as of October 31, 2022.

Presented below is basic and diluted EPS for the three months ended ~~January~~October 31, 2023 and 2022 (in thousands, except per share amounts):


		Three Months Ended January 31,									Three Months Ended October 31,
		2023				2022					2023				2022
		Basic		Diluted		Basic		Diluted			Basic		Diluted		Basic		Diluted
Net income per share:
Net income attributable to Vail Resorts		$	208,679	$	208,679	$	223,391	$	223,391
Net loss per share:										Net loss per share:
Net loss attributable to Vail Resorts										Net loss attributable to Vail Resorts	$	(175,512)	$	(175,512)	$	(136,971)	$	(136,971)
Weighted-average Vail Shares outstanding	Weighted-average Vail Shares outstanding	40,327		40,327		40,505		40,505		Weighted-average Vail Shares outstanding	38,117		38,117		40,296		40,296
Weighted-average Exchangeco Shares outstanding	Weighted-average Exchangeco Shares outstanding	—		—		33		33		Weighted-average Exchangeco Shares outstanding	—		—		2		2
Total Weighted-average shares outstanding	Total Weighted-average shares outstanding	40,327		40,327		40,538		40,538		Total Weighted-average shares outstanding	38,117		38,117		40,298		40,298
Effect of dilutive securities	Effect of dilutive securities	—		107		—		282		Effect of dilutive securities	—		—		—		—
Total shares	Total shares	40,327		40,434		40,538		40,820		Total shares	38,117		38,117		40,298		40,298
Net income per share attributable to Vail Resorts		$	5.17	$	5.16	$	5.51	$	5.47
Net loss per share attributable to Vail Resorts										Net loss per share attributable to Vail Resorts	$	(4.60)	$	(4.60)	$	(3.40)	$	(3.40)

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 ~~25,000~~0.3 million and ~~zero~~0.2 million for the three months ended ~~January 31, 2023 and 2022, respectively.~~

~~Presented below is basic and diluted EPS for the six months ended January 31, 2023 and 2022 (in thousands, except per share amounts):~~

Six Months Ended January 31,
2023 2022
Basic Diluted Basic Diluted
Net income per share:
Net income attributable to Vail Resorts $ 71,708 $ 71,708 $ 84,059 $ 84,059
Weighted-average Vail Shares outstanding 40,312 40,312 40,460 40,460
Weighted-average Exchangeco Shares outstanding 1 1 33 33
Total Weighted-average shares outstanding 40,313 40,313 40,493 40,493
Effect of dilutive securities — 95 — 344
Total shares 40,313 40,408 40,493 40,837
Net income per share attributable to Vail Resorts $ 1.78 $ 1.77 $ 2.08 $ 2.06

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 26,000 and 1,000 for the six months ended JanuaryOctober 31, 2023 and 2022, respectively.

In December 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 ~~and six~~ months ended ~~January~~October 31, 2023 and 2022, 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 ~~and six~~ months ended ~~January~~October 31, 2023 ~~the Company paid cash dividends of $1.91~~ and ~~$3.82 per share, respectively ($77.0 million and $154.0 million, respectively). During the three and six months ended January 31,~~ 2022, the Company paid cash dividends of ~~$0.88~~$2.06 and ~~$1.76~~$1.91 per share, respectively ($~~35.7~~78.5 million and ~~$71.3~~$77.0 million, ~~respectively, including cash dividends paid to Exchangeco shareholders)~~respectively). On ~~March 7,~~December 6, 2023, the Company’s Board of Directors approved a cash dividend of $2.06 per share payable on ~~April 11, 2023~~January 9, 2024 to stockholders of record as of ~~March 27,~~December 26, 2023.

5. Long-Term Debt

Long-term debt, net as of ~~January~~October 31, 2023, July 31, ~~2022~~2023 and ~~January~~October 31, 2022 is summarized as follows (in thousands):


		Maturity	January 31, 2023		July 31, 2022		January 31, 2022			Maturity	October 31, 2023		July 31, 2023		October 31, 2022
Vail Holdings Credit Agreement term loan (a)	Vail Holdings Credit Agreement term loan (a)	2026	$	1,046,875	$	1,078,125	$	1,109,375	Vail Holdings Credit Agreement term loan (a)	2026	$	1,000,000	$	1,015,625	$	1,062,500
Vail Holdings Credit Agreement revolver (a)	Vail Holdings Credit Agreement revolver (a)	2026	—		—		—		Vail Holdings Credit Agreement revolver (a)	2026	—		—		—
6.25% Notes	6.25% Notes	2025	600,000		600,000		600,000		6.25% Notes	2025	600,000		600,000		600,000
0.0% Convertible Notes (b)	0.0% Convertible Notes (b)	2026	575,000		575,000		575,000		0.0% Convertible Notes (b)	2026	575,000		575,000		575,000
Whistler Credit Agreement revolver (c)	Whistler Credit Agreement revolver (c)	2026	11,275		11,717		21,243		Whistler Credit Agreement revolver (c)	2028	—		—		11,011

EPR Secured Notes (d)	EPR Secured Notes (d)	2034-2036	114,162		114,162		114,162		EPR Secured Notes (d)	2034-2036	114,162		114,162		114,162

NRP Loan (e)		2036	39,967		—		—
NRP Loan									NRP Loan	2036	37,269		40,399		36,430
Employee housing bonds	Employee housing bonds	2027-2039	52,575		52,575		52,575		Employee housing bonds	2027-2039	52,575		52,575		52,575
Canyons obligation	Canyons obligation	2063	360,497		357,607		354,713		Canyons obligation	2063	364,825		363,386		359,052
Whistler Blackcomb employee housing leases (f)		2042	29,346		—		—
Whistler Blackcomb employee housing leases									Whistler Blackcomb employee housing leases	2042	27,984		29,491		—
Other	Other	2023-2036	37,633		17,860		17,562		Other	2023-2036	33,971		35,011		36,587
Total debt	Total debt		2,867,330		2,807,046		2,844,630		Total debt		2,805,786		2,825,649		2,847,317
Less: Unamortized premiums, discounts and debt issuance costs (b)	Less: Unamortized premiums, discounts and debt issuance costs (b)		7,921		72,997		85,295		Less: Unamortized premiums, discounts and debt issuance costs (b)		4,090		5,814		9,808
Less: Current maturities (g)			69,582		63,749		63,746
Less: Current maturities (e)									Less: Current maturities (e)		69,659		69,160		67,811
Long-term debt, net	Long-term debt, net		$	2,789,827	$	2,670,300	$	2,695,589	Long-term debt, net		$	2,732,037	$	2,750,675	$	2,769,698

(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 cash flows associated with the SOFR-based variable interest rate component of $400.0 million in principal amount of its Vail Holdings Credit Agreement until September 23, 2024. Subsequent to the Fifth Amendment, these interest rate swaps were amended to transition from a hedge of LIBOR to a hedge of SOFR.

As of ~~January~~October 31, 2023, the Vail Holdings Credit Agreement consists of a $500.0 million revolving credit facility and a ~~term loan facility with~~ $1.0 billion ~~outstanding.~~outstanding term loan. 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 is due upon maturity 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~~the Secured Overnight Financing Rate (“SOFR”) plus a spread of ~~1.35%~~1.60% as of ~~January~~October 31, 2023 ~~(5.91%~~(6.92% as of ~~January~~October 31, 2023). 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%~~(0.30% as of ~~January~~October 31, 2023). The Company is party to various interest rate swap agreements which hedge the cash flows associated with the SOFR-based variable interest rate component of $400.0 million in principal amount of its Vail Holdings Credit Agreement until September 23, 2024, at an effective rate of 1.38%.

(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 Significant Accounting Policies, for further information on ASU 2020-06. As of ~~January~~October 31, 2023, the conversion price of the 0.0% Convertible Notes, adjusted for cash dividends paid since the issuance date, was ~~$391.99.~~$381.27.

(c)Whistler Mountain Resort Limited Partnership (“Whistler LP”) and Blackcomb Skiing Enterprises Limited Partnership (“Blackcomb LP”), and together ~~“The WB Partnerships,”~~with Whistler LP, the “WB Partnerships”) are party to a credit agreement ~~dated as~~consisting of ~~November 12, 2013 (as~~a C$300.0 million credit facility which was most recently amended ~~the “Whistler Credit Agreement”),~~on April 14, 2023, 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~~has a maturity date of ~~a C$300.0 million revolving credit facility.~~April 14, 2028 and uses rates based on SOFR with regard to borrowings under the facility made in U.S. dollars. As of ~~January~~October 31, 2023, ~~all~~there were no borrowings under the Whistler Credit ~~Agreement were made in Canadian dollars and by way of the issuance of bankers’ acceptances plus 1.75% (approximately 6.68% as of January 31, 2023).~~Agreement. The Whistler Credit Agreement also includes a quarterly unused commitment fee based on the Consolidated Total Leverage Ratio, which as of ~~January~~October 31, 2023 is equal to 0.39% per annum.

(d)OnIn 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 ~~January~~October 31, 2023, interest on this note accrued at a rate of 11.72%.

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 ~~January~~October 31, 2023, interest on this note accrued at a rate of ~~11.24%~~11.41%.

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 ~~January~~October 31, 2023, interest on this note accrued at a rate of ~~11.24%~~11.41%.

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 ~~January~~October 31, 2023, interest on this note accrued at a rate of ~~12.14%~~12.32%.

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 ~~January~~October 31, 2023, interest on this note accrued at a rate of ~~8.88%~~9.03%.

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 January 31, 2023, the Company had funded the EPR debt service reserve account in an amount equal to approximately $3.2 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)~~During the three and six months ended January 31, 2023, the Company entered into new finance lease agreements for employee housing units at Whistler Blackcomb, resulting in an incremental finance lease liability on the commencement date of $28.6 million, which represents the minimum lease payments of $56.4 million, net of $27.8 million of amounts representing interest, for the initial 20 year term of the lease discounted at the estimated incremental borrowing rate. The Company recorded $28.6 million finance lease right-of-use assets in connection with these leases, which have a value of $28.2 million as of January 31, 2023, net of $0.4 million accumulated amortization, and are included within property, plant and equipment, net in the Company’s Consolidated Condensed Balance Sheet.

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

Aggregate maturities of debt outstanding as of ~~January~~October 31, 2023 reflected by fiscal year (August 1 through July 31) are as follows (in thousands):


		Total			Total
2023 (February 2023 through July 2023)		$	41,163
2024		69,711
2024 (November 2023 through July 2024)				2024 (November 2023 through July 2024)	$	51,421
2025	2025	669,136		2025	675,755
2026	2026	643,580		2026	643,543
2027	2027	856,182		2027	851,151
2028				2028	4,655
Thereafter	Thereafter	587,558		Thereafter	579,261
Total debt	Total debt	$	2,867,330	Total debt	$	2,805,786

The Company recorded interest expense of ~~$38.4~~$40.7 million and ~~$37.4~~$35.3 million for the three months ended ~~January~~October 31, 2023 and 2022, respectively, of which $1.6 million ~~and $1.5 million, respectively,~~ was amortization of deferred financing costs. The Company recorded interest expense of $73.7 million and $76.9 million for the six months ended January 31, 2023 and 2022, respectively, of which $3.2 million and $2.9 million, respectively, was amortization of deferred financing costs.costs in both periods. 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 ~~$2.3~~$5.0 million and $(3.8) million, respectively, of non-cash foreign currency gains (losses) on the intercompany loan to Whistler Blackcomb for the three and six months ended January 31, 2023 on the Company’s Consolidated Condensed Statements of Operations. The Company recognized approximately $2.9 million and $2.0$6.1 million, respectively, of non-cash foreign currency losses on the intercompany loan to Whistler Blackcomb for the three ~~and six~~ months ended ~~January~~October 31, 2023 and 2022 on the Company’s Consolidated Condensed Statements of Operations.

1512

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.

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 interests	91,524
Total estimated purchase consideration	$	246,889

Allocation of total estimated purchase consideration:
Current assets	$	119,867
Property, plant and equipment	176,805
Goodwill	~~3,750~~3,368
Identifiable intangible assets and other assets	7,476
Assumed long-term debt	(44,130)
Other liabilities	~~(16,879)~~(16,497)
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 resort 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.

The estimated fair values of assets acquired and liabilities assumed in the acquisition of Andermatt-Sedrun are preliminary and are based on the information that was available as of the acquisition date. 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.

1613

~~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 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 equipment~~	~~118,415~~
~~Goodwill~~	~~5,041~~
~~Identifiable intangible assets and other assets~~	~~5,335~~
~~Liabilities~~	~~(15,222)~~
~~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.

7. Supplementary Balance Sheet Information

The composition of property, plant and equipment follows (in thousands):


		January 31, 2023		July 31, 2022		January 31, 2022			October 31, 2023		July 31, 2023		October 31, 2022
Land and land improvements	Land and land improvements	$	793,271	$	763,432	$	767,433	Land and land improvements	$	790,550	$	796,730	$	780,977
Buildings and building improvements	Buildings and building improvements	1,635,700		1,545,571		1,564,845		Buildings and building improvements	1,626,566		1,643,517		1,574,931
Machinery and equipment	Machinery and equipment	1,769,052		1,505,236		1,504,991		Machinery and equipment	1,781,980		1,792,378		1,594,588
Furniture and fixtures	Furniture and fixtures	330,257		307,867		318,434		Furniture and fixtures	302,646		298,725		316,350
Software	Software	141,595		138,058		126,742		Software	151,809		152,033		139,522
Vehicles	Vehicles	85,329		81,927		82,710		Vehicles	86,173		87,298		82,239
Construction in progress	Construction in progress	135,903		127,282		114,165		Construction in progress	185,229		134,113		221,990
Gross property, plant and equipment	Gross property, plant and equipment	4,891,107		4,469,373		4,479,320		Gross property, plant and equipment	4,924,953		4,904,794		4,710,597
Accumulated depreciation	Accumulated depreciation	(2,469,712)		(2,351,321)		(2,288,988)		Accumulated depreciation	(2,580,352)		(2,533,237)		(2,397,536)
Property, plant and equipment, net	Property, plant and equipment, net	$	2,421,395	$	2,118,052	$	2,190,332	Property, plant and equipment, net	$	2,344,601	$	2,371,557	$	2,313,061

The composition of accounts payable and accrued liabilities follows (in thousands):


		January 31, 2023		July 31, 2022		January 31, 2022			October 31, 2023		July 31, 2023		October 31, 2022
Trade payables	Trade payables	$	179,221	$	151,263	$	137,895	Trade payables	$	161,581	$	148,521	$	162,366
Deferred revenue	Deferred revenue	619,511		511,306		611,477		Deferred revenue	872,418		572,602		787,514
Accrued salaries, wages and deferred compensation	Accrued salaries, wages and deferred compensation	66,275		64,570		59,008		Accrued salaries, wages and deferred compensation	33,733		38,908		41,239
Accrued benefits	Accrued benefits	54,129		45,202		46,894		Accrued benefits	57,340		60,466		44,008
Deposits	Deposits	81,612		37,731		80,547		Deposits	42,880		37,798		35,491
Operating lease liabilities	Operating lease liabilities	36,667		34,218		35,438		Operating lease liabilities	38,332		36,904		35,331
Other liabilities	Other liabilities	107,380		98,540		95,878		Other liabilities	70,241		82,822		84,573
Total accounts payable and accrued liabilities	Total accounts payable and accrued liabilities	$	1,144,795	$	942,830	$	1,067,137	Total accounts payable and accrued liabilities	$	1,276,525	$	978,021	$	1,190,522

The changes in the net carrying amount of goodwill by segment for the ~~six~~three months ended ~~January~~October 31, 2023 are as follows (in thousands):

Mountain Lodging Goodwill, net
Balance at July 31, 2022 $ 1,709,922 $ 45,006 $ 1,754,928
Acquisition (including measurement period adjustments) 3,800 — 3,800
Effects of changes in foreign currency exchange rates (35,709) — (35,709)
Balance at January 31, 2023 $ 1,678,013 $ 45,006 $ 1,723,019


	Mountain		Lodging		Goodwill, net
Balance at July 31, 2023	$	1,675,338	$	45,006	$	1,720,344


Effects of changes in foreign currency exchange rates	(52,316)		—		(52,316)
Balance at October 31, 2023	$	1,623,022	$	45,006	$	1,668,028

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:

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.

1814

The table below summarizes the Company’s cash equivalents, restricted cash, 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 January 31, 2023									Estimated Fair Value Measurement as of October 31, 2023
Description	Description	Total		Level 1		Level 2		Level 3		Description	Total		Level 1		Level 2		Level 3
Assets:	Assets:									Assets:
Money Market	Money Market	$	614,439	$	614,439	$	—	$	—	Money Market	$	101,903	$	101,903	$	—	$	—
Commercial Paper	Commercial Paper	$	2,401	$	—	$	2,401	$	—	Commercial Paper	$	2,401	$	—	$	2,401	$	—
Certificates of Deposit	Certificates of Deposit	$	111,140	$	—	$	111,140	$	—	Certificates of Deposit	$	138,614	$	—	$	138,614	$	—
Interest Rate Swaps	Interest Rate Swaps	$	19,270	$	—	$	19,270	$	—	Interest Rate Swaps	$	13,931	$	—	$	13,931	$	—
Liabilities:	Liabilities:									Liabilities:
Contingent Consideration	Contingent Consideration	$	25,200	$	—	$	—	$	25,200	Contingent Consideration	$	59,300	$	—	$	—	$	59,300

		Estimated Fair Value Measurement as of July 31, 2022									Estimated Fair Value Measurement as of July 31, 2023
Description	Description	Total		Level 1		Level 2		Level 3		Description	Total		Level 1		Level 2		Level 3
Assets:	Assets:									Assets:
Money Market	Money Market	$	505,901	$	505,901	$	—	$	—	Money Market	$	170,872	$	170,872	$	—	$	—
Commercial Paper	Commercial Paper	$	2,401	$	—	$	2,401	$	—	Commercial Paper	$	2,401	$	—	$	2,401	$	—
Certificates of Deposit	Certificates of Deposit	$	9,473	$	—	$	9,473	$	—	Certificates of Deposit	$	144,365	$	—	$	144,365	$	—
Interest Rate Swaps	Interest Rate Swaps	$	12,301	$	—	$	12,301	$	—	Interest Rate Swaps	$	17,229	$	—	$	17,229	$	—
Liabilities:	Liabilities:									Liabilities:
Contingent Consideration	Contingent Consideration	$	42,400	$	—	$	—	$	42,400	Contingent Consideration	$	73,300	$	—	$	—	$	73,300

		Estimated Fair Value Measurement as of January 31, 2022									Estimated Fair Value Measurement as of October 31, 2022
Description	Description	Total		Level 1		Level 2		Level 3		Description	Total		Level 1		Level 2		Level 3
Assets:	Assets:									Assets:
Money Market	Money Market	$	504,306	$	504,306	$	—	$	—	Money Market	$	509,165	$	509,165	$	—	$	—
Commercial Paper	Commercial Paper	$	2,401	$	—	$	2,401	$	—	Commercial Paper	$	2,401	$	—	$	2,401	$	—
Certificates of Deposit	Certificates of Deposit	$	9,564	$	—	$	9,564	$	—	Certificates of Deposit	$	106,790	$	—	$	106,790	$	—
Interest Rate Swaps										Interest Rate Swaps	$	22,991	$	—	$	22,991	$	—
Liabilities:	Liabilities:									Liabilities:
Interest Rate Swaps		$	1,155	$	—	$	1,155	$	—
Contingent Consideration	Contingent Consideration	$	40,900	$	—	$	—	$	40,900	Contingent Consideration	$	24,100	$	—	$	—	$	24,100

The Company’s cash equivalents, restricted cash, other current assets and interest rate swaps are measured utilizing quoted market prices or pricing models whereby all significant inputs are either observable or corroborated by observable market data. The estimated fair value of the interest rate swaps are included within other current assets on the Company’s Consolidated Condensed Balance Sheet as of ~~January~~October 31, 2023 and included within and other assets as of July 31, ~~2022,~~2023 and ~~included within other long-term liabilities as of January~~October 31, 2022.

The changes in Contingent Consideration during the ~~six~~three months ended ~~January~~October 31, 2023 and 2022 were as follows (in thousands):


Balance as of July 31, 2022 and 2021, respectively		$	42,400	$	29,600
Balance as of July 31, 2023 and 2022, respectively						Balance as of July 31, 2023 and 2022, respectively	$	73,300	$	42,400
Payments	Payments	(18,936)		(7,480)		Payments	(17,057)		(18,936)
Change in estimated fair value	Change in estimated fair value	1,736		18,780		Change in estimated fair value	3,057		636
Balance as of January 31, 2023 and 2022, respectively		$	25,200	$	40,900
Balance as of October 31, 2023 and 2022, respectively						Balance as of October 31, 2023 and 2022, respectively	$	59,300	$	24,100

1915

The lease for Park City provides for participating contingent payments (the “Contingent Consideration”) to the landlord of 42% of the amount by which EBITDA for the Park City resort operations, as calculated under the lease, exceeds approximately $35 million, as established atupon the ~~transaction date,~~Company’s acquisition of the resort, with such threshold amount subsequently increased annually by an inflation linked index and aan adjustment equal to 10% ~~adjustment for~~of any capital improvements or investments made under the lease by the Company. Contingent Consideration is classified as a liability, which is remeasured to fair value at each reporting date until the contingency is resolved.

The Company estimated the fair value of the Contingent Consideration payments using an option pricing valuation model. The estimated fair value of Contingent Consideration includes ~~the~~ future period resort operations of Park City in the calculation of EBITDA on which participating contingent payments are made, which is determined on the basis of estimated subsequent year performance, escalated by an assumed annual growth ~~factor. The Company estimated the fair value of the Contingent Consideration payments using an option pricing valuation model. Key~~factor and discounted to present value. Other significant assumptions included a discount rate of 11.1%, and volatility of 17.0% ~~and~~, which together with future period Park City EBITDA, ~~which~~ are all unobservable inputs and thus are considered Level 3 inputs. The Company prepared a sensitivity analysis to evaluate the effect that changes on certain key assumptions would have on the estimated fair value of the Contingent Consideration. A change in the discount rate of 100 basis points or a 5% change in estimated subsequent year performance of the resort would result in a change in the estimated fair value within the range of approximately ~~$3.5~~$10.1 million to ~~$6.1~~$13.7 million.

~~Contingent Consideration is classified as a liability, which is remeasured to fair value at each reporting date until the contingency is resolved.~~ During the ~~six~~three months ended ~~January~~October 31, 2023, the Company made a payment to the landlord for Contingent Consideration of approximately ~~$18.9~~$17.1 million and recorded an increase of approximately ~~$1.7 million.~~$3.1 million, primarily related to the estimated Contingent Consideration payment for the fiscal year ending July 31, 2024. These changes resulted in an estimated fair value of the Contingent Consideration of approximately ~~$25.2~~$59.3 million, which is reflected in other long-term liabilities in the Company’s Consolidated Condensed Balance Sheet.

9. Commitments and Contingencies

~~Metropolitan Districts~~

The Company credit-enhances $6.3 million of bonds issued by Holland Creek Metropolitan District (“HCMD”) through a $6.4 million letter of credit issued under the Vail Holdings Credit Agreement. HCMD’s bonds were issued and used to build infrastructure associated with the Company’s Red Sky Ranch residential development. The Company has agreed to pay capital improvement fees to the Red Sky Ranch Metropolitan District (“RSRMD”) until RSRMD’s revenue streams from property taxes are sufficient to meet debt service requirements under HCMD’s bonds. The Company has recorded a liability of $1.7 million, $1.8 million and $1.8 million primarily within other long-term liabilities in the accompanying Consolidated Condensed Balance Sheets, as of January 31, 2023, July 31, 2022 and January 31, 2022, respectively, with respect to the estimated present value of future RSRMD capital improvement fees. The Company estimates it will make capital improvement fee payments under this arrangement through the fiscal year ending July 31, 2031.

Guarantees/Indemnifications

As of ~~January~~October 31, 2023, the Company had various ~~other~~ letters of credit outstanding totaling ~~$83.0~~$84.1 million, consisting of $53.4 million to support the Employee Housing ~~Bonds~~Bonds; $6.4 million to support bonds issued by Holland Creek Metropolitan District; and ~~$29.6~~$24.3 million primarily for ~~insurance-related deductibles,~~workers’ compensation, a wind energy purchase agreement and ~~workers’ compensation.~~insurance-related deductibles. The Company also had surety bonds of ~~$13.1~~$9.5 million as of ~~January~~October 31, 2023, primarily to provide collateral for its U.S. workers compensation self-insurance programs.

In addition to the guarantees noted above, the Company has entered into contracts in the normal course of business that include certain indemnifications under which it could be required to make payments to third parties upon the occurrence or non-occurrence of certain future events. These indemnities include indemnities related to licensees in connection with third-parties’ use of the Company’s trademarks and logos, liabilities associated with the infringement of other parties’ technology and software products, liabilities associated with the use of easements, liabilities associated with employment of contract workers and the Company’s use of trustees and liabilities associated with the Company’s use of public lands and environmental matters. The duration of these indemnities generally is indefinite and generally do not limit the future payments the Company could be obligated to make.

As permitted under applicable law, the Company and certain of its subsidiaries have agreed to indemnify their directors and officers over their lifetimes for certain events or occurrences while the officer or director is, or was, serving the Company or its subsidiaries in such a capacity. The maximum potential amount of future payments the Company could be required to make under these indemnification agreements is unlimited; however, the Company has a director and officer insurance policy that should enable the Company to recover a portion of any amounts paid.

Unless otherwise noted, the Company has not recorded any significant liabilities for the letters of credit, indemnities and other guarantees noted above in the accompanying Consolidated Condensed Financial Statements, either because the Company has recorded on its Consolidated Condensed Balance Sheets the underlying liability associated with the guarantee, the guarantee is with respect to the Company’s own performance and is therefore not subject to the measurement requirements as prescribed by GAAP, or because the Company has calculated the estimated fair value of the indemnification or guarantee to be immaterial based on the current facts and circumstances that would trigger a payment under the indemnification clause. In addition, with respect to certain indemnifications, it is not possible to determine the maximum potential amount of liability under these potential obligations due to the unique set of facts and circumstances likely to be involved in each particular claim and indemnification provision. Historically, payments made by the Company under these obligations have not been material.

As noted above, the Company makes certain indemnifications to licensees for their use of the Company’s trademarks and logos. The Company does not record any liabilities with respect to these indemnifications.

Additionally, the Company has entered into strategic long-term season pass alliance agreements with third-party mountain resorts in which the Company has committed to pay minimum revenue guarantees over the remaining terms of these agreements.

Self-Insurance

The Company is self-insured for claims under its U.S. health benefit plans and for the majority of workers’ compensation claims in the U.S. Workers compensation claims in the U.S. are subject to stop loss policies. The self-insurance liability related to workers’ compensation is determined actuarially based on claims filed. The self-insurance liability related to claims under the Company’s U.S. health benefit plans is determined based on analysis of actual claims. The amounts related to these claims are included as a component of accrued benefits in accounts payable and accrued liabilities (see Note 7, Supplementary Balance Sheet Information).

Legal

The Company is a party to various lawsuits arising in the ordinary course of business. Management believes the Company has adequate insurance coverage and/or has accrued for all loss contingencies for asserted and unasserted matters deemed to be probable and estimable losses. As of ~~January~~October 31, 2023, July 31, ~~2022~~2023 and ~~January~~October 31, 2022, the accruals for the above loss contingencies were not material individually or in the aggregate.

10. Segment Information

The Company has three reportable segments: Mountain, Lodging and Real Estate. The Company refers to “Resort” as the combination of the Mountain and Lodging segments. The Mountain segment includes the operations of the Company’s mountain resorts/ski areas and related ancillary activities. The Lodging segment includes the operations of the Company’s owned hotels, RockResorts, NPS concessioner properties, condominium management, Colorado resort ground transportation operations and mountain resort golf operations. The Real Estate segment owns, develops and sells real estate in and around the Company’s resort communities. The Company’s reportable segments, although integral to the success of the others, offer distinctly different products and services and require different types of management focus. As such, these segments are managed separately.

The Company reports its segment results using Reported EBITDA (defined as segment net revenue less segment operating expenses, plus segment equity investment income or loss, and for the Real Estate segment, plus gain or loss on sale of real property). The Company reports segment results in a manner consistent with management’s internal reporting of operating results to the chief operating decision maker (Chief Executive Officer) for purposes of evaluating segment performance.

Items excluded from Reported EBITDA are significant components in understanding and assessing financial performance. Reported EBITDA should not be considered in isolation or as an alternative to, or substitute for, net ~~income,~~loss, net change in cash and cash equivalents or other financial statement data presented in the accompanying Consolidated Condensed Financial Statements as indicators of financial performance or liquidity.

The Company utilizes Reported EBITDA in evaluating the performance of the Company and in allocating resources to its segments. Mountain Reported EBITDA consists of Mountain net revenue less Mountain operating expense plus Mountain equity investment income or loss. Lodging Reported EBITDA consists of Lodging net revenue less Lodging operating expense. Real Estate Reported EBITDA consists of Real Estate net revenue less Real Estate operating expense plus gain or loss on sale of real property. All segment expenses include an allocation of corporate administrative expense. Assets are not used to evaluate performance, except as shown in the table below. The accounting policies specific to each segment are the same as those described in Note 2, Summary of Significant Accounting Policies.

The following table presents financial information by reportable segment, which is used by management in evaluating performance and allocating resources (in thousands):


		Three Months Ended January 31,				Six Months Ended January 31,					Three Months Ended October 31,
		2023		2022		2023		2022			2023		2022
Net revenue:	Net revenue:									Net revenue:

Mountain	Mountain	$	1,013,442	$	834,375	1,215,159		943,675		Mountain	$	172,455	$	201,717
Lodging	Lodging	80,577		71,980		158,194		137,941		Lodging	81,821		77,617
Total Resort net revenue	Total Resort net revenue	1,094,019		906,355		1,373,353		1,081,616		Total Resort net revenue	254,276		279,334
Real Estate	Real Estate	7,699		180		7,812		495		Real Estate	4,289		113
Total net revenue	Total net revenue	$	1,101,718	$	906,535	$	1,381,165	$	1,082,111	Total net revenue	$	258,565	$	279,447
Segment operating expense:	Segment operating expense:									Segment operating expense:
Mountain	Mountain	$	614,633	$	446,700	$	908,829	$	668,478	Mountain	$	312,839	$	294,196
Lodging	Lodging	84,630		62,612		166,604		126,022		Lodging	82,057		81,974
Total Resort operating expense	Total Resort operating expense	699,263		509,312		1,075,433		794,500		Total Resort operating expense	394,896		376,170
Real Estate	Real Estate	6,310		1,511		7,692		2,981		Real Estate	5,181		1,382
Total segment operating expense	Total segment operating expense	$	705,573	$	510,823	$	1,083,125	$	797,481	Total segment operating expense	$	400,077	$	377,552

Gain on sale of real property	Gain on sale of real property	$	757	$	931	$	757	$	962	Gain on sale of real property	$	6,285	$	—
Mountain equity investment income, net	Mountain equity investment income, net	$	42	$	818	$	388	$	2,332	Mountain equity investment income, net	$	859	$	346
Reported EBITDA:	Reported EBITDA:									Reported EBITDA:
Mountain	Mountain	$	398,851	$	388,493	$	306,718	$	277,529	Mountain	$	(139,525)	$	(92,133)
Lodging	Lodging	(4,053)		9,368		(8,410)		11,919		Lodging	(236)		(4,357)
Resort	Resort	394,798		397,861		298,308		289,448		Resort	(139,761)		(96,490)
Real Estate	Real Estate	2,146		(400)		877		(1,524)		Real Estate	5,393		(1,269)
Total Reported EBITDA	Total Reported EBITDA	$	396,944	$	397,461	$	299,185	$	287,924	Total Reported EBITDA	$	(134,368)	$	(97,759)

Real estate held for sale or investment	Real estate held for sale or investment	$	90,354	$	95,331	$	90,354	$	95,331	Real estate held for sale or investment	$	86,465	$	95,608

Reconciliation from net income attributable to Vail Resorts, Inc. to Total Reported EBITDA:
Net income attributable to Vail Resorts, Inc.		$	208,679	$	223,391	$	71,708	$	84,059
Net income attributable to noncontrolling interests		11,440		10,539		4,851		7,350
Net income		220,119		233,930		76,559		91,409
Provision for (benefit from) income taxes		79,032		52,049		21,026		(7,804)
Income before provision for (benefit from) income taxes		299,151		285,979		97,585		83,605
Reconciliation from net loss attributable to Vail Resorts, Inc. to Total Reported EBITDA:										Reconciliation from net loss attributable to Vail Resorts, Inc. to Total Reported EBITDA:
Net loss attributable to Vail Resorts, Inc.										Net loss attributable to Vail Resorts, Inc.	$	(175,512)	$	(136,971)
Net loss attributable to noncontrolling interests										Net loss attributable to noncontrolling interests	(7,535)		(6,589)
Net loss										Net loss	(183,047)		(143,560)
Benefit from income taxes										Benefit from income taxes	(65,160)		(58,006)
Loss before benefit from income taxes										Loss before benefit from income taxes	(248,207)		(201,566)
Depreciation and amortization	Depreciation and amortization	65,989		62,070		130,603		123,559		Depreciation and amortization	66,728		64,614

Change in estimated fair value of contingent consideration	Change in estimated fair value of contingent consideration	1,100		16,780		1,736		18,780		Change in estimated fair value of contingent consideration	3,057		636
Loss (gain) on disposal of fixed assets and other, net		1,780		(7,347)		1,786		(16,214)
Loss on disposal of fixed assets and other, net										Loss on disposal of fixed assets and other, net	2,043		6
Investment income and other, net	Investment income and other, net	(7,108)		(257)		(9,994)		(756)		Investment income and other, net	(3,684)		(2,886)
Foreign currency (gain) loss on intercompany loans		(2,338)		2,870		3,797		2,039
Foreign currency loss on intercompany loans										Foreign currency loss on intercompany loans	4,965		6,135
Interest expense, net	Interest expense, net	38,370		37,366		73,672		76,911		Interest expense, net	40,730		35,302
Total Reported EBITDA	Total Reported EBITDA	$	396,944	$	397,461	$	299,185	$	287,924	Total Reported EBITDA	$	(134,368)	$	(97,759)

2218

11. Share Repurchase Program

On March 9, 2006, the Company’s Board of Directors approved a share repurchase program, authorizing the Company to repurchase up to 3,000,000 Vail Shares. On July 16, 2008, December 4, 2015 and March 7, 2023, the Company’s Board of Directors increased the authorization by an additional 3,000,000, 1,500,000 and 2,500,000 Vail Shares, ~~and on December 4, 2015, the Company’s Board of Directors increased the authorization by an additional 1,500,000 Vail Shares~~respectively, for a total authorization to repurchase up to ~~7,500,000~~10,000,000 Vail Shares. The Company repurchased 237,056 Vail Shares during the three months ended October 31, 2023 (at a total cost of approximately $50.0 million, excluding accrued excise tax). The Company did not repurchase any Vail Shares during the three ~~and six~~ months ended ~~January~~October 31, ~~2023 or~~ 2022. Since inception of its share repurchase program through ~~January~~October 31, 2023, the Company has repurchased ~~6,465,708~~8,885,358 Vail Shares for approximately ~~$479.4~~$1,029.5 million. As of ~~January~~October 31, 2023, ~~1,034,292~~1,114,642 Vail Shares remained available to repurchase under the existing share repurchase program. On March 7, 2023, the Company’s Board of Directors approved an increase in the number of shares authorized to be repurchased under the share repurchase program by an additional 2,500,000 Vail Shares. As a result, 3,534,292 Vail Shares are available to repurchase under the share repurchase program, which has no expiration date. Vail Shares purchased pursuant to the repurchase program will be held as treasury shares and may be used for the issuance of Vail Shares under the Company’s employee share award plan.

12. Subsequent Event

On November 30, 2023, the Company announced that it had entered into an agreement to acquire Crans-Montana Mountain Resort in Switzerland from CPI Property Group. Pursuant to the terms of the agreement, the Company will acquire (i) an 84% ownership stake in Remontées Mécaniques Crans Montana Aminona SA, which controls and operates all of the lifts and supporting mountain operations, including four retail and rental locations; (ii) an 80% ownership stake in SportLife AG, which operates one of the ski schools located at the resort; and (iii) 100% ownership of 11 restaurants located on and around the mountain. Subject to closing adjustments, the enterprise value of the resort operations is expected to be CHF 118.5 million. The Company expects to fund the purchase price for the acquired ownership interest of the resort operations through cash on hand.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Vail Resorts, Inc., together with its subsidiaries, is referred to throughout this Quarterly Report on Form 10-Q for the period ended ~~January~~October 31, 2023 (“Form 10-Q”) as “we,” “us,” “our” or the “Company.”

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) should be read in conjunction with our Annual Report on Form 10-K for the fiscal year ended July 31, ~~2022~~2023 (“Form 10-K”) and the Consolidated Condensed Financial Statements as of ~~January~~October 31, 2023 and 2022 and for the three ~~and six~~ months then ended, included in Part I, Item 1 of this Form 10-Q, which provide additional information regarding our financial position, results of operations and cash flows. To the extent that the following MD&A contains statements which are not of a historical nature, such statements are forward-looking statements, which involve risks and uncertainties. See “Forward-Looking Statements” below. These risks include, but are not limited to, those discussed in our filings with the Securities and Exchange Commission (“SEC”), including the risks described in Item 1A. “Risk Factors” of Part I of our Form 10-K, which was filed on September 28, ~~2022.~~2023.

The MD&A includes discussion of financial performance within each of our three segments. We have chosen to specifically include segment Reported EBITDA (defined as segment net revenue less segment operating expense, plus segment equity investment income or loss, and for the Real Estate segment, plus gain or loss on sale of real property) in the following discussion because we consider this measurement to be a significant indication of our financial performance. We utilize segment Reported EBITDA in evaluating our performance and in allocating resources to our segments. Net Debt (defined as long-term debt, net plus long-term debt due within one year less cash and cash equivalents) is included in the following discussion because we consider this measurement to be a significant indication of our available capital resources. We also believe that Net Debt is an important measurement as it is an indicator of our ability to obtain additional capital resources for our future cash needs. Resort Reported EBITDA (defined as the combination of segment Reported EBITDA of our Mountain and Lodging segments), Total Reported EBITDA (which is Resort Reported EBITDA plus segment Reported EBITDA from our Real Estate segment) and Net Debt are not measures of financial performance or liquidity defined under accounting principles generally accepted in the United States (“GAAP”). Refer to the end of the Results of Operations section for a reconciliation of net ~~income~~loss attributable to Vail Resorts, Inc. to Total Reported EBITDA and Resort Reported EBITDA, and long-term debt, net to Net Debt.

Items excluded from Resort Reported EBITDA, Total Reported EBITDA and Net Debt are significant components in understanding and assessing financial performance or liquidity. Resort Reported EBITDA, Total Reported EBITDA and Net Debt should not be considered in isolation or as an alternative to, or substitute for, net ~~income,~~loss, net change in cash and cash equivalents or other financial statement data presented in the Consolidated Condensed Financial Statements as indicators of financial performance or liquidity. Because Resort Reported EBITDA, Total Reported EBITDA and Net Debt are not measurements determined in accordance with GAAP and are thus susceptible to varying calculations, Resort Reported EBITDA, Total Reported EBITDA and Net Debt, as presented herein, may not be comparable to other similarly titled measures of other companies. In addition, our segment Reported EBITDA (i.e., Mountain, Lodging and Real Estate), the measure of segment profit or loss required to be disclosed in accordance with GAAP, may not be comparable to other similarly titled measures of other companies.

Overview

Our operations are grouped into three integrated and interdependent segments: Mountain, Lodging and Real Estate. We refer to “Resort” as the combination of the Mountain and Lodging segments.

Mountain Segment

In the Mountain segment, the Company operates the following 41 destination mountain resorts and regional ski ~~areas:~~areas (collectively, “Resorts”):

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

Additionally, ~~we operate~~the Mountain segment includes ancillary services, primarily including ski school, dining and retail/rental operations, and for our Australian ski areas, including lodging and transportation operations. Mountain segment revenue is seasonal, with the majority of revenue earned from our North American and European ski operations occurring in our second and third fiscal quarters and the majority of revenue earned from our Australian ski operations occurring in our first and fourth fiscal quarters. Our North American and European ~~destination mountain resorts and regional ski areas (collectively, “Resorts”)~~Resorts typically experience their peak operating season for the Mountain segment from mid-December through mid-April, and our Australian ski areas typically experience their peak operating season from June to early October. Consequently, our first and fourth fiscal ~~quarter is a~~quarters are seasonally low ~~period~~periods as most of our North American and European ski operations are generally not open for business, ~~until our second fiscal quarter, while~~and the activity of our Australian ski areas’ peak season and our North American and European summer operating results are not sufficient to offset the losses incurred during ~~the~~these seasonally low ~~periods at our North American and European Resorts.~~periods. Revenue of the Mountain segment during the first and fourth fiscal quarters is primarily generated from summer and group related visitation at our North American and European destination mountain resorts, retail/rental operations and peak season Australian ski operations. Our largest source of Mountain segment revenue is the sale of lift tickets (including pass products), which represented approximately 58% and 63% of Mountain segment net revenue for the three months ended January 31, 2023 and 2022, respectively.

Lift revenue is driven by volume and pricing. Pricing is impacted by absolute pricing, as well as both the demographic and geographic mix of guests, which impacts the price points at which various products are purchased. The demographic mix of guests that visit our North American Resorts is divided into two primary categories: (i) out-of-state and international

2420

(“Destination”) guests and (ii) in-state and local (“Local”) guests. The geographic mix depends on levels of visitation to our destination mountain resorts versus our regional ski areas. For the three months ended January 31, 2023, Destination guests comprised approximately 54% of our North American destination mountain resort skier visits (excluding complimentary access), while Local guests comprised approximately 46% of our North American destination mountain resort skier visits (excluding complimentary access), which compares to 55% and 45%, respectively, for the three months ended January 31, 2022. Skier visitation at our regional ski areas is largely comprised of Local guests. Destination guests generally purchase our higher-priced lift tickets (including pass products) and utilize more ancillary services such as ski school, dining and retail/rental, as well as lodging at or around our mountain resorts. Additionally, Destination guest visitation is less likely to be impacted by changes in the weather during the current season, but may be more impacted by adverse economic conditions, the global geopolitical climate, travel disruptions or weather conditions in the immediately preceding ski season. Local guests tend to be more value-oriented and weather-sensitive.

We offer a variety of pass products for all of our Resorts, marketed toward both Destination and Local guests. Our pass product offerings range from providing access to one or a combination of our Resorts for a certain number of days to our Epic Pass, which allows pass holders unlimited and unrestricted access to all of our Resorts. The Epic Day Pass is a customizable one to seven day pass product purchased in advance of the season, for those skiers and riders who expect to ski a certain number of days during the season, and which is available in three tiers of resort access offerings. Our pass products provide a compelling value proposition to our guests, which in turn assists us in developing a loyal base of customers who commit to ski at our Resorts generally in advance of the ski season and typically ski more days each season at our Resorts than those guests who do not buy pass products. Additionally, we enter into strategic long-term pass alliance agreements with third-party mountain resorts, which further increase the value proposition of our pass products. For the 2023/2024 ski season, our pass alliances include Telluride Ski Resort in Colorado, Hakuba Valley and Rusutsu Resort in Japan, Resorts of the Canadian Rockies in Canada, Les 3 Vallées in France, Disentis Ski Area and Verbier 4 Vallées in Switzerland, Skirama Dolomiti in Italy and Ski Arlberg in Austria. Our pass program drives strong customer loyalty; mitigates exposure to more weather sensitive guests; generates additional ancillary spending; and provides cash flow in advance of winter season operations. In addition, our pass program attracts new guests to our Resorts. All of our pass products, including the Epic Pass and Epic Day Pass, are predominately sold prior to the start of the ski season. Pass product revenue, although primarily collected prior to the ski season, is recognized in the Consolidated Condensed Statements of Operations throughout the ski season on a straight-line basis using the skiable days of the season to date relative to the total estimated skiable days of the season.

Lift revenue consists of pass product lift revenue (“pass revenue”) and non-pass product lift revenue (“non-pass revenue”). For the three months ended January 31, 2023 and 2022, approximately 70% and 68%, respectively, of our total lift revenue recognized was derived from pass revenue. Pass revenue recognized year to date (excluding Andermatt-Sedrun and legacy passes assumed in the acquisition of the Seven Springs Resorts, both as defined below), which is primarily recognized in our second fiscal quarter, represents approximately 51% and 46%, of our total North American pass product revenue for the 2022/2023 and 2021/2022 North American ski seasons, respectively, with the remaining North American pass revenue almost entirely recognized as lift revenue in our third fiscal quarter ending April 30. The increase in the portion of pass revenue recognized year to date compared to the prior year to date period is primarily the result of challenging early season conditions in the prior year, which resulted in delayed openings for a number of our destination mountain resorts, as well as early openings of certain Resorts for the current 2022/2023 North American ski season. This variability in Resort opening dates drove a pass revenue increase of approximately $40 million for the three months ended January 31, 2023 compared to the three months ended January 31, 2022. This is a timing difference that will largely reverse during our third fiscal quarter.

The cost structure of our mountain resort operations has a significant fixed component with variable expenses including, but not limited to, land use permit or lease fees, credit card fees, retail/rental cost of sales and labor, ski school labor and dining operations; as such, profit margins can fluctuate greatly based on the level of revenues.

Lodging Segment

Operations within the Lodging segment include: (i) ownership/management of a group of luxury hotels through the RockResorts brand proximate to our Colorado and Utah mountain resorts; (ii) ownership/management of non-RockResorts branded hotels and condominiums proximate to our North American Resorts; (iii) National Park Service (“NPS”) concessioner properties, including the Grand Teton Lodge Company (“GTLC”); (iv) a Colorado resort ground transportation company; and (v) mountain resort golf courses.

~~The performance~~Revenue of the lodging segment during our first fiscal quarter is generated primarily by the operations of our ~~lodging~~NPS concessioner properties (as their peak operating season generally occurs during the months of June to October), as well as golf operations and seasonally low operations from our other owned and managed properties and businesses. Lodging properties (including managed condominium rooms) ~~proximate to~~at or around our ~~Resorts,~~mountain resorts, and our Colorado resort ground transportation company, are closely aligned with the performance of the Mountain segment and generally experience similar seasonal trends, particularly with respect to visitation by Destination guests. Revenues from such properties represented approximately 94% of Lodging segment net revenue (excluding Lodging segment revenue associated with the reimbursement of payroll costs) for both the three months ended January 31, 2023 and 2022.trends. Management primarily focuses on Lodging net revenue excluding payroll cost reimbursements and Lodging operating expense excluding reimbursed payroll costs (which are not measures of financial performance under GAAP) as the reimbursements are made based upon the costs incurred with no added margin and as such, the revenue and corresponding expense do not affect our Lodging Reported EBITDA, which we use to evaluate Lodging segment performance. Revenue of the Lodging segment during our first and fourth fiscal quarters is generated primarily by the operations of our NPS concessioner properties (as their peak operating season generally occurs from mid-May through the end of September); mountain resort golf operations and seasonally lower volume from our other owned and managed properties and businesses.

Real Estate Segment

The principal activities of our Real Estate segment include the sale of land parcels to third-party developers and planning for future real estate development projects, including zoning and acquisition of applicable permits. We continue undertaking preliminary planning and design work on future projects and are pursuing opportunities with third-party developers rather than undertaking our own significant vertical development projects. Additionally, real estate development projects by third-party developers most often result in the creation of certain resort assets that provide additional benefit to the Mountain segment. We believe that, due to our low carrying cost of real estate land investments, we are well situated to promote future projects by third-party developers while limiting our financial risk. Our revenue from the Real Estate segment and associated expense can fluctuate significantly based upon the timing of closings and the type of real estate being sold, causing volatility in the Real Estate segment’s operating results from period to period.

Recent Trends, Risks and Uncertainties

Together with those risk factors we have identified in our Form 10-K, we have identified the following important factors (as well as risks and uncertainties associated with such factors) that could impact our future financial performance or condition:

•The economies in the countries in which we operate and from which we attract our guests may be impacted by economic challenges associated with rising inflation, increasing or elevated interest rates, geopolitical conflicts and financial institution disruptions and/or fluctuating commodity prices that could adversely impact our business, including decreased guest spending or visitation or increased costs of operations. Skiing, travel and tourism are discretionary recreational activities that can entail a relatively high cost of participation. As a result, economic downturns and other negative impacts to consumer discretionary spending may have a pronounced impact on visitation to our Resorts. We cannot predict the ~~ultimate~~ extent ofto which we may be impacted by such potential economic challenges, whether in North America or globally.

•The timing and amount of snowfall can have an impact on Mountain and Lodging revenue, particularly with regard to skier visits and the duration and frequency of guest visitation. To help mitigate this impact, we sell a variety of pass products prior to the beginning of the ski season, which results in a more stabilized stream of lift revenue. Additionally, our pass products provide a compelling value proposition to our guests, which in turn create a guest commitment predominately prior to the start of the ski season. Pass ~~revenue increased approximately $59.6 million, or 16.8%,~~product sales through December 4, 2023 for the three months ended January 31, 2023 compared to the same period in the prior year, primarily due to delayed destination mountain resort opening dates in the prior year (as discussed above), as well as increased pass product sales for the 2022/20232023/2024 North American ski season increased approximately 4% in units and approximately 11% in sales dollars as compared to the ~~2021/2022 North American ski season. Deferred revenue related to North American pass~~prior year through December 5, 2022. Pass product sales ~~(excluding assumed deferred~~are adjusted to eliminate the impact of foreign currency by applying an exchange rate of $0.74 between the Canadian dollar and U.S. dollar in both periods for Whistler Blackcomb pass sales. We cannot predict the overall impact that sales of our pass products will have on total lift revenue ~~associated with~~or effective ticket price for the ~~Seven Springs Resorts, as defined below) was approximately $398.0 million as of January~~fiscal year ending July 31, ~~2023 (compared to approximately $425.5 million as of January 31, 2022).~~2024.

•Improved conditions at our Colorado, Utah and Tahoe resorts enabled select early resort openings and drove strong early season local visitation, and the easing of travel restrictions in Canada contributed to a strong rebound in Destination visitation at Whistler Blackcomb relative to the prior year period. Visitation at our western U.S. Resorts was negatively impacted by airline travel disruptions during the peak holiday period, as well as severe weather disruptions at our Tahoe resorts. In Tahoe, significant snowstorms continued to impact resort access and hindered our ability to fully open our Resorts throughout the remainder of the quarter. Across our 26 Midwest, Mid-Atlantic and Northeast Resorts (collectively, “Eastern” U.S. Resorts), results for the quarter were negatively impacted by abnormal weather conditions, which significantly reduced operating days, terrain availability and activity offerings across the region which impacted demand and increased operating costs, including snowmaking, grooming and related labor costs. In particular, results at our Eastern U.S. Resorts were significantly below expectations in the post-holiday period, as conditions did not return to normal after the holidays as expected with January having only 50-60% of lifts

2621

and terrain open during the period. The recent investments we made in our Resorts and our employees helped drive improved staffing levels and employee satisfaction scores, a return to normal operations and strong guest satisfaction scores. Our ancillary businesses, including ski school, dining, and retail/rental, experienced strong growth compared to the prior year period, when staffing shortages constrained capacity of ancillary businesses.

•~~COVID-19 has led~~Given that we operate in the travel and leisure industry, we are subject to risks related to public health emergencies, including the potential outbreak and spread of contagious disease. Public health emergencies may lead to adverse economic impacts in global and local ~~economies. While~~economies, including the economies in which we ~~have experienced continued recovery from~~operate, which may in turn impact consumer demand, the ~~COVID-19 pandemic, our operations for the fiscal year ending July 31, 2023 (“Fiscal 2023”) may continue~~willingness or ability of guests to be negatively impacted by COVID-19. Although conditions have improved, demand may continue to be varied as the recovery progresses. A significant outbreak of any new COVID-19 variants could result in temporary impacts to ourtravel, guest visitation, staffing levels ~~and may impact our~~or financial results for a period of time which we are currently unable to predict. While we anticipate continued improvements with regard to COVID-19 as compared to the fiscal years ended July 31, 2022 and 2021, weresults. We cannot predict the ultimate impact that ~~COVID-19 will~~any potential public health emergency may have on ~~our results of operations, particularly in the event of any staffing challenges caused by COVID-19, or from any impact to~~ our guest visitation, guest spending, orstaffing capabilities, other related trends ~~for the 2022/2023 North American and European ski seasons~~ or ~~the remainder~~overall results of ~~Fiscal 2023.~~operations.

•As of ~~January~~October 31, 2023, we had ~~$1.3 billion~~$728.9 million of cash and cash equivalents, as well as ~~$414.6~~$419.8 million available under the revolver component of our Eighth Amended and Restated Credit Agreement, dated as of August 15, 2018 and as amended most recently on August 31, 2022 (the “Vail Holdings Credit Agreement”), which represents the total commitment of $500.0 million less certain letters of credit outstanding of ~~$85.4~~$80.2 million. Additionally, we have a credit facility which supports the liquidity needs of Whistler Blackcomb (the “Whistler Credit Agreement”). As of ~~January~~October 31, 2023, we had C$~~281.6~~296.6 million ($~~211.7~~213.9 million) available under the revolver component of the Whistler Credit Agreement, ~~(which~~which represents the total commitment of C$300.0 million ($~~225.5~~216.3 million) less ~~outstanding borrowings of C$15.0 million ($11.3 million) and a letter~~letters of credit outstanding of C$3.4 million ($~~2.5~~2.4 million). We believe that our existing cash and cash equivalents, availability under our credit agreements and the expected positive cash flow from operating activities of our Mountain and Lodging segments less resort capital expenditures will continue to provide us with sufficient liquidity to fund our operations.

•On August 3, 2022, through a wholly-owned subsidiary, we acquired a 55% controlling interest in Andermatt-Sedrun Sport AG (“Andermatt-Sedrun”) from Andermatt Swiss Alps AG (“ASA”). Andermatt-Sedrun controls and operates all of Andermatt-Sedrun's mountain and ski-related assets, including lifts, most of the restaurants and a ski school operation at the ski area. The total consideration we paid was comprised of a $114.4 million (CHF 110.0 million) investment into Andermatt-Sedrun for use in capital investments to enhance the guest experience on the mountain and $41.3 million (CHF 39.3 million) paid to ASA. As of August 3, 2022 the total fair value of the consideration paid was $155.4 million (CHF 149.3 million). The proceeds paid to ASA will be fully reinvested into the real estate developments in the base area. ASA retains a 40% ownership stake, with a group of existing shareholders comprising the remaining 5% ownership. We are providing unlimited and unrestricted access to Andermatt-Sedrun on the Epic Pass for the 2022/2023 ski season, as well as providing access on other pass products. We cannot predict the ultimate impact the acquisition of Andermatt-Sedrun will have on our future results from operations.

RESULTS OF OPERATIONS

Summary

Below is a summary of operating results for the three ~~and six~~ months ended ~~January 31, 2023, compared to the three and six months ended January 31, 2022 (in thousands):~~

Three Months Ended January 31, Six Months Ended January 31,
2023 2022 2023 2022
Net income attributable to Vail Resorts, Inc. $ 208,679 $ 223,391 $ 71,708 $ 84,059
Income before (provision for) benefit from income taxes $ 299,151 $ 285,979 $ 97,585 $ 83,605
Mountain Reported EBITDA $ 398,851 $ 388,493 $ 306,718 $ 277,529
Lodging Reported EBITDA (4,053) 9,368 (8,410) 11,919
Resort Reported EBITDA $ 394,798 $ 397,861 $ 298,308 $ 289,448
Real Estate Reported EBITDA $ 2,146 $ (400) $ 877 $ (1,524)

The consolidated condensed results of operations, including any consolidated financial metrics pertaining thereto, include the operations of Andermatt-Sedrun (acquired August 3, 2022) and Seven Springs Mountain Resort, Hidden Valley Resort and Laurel Mountain Ski Area (together, the “Seven Springs Resorts,” acquired December 31, 2021) prospectively from their respective dates of acquisition.

~~Mountain Segment~~

~~Three months ended January~~October 31, 2023, compared to the three months ended ~~January~~October 31, 2022 (in thousands):


	Three Months Ended October 31,
		2023		2022
Net loss attributable to Vail Resorts, Inc.		$	(175,512)	$	(136,971)
Loss before benefit from income taxes		$	(248,207)	$	(201,566)
Mountain Reported EBITDA		$	(139,525)	$	(92,133)
Lodging Reported EBITDA		(236)		(4,357)
Resort Reported EBITDA		$	(139,761)	$	(96,490)
Real Estate Reported EBITDA		$	5,393	$	(1,269)

Mountain Segment

Three months ended October 31, 2023 compared to the three months ended October 31, 2022

Mountain segment operating results for the three months ended ~~January~~October 31, 2023 and 2022 are presented by category as follows (in thousands, except effective ticket price (“ETP”)). ETP is calculated as lift revenue divided by total skier visits for each applicable period presented.


		Three Months Ended January 31,				Percentage Increase (Decrease)			Three Months Ended October 31,				Percentage Increase (Decrease)
		2023		2022					2023		2022
Mountain net revenue:	Mountain net revenue:							Mountain net revenue:
Lift	Lift	$	592,603	$	521,582	13.6	%	Lift	$	45,390	$	59,540	(23.8)	%
Ski school	Ski school	123,451		92,072		34.1	%	Ski school	7,178		8,927		(19.6)	%
Dining	Dining	85,828		54,049		58.8	%	Dining	18,077		19,442		(7.0)	%
Retail/rental	Retail/rental	159,932		126,831		26.1	%	Retail/rental	33,474		40,344		(17.0)	%
Other	Other	51,628		39,841		29.6	%	Other	68,336		73,464		(7.0)	%
Total Mountain net revenue	Total Mountain net revenue	1,013,442		834,375		21.5	%	Total Mountain net revenue	172,455		201,717		(14.5)	%
Mountain operating expense:	Mountain operating expense:							Mountain operating expense:
Labor and labor-related benefits	Labor and labor-related benefits	277,537		178,692		55.3	%	Labor and labor-related benefits	112,049		108,045		3.7	%
Retail cost of sales	Retail cost of sales	48,197		36,288		32.8	%	Retail cost of sales	17,821		20,741		(14.1)	%
Resort related fees		43,550		36,885		18.1	%

General and administrative	General and administrative	97,365		77,525		25.6	%	General and administrative	93,168		83,289		11.9	%
Other	Other	147,984		117,310		26.1	%	Other	89,801		82,121		9.4	%
Total Mountain operating expense	Total Mountain operating expense	614,633		446,700		37.6	%	Total Mountain operating expense	312,839		294,196		6.3	%
Mountain equity investment income, net	Mountain equity investment income, net	42		818		(94.9)	%	Mountain equity investment income, net	859		346		148.3	%
Mountain Reported EBITDA	Mountain Reported EBITDA	$	398,851	$	388,493	2.7	%	Mountain Reported EBITDA	$	(139,525)	$	(92,133)	(51.4)	%

Total skier visits	Total skier visits	8,308		7,360		12.9	%	Total skier visits	658		993		(33.7)	%
ETP	ETP	$	71.33	$	70.87	0.6	%	ETP	$	68.98	$	59.96	15.0	%

Mountain Reported EBITDA includes ~~$5.7~~$5.8 million and ~~$5.4~~$5.3 million of stock-based compensation expense for the three months ended ~~January~~October 31, 2023 and 2022, respectively.

28Our first fiscal quarter historically results in negative Mountain Reported EBITDA, as most of our North American and European Resorts generally do not open for ski operations until our second fiscal quarter, which begins in November. The first fiscal quarter generally consists of operating and administrative expenses, summer activities (including dining), retail/rental operations and the winter operations of our Australian ski areas, for which the ski season generally occurs from June through early October.

Mountain Reported EBITDA ~~increased $10.4~~decreased $47.4 million, or ~~2.7%. The increase was attributable to~~51.4%, primarily driven by an increase in expenses at our North American ~~pass revenue, which was impacted by: (i) timing of recognition of pass revenue resulting in a $40 million increase due to delayed openings for a number~~Resorts, including increased labor costs and general and administrative expenses (which includes the incremental impact of our ~~destination mountain resorts~~prior year investments in employee wages), increases in repairs and maintenance expense and professional services expense (including costs associated with our workforce planning tools implementation), and the impact of inflation. Mountain Reported EBITDA also decreased as a result of our Australian operations, which experienced weather-related challenges that impacted terrain in the current year, compared to record visitation and favorable snow conditions in the prior ~~year and early openings of certain Resorts for the current year and (ii) an increase in pass product sales for the 2022/2023~~year. Summer revenue at our North American ~~ski season~~Resorts also decreased primarily as a result of decreased summer visitation from lower demand for summer mountain travel and weather related challenges compared to the prior year. Additionally, the increase in Mountain Reported EBITDA was due to an overall increase in skier visitation that benefited our ancillary lines of business, which remained disproportionately impacted by COVID-19 restrictions and limitations in the prior year. These increases were partially offset by: (i) increased labor and labor-related benefits and general and administrative expense, primarily as a result of investments in North American employee wages and increased headcount to support more normalized staffing and operations at our Resorts; (ii) increased variable expenses associated with increased revenues; and (iii) increased expenses related to variable weather conditions and inflation. Mountain segment results also include $0.3 million and $2.6 million of acquisition and integration related expenses for the three months ended January 31, 2023 and 2022, respectively.

Lift revenue ~~increased $71.0~~decreased $14.2 million, or ~~13.6%~~23.8%, primarily due to ~~an increase~~a decrease in ~~pass~~paid lift revenue at our Australian resorts as ~~well as increase~~a result of reduced visitation from weather-related disruptions and unfavorable snow conditions in ~~non-pass lift ticket purchases. Pass revenue increased 16.8%, which was primarily driven by~~the current year, compared to record visitation and favorable snow conditions in the prior year negative impact of delayed Resort openings due to challenging early season conditions for the 2021/2022 North American ski season and early Resort openings for the current 2022/2023 North American ski season, as well as an increase in pass product sales for the 2022/2023 North American ski season. Non-pass revenue increased 6.8%, driven by an increase in non-pass ETP (excluding Andermatt-Sedrun) of 8.4% and an increase in visitation compared to the prior year, as well as incremental revenue from Andermatt-Sedrun of $5.8 million. Total non-pass ETP, including the impact of Andermatt-Sedrun, increased 3.7%.year.

Ski school revenue ~~increased $31.4~~decreased $1.7 million, or ~~34.1%~~19.6%, and dining revenue ~~increased $31.8~~decreased $1.4 million, or ~~58.8%, and retail/rental revenue increased $33.1 million, or 26.1%~~7.0%, each primarily driven by ~~increased skier~~decreased visitation at our Australian resorts, as a result of weather-related disruptions and unfavorable snow conditions in the current year, compared to record visitation and favorable snow conditions in the prior year. Retail/rental revenue decreased $6.9 million, or 17.0%, driven by a decrease in summer visitation at our North American Resorts, which drove decreased demand at our on-mountain retail locations, as well as ~~the greater impact of COVID-19 and related limitations and restrictions~~a decrease in ~~the prior year, including staffing challenges which limited~~retail/rental revenue at our ~~ability to operate at full capacity.~~Australian stores.

Other revenue mainly consists of summer visitation and other mountain activities revenue, employee housing revenue, guest services revenue, commercial leasing revenue, marketing revenue, private club revenue (which includes both club dues and amortization of initiation fees), municipal services revenue and other recreation activity revenue. Other revenue ~~increased $11.8~~also includes Australian ski area lodging and transportation revenue. Other revenue decreased $5.1 million, or ~~29.6%~~7.0%, primarily driven by ~~staffing challenges in the prior year which impacted the company’s ability to operate ancillary services~~decreased sightseeing and other on-mountain summer activities revenue due to decreased summer visitation at ~~full capacity,~~our North American Resorts as ~~well as increased skier visitation which drove additional~~a result of lower demand for ~~ancillary services.~~summer mountain travel and weather related challenges compared to the prior year.

Operating expense increased ~~$167.9~~$18.6 million, or 37.6%, which was primarily attributable to investments in employee wages and salaries and increased headcount to support more normalized staffing and operations at our Resorts, as well as increased variable expenses associated with increased revenue, the impact of inflation and incremental expenses associated with Andermatt-Sedrun and the Seven Springs Resorts. Additionally, operating expense includes $0.3 million and $2.6 million of acquisition and integration related expenses for the three months ended January 31, 2023 and 2022, respectively.

6.3%. Labor and labor-related benefits increased ~~55.3%~~3.7%, primarily due to normal wage adjustments and the incremental impact of our prior year investments in wages and salaries for North American employees, ~~and increased headcount to support more normalized staffing and operations~~which went into effect in October 2022, but were in effect for the full quarter in the current year, partially offset by lower labor costs at our Resorts, as well as additional labor costs incurred as a result of variable weather conditions, particularly at our Eastern U.S. resorts and incremental expenses from Andermatt-Sedrun and the Seven Springs Resorts of $8.4 million for the comparable period they were not owned in the prior year.Australian ski areas. Retail cost of sales ~~increased 32.8%~~decreased 14.1%, compared to ~~an increase~~a decrease in retail sales of ~~26.2%~~15.5%, ~~resulting in~~reflecting decreased margins on retail products driven by higher sales of discounted inventory. ~~Resort related fees increased 18.1% primarily as a result of an increase in revenues on which those fees are based.~~ General and administrative expense increased ~~25.6%,~~11.9% primarily due to an increase in allocated corporate overhead costs, ~~across nearly all corporate functions, which were primarily driven by~~including the incremental impact of our prior year investments in ~~employee~~ wages and ~~salaries. Other expense increased 26.1%, primarily due to increases~~salaries for North American employees, which went into effect in variable operating expenses associated with increased revenues, in addition to increased utility costs of $9.3 million associated with higher variable rates and increased snowmaking operations at our Eastern U.S. resorts,October 2022, as well as an increase in marketing expense to drive incremental 2023/2024 North American pass product sales. Other expense increased 9.4% primarily due to increase in repairs and maintenance expenses ($4.6 million), professional services ($2.8 million), which includes costs associated with our workforce planning tools implementation, and the impact of ~~$4.3 million, partially offset by a decrease in acquisition and integration related expenses of $2.3 million.~~inflation.

Mountain equity investment income, net primarily includes our share of income from the operations of a real estate brokerage company.

~~Six months ended January 31, 2023 compared to the six months ended January 31, 2022~~

~~Mountain segment operating results for the six months ended January 31, 2023 and 2022 are presented by category as follows (in thousands, except ETP):~~
Six Months Ended January 31, Percentage
Increase
(Decrease)
2023 2022
Mountain net revenue:
Lift $ 652,143 $ 535,911 21.7 %
Ski school 132,378 93,545 41.5 %
Dining 105,270 66,569 58.1 %
Retail/rental 200,276 155,207 29.0 %
Other 125,092 92,443 35.3 %
Total Mountain net revenue 1,215,159 943,675 28.8 %
Mountain operating expense:
Labor and labor-related benefits 385,582 259,119 48.8 %
Retail cost of sales 68,938 50,911 35.4 %
Resort related fees 47,181 39,993 18.0 %
General and administrative 180,654 142,262 27.0 %
Other 226,474 176,193 28.5 %
Total Mountain operating expense 908,829 668,478 36.0 %
Mountain equity investment income, net 388 2,332 (83.4) %
Mountain Reported EBITDA $ 306,718 $ 277,529 10.5 %
Total skier visits 9,301 7,576 22.8 %
ETP $ 70.12 $ 70.74 (0.9) %

~~Mountain Reported EBITDA includes $11.1 million and $10.8 million of stock-based compensation expense for the six months ended January 31, 2023 and 2022, respectively.~~

Mountain Reported EBITDA increased $29.2 million, or 10.5%. The increase was primarily driven by our Australian operations, which experienced record visitation and favorable snow conditions in the current year following periodic COVID-19 related closures in the prior year at Perisher, Falls Creek and Hotham. Additionally, the increase was attributable to an increase in North American pass revenue, which was impacted by: (i) timing of recognition of pass revenue resulting in a $40 million increase due to delayed openings for a number of our destination mountain resorts in the prior year and early openings of certain Resorts for the current year and (ii) an increase in pass product sales for the 2022/2023 North American ski season compared to the prior year. Additionally, the increase was due to an overall increase in skier visitation that benefited our ancillary lines of business, which remained disproportionately impacted by COVID-19 restrictions and limitations in the prior year. These increases were partially offset by: (i) increased labor and labor-related benefits and general and administrative expense, primarily as a result of investments in North American employee wages and increased headcount to support more normalized staffing and operations at our Resorts; (ii) increased variable expenses associated with increased revenues; and (iii) increased expenses related to variable weather conditions and inflation. Mountain segment results also include $2.9 million and $3.1 million of acquisition and integration related expenses for the three months ended January 31, 2023 and 2022, respectively.

As our North American Resorts primarily opened for ski season operations during our second fiscal quarter, certain components of Mountain segment net revenue, such as North American lift revenue, ski school revenue, dining revenue, and retail/rental revenue for the six months ended January 31, 2023 and 2022 are materially unchanged as compared to those same components for the three months ended January 31, 2023 and 2022. Accordingly, the primary basis for the changes to these components of our North American Resorts for the six months ended January 31, 2023 as compared to the prior period are discussed above under the section heading “~~Three months ended January 31, 2023 compared to the three months ended January 31, 2022~~.” Additionally, with regard to the six months ended January 31, 2023 compared to the six months ended January 31, 2022, lift revenue, ski school revenue, dining revenue and retail/rental revenue all increased at our Australian ski areas, which experienced record visitation and favorable snow conditions in the current year following periodic COVID-19 related closures and restrictions in the prior year. Retail/rental revenue in the current year also benefited from higher sales at our Colorado city store locations, as well as stronger summer visitation at our North American Resorts which drove increased demand at our on-mountain retail locations, particularly at Whistler Blackcomb, which was disproportionately impacted in the prior year due to

~~border closures and other COVID-19 related limitations and restrictions, as well as at our Tahoe resorts as a result of disruptions on our operations from forest fires in the prior year.~~

Other revenue mainly consists of summer visitation, other mountain activities revenue, employee housing revenue, guest services revenue, commercial leasing revenue, marketing and internet advertising revenue, private club revenue (which includes both club dues and amortization of initiation fees), municipal services revenue and other recreation activity revenue. Other revenue also includes Australian resort lodging and transportation revenue. Other revenue increased $32.6 million or 35.3%, primarily driven by an increase in summer and winter visitation at our North American Resorts compared to the prior year, and staffing challenges in the prior year which impacted the company’s ability to operate ancillary services and other on-mountain activities at full capacity, as well as our Australian ski areas, as a result of the greater impact of COVID-19 and related limitations and restrictions in the prior year.

Operating expense increased $240.4 million or 36.0%, which was primarily attributable to investments in employee wages and salaries and increased headcount to support more normalized staffing and operations at our Resorts, as well as increased variable expenses associated with increased revenue, the impact of inflation and incremental expenses associated with Andermatt-Sedrun and the Seven Springs Resorts. Additionally, operating expense includes $2.9 million and $3.1 million of acquisition and integration related expenses for the six months ended January 31, 2023 and 2022, respectively.

Labor and labor-related benefits increased 48.8%, primarily due to investments in wages and salaries for North American employees and increased headcount to support more normalized staffing and operations at our Resorts, as well as an increase in Australian operations as a result of periodic closures during the prior year, additional labor costs incurred as a result of variable weather conditions, particularly at our Eastern U.S. resorts, and incremental expenses from Andermatt-Sedrun and the Seven Springs Resorts of $12.7 million for the comparable period they were not owned in the prior year. Retail cost of sales increased 35.4%, compared to an increase in retail sales of 27.9%, resulting in decreased margins on retail products driven by higher sales of discounted inventory. Resort related fees increased 18.0% primarily as a result of an increase in revenues on which those fees are based. General and administrative expense increased 27.0%, due to an increase in costs across nearly all corporate functions, which were primarily driven by investments in employee wages and salaries. Other expense increased 28.5%, primarily due to increases in variable operating expenses associated with increased revenues, in addition to increased utility costs of $11.0 million primarily associated with higher variable rates and increased snowmaking operations at our Eastern U.S. resorts, as well as an increase in repairs and maintenance expense of $7.8 million.

~~Mountain equity investment income, net primarily includes our share of income from the operations of a real estate brokerage company.~~

3124

Lodging Segment

Three months ended ~~January~~October 31, 2023 compared to the three months ended ~~January~~October 31, 2022

Lodging segment operating results for the three months ended ~~January~~October 31, 2023 and 2022 are presented by category as follows (in thousands, except average daily rates (“ADR”) and revenue per available room (“RevPAR”)):

Three Months Ended January 31, Percentage
Increase
(Decrease)
2023 2022
Lodging net revenue:
Owned hotel rooms $ 13,479 $ 13,584 (0.8) %
Managed condominium rooms 31,336 33,125 (5.4) %
Dining 13,184 8,375 57.4 %
Transportation 5,888 5,766 2.1 %
Other 11,700 9,269 26.2 %
75,587 70,119 7.8 %
Payroll cost reimbursements 4,990 1,861 168.1 %
Total Lodging net revenue 80,577 71,980 11.9 %
Lodging operating expense:
Labor and labor-related benefits 39,497 30,089 31.3 %
General and administrative 19,251 13,736 40.1 %
Other 20,892 16,926 23.4 %
79,640 60,751 31.1 %
Reimbursed payroll costs 4,990 1,861 168.1 %
Total Lodging operating expense 84,630 62,612 35.2 %
Lodging Reported EBITDA $ (4,053) $ 9,368 (143.3) %
Owned hotel statistics(1):
ADR $ 337.16 $ 338.39 (0.4) %
RevPAR $ 145.48 $ 161.00 (9.6) %
Managed condominium statistics:
ADR $ 514.29 $ 501.70 2.5 %
RevPAR $ 171.81 $ 165.86 3.6 %
Owned hotel and managed condominium statistics (combined):
ADR $ 469.72 $ 463.26 1.4 %
RevPAR $ 166.37 $ 165.46 0.5 %

~~(1)~~ Owned hotel ADR and RevPAR for the three months ended January 31, 2023 declined from the prior comparative period primarily due to the inclusion of properties acquired through the Seven Springs Resorts for the full quarter, compared to only being included for one month in the prior quarter, partially offset by price increases at our other lodging properties.



	Three Months Ended October 31,				Percentage Increase (Decrease)
	2023		2022
Lodging net revenue:
Owned hotel rooms	$	25,177	$	23,565	6.8	%
Managed condominium rooms	12,003		12,859		(6.7)	%
Dining	18,083		16,829		7.5	%

Golf	6,376		5,890		8.3	%
Other	16,723		14,797		13.0	%
	78,362		73,940		6.0	%
Payroll cost reimbursements	3,459		3,677		(5.9)	%
Total Lodging net revenue	81,821		77,617		5.4	%
Lodging operating expense:
Labor and labor-related benefits	37,475		36,915		1.5	%
General and administrative	14,857		15,510		(4.2)	%
Other	26,266		25,872		1.5	%
	78,598		78,297		0.4	%
Reimbursed payroll costs	3,459		3,677		(5.9)	%
Total Lodging operating expense	82,057		81,974		0.1	%
Lodging Reported EBITDA	$	(236)	$	(4,357)	94.6	%

Owned hotel statistics:
ADR	$	304.03	$	277.25	9.7	%
RevPAR	$	158.97	$	155.03	2.5	%
Managed condominium statistics:
ADR	$	233.92	$	240.08	(2.6)	%
RevPAR	$	50.78	$	52.90	(4.0)	%
Owned hotel and managed condominium statistics (combined):
ADR	$	269.31	$	258.48	4.2	%
RevPAR	$	82.95	$	81.36	2.0	%

Lodging Reported EBITDA includes ~~$1.1~~$0.9 million and $1.0 million of stock-based compensation expense for ~~both~~ the three months ended ~~January~~October 31, 2023 and 2022, respectively.

Lodging Reported EBITDA ~~decreased $13.4~~increased $4.1 million, or 143.3%, primarily driven by an increase in labor and labor-related benefits and general and administrative expense, including investments in employee wages and salaries and increased headcount to support more normalized staffing and operations at our lodging properties, and an increase in expenses due to inflation.

94.6%. Revenue from ~~managed condominium~~owned hotel rooms ~~decreased $1.8~~increased $1.6 million, or ~~5.4%~~6.8%, primarily due to decreased revenue at our lodging properties proximate to our western U.S. Resorts as a result of a reduction of available rooms in our managed rooms inventory. Dining revenue increased $4.8 million, or 57.4%, primarily due to incremental revenue from the Seven Springs Resorts. Other revenue increased $2.4 million, or 26.2%, primarily due to increases in ancillary revenue associated with the return to more normalized operations.

Operating expense (excluding reimbursed payroll costs) increased 31.1%. Labor and labor-related benefits increased 31.3%, primarily due to investments in employee wages and salaries, and increased headcount to support more normalized staffing and operations at our lodging properties compared to the prior year, as well as incremental costs from the Seven Springs Resorts of $3.2 million for the comparable period they were not owned in the prior year. General and administrative expense increased 40.1% compared to the prior year, due to an increase in ~~costs across nearly all corporate functions,~~ADR at GTLC. Dining revenue increased $1.3 million, or 7.5%, and ~~particularly for our central reservations booking service, which were~~other revenue increased $1.9 million, or 13.0%, each primarily as a result of improved park visitation at GTLC, driven by ~~employee wage and salary investments. Other expense~~positive weather conditions which enabled increased 23.4%, primarily due to increases in variable operating expenses associated with increased revenues, as well as incremental costs from the Seven Springs Resorts of $1.9 million for the comparable period they were not owned in the prior year.ancillary product sales.

Revenue from payroll cost reimbursement and the corresponding reimbursed payroll costs relate to payroll costs at managed hotel properties where we are the employer and all payroll costs are reimbursed by the owners of the properties under contractual arrangements. Since the reimbursements are made based upon the costs incurred with no added margin, the revenue and corresponding expense have no effect on our Lodging Reported EBITDA.

3325

~~Six months ended January 31, 2023 compared to the six months ended January 31, 2022~~

~~Lodging segment operating results for the six months ended January 31, 2023 and 2022 are presented by category as follows (in thousands, except ADR and RevPAR):~~

Six Months Ended January 31, Percentage
Increase
(Decrease)
2023 2022
Lodging net revenue:
Owned hotel rooms $ 37,044 $ 35,067 5.6 %
Managed condominium rooms 44,195 46,209 (4.4) %
Dining 30,013 18,650 60.9 %
Transportation 7,348 7,559 (2.8) %
Golf 5,939 5,118 16.0 %
Other 24,988 21,736 15.0 %
149,527 134,339 11.3 %
Payroll cost reimbursements 8,667 3,602 140.6 %
Total Lodging net revenue 158,194 137,941 14.7 %
Lodging operating expense:
Labor and labor-related benefits 76,412 57,738 32.3 %
General and administrative 34,761 26,233 32.5 %
Other 46,764 38,449 21.6 %
157,937 122,420 29.0 %
Reimbursed payroll costs 8,667 3,602 140.6 %
Total Lodging operating expense 166,604 126,022 32.2 %
Lodging Reported EBITDA $ (8,410) $ 11,919 (170.6) %
Owned hotel statistics(1):
ADR $ 297.69 $ 296.18 0.5 %
RevPAR $ 151.19 $ 164.96 (8.3) %
Managed condominium statistics:
ADR $ 405.00 $ 371.67 9.0 %
RevPAR $ 112.21 $ 101.49 10.6 %
Owned hotel and managed condominium statistics (combined):
ADR $ 365.05 $ 353.76 3.2 %
RevPAR $ 121.74 $ 121.13 0.5 %

~~(1)~~ Owned hotel RevPAR for the six months ended January 31, 2023 declined from the prior comparative period primarily due to the inclusion of properties acquired through the Seven Springs Resorts for the full year to date period, compared to only being included for one month in the prior year period, partially offset by price increases at our other lodging properties.

~~Lodging Reported EBITDA includes $2.0 million of stock-based compensation expense for both the six months ended January 31, 2023 and 2022.~~

Lodging Reported EBITDA decreased $20.3 million, or 170.6%, primarily driven by an increase in labor and labor-related benefits and general and administrative expense, including investments in employee wages and salaries and increased headcount to support more normalized staffing and operations at our lodging properties, and an increase in expenses due to inflation.

Revenue from owned hotel rooms increased $2.0 million, or 5.6%, primarily due to incremental revenue from the Seven Springs Resorts of $4.2 million for the comparable period they were not owned in the prior year, partially offset by a reduction in revenue from the DoubleTree at Breckenridge hotel, which we sold after the 2021/2022 ski season. Revenue from managed condominium rooms decreased $2.0 million, or 4.4%, primarily due to decreased revenue at our lodging properties proximate to our western U.S. Resorts as a result of a reduction of available rooms in our managed rooms inventory. Dining revenue increased $11.4 million, or 60.9%, primarily due to incremental revenue from the Seven Springs Resorts of $7.2 million for the comparable period they were not owned in the prior year, as well as increases in revenue at our other lodging properties as a result of fewer COVID-19 related limitations and restrictions as compared to the prior year. Other revenue increased $3.3 million, or 15.0%, primarily due to increases in ancillary revenue associated with the return to more normalized operations, as well as incremental revenue from the Seven Springs Resorts of $1.2 million for the comparable period they were not owned in the prior year.

Operating expense (excluding reimbursed payroll costs) increased 29.0%. Labor and labor-related benefits increased 32.3%, primarily due to investments in employee wages and salaries, and increased headcount to support more normalized staffing and operations at our lodging properties as compared to prior year, as well as incremental costs from the Seven Springs Resorts of $6.8 million for the comparable period they were not owned in the prior year. General and administrative expense increased 32.5% compared to the prior year, due to an increase in costs across nearly all corporate functions, and particularly for our central reservations booking service, which were primarily driven by employee wage and salary investments. Other expense increased 21.6%, primarily related to increases in variable expenses associated with increased revenues, as well as incremental costs from the Seven Springs Resorts of $4.2 million for the comparable period they were not owned in the prior year.

Real Estate Segment

Our Real Estate net revenue is primarily determined by the timing of closings and the mix of real estate sold in any given period. Different types of projects have different revenue and profit margins; therefore, as the real estate inventory mix changes, it can greatly impact Real Estate segment net revenue, operating expense, gain or loss on sale of real property and Real Estate Reported EBITDA.

Three months ended ~~January~~October 31, 2023 compared to the three months ended ~~January~~October 31, 2022

Real Estate segment operating results for the three months ended ~~January~~October 31, 2023 and 2022 are presented by category as follows (in thousands):


		Three Months Ended January 31,				Percentage Increase (Decrease)			Three Months Ended October 31,				Percentage Increase (Decrease)
		2023		2022					2023		2022
Total Real Estate net revenue	Total Real Estate net revenue	$	7,699	$	180	4,177.2	%	Total Real Estate net revenue	$	4,289	$	113	3,695.6	%
Real Estate operating expense:	Real Estate operating expense:							Real Estate operating expense:
Cost of sales	Cost of sales	5,146		—		nm		Cost of sales	3,607		—		nm
Other	Other	1,164		1,511		(23.0)	%	Other	1,574		1,382		13.9	%
Total Real Estate operating expense	Total Real Estate operating expense	6,310		1,511		317.6	%	Total Real Estate operating expense	5,181		1,382		274.9	%
Gain on sale of real property	Gain on sale of real property	757		931		(18.7)	%	Gain on sale of real property	6,285		—		nm
Real Estate Reported EBITDA	Real Estate Reported EBITDA	$	2,146	$	(400)	636.5	%	Real Estate Reported EBITDA	$	5,393	$	(1,269)	525.0	%

During the three months ended ~~January~~October 31, 2023 we closed on the sale of a land parcel in Keystone, CO for ~~$7.5~~$4.2 million, which was recorded within Real Estate net revenue, with a corresponding cost of sale of ~~$5.1~~$3.6 million. Additionally, we recorded a gain on sale of real property for $6.3 million related to a land parcel sale in Beaver Creek, CO, which closed for proceeds of $6.5 million during the three months ended October 31, 2023. We did not close on any significant real estate transactions during the three months ended October 31, 2022.

Other operating expense for both the three months ended ~~January 31, 2023 and 2022 was primarily comprised of general and administrative costs, such as labor and labor-related benefits, professional services and allocated corporate overhead costs.~~

~~Six months ended January 31, 2023 compared to the six months ended January 31, 2022~~

~~Real Estate segment operating results for the six months ended January 31, 2023 and 2022 are presented by category as follows (in thousands):~~

Six Months Ended January 31, Percentage
Increase
(Decrease)
2023 2022
Total Real Estate net revenue $ 7,812 $ 495 1,478.2 %
Real Estate operating expense:
Cost of sales (including sales commission) 5,146 244 2,009.0 %
Other 2,546 2,737 (7.0) %
Total Real Estate operating expense 7,692 2,981 158.0 %
Gain on sale of real property 757 962 (21.3) %
Real Estate Reported EBITDA $ 877 $ (1,524) 157.5 %

During the six months ended January 31, 2023, we closed on the sale of a land parcel in Keystone for $7.5 million, which was recorded within Real Estate net revenue, with a corresponding cost of sale of $5.1 million.

~~Other operating expense for both the six months ended January~~October 31, 2023 and 2022 was primarily comprised of general and administrative costs, such as labor and labor-related benefits, professional services and allocated corporate overhead costs.

Other Items

In addition to segment operating results, the following material items contributed to our overall financial results for the three ~~and six~~ months ended ~~January~~October 31, 2023 and 2022 (in thousands):

Three Months Ended January 31, Increase
(Decrease) Six Months Ended January 31, Increase
(Decrease)
2023 2022 2023 2022
Depreciation and amortization $ (65,989) $ (62,070) 6.3 % $ (130,603) $ (123,559) 5.7 %
Change in estimated fair value of contingent consideration $ (1,100) $ (16,780) (93.4) % $ (1,736) $ (18,780) (90.8) %
Foreign currency gain (loss) on intercompany loans $ 2,338 $ (2,870) 181.5 % $ (3,797) $ (2,039) (86.2) %
(Loss) gain on disposal of fixed assets and other, net $ (1,780) $ 7,347 (124.2) % $ (1,786) $ 16,214 (111.0) %
Investment income and other, net $ 7,108 $ 257 2,665.8 % $ 9,994 $ 756 1,222.0 %
(Provision for) benefit from income taxes $ (79,032) $ (52,049) 51.8 % $ (21,026) $ 7,804 (369.4) %
Effective tax rate (26.4) % (18.2) % (8.2) pts (21.5) % 9.3 % (30.8) pts


	Three Months Ended October 31,				Increase (Decrease)
	2023	2022







Interest expense, net		$	(40,730)		$	(35,302)		15.4	%
Benefit from income taxes		$	65,160		$	58,006		12.3	%
Effective tax rate		26.3		%	28.8		%	(2.5) pts

~~Depreciation and amortization~~Interest expense, net. ~~. Depreciation and amortization~~Interest expense, net for the three ~~and six~~ months ended ~~January~~October 31, 2023 increased ~~$3.9~~$5.4 million ~~and $7.0 million, respectively,~~ compared to the same period in the prior year, primarily due to ~~assets acquired~~an increase in variable interest rates associated with the ~~acquisitions~~unhedged portion of our term loan borrowings under the ~~Seven Springs Resorts and Andermatt-Sedrun.~~Vail Holdings Credit Agreement.

~~Change in estimated fair value of contingent consideration. Change in estimated fair value of contingent consideration for the~~three and six months ended January 31, 2023 decreased $15.7 million and $17.0 million, respectively, primarily related to a decrease in the estimated contingent consideration payment related to Park City performance for Fiscal 2023 compared to the fiscal year ended July 31, 2022. Estimates for contingent consideration payments relating to each fiscal year are preliminary as of January 31, as only half of the Park City ski season has elapsed, and therefore adjustments to the estimated liability in future periods could be material once the full season has elapsed.

~~Foreign currency gain (loss) on intercompany loans.~~ ~~Foreign currency gain (loss) on intercompany loans for the~~three months ended January 31, 2023 increased $5.2 million as a result of the value of the Canadian dollar increasing relative to the U.S. dollar compared to the same period in the prior year. Foreign currency loss on intercompany loans for thesix months ended January 31, 2023 increased $1.8 million as a result of the value of the Canadian dollar decreasing relative to the U.S. dollar compared to the same period in the prior year. This activity is associated with an intercompany loan from Vail Holdings, Inc. to Whistler Blackcomb, which 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 our results of operations.

~~(Loss) gain on disposal of fixed assets and other, net.~~ Gain on disposal of fixed assets and other, net for the three and six months ended January 31, 2022 included $7.9 million from the sale of an administrative building in Avon, CO. Gain on disposal of fixed assets and other, net for the six months ended January 31, 2022 also included proceeds from the NPS related to a partial payment for leasehold surrender interest at GTLC associated with assets that have been fully depreciated by the Company. This payment was made at the request of the NPS.

~~Investment income and other, net.~~ Investment income and other, net for the three and six months ended January 31, 2023 increased $6.9 million and $9.2 million, respectively, compared to the same period in the prior year, primarily as a result of increased deposits into short-term investments, as well as an increase in earned interest rates.

~~(Provision for) benefit~~Benefit from income taxes. At the end of each interim period, the Company estimates the annual effective tax rate and applies that rate to its ordinary quarterly earnings. The tax expense or benefit related to significant, unusual or extraordinary items that will be separately reported or reported net of their related tax effect are individually computed and recognized in the interim period in which those items occur. In addition, the effects of changes in enacted tax laws or rates or tax status are recognized in the interim period in which the change occurs. The effective tax rate ~~(provision) benefit~~ for the three ~~and six~~ months ended ~~January~~October 31, 2023 was ~~(26.4)% and (21.5)%, respectively,~~26.3% compared to ~~(18.2)% and 9.3%, respectively,~~28.8% for the three ~~and six~~ months ended ~~January~~October 31, 2022.

The ~~increase~~decrease in the effective tax ~~rates~~rate for ~~both~~ the three ~~and six~~ months ended ~~January~~October 31, 2023 compared to the three ~~and six~~ months ended ~~January~~October 31, 2022 was primarily due to ~~an increase~~a decrease in ~~expected full year pre-tax book income~~favorable discrete items impacting the first quarter tax provision in the current period, as well as a reduction in favorable permanent and discrete items, including excess tax benefits from employee share award exercises (which decreased $13.6 million and $17.2 million for the three and six months ended January 31, 2023 as compared to the prior year periods, respectively).period.

Reconciliation of Segment Earnings and Net Debt

The following table reconciles net ~~income~~loss attributable to Vail Resorts, Inc. to Total Reported EBITDA for the three ~~and six~~ months ended ~~January~~October 31, 2023 and 2022 (in thousands):

Three Months Ended January 31, Six Months Ended January 31,
2023 2022 2023 2022
Net income attributable to Vail Resorts, Inc. $ 208,679 $ 223,391 $ 71,708 $ 84,059
Net income attributable to noncontrolling interests 11,440 10,539 4,851 7,350
Net income 220,119 233,930 76,559 91,409
Provision for (benefit from) income taxes 79,032 52,049 21,026 (7,804)
Income before provision for (benefit from) income taxes 299,151 285,979 97,585 83,605
Depreciation and amortization 65,989 62,070 130,603 123,559
Loss (gain) on disposal of fixed assets and other, net 1,780 (7,347) 1,786 (16,214)
Change in fair value of contingent consideration 1,100 16,780 1,736 18,780
Investment income and other, net (7,108) (257) (9,994) (756)
Foreign currency (gain) loss on intercompany loans (2,338) 2,870 3,797 2,039
Interest expense, net 38,370 37,366 73,672 76,911
Total Reported EBITDA $ 396,944 $ 397,461 $ 299,185 $ 287,924
Mountain Reported EBITDA $ 398,851 $ 388,493 $ 306,718 $ 277,529
Lodging Reported EBITDA (4,053) 9,368 (8,410) 11,919
Resort Reported EBITDA 394,798 397,861 298,308 289,448
Real Estate Reported EBITDA 2,146 (400) 877 (1,524)
Total Reported EBITDA $ 396,944 $ 397,461 $ 299,185 $ 287,924


	Three Months Ended October 31,
	2023		2022
Net loss attributable to Vail Resorts, Inc.	$	(175,512)	$	(136,971)
Net loss attributable to noncontrolling interests	(7,535)		(6,589)
Net loss	(183,047)		(143,560)
Benefit from income taxes	(65,160)		(58,006)
Loss before benefit from income taxes	(248,207)		(201,566)
Depreciation and amortization	66,728		64,614

Loss on disposal of fixed assets and other, net	2,043		6
Change in fair value of contingent consideration	3,057		636
Investment income and other, net	(3,684)		(2,886)
Foreign currency loss on intercompany loans	4,965		6,135
Interest expense, net	40,730		35,302
Total Reported EBITDA	$	(134,368)	$	(97,759)

Mountain Reported EBITDA	$	(139,525)	$	(92,133)
Lodging Reported EBITDA	(236)		(4,357)
Resort Reported EBITDA	(139,761)		(96,490)
Real Estate Reported EBITDA	5,393		(1,269)
Total Reported EBITDA	$	(134,368)	$	(97,759)

The following table reconciles long-term debt, net to Net Debt (in thousands):


		January 31,					October 31,
		2023		2022			2023		2022
Long-term debt, net	Long-term debt, net	$	2,789,827	$	2,695,589	Long-term debt, net	$	2,732,037	$	2,769,698
Long-term debt due within one year	Long-term debt due within one year	69,582		63,746		Long-term debt due within one year	69,659		67,811
Total debt	Total debt	2,859,409		2,759,335		Total debt	2,801,696		2,837,509
Less: cash and cash equivalents	Less: cash and cash equivalents	1,295,252		1,407,019		Less: cash and cash equivalents	728,859		1,180,942
Net Debt	Net Debt	$	1,564,157	$	1,352,316	Net Debt	$	2,072,837	$	1,656,567

LIQUIDITY AND CAPITAL RESOURCES

Changes in significant sources of cash for the ~~six~~three months ended ~~January~~October 31, 2023 and 2022 are presented by categories as follows (in thousands).


		Six Months Ended January 31,				Three Months Ended October 31,
		2023		2022				2023		2022
Net cash provided by operating activities	Net cash provided by operating activities	$	605,493	$	611,329		Net cash provided by operating activities	$	328,499	$	332,991
Net cash used in investing activities		$	(206,025)	$	(225,532)
Net cash provided by (used in) investing activities							Net cash provided by (used in) investing activities	$	5,565	$	(134,531)
Net cash used in financing activities	Net cash used in financing activities	$	(201,377)	$	(220,693)		Net cash used in financing activities	$	(153,608)	$	(104,628)

~~Six~~Three months ended ~~January~~October 31, 2023 compared to the ~~six~~three months ended ~~January~~October 31, 2022

We generated ~~$605.5~~$328.5 million of cash from operating activities during the ~~six~~three months ended ~~January~~October 31, 2023, a decrease of ~~$5.8~~$4.5 million compared to ~~$611.3~~$333.0 million generated during the ~~six~~three months ended ~~January~~October 31, 2022. The decrease in operating cash flows was primarily a result of decreased Mountain ~~and Lodging~~ segment results ~~(excluding pass product revenue)~~ for the ~~six~~three months ended ~~January~~October 31, 2023

compared to the prior year, ~~an increase in income taxes paid of $12.8 million and an increase in cash interest payments of $8.7 million. These decreases were~~ partially offset by an increase in pass and other product sales and receivable collections of approximately ~~$63.3 million, and a decrease inventory purchases of $10.7~~$37.8 million. ~~Additionally, we generated $7.5 million of proceeds from real estate land parcel sales during the six months ended January 31, 2023.~~

Cash ~~used in~~provided by (used in) investing activities for the ~~six~~three months ended ~~January~~October 31, 2023 ~~decreased~~increased by ~~$19.5~~$140.1 million primarily due to (i) prior year short-term bank deposit investments of $86.8 million, which were invested in deposits with maturity dates of more than three months at the date of purchase and were therefore not reflected as cash equivalents as of October 31, 2022, of which $52.4 million matured in the current year; (ii) a decrease in capital expenditures of approximately $70.7 million as compared to the prior year, driven by our significant investment in lift upgrades in calendar year 2022; and (iii) $38.6 million of cash paid to Andermatt Swiss Alps AG upon closing the acquisition of ~~the Seven Springs Resorts for $118.1 million, as well as~~Andermatt-Sedrun, net of cash acquired, on August 3, 2022. This increase was partially offset by the return of a cash deposit of approximately $114.5 million (CHF 110.0 million) originally made in July 2022 ~~as a result~~in conjunction with the acquisition of ~~the consolidation of~~ Andermatt-Sedrun, ~~in the current year,~~ which closed on August 3, 2022. The cash deposit was invested into Andermatt-Sedrun, which is consolidated in our consolidated condensed financial statements subsequent to the acquisition being completed. These decreases were partially offset by (i) $86.8 million of short-term investments in bank deposits in the current year, which were invested in deposits with maturity dates of more than three months at the date of purchase and are therefore not reflected as cash equivalents; (ii) an increase in capital expenditures of approximately $77.8 million as compared to the prior year, driven by our significant investment in lift upgrades in calendar year 2022; (iii) $38.6 million of cash paid to Andermatt Swiss Alps AG upon closing the acquisition of Andermatt-Sedrun, net of cash acquired, on August 3, 2022 and (iv) proceeds in the prior year due to payment from the NPS related to a leasehold surrender interest at GTLC associated with assets that had been fully depreciated by the Company, which did not recur in the current year.

Cash used in financing activities ~~decreased~~increased by ~~$19.3~~$49.0 million during the ~~six~~three months ended ~~January~~October 31, 2023 compared to the ~~six~~three months ended ~~January~~October 31, 2022, primarily due to a decrease in debt repayments, including the prior year repayment associated with the maturity of the EB-5 Development Notes, which were assumed in our acquisition of Peak Resorts, Inc. ($51.5 million) and net payments under the revolver component of our Whistler Credit Agreement ($23.1 million), as well as a decrease in employee taxes paid for share award exercises ($32.1 million), partially offset by an increase in ~~dividends paid~~repurchases of ~~$82.7~~common stock of $50.0 million.

Significant Sources of Cash

We had ~~$1.3 billion~~$728.9 million of cash and cash equivalents as of ~~January~~October 31, 2023, compared to ~~$1.4 billion~~$1,180.9 million as of ~~January~~October 31, ~~2022.~~2022, and the decrease was primarily due to increased activity during the last twelve months associated with our share repurchase program. We currently anticipate that our Mountain and Lodging segment operating results will continue to provide a significant source of future operating cash flows (primarily generated in our second and third fiscal quarters).

In addition to our ~~$1.3 billion~~$728.9 million of cash and cash equivalents at ~~January~~October 31, 2023, we had ~~$414.6~~$419.8 million available under the revolver component of our Vail Holdings Credit Agreement as of ~~January~~October 31, 2023 (which represents the total commitment of $500.0 million less outstanding letters of credit of ~~$85.4~~$80.2 million). Additionally, we had C$~~281.6~~296.6 million ($~~211.7~~213.9 million) available under the revolver component of our Whistler Credit Agreement (which represents the total commitment of C$300.0 million ($~~225.5~~216.3 million) less ~~outstanding borrowings of C$15.0 million ($11.3 million) and~~ certain outstanding letters of credit of C$3.4 million ($~~2.5~~2.4 million)). We expect that our liquidity needs in the near term will be met by continued use of our existing cash and cash equivalents, operating cash flows and borrowings under both the Vail Holdings Credit Agreement and Whistler Credit Agreement, if needed. The Vail Holdings Credit Agreement and the Whistler Credit Agreement provide adequate flexibility with any new borrowings currently priced at ~~SOFR~~the Secured Overnight Financing Rate plus ~~a spread of 1.35%~~1.60% and Bankers Acceptance Rate plus 1.75%, respectively.

Significant Uses of Cash

Capital Expenditures

We have historically invested significant amounts of cash in capital expenditures for our resort operations, and we expect to continue to do so, subject to operating performance particularly as it relates to discretionary ~~projects. In addition, we may incur capital expenditures for retained ownership interests associated with third-party real estate development~~ projects. Currently planned capital expenditures primarily include investments that will allow us to maintain our high-quality standards for the guest experience, as well as certain incremental discretionary improvements at our Resorts, throughout our owned hotels and in technology that can impact the full network. We evaluate additional discretionary capital improvements based on an expected level of return on investment.

We currently anticipate we will spend approximately $180 million to $185 million on resort capital expenditures during calendar year 2023, excluding one-time investments related to integration activities, deferred capital associated with the Keystone and Park City projects, $5$4 million of reimbursable investments associated with insurance recoveries, and ~~$10~~$9 million of growth capital investments at Andermatt-Sedrun. Including these one-time items, our total capital plan for calendar year 2023 is expected to be approximately ~~$206~~$204 million to ~~$211~~$209 million. Included in these estimated capital expenditures are approximately $112 million to $117 million of maintenance capital expenditures (excluding Andermatt-Sedrun), which are necessary to maintain appearance and level of service appropriate to our resort operations. We currently plan to utilize cash on hand, borrowings available under our credit agreements and/or cash flow generated from future operations to provide the cash necessary to complete our capital plans.

~~Acquisitions~~We had spent approximately $162 million for capital expenditures in calendar year 2023 as of October 31, 2023, leaving approximately $42 million to $47 million to spend in the remainder of calendar year 2023.

~~On August 3, 2022, we acquired a majority stake~~

We expect our capital plan for calendar year 2024 will be approximately $189 million to $194 million, excluding $13 million of incremental capital investments in premium fleet and fulfillment infrastructure to support the official launch of My Epic Gear

for the 2024/2025 winter season at 12 destination mountain resorts and regional ski areas across North America, $11 million of growth capital investments at Andermatt-Sedrun ~~which was funded with~~and $1 million of reimbursable capital. Including My Epic Gear and one-time investments, our total capital plan for calendar year 2024 is expected to be approximately $214 million to $219 million. We currently plan to utilize cash on ~~hand. The purchase price was comprised of a $114.4 million (CHF 110.0 million) investment into Andermatt-Sedrun for use in~~hand, borrowings available under our credit agreements and/or cash generated from future operations to provide the cash necessary to complete our capital investments to enhance the guest experience on the mountain and $41.3 million (CHF 39.3 million) paid to the seller. As of August 3, 2022 the total fair value of the consideration paid was $155.4 million (CHF 149.3 million).plans.

Debt

As of ~~January~~October 31, 2023, principal payments on the majority of our long-term debt ($~~2.8~~2.1 billion of the total ~~$2.9~~$2.8 billion debt outstanding as of ~~January~~October 31, 2023) are not due until fiscal year ~~2025~~2026 and beyond. As of ~~January~~both October 31, 2023 and 2022, total long-term debt, net (including long-term debt due within one year) was ~~$2.9 billion, compared to~~ $2.8 ~~billion as of January 31, 2022.~~billion. Net Debt (defined as long-term debt, net plus long-term debt due within one year less cash and cash equivalents) increased from ~~$1.4~~$1.7 billion as of ~~January~~October 31, 2022 to ~~$1.6~~$2.1 billion as of ~~January~~October 31, 2023. The increase was primarily associated with the use of cash to fund share repurchases under our share repurchase program during the last twelve months.

As of ~~January~~October 31, 2023, the Vail Holdings Credit Agreement provides for (i) a revolving loan facility in an aggregate principal amount of $500.0 million and (ii) a term loan ~~facility~~ of $1.0 billion. We expect that our liquidity needs in the near term will be met by continued use of our existing cash ~~on hand,~~and cash equivalents, operating cash flows and borrowings under both the Vail Holdings Credit Agreement and ~~the~~ Whistler Credit ~~Agreement.~~Agreement, if needed.

Our debt service requirements can be impacted by changing interest rates as we had approximately $0.7 billion of variable-rate debt outstanding as of ~~January~~October 31, 2023. A 100-basis point change in our borrowing rates would cause our annual interest payments to change by approximately ~~$7.1~~$6.5 million. Additionally, the annual payments associated with the financing of the Canyons Resort transaction increase by the greater of CPI less 1%, or 2%. The fluctuation in our debt service requirements, in addition to interest rate and inflation changes, may be impacted by future borrowings under our credit agreements or other alternative financing arrangements we may enter into. Our long term liquidity needs depend upon operating results that impact the borrowing capacity under our credit ~~agreements, which can be mitigated by adjustments to capital expenditures, flexibility of investment activities and the ability to obtain favorable future financing.~~agreements. We can respond to liquidity impacts of changes in

the business and economic environment by managing our capital expenditures, variable operating expenses, the timing of new real estate development activity and the payment of cash dividends on our common stock.

Dividend Payments

On ~~March 7,~~December 6, 2023, the Company’s Board of Directors approved a cash dividend of $2.06 per share payable on ~~April 11, 2023~~January 9, 2024 to stockholders of record as of ~~March 27,~~December 26, 2023. ~~For~~During the ~~six~~three months ended ~~January~~October 31, 2023, we paid cash dividends of ~~$3.82~~$2.06 per share ($~~154.0 million in~~78.5 million). During the ~~aggregate)~~three months ended October 31, 2022, we paid cash dividends of $1.91 per share ($77.0 million). We funded ~~the dividend~~these dividends with available cash on hand. The amount, if any, of dividends to be paid in the future will depend on our available cash on hand, anticipated cash needs, overall financial condition, restrictions contained in our Vail Holdings Credit Agreement, future prospects for earnings and cash flows, as well as other factors considered relevant by our Board of Directors.

Share Repurchase Program

Our share repurchase program is conducted under authorizations made from time to time by our Board of Directors. On March 9, 2006, our Board of Directors initially authorized the repurchase of up to 3,000,000 shares of Vail Resorts common stock (“Vail Shares”) and later authorized additional repurchases of up to 3,000,000 Vail Shares (July 16, 2008) ~~and~~, 1,500,000 Vail Shares (December 4, 2015) and 2,500,000 Vail Shares (March 7, 2023), for a total authorization to repurchase up to ~~7,500,000~~10,000,000 Vail Shares. During the three months ended October 31, 2023, we repurchased 237,056 shares (at an average cost of $210.92) for a total cost of approximately $50.0 million, excluding accrued excise tax. We funded the share repurchases with available cash on hand. We did not repurchase any Vail Shares during the ~~six~~three months ended ~~January~~October 31, ~~2023 or~~ 2022. Since inception of this stock repurchase program through ~~January~~October 31, 2023, we have repurchased ~~6,465,708~~8,885,358 Vail Shares at a cost of approximately ~~$479.4~~$1,029.5 million. As of ~~January~~October 31, 2023, ~~1,034,292~~1,114,642 Vail Shares remained available to repurchase under the existing repurchase authorization. On March 7, 2023, our Board of Directors approved an increase in the number of shares authorized to be repurchased under the share repurchase program by an additional 2,500,000 Vail Shares. As a result, 3,534,292 Vail Shares are available to purchase under the share repurchase program. Vail Shares purchased pursuant to the repurchase program will be held as treasury shares and may be used for the issuance of shares under our share award plan. Repurchases under the program may be made from time to time at prevailing prices as permitted by applicable laws, and subject to market conditions and other factors. The timing as well as the number of Vail Shares that may be repurchased under the program will depend on several factors, including our future financial performance, our available cash resources and competing uses for cash that may arise in the future, the restrictions in our Vail Holdings Credit Agreement, prevailing prices of Vail Shares and the number of Vail Shares that become available for ~~sale~~repurchase at prices that we believe are attractive. The share repurchase program has no expiration date.

Covenants and Limitations

We must abide by certain restrictive financial covenants under our credit agreements. The most restrictive of those covenants include the following covenants: for the Vail Holdings Credit Agreement, Net Funded Debt to Adjusted EBITDA ratio, Secured Net Funded Debt to Adjusted EBITDA ratio and the Interest Coverage ratio (each as defined in the Vail Holdings Credit Agreement); for the Whistler Credit Agreement, Consolidated Total Leverage Ratio and Consolidated Interest Coverage Ratio (each as defined in the Whistler Credit Agreement); and for the EPR Secured Notes, Maximum Leverage Ratio and Consolidated Fixed Charge Ratio (each as defined in the EPR Agreements). Additionally, the New Regional Policy loan between Andermatt-Sedrun and the Canton of Uri and Canton of Graubünden dated June 24, 2016 includes restrictive covenants requiring certain minimum financial results (as defined in the agreement). In addition, our financing arrangements limit our ability to make certain restricted payments, pay dividends on or redeem or repurchase stock, make certain investments and make certain affiliate transfers, and may limit our ability to enter into certain mergers, consolidations or sales of assets and incur certain indebtedness. Our borrowing availability under the Vail Holdings Credit Agreement is primarily determined by the Net Funded Debt to Adjusted EBITDA ratio, which is based on our segment operating performance, as defined in the Vail Holdings Credit Agreement. Our borrowing availability under the Whistler Credit Agreement is primarily determined based on the commitment size of the credit facility and our compliance with the terms of the Whistler Credit Agreement.

We were in compliance with all restrictive financial covenants in our debt instruments as of ~~January~~October 31, 2023. We expect that we will meet all applicable financial maintenance covenants in effect in our credit agreements through the next twelve months. However, there can be no assurance we will meet such financial covenants. If such covenants are not met, we would be required to seek a waiver or amendment from the banks participating in the credit agreements. There can be no assurance that such waivers or amendments would be granted, which could have a material adverse impact on our liquidity.

OFF BALANCE SHEET ARRANGEMENTS

We do not have off balance sheet transactions that are expected to have a material effect on our financial condition, revenue, expenses, results of operations, liquidity, capital expenditures or capital resources.

CRITICAL ACCOUNTING POLICIES

There were no significant changes to our critical accounting policies and estimates as reported in our Form 10-K for the fiscal year ended July 31, ~~2022.~~2023.

FORWARD-LOOKING STATEMENTS

Except for any historical information contained herein, the matters discussed or incorporated by reference in this Form 10-Q contain certain forward-looking statements within the meaning of the federal securities laws. These statements relate to analyses and other information available as of the date hereof, which are based on forecasts of future results and estimates of amounts not yet determinable. These statements also relate to our contemplated future prospects, developments and business strategies.

These forward-looking statements are identified by their use of terms and phrases such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “predict,” “project,” “will” and similar terms and phrases, including references to assumptions. Although we believe that our plans, intentions and expectations reflected in or suggested by such forward-looking statements are reasonable, we cannot assure you that such plans, intentions or expectations will be achieved. Important factors that could cause actual results to differ materially from our forward-looking statements include, but are not limited to:

•the economy generally, and our business and results of operations, including the ultimate amount of refunds that we would be required to refund to our pass product holders for qualifying circumstances under our Epic Coverage program;

•prolonged weakness in general economic conditions, including adverse effects on the overall travel and leisure related industries;

•risks associated with the ~~COVID-19 pandemic,~~effects of high or prolonged inflation, rising interest rates and ~~its impact on the travel and leisure industry generally, and our~~ financial ~~condition and operations;~~institution disruptions;

•unfavorable weather conditions or the impact of natural ~~disasters;~~disasters or other unexpected events;

•the willingness or ability of our guests to travel due to terrorism, the uncertainty of military conflicts or ~~outbreaks of contagious diseases (such as the ongoing COVID-19 pandemic),~~public health emergencies, and the cost and availability of travel options and changing consumer preferences, discretionary spending habits or willingness to travel;

•risks related to travel and airline disruptions, and other adverse impacts on the ability of our guests to travel;

•risks related to interruptions or disruptions of our information technology systems, data security or cyberattacks;

•risks related to our reliance on information technology, including our failure to maintain the integrity of our customer or employee data and our ability to adapt to technological developments or industry trends;

•our ability to acquire, develop and implement relevant technology offerings for customers and partners;

•the seasonality of our business combined with adverse events that may occur during our peak operating periods;

•competition in our mountain and lodging businesses or with other recreational and leisure activities;

•risks related to the high fixed cost structure of our business;

•our ability to fund resort capital expenditures;

•risks related to a disruption in our water supply that would impact our snowmaking capabilities and operations;

•our reliance on government permits or approvals for our use of public land or to make operational and capital improvements;

•risks related to federal, state, local and foreign government laws, rules and regulations, including environmental and health and safety laws and regulations;

•risks related to changes in security and privacy laws and regulations which could increase our operating costs and adversely affect our ability to market our products, properties and services effectively;

•potential failure to adapt to technological developments or industry trends regarding information technology;

•our ability to successfully launch and promote adoption of new products, technology, services and programs;

•risks related to our workforce, including increased labor costs, loss of key personnel and our ability to maintain adequate staffing, including hiring and retaining a sufficient seasonal workforce;

•a deterioration in the quality or reputation of our brands, including our ability to protect our intellectual property and the risk of accidents at our mountain resorts;

•risks related to scrutiny and changing expectations regarding our environmental, social and governance practices and reporting;

•our ability to successfully integrate acquired businesses, including their integration into our internal controls and infrastructure; our ability to successfully navigate new markets, including Europe; or that acquired businesses may fail to perform in accordance with ~~expectations, including the Seven Springs Resorts and Andermatt-Sedrun;~~expectations;

•risks associated with international operations;

•~~risks associated with the effects of high or prolonged inflation;~~

•fluctuations in foreign currency exchange rates where the Company has foreign currency exposure, primarily the Canadian and Australian dollars and the Swiss franc, as compared to the U.S. dollar;

•changes in tax laws, regulations or interpretations, or adverse determinations by taxing authorities;

•risks related to our indebtedness and our ability to satisfy our debt service requirements under our outstanding debt including our unsecured senior notes, which could reduce our ability to use our cash flow to fund our operations, capital expenditures, future business opportunities and other purposes;

•a materially adverse change in our financial condition;

•adverse consequences of current or future litigation and legal claims;

•changes in accounting judgments and estimates, accounting principles, policies or guidelines; and

•other risks and uncertainties included under Part 1. Item 1A. “Risk Factors” of our Annual Report on Form 10-K for the fiscal year ended July 31, ~~2022.~~2023.

All forward-looking statements attributable to us or any persons acting on our behalf are expressly qualified in their entirety by these cautionary statements.

If one or more of these risks or uncertainties materialize, or if underlying assumptions prove incorrect, our actual results may vary materially from those expected, estimated or projected. Given these uncertainties, users of the information included or incorporated by reference in this Form 10-Q, including investors and prospective investors, are cautioned not to place undue reliance on such forward-looking statements. Actual results may differ materially from those suggested by the forward-looking statements that we make for a number of reasons including those described above and in Part I, Item 1A. “Risk Factors” of our Form 10-K. All forward-looking statements are made only as of the date hereof. Except as may be required by law, we do not intend to update these forward-looking statements, even if new information, future events or other circumstances have made them incorrect or misleading.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Interest Rate Risk. Our exposure to market risk is limited primarily to the fluctuating interest rates associated with variable rate indebtedness. As of ~~January~~October 31, 2023, we had approximately $0.7 billion of variable rate indebtedness (after taking into consideration $400.0 million in interest rate swaps which converts variable-rate debt to fixed-rate debt), representing approximately ~~25%~~23.3% of our total debt outstanding, at an average interest rate during the three ~~and six~~ months ended ~~January~~October 31, 2023 of approximately ~~5.4% and 4.7%, respectively.~~6.8%. Based on variable-rate borrowings outstanding as of ~~January~~October 31, 2023, a 100-basis point (or 1.0%) change in our borrowing rates would result in our annual interest payments changing by approximately ~~$7.1~~$6.5 million. Our market risk exposure fluctuates based on changes in underlying interest rates.

Foreign Currency Exchange Rate Risk. We are exposed to currency translation risk because the results of our international entities are reported in local currency, which we then translate to U.S. dollars for inclusion in our Consolidated Condensed Financial Statements. As a result, changes between the foreign exchange rates, in particular the Canadian dollar, Australian dollar and Swiss franc compared to the U.S. dollar, affect the amounts we record for our foreign assets, liabilities, revenues and expenses, and could have a negative effect on our financial results. Additionally, we also have foreign currency transaction exposure from an intercompany loan to Whistler Blackcomb that is not deemed to be permanently invested, which has and could materially change due to fluctuations in the Canadian dollar exchange rate. The results of Whistler Blackcomb are reported in Canadian dollars, the results of our Australian resorts are reported in Australian dollars and the results of Andermatt-Sedrun are reported in Swiss francs, each of which we then translate to U.S. dollars for inclusion in our Consolidated Condensed Financial Statements. We do not currently enter into hedging arrangements to minimize the impact of foreign currency fluctuations on our operations.

The following table summarizes the amounts of foreign currency translation adjustments, representing losses, and foreign currency loss on intercompany loans recognized in comprehensive ~~income~~loss (in thousands).


		Six Months Ended January 31,					Three Months Ended October 31,
		2023		2022			2023		2022
Foreign currency translation adjustments	Foreign currency translation adjustments	$	(35,340)	$	(33,720)	Foreign currency translation adjustments	$	(92,094)	$	(117,808)
Foreign currency loss on intercompany loans	Foreign currency loss on intercompany loans	$	(3,797)	$	(2,039)	Foreign currency loss on intercompany loans	$	(4,965)	$	(6,135)

ITEM 4. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

Management of the Company, under the supervision and with participation of the Chief Executive Officer (the “CEO”) and Chief Financial Officer (the “CFO”), evaluated the effectiveness of the Company’s “disclosure controls and procedures” as such term is defined in Rule 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Act”), as of the end of the period covered by this Quarterly Report on Form 10-Q.

Based upon their evaluation of the Company’s disclosure controls and procedures, the CEO and the CFO concluded that, as of the end of the period covered by this Quarterly Report on Form 10-Q, the disclosure controls and procedures are effective to provide reasonable assurance that information required to be disclosed by the Company in the reports that it files or submits under the Act is accumulated and communicated to management, including the CEO and the CFO, as appropriate, to allow timely decisions regarding required disclosure and are effective to provide reasonable assurance that such information is recorded, processed, summarized and reported within the time periods specified by the SEC’s rules and forms.

The Company, including its CEO and CFO, does not expect that the Company’s controls and procedures will prevent or detect all error and all fraud. A control system, no matter how well conceived or operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met.

Changes in Internal Controls over Financial Reporting

~~There~~On August 3, 2022, we completed our acquisition of Andermatt-Sedrun. In accordance with the SEC’s general guidance for recently acquired businesses, our assessment of and conclusion on the effectiveness of our internal control over financial reporting as of the fiscal year ended July 31, 2023 did not include certain elements of the internal controls of Andermatt-Sedrun. However, as of October 31, 2023, Andermatt-Sedrun is now included within our assessment of and conclusion on the effectiveness of our internal control over financial reporting.

Excluding Andermatt-Sedrun, there were no changes in the Company’s internal control over financial reporting that occurred during the three months ended ~~January~~October 31, 2023 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

We are a party to various lawsuits arising in the ordinary course of business. We believe that we have adequate insurance coverage and/or have accrued for all loss contingencies for asserted and unasserted matters and that, although the ultimate outcome of such claims cannot be ascertained, current pending and threatened claims are not expected, individually or in the aggregate, to have a material adverse impact on our financial position, results of operations and cash flows. ~~See Notes to the Consolidated Condensed Financial Statements for additional information.~~

ITEM 1A. RISK FACTORS

There have been no material changes to the risk factors we previously disclosed in our Form 10-K, which was filed on September 28, ~~2022~~2023 as of and for the year ended July 31, ~~2022.~~2023.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

~~None.~~Repurchase of Equity Securities

The following table sets forth our purchases of Vail Shares during the first quarter of fiscal 2024:


Period	Total Number of Shares Purchased	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1)	Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs (1)
August 1, 2023 - August 31, 2023	—	$	—	—	1,351,698
September 1, 2023 - September 30, 2023	—	$	—	—	1,351,698
October 1, 2023 - October 31, 2023	237,056	$	210.92	237,056	1,114,642
Total	237,056	$	210.92	237,056	1,114,642


(1)			The share repurchase program is conducted under authorizations made from time to time by our Board of Directors. The Board of Directors initially authorized the repurchase of up to 3,000,000 Vail Shares (March 9, 2006), and later authorized additional repurchases of up to 3,000,000 Vail Shares (July 16, 2008), 1,500,000 Vail Shares (December 4, 2015) and 2,500,000 Vail Shares (March 7, 2023), for a total authorization to repurchase up to 10,000,000 Vail Shares. As of October 31, 2023, 1,114,642 Vail Shares remained available to repurchase under the existing repurchase authorization. Repurchases under these authorizations may be made from time to time at prevailing prices as permitted by applicable laws, including under plans complying with Rule 10b5-1 under the Securities Exchange Act of 1934, as amended, and subject to market conditions and other factors. These authorizations have no expiration date.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

~~None.~~Director and Officer Rule 10b5-1 Trading Arrangements

During the three months ended October 31, 2023, none of the Company’s directors or “officers” (as defined in Rule 16a-1(f) under the Exchange Act) adopted, modified or terminated “Rule 10b5-1 trading arrangements” or “non-Rule 10b5-1 trading arrangements” (each as defined in Item 408 of Regulation S-K).

4333

ITEM 6. EXHIBITS

The following exhibits are either filed or furnished herewith or, if so indicated, incorporated by reference to the documents indicated in parentheses, which have previously been filed or furnished with the Securities and Exchange Commission.


Exhibit Number			Description

10.1			Form of Separation Agreement and General Release by and between Ryan Bennett and Vail Resorts, Inc. dated October 12, 2023.

10.2*			Vail Resorts, Inc. Management Incentive Plan (amended September 13, 2023).

31.1			Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2			Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32			Certifications of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS			XBRL Instance Document - the instance document does not appear in the interactive data file as its XBRL tags are embedded within the inline XBRL document.

101.SCH			XBRL Schema Document.

101.CAL			XBRL Calculation Linkbase Document.

101.DEF			XBRL Definition Linkbase Document.

101.LAB			XBRL Label Linkbase Document.

101.PRE			XBRL Taxonomy Extension Presentation Linkbase Document.

104			The cover page from this Quarterly Report on Form 10-Q, formatted in inline XBRL.

*Management contracts and compensatory plans and arrangements.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


		Vail Resorts, Inc.

Date: ~~March 9,~~December 7, 2023	By:	/s/ Angela A. Korch
		Angela A. Korch
		Executive Vice President and Chief Financial Officer
		(Principal Financial Officer)

Date: ~~March 9,~~December 7, 2023	By:	/s/ Nathan Gronberg
		Nathan Gronberg
		Vice President, Controller and Chief Accounting Officer
		(Principal Accounting Officer)


	As of August 1, 2022
Balance Sheet	Balances without the Adoption of ASU 2020-06		Adjustments		Balances 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