What changed in this filing

/stocks — the workspaceLOADING

Item 7. Management’s Discussion and Analysis

2020-09-24 compared with 2019-09-26 · 315 added, 276 removed, 336 unchanged (64% of the section changed)

2 unchanged sentences

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.

These risks include, but are not limited to, those discussed in Item 1A, “Risk Factors” in this Form 10-K.

The following discussion and analysis should be read in conjunction with the Forward-Looking Statements section and Item 1A, “Risk Factors” each included in this Form 10-K.

These risks include, but are not limited to, those discussed in Item 1A.

“Risk Factors” in this Form 10-K.

The following discussion and analysis should be read in conjunction with the Forward-Looking Statements section and Item 1A.

“Risk Factors” each included in this Form 10-K.

The MD&A includes discussion of financial performance within each of our three segments.

We have chosen to specifically include Reported EBITDA (defined as segment net revenue less segment operating expense, plus or minus segment equity investment income or loss and for the Real Estate segment, plus gain or loss on sale of real property) and Net Debt (defined as long-term debt, net plus long-term debt due within one year less cash and cash equivalents), in the following discussion because we consider these measurements to be significant indications of our financial performance and available capital resources.

Resort Reported EBITDA, Total Reported EBITDA and Net Debt are not measures of financial performance or liquidity defined under generally accepted accounting principles (“GAAP”).

We utilize Reported EBITDA in evaluating our performance and in allocating resources to our segments.

We have chosen to specifically include segment Reported EBITDA (defined as segment net revenue less segment operating expense, plus or minus segment equity investment income or loss and for the Real Estate segment, plus gain or loss on sale of real property) and Net Debt (defined as long-term debt, net plus long-term debt due within one year less cash and cash equivalents), in the following discussion because we consider these measurements to be significant indications of our financial performance and available capital resources.

Resort Reported EBITDA, Total Reported EBITDA and Net Debt are not measures of financial performance or liquidity defined under accounting principles generally accepted in the United States (“GAAP”).

We utilize segment Reported EBITDA in evaluating our performance and in allocating resources to our segments.

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.

Refer to the end of the Results of Operations section for a reconciliation of Reported EBITDA to net income attributable to Vail Resorts, Inc.

and Net Debt to long-term debt, net.

Refer to the end of the Results of Operations section for a reconciliation of net income attributable to Vail Resorts, Inc.

to Total Reported EBITDA and long-term debt, net to Net Debt.

Items excluded from Reported EBITDA and Net Debt are significant components in understanding and assessing financial performance or liquidity.

7 unchanged sentences

The Mountain, Lodging and Real Estate segments represented approximately 87%, 13% and 0%, respectively, of our net revenue for Fiscal 2020.

On March 14, 2020, we announced a temporary closure of our North American Resorts and retail/rental operations as a result of the COVID-19 pandemic and as a precautionary measure for the safety of our guests and employees beginning on March 15, 2020.

Subsequently on March 17, 2020, we announced the early closure of the 2019/2020 North American ski season for our North American Resorts, lodging properties and retail stores.

Additionally, the ongoing impacts of the COVID-19 pandemic resulted in restrictions, limitations or closures of our 2020 Australian ski area operations and 2020 North American summer operations.

Two of our Australian ski areas, Mount Hotham and Falls Creek, opened for their 2020 winter season on July 6, 2020 and were closed four days later due to a “stay at home” order put in place by the Victorian government as a result of a reemergence of COVID-19 in the region.

These actions (the “Resort Closures”), and the COVID-19 pandemic in general, had a significant adverse impact to our results of operations for Fiscal 2020 as further described below in the discussion for each of our segments.

Mountain Segment

The Mountain segment, as of July 31, 2019, was comprised of the operations of seventeen mountain resort properties and three urban ski areas including:

Mountain Resorts:

Vail Mountain Resort (“Vail Mountain”)

Breckenridge Ski Resort (“Breckenridge”)

Keystone Resort (“Keystone”)

Beaver Creek Resort (“Beaver Creek”)

Crested Butte Mountain Resort (“Crested Butte”)

Heavenly Mountain Resort (“Heavenly”)

Lake Tahoe area of Nevada and California

Northstar Resort (“Northstar”)

Lake Tahoe area of California

Kirkwood Mountain Resort (“Kirkwood”)

Lake Tahoe area of California

Mount Sunapee Resort (“Mount Sunapee”)

New Hampshire

Park City Resort (“Park City”)

Stowe Mountain Resort (“Stowe”)

Okemo Mountain Resort (“Okemo”)

Stevens Pass Mountain Resort (“Stevens Pass”)

Whistler Blackcomb Resort (“Whistler Blackcomb”)

British Columbia, Canada

Perisher Ski Resort (“Perisher”)

New South Wales, Australia

Falls Creek Alpine Resort (“Falls Creek”)

Victoria, Australia

Hotham Alpine Resort (“Hotham”)

Victoria, Australia

Urban Ski Areas:

Afton Alps Ski Area (“Afton Alps”)

Mount Brighton Ski Area (“Mt.

Wilmot Mountain (“Wilmot”)

Additionally, we operate ancillary services, primarily including ski school, dining and retail/rental operations, and for our Australian resorts, including lodging and transportation operations.

Mountain segment revenue is seasonal, with the majority of revenue earned from our North American mountain resorts and ski areas occurring in our second and third fiscal quarters and the majority of revenue earned from our Australian resorts occurring in our first and fourth fiscal quarters.

Our North American mountain resorts were open for business for the 2018/2019 ski season primarily from mid-November through mid-April, which is the peak operating season for the Mountain segment.

In the Mountain segment, the Company operates the following 37 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 our regional ski areas, which tend to generate skier visits predominantly from their respective local markets.

Additionally, we operate ancillary services, 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 destination mountain resorts and regional ski areas (collectively, our “Resorts”) occurring in our second and third fiscal quarters and the majority of revenue earned from our Australian ski areas occurring in our first and fourth fiscal quarters.

Our North American Resorts are typically open for business from mid-November through mid-April, which is the peak operating season for the Mountain segment, and our Australian ski areas are typically open for business from June to early October.

Our single largest source of Mountain segment revenue is the sale of lift tickets (including pass products), which represented approximately 53%, 53% and 51% of Mountain segment net revenue for Fiscal 2020, the fiscal year ended July 31, 2019 (“Fiscal 2019”) and the fiscal year ended July 31, 2018 (“Fiscal 2018”), respectively.

During Fiscal 2020 and as a result of the impacts of the COVID-19 pandemic, including the Resort Closures, we announced that we would offer credits to customers who had purchased 2019/2020 North American pass products towards the purchase of a 2020/2021 North American pass product if such purchase was made by September 17, 2020 (the “Credit Offer”).

The Credit Offer discounts range from a minimum of 20% to a maximum of 80% for season pass holders, depending on the number of days the pass holder used their pass product during the 2019/2020 season and a credit, with no minimum, but up to 80% for multi-day pass products, such as the Epic Day Pass, based on total unused days.

As a result of the Credit Offer to 2019/2020 pass product holders, we delayed the recognition of approximately $120.9 million of deferred season pass revenue, as well as approximately $2.9 million of related deferred costs, that would have been recognized in Fiscal 2020 and are now expected to be recognized primarily in the second and third quarters of the fiscal year ending July 31, 2021 (“Fiscal 2021”).

While we expect most of this revenue and deferred cost will be recognized during Fiscal 2021, in the event that a pass holder obtains a refund under Epic Coverage (as discussed below) for the 2020/2021 North American ski season and is eligible to utilize their credit toward the purchase of a pass product purchase for the 2021/2022 North American ski season, a portion of this deferred revenue and related deferred cost will be recognized in Fiscal 2022.

Lift revenue is driven by volume and pricing.

2 unchanged sentences

(1) out-of-state and international (“Destination”) guests and (2) in-state and local (“Local”) guests.

For the 2018/2019 North American ski season, Destination guests comprised approximately 57% of our North American mountain resort skier visits, while Local guests comprised approximately 43% of our North American mountain resort skier visits, which compares to approximately 59% and 41%, respectively, for the 2017/2018 North American ski season.

Destination guests generally purchase our higher-priced lift ticket products and utilize more ancillary services such as ski school, dining and retail/rental, as well as lodging at or around our mountain resorts.

Destination guest visitation during a ski season is less likely to be impacted by changes in the weather during the current ski season, but may be more impacted by adverse economic conditions, the global geopolitical climate or weather conditions in the immediately preceding ski season.

For the 2019/2020 North American ski season, Destination guests comprised approximately 58% of our North American destination mountain resort skier visits (excluding complimentary access), while Local guests comprised approximately 42% of our North American destination mountain resort skier visits (excluding complimentary access), which compares to approximately 57% and 43%, respectively, for the 2018/2019 North American ski season and approximately 59% and 41%, respectively, for the 2017/2018 North American ski season.

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.

Destination guest visitation is less likely to be impacted by changes in the weather during the current ski season, but may be more impacted by restrictions or preferences for travel due to the COVID-19 pandemic, adverse economic conditions, the global geopolitical climate 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 mountain resorts and ski areas (collectively, “Resorts”), marketed towards both Destination and Local guests.

We offer a variety of pass products for all of our Resorts marketed towards both Destination and Local guests.

Our pass product offerings range from providing access to one or a combination of our Resorts to our Epic Pass, which allows pass holders unlimited and unrestricted access to all of our Resorts.

Additionally, beginning with the 2019/2020 North American ski season, we are offering the Epic Day Pass, 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.

Our pass program provides 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 have entered into strategic long-term season pass alliance agreements with third-party mountain resorts including Telluride Ski Resort in Colorado, Sun Valley Resort in Idaho, Snowbasin Resort in Utah, Hakuba Valley and Rusutsu Resort in Japan, Resorts of the Canadian Rockies in Canada, Les 3 Vallées in France, 4 Vallées in Switzerland and Skirama Dolomiti in Italy, which further increases the value proposition of our pass products.

The Epic Day Pass, which we began offering for the 2019/2020 North American ski season, is a customizable one to seven day pass product valid at each of our resorts, purchased in advance of the season, for those skiers and riders who expect to ski a certain number of days during the season.

For the upcoming 2020/2021 North American ski season, we introduced Epic Mountain Rewards, a program which gives pass product holders a discount of 20% off on-mountain food and beverage, lodging, group ski and ride school lessons, equipment rentals and more at the Company’s North American owned and operated Resorts.

Epic Mountain Rewards is available for everyone who purchases an Epic Pass, Epic Local Pass, Epic Day Pass, Epic Military Pass and most of our other pass products, regardless of whether guests plan to ski one day or every day of the season.

Additionally, we introduced Epic Coverage for the 2020/2021 North American ski season, which is free for all pass holders, completely replacing the need for pass insurance, and providing expanded coverage over our historical pass insurance program.

Epic Coverage provides refunds in the event of certain resort closures (e.g.

for COVID-19), giving pass product holders a refund for any portion of the season that is lost due to qualifying circumstances.

Additionally, Epic Coverage provides a refund for personal circumstances that were historically covered by our pass insurance program, such as eligible injuries, job losses and many other personal events, as well as in the event that the pass holder cannot reserve their preferred days.

Refunds for resort closure events could vary based on the duration of the closure, certain elections made by the pass product holder and the number of days skied by the pass product holder.

We will estimate the amount of expected refunds under the Epic Coverage program and will reduce the amount of pass product revenue recognized by that expected amount.

The expected refunds will be calculated utilizing estimates and assumptions, including historical data and current information.

If we believe it is probable that upon resolution of the contingencies for which we would provide refunds that a significant amount of revenue may be reversed, we will not recognize those amounts as revenue until such time as the contingencies have been resolved.

Our pass program provides 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 have entered into strategic long-term season pass alliance agreements with third-party mountain resorts including Telluride Ski Resort in Colorado, Sun Valley Resort in Idaho, Snowbasin Resort in Utah, Hakuba Valley and Rusutsu Resort in Japan, Resorts of the Canadian Rockies in Canada, Les 3 Vallées in France, 4 Vallées in Switzerland, Skirama Dolomiti in Italy and Ski Arlberg in Austria, which further increases the value proposition of our pass products.

As such, 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.

3 unchanged sentences

Lift revenue consists of pass product lift revenue (“pass revenue”) and non-pass product lift revenue (“non-pass revenue”).

Approximately 47%, 47% and 43% of total lift revenue was derived from pass revenue for Fiscal 2019, Fiscal 2018 and Fiscal 2017, respectively.

Approximately 51%, 47% and 47% of total lift revenue was derived from pass revenue for Fiscal 2020 (including the impact of the deferral of pass revenue as a result of the Credit Offer), Fiscal 2019 and Fiscal 2018, respectively.

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 expenses associated with dining operations.

2 unchanged sentences

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 mountain resorts;

(iii) National Park Service (“NPS”) concessionaire properties including Grand Teton Lodging Company (“GTLC”);

(iv) a Colorado resort ground transportation company and (v) mountain resort golf courses.

(ii) ownership/management of non-RockResorts branded hotels and condominiums proximate to our North American Resorts;

(iii) National Park Service (“NPS”) concessionaire properties including Grand Teton Lodge Company (“GTLC”);

(iv) a Colorado resort ground transportation company;

and (v) mountain resort golf courses.

The performance of our lodging properties (including managed condominium units and our Colorado resort ground transportation company) proximate to our mountain resorts is closely aligned with the performance of the Mountain segment and generally experiences similar seasonal trends, particularly with respect to visitation by Destination guests.

4 unchanged sentences

mountain resort golf operations and seasonally lower volume from our other owned and managed properties and businesses.

As discussed above, our North American lodging properties closed early in March for the remainder of the 2019/2020 ski season as a result of the COVID-19 pandemic.

Our summer operations for the 2020 season were also limited or adjusted, including at GTLC with the closures of Jackson Lake Lodge and Jenny Lake Lodge, as well as not offering guided activities, in-restaurant dining and the temporary closure of many facilities, among others.

Real Estate Segment

6 unchanged sentences

We have identified the following significant factors (as well as uncertainties associated with such factors) that could impact our future financial performance:

Given the escalating concerns surrounding the spread of COVID-19 and the potential impact that continuing to operate our resorts would have had on our resort communities, we suspended the operations at all of our North American Resorts and retail stores beginning on March 15, 2020 for the remainder of the 2019/2020 North American ski season.

As a result of the COVID-19 pandemic and in response to guidance from the Centers for Disease Control and Prevention and other local and national health authorities, operations for the 2020 North American summer season were limited, adjusted or restricted.

Additionally, although our Mount Hotham and Falls Creek ski areas opened for their 2020 winter season on July 6, 2020, we closed these two ski areas four days later due to a “stay at home” order put in place by the Victorian government as a result of a reemergence of COVID-19 in the region.

These various closures and limitations on our operations had a significant negative impact on our results for Fiscal 2020, and we cannot predict the ultimate impact that the Resort Closures and other business disruptions as a result of the COVID-19 pandemic will continue to have on our results for the upcoming 2020/2021 North American ski season or our overall results for Fiscal 2021.

The global outbreak of COVID-19 has led to travel restrictions and other adverse economic impacts including reduced consumer confidence, an increase in unemployment rates and volatility in global and local economies.

Although we are uncertain as to the ultimate severity and duration of the COVID-19 pandemic, the related global travel restrictions and other adverse impacts, we have seen a significant negative change in performance and expect our future performance will also be negatively impacted.

In addition, the North American economy may be impacted by economic challenges in North America or declining or slowing growth in economies outside of North America, accompanied by devaluation of currencies, rising inflation, trade tariffs and lower commodity prices.

We cannot predict the ultimate impact that the global economic

uncertainty as a result of the COVID-19 pandemic will have on overall travel and leisure spending or more specifically, on our guest visitation, guest spending or other related trends for the upcoming 2020/2021 North American ski season.

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.

2019, we began our early pass product sales program for the 2019/2020 North American ski season.

Through September 22, 2019, North American ski season pass sales increased approximately 14% in units and approximately 15% in sales dollars as compared to the period in the prior year through September 23, 2018, including Military Pass sales in both periods.

Pass sales exclude Peak Resorts pass sales in both periods and are adjusted to eliminate the impact of foreign currency by applying an exchange rate of $0.75 between the Canadian dollar and U.S.

dollar in both periods for Whistler Blackcomb pass sales.

Excluding sales of Military Passes, season pass sales increased approximately 13% in units and 14% in sales dollars over the comparable prior year period.

We cannot predict if this favorable trend will continue for the entire duration of the fall 2019 North American pass sales campaign, nor can we predict the overall impact that pass product sales will have on lift revenue for the 2019/2020 North American ski season.

In Fiscal 2019, our lift revenue was favorably impacted by non-pass price increases at our mountain resorts that were implemented for the 2018/2019 North American ski season.

Non-pass prices for the 2019/2020 North American ski season have not yet been finalized;

and, as such, there can be no assurances as to the level of price increases, if any, which will occur and the impact that pricing may have on visitation or revenue.

Our Fiscal 2019 results for our Mountain segment showed improvement over Fiscal 2018 largely due to strong pass sales growth for the 2018/2019 North American ski season, strong growth in visitation and spending at our western U.S.

resorts and the incremental operations of Stevens Pass, Triple Peaks and Falls Creek/Hotham (acquired in August 2018, September 2018 and April 2019, respectively).

After the challenging early season period for Destination visitation during the 2018/2019 North American ski season, our results for the remainder of the season were largely in line with our original expectations, with strong growth in visitation and spending compared to the prior year, including a strong finish to the season with good conditions across our western U.S.

destination resorts.

However, we continued experiencing relative weakness in international visitation compared to the prior year, particularly at Whistler Blackcomb.

We cannot predict whether our resorts will experience normal snowfall conditions for the upcoming 2019/2020 North American ski season nor can we estimate the impact there may be to advance bookings, guest travel, pass product sales, lift revenue (excluding pass products), retail/rental sales or other ancillary services revenue next ski season as a result of past snowfall conditions.

Key North American economic indicators have remained steady into calendar year 2019, including strong consumer confidence and declines in the unemployment rate.

However, the growth in the North American economy may be impacted by economic challenges in North America or declining or slowing growth in economies outside of North America, accompanied by devaluation of currencies, rising inflation, trade tariffs and fluctuating commodity prices.

Given these economic uncertainties, we cannot predict what the impact of the overall North American or global economy will be on overall travel and leisure spending or more specifically, on our guest visitation, guest spending or other related trends for the upcoming 2019/2020 North American ski season.

As of July 31, 2019, we had $108.9 million in cash and cash equivalents, as well as $214.4 million available under the revolver component of the Vail Holdings Credit Agreement (which represents the total commitment of $500.0 million less outstanding borrowings of $208.0 million and certain letters of credit outstanding of $77.6 million).

In early March 2020, we began our pass product sales program for the 2020/2021 North American ski season.

In April 2020 and in connection with our announcement of the Credit Offer, we announced significant extensions to our traditional deadlines for pass product sales that normally would have occurred throughout the North American summer selling season.

These extensions in our traditional deadlines and broader impacts from COVID-19 has had a significant negative impact on pass product sales through July 31, 2020 in comparison to the prior year comparable pass product sales.

As previously discussed, as a result of the Resort Closures, we provided a Credit Offer to 2019/2020 pass product holders to apply toward the purchase of a 2020/2021 pass product.

Additionally, looking ahead to the 2020/2021 North American ski season, we are optimistic that we will be operational for the ski season, but we also understand that many pass holders are nervous about the future given the current uncertainty, as our ability to open our Resorts may depend on local and/or state restrictions outside of our control.

As a result, we introduced Epic Coverage for the 2020/2021 North American ski season, which is free for all pass holders and completely replaces the need to purchase pass insurance.

Epic Coverage provides refunds in the event of certain resort closures (e.g., for COVID-19), giving pass product holders a refund for any portion of the season that is lost due to qualifying circumstances.

Additionally, Epic Coverage provides a refund for qualifying personal circumstances that were historically covered by our pass insurance for eligible injuries, job losses and many other personal events, as well as in the event that the pass holder cannot reserve their preferred days.

In addition to these changes, in order to give our pass product holders the time they need to make decisions regarding next season, we extended the deadline for pass holders to use their Credit Offer and receive spring benefits (including Buddy Tickets) until September 17, 2020, and we extended the period for pass holders to lock in their purchase with only $49 down.

We also announced that we would be implementing a reservation system for our 34 North American Resorts for the 2020/2021 North American ski season, which will only be available for pass holders during the early season (paid lift tickets will not be sold until December 8, 2020).

Season pass sales through September 18, 2020 for the upcoming 2020/2021 North American ski season increased approximately 18% in units and decreased approximately 4% in sales dollars as compared to the period in the prior year through September 20, 2019, with sales dollars for this year reduced by the value of the redeemed credits provided to 2019/2020 North American pass holders.

Without deducting for the value of the redeemed credits, sales dollars increased approximately 24% compared to the prior year.

Pass sales results are adjusted to eliminate the impact of foreign currency by applying an exchange rate of $0.76 between the Canadian dollar and U.S.

dollar in both periods for Whistler Blackcomb pass sales.We cannot predict if this trend will continue for the entire duration of the fall 2020 North American pass sales campaign, nor can we predict the overall impact that the Credit Offer, Epic Coverage, extended spring benefits and the extended $49 down deadline will have on pass product sales or lift revenue for the upcoming 2020/2021 North American ski season.

On March 27, 2020, in response to the outbreak of the COVID-19 pandemic, the U.S.

government enacted legislation commonly referred to as the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”).

The CARES Act includes various amendments to the U.S.

tax code that impacted the Company’s accounting and reporting for income taxes during Fiscal 2020 and is expected to continue to impact the Company’s accounting and reporting for income taxes in the future, including the following:

(i) allowing a carryback of the entire amount of eligible Federal net operating losses (“NOLs”) generated in calendar years 2018, 2019 and 2020 for up to five years prior to when such losses were incurred, representing a change from previous rules under the Tax Cuts & Jobs Act of 2017 (the “TCJA”), in which NOLs could not be carried back to prior years and utilization was limited to 80% of taxable income in future years;

(ii) treatment of certain qualified improvement property (“QIP”) as 15-year property and allowing such QIP placed in service after December 31, 2017 to be eligible for bonus depreciation, which the Company expects will incrementally add to its pre-existing NOLs;

and (iii) increases in the allowable business interest deduction from 30% of adjusted taxable income to 50% of adjusted taxable income for calendar years 2019 and 2020.

The CARES Act also provides for refundable employee retention tax credits and defers the requirement to remit the employer-paid portion of social security payroll taxes.

As a result, we recorded a benefit of approximately $9.6 million during Fiscal 2020, which primarily offset Mountain and Lodging operating expense, as a result of wages paid to employees who were not providing services.

We are still in the process of fully evaluating the potential benefits that the amendments discussed above will have on our financial statements.

We also recognized a credit of approximately $8.5 million during Fiscal 2020 as a result of the recent Canada Emergency Wage Subsidy and Australian JobKeeper legislation for our Canadian and Australian employees, which primarily offset Mountain and Lodging operating expense.

As of July 31, 2020 , we had $391.0 million of cash and cash equivalents as well as $418.8 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 April 28, 2020 (the “Vail Holdings Credit Agreement”), which represents the total commitment of $500.0 million less certain letters of credit outstanding of $81.2 million.

Additionally, we have a credit facility which supports the liquidity needs of Whistler Blackcomb (the “Whistler Credit Agreement”).

As of July 31, 2020, we had C$221.1 million ($165.1 million) available under the revolver component of the Whistler Credit Agreement (which represents the total commitment of C$300.0 million ($224.0 million) less outstanding borrowings of C$78.0 million ($58.2 million) and a letter of credit outstanding of C$0.9 million ($0.7 million)).

On August 15, 2018, we amended our Vail Holdings Credit Agreement in the form of an Eighth Amended and Restated Credit Agreement to provide for an incremental term loan of $265.6 million, increasing the capacity of the term loan to $950.0 million, to fund the acquisitions of Stevens Pass and Triple Peaks, as discussed and defined below.

Subsequently, on April 15, 2019, we entered into the First Amendment to the Eighth Amended and Restated Credit Agreement which primarily extended the maturity date for the outstanding term loans and revolver facility to April 15, 2024, increased the amount of dividends we are permitted to pay in each fiscal quarter under the agreement and increased the amount of the revolver facility from $400.0 million to $500.0 million.

Additionally, on September 23, 2019, we entered into the Second Amendment to the Eighth Amended and Restated Credit Agreement which increased the term loan facility by approximately $335.6 million to fund the acquisition of Peak Resorts and to prepay certain portions of the debt assumed in connection with the acquisition, as discussed and defined below, and extended the maturity date for the outstanding term loans and revolver facility to September 23, 2024.

During Fiscal 2019, we also entered into an amendment of the Whistler Credit Agreement which extended the maturity date of the revolving credit facility to December 2023.

No other material terms of the Whistler Credit Agreement were altered.

We believe that the terms of our credit agreements allow for sufficient flexibility in our ability to make future acquisitions, investments, distributions to stockholders and incur additional debt.

This, combined with the continued positive cash

flow from operating activities of our Mountain and Lodging segments less resort capital expenditures, has and is anticipated to continue to provide us with significant liquidity.

We believe our liquidity will allow us to consider strategic investments and other forms of returning value to our stockholders including additional share repurchases and the continued payment of a quarterly cash dividend.

On September 24, 2019, through a wholly-owned subsidiary, we acquired 100 percent of the outstanding stock of Peak Resorts, Inc.

On April 28, 2020, we entered into the Third Amendment to our Vail Holdings Credit Agreement (the “Third Amendment”).

Pursuant to the Third Amendment, the Company is exempt from complying with the Vail Holdings Credit Agreement’s maximum leverage ratio and minimum interest coverage ratio financial maintenance covenants for each of the fiscal quarters ended July 31, 2020 through January 31, 2022 (unless we make a one-time irrevocable election to terminate such exemption prior to such date) (such period, the “Financial Covenants Temporary Waiver Period”), after which we will be required to comply with such covenants starting with the fiscal quarter ending April 30, 2022 (or such earlier fiscal quarter as elected by us).

During the Financial Covenants Temporary Waiver Period, we are subject to other restrictions which will limit our ability to make future acquisitions, investments, distributions to stockholders, share repurchases or incur additional debt.

See Liquidity and Capital Resources for additional information.

Additionally, on May 4, 2020, we completed an offering of $600.0 million in aggregate principal amount of 6.25% Senior Notes due 2025 (the “Notes”) in a private placement conducted pursuant to Rule 144A and Regulation S under the Securities Act of 1933, as amended, a portion of which was utilized to pay down the outstanding balance of the revolver component of our Vail Holdings Credit Agreement in its entirety (which will continue to be available to the Company to borrow including throughout the Financial Covenants Temporary Waiver Period).

The Notes are guaranteed on a senior subordinated basis by certain of the Company’s domestic subsidiaries.

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 through at least the 2021/2022 ski season, even in the event of extended resort shutdowns.

On September 24, 2019, through a wholly-owned subsidiary, we acquired 100% of the outstanding stock of Peak Resorts, Inc.

(“Peak Resorts”) at a purchase price of $11.00 per share or approximately $264.5 million .

Through the acquisition we added 17 U.S.

ski areas to our network of resorts located near major metropolitan areas including New York, Boston, Washington D.C., Baltimore, Philadelphia, Cleveland, St.

Louis, Kansas City, and Louisville.

The ski areas owned by Peak Resorts offer a breadth of activities, services and amenities, including skiing, snowboarding, terrain parks, tubing, dining, lodging, equipment rentals and sales, ski and snowboard instruction, mountain biking, golf and other summer activities.

We funded the cash purchase price through incremental term loan borrowings, as discussed above, in conjunction with our September 23, 2019 amendment of the Vail Holdings Credit Agreement.

We expect that the acquisition of Peak Resorts will positively contribute to our results of operations;

however, we cannot predict the ultimate impact the new resorts will have on our future results of operations.

On April 4, 2019, through a wholly-owned subsidiary, we acquired ski field leases and related infrastructure used to operate two resorts in Victoria, Australia.

We acquired Australian Alpine Enterprises Holdings Pty.

Ltd and all related corporate entities that operate the Falls Creek and Hotham resorts from Living and Leisure Australia Group, a subsidiary of Merlin Entertainments, for a purchase price of approximately AU$178.9 million ($127.4 million), after adjustments for certain agreed-upon terms, including an increase in the purchase price for operating losses incurred for the period from December 29, 2018 through closing.

The acquisition included the ski school, retail/rental, reservation and property management operations at both resort areas and we funded the cash purchase price through cash on-hand.

We expect that the acquisition of Falls Creek and Hotham will positively contribute to our results of operations;

In addition, contemporaneous with the closing the transaction, Peak Resorts was required to pay approximately $70.2 million of certain outstanding debt instruments and lease obligations in order to complete the transaction.

Accordingly, the total purchase price, including the repayment of certain outstanding debt instruments and lease obligations, was approximately $334.7 million , for which we borrowed approximately $335.6 million under the Vail Holdings Credit Agreement to fund the acquisition.

The newly acquired resorts include:

Mount Snow in Vermont;

Hunter Mountain in New York;

Attitash Mountain Resort, Wildcat Mountain and Crotched Mountain in New Hampshire;

Liberty Mountain Resort, Roundtop Mountain Resort, Whitetail Resort, Jack Frost and Big Boulder in Pennsylvania;

Alpine Valley, Boston Mills, Brandywine and Mad River Mountain in Ohio;

Hidden Valley and Snow Creek in Missouri;

and Paoli Peaks in Indiana.

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 lodging operations at certain resorts.

We expect that the acquisition of Peak Resorts will positively contribute to our annual results of operations;

however we cannot predict the ultimate impact the new resorts will have on our future results of operations.

On August 15, 2018, through a wholly-owned subsidiary, we acquired Stevens Pass Resort in the State of Washington from Ski Resort Holdings, LLC for a total purchase price of $64.0 million .

We borrowed $70.0 million on August 15, 2018 under the term loan of our Vail Holdings Credit Agreement, as discussed above, primarily to fund the acquisition of Stevens Pass.

Additionally, on September 27, 2018, we acquired Triple Peaks, LLC (“Triple Peaks”), the parent company of Okemo Mountain Resort in Vermont, Crested Butte Mountain Resort in Colorado and Mount Sunapee Resort in New Hampshire, for a cash purchase price of approximately $74.1 million, after adjustments for certain agreed-upon terms.

In addition, contemporaneous with the closing of the transaction, Triple Peaks paid $155.0 million to satisfy the remaining obligations for the leases that all three resorts had with Ski Resort Holdings, with funds provided by us.

Accordingly, the total purchase price, including the repayment of lease obligations, was $229.1 million, for which we utilized cash on hand and borrowed $195.6 million under the term loan of our Vail Holdings Credit Agreement to fund the transaction and associated acquisition related expenses.

We expect that the acquisitions of Stevens Pass and Triple Peaks will positively contribute to our results of operations;

however, we cannot predict whether we will realize all of the synergies expected from the operations of Stevens Pass and Triple Peaks and the ultimate impact the new resorts will have on our future results of operations.

Results of Operations

1 unchanged sentence

Year Ended July 31,

Net income attributable to Vail Resorts, Inc.

Income before (provision) benefit from income taxes

Mountain Reported EBITDA

2 unchanged sentences

Real Estate Reported EBITDA

Income before (provision) benefit from income taxes

Net income attributable to Vail Resorts, Inc.

A discussion of segment results, including reconciliations of segment Reported EBITDA to net income attributable to Vail Resorts, Inc., and other items can be found below.

A discussion of segment results, including reconciliations of net income attributable to Vail Resorts, Inc.

to Total Reported EBITDA, and other items can be found below.

The consolidated results of operations, including any consolidated financial metrics pertaining thereto, include the operations of Peak Resorts (acquired September 24, 2019), Falls Creek and Hotham (acquired April 4, 2019), Triple Peaks (acquired September 27, 2018) and Stevens Pass (acquired August 15, 2018), prospectively from their respective dates of acquisition.

The COVID-19 pandemic and the Resort Closures both had a significant adverse impact to our results of operations for Fiscal 2020, as further described below in our segment results of operations.

The sections titled “Fiscal 2020 compared to Fiscal 2019” and “Fiscal 2019 compared to Fiscal 2018” in each of the Mountain and Lodging segment discussions below provide comparisons of financial and operating performance for Fiscal 2020 to Fiscal 2019 and Fiscal 2019 to Fiscal 2018, respectively, unless otherwise noted.

The operating results reported above do not include any results from the Peak Resorts acquisition as the closing of that transaction occurred on September 24, 2019, and the results of those operations will be reflected prospectively from the closing date in our consolidated financial statements.

Mountain Segment

16 unchanged sentences

Fiscal 2020 compared to Fiscal 2019

Mountain Reported EBITDA decreased $178.5 million, or 26.3%, primarily due to the impact of the delayed recognition of $120.9 million of pass product revenue during Fiscal 2020 as a result of the Credit Offer to 2019/2020 North American pass product holders from the Resort Closures and the overall impacts of the COVID-19 pandemic, which resulted in significantly reduced visitation and operations at our Resorts and retail stores for the 2019/2020 North American ski season, the 2020 Australian ski season and our 2020 North American summer operations.

These decreases were partially offset by the incremental operations of Peak Resorts, Falls Creek and Hotham.

Mountain segment results include $13.6 million and $16.4 million of acquisition and integration related expenses for Fiscal 2020 and Fiscal 2019, respectively, which are recorded within Mountain other operating expense.

Lift revenue decreased $120.1 million, or 11.6%, primarily due to a 3.4% decrease in pass product revenue and an 18.8% decrease in non-pass revenue.

Pass product revenue decreased primarily as a result of the deferral of approximately $120.9 million of pass product revenue associated with the Credit Offer to 2019/2020 North American pass product holders, which would have been recognized during Fiscal 2020 and which is now expected to be recognized primarily in the second and third quarters of Fiscal 2021, partially offset by a combination of an increase in pricing and units sold and increased pass sales to Destination guests, as well as the introduction of the Epic Day Pass.

Non-pass revenue decreased primarily due to significantly reduced skier visitation as a result of the Resort Closures, partially offset by an increase in non-pass ETP (excluding Peak Resorts, Falls Creek and Hotham) of 6.2% and incremental revenue from Peak Resorts, Falls Creek and Hotham of approximately $61.4 million.

Total non-pass ETP, including the impact of Peak Resorts, Falls Creek and Hotham decreased 7.3%.

Ski school revenue, dining revenue and retail/rental revenue in Fiscal 2020 all decreased compared to Fiscal 2019 due to the Resort Closures.

These decreases were partially offset by incremental revenue from our acquisitions of Peak Resorts, Falls Creek and Hotham of $18.0 million of ski school revenue, $23.8 million of dining revenue and $26.8 million of retail/rental revenue.

Other revenue mainly consists of summer visitation and 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 is also comprised of Australian ski area lodging and transportation revenue.

For Fiscal 2020, other revenue decreased as a result of the Resort Closures, partially offset by incremental revenue from Peak Resorts of approximately $12.6 million.

Resort Closures and the associated actions taken by the Company to reduce costs resulted in a decrease in our operating expense of $67.5 million, or 5.3%, which includes incremental operating expenses from Peak Resorts, Falls Creek and Hotham of approximately $121.4 million, as well as $13.6 million and $16.4 million of acquisition and integration related expenses for Fiscal 2020 and Fiscal 2019, respectively.

Labor and labor-related benefits decreased 6.8%, which primarily resulted from cost actions associated with the Resort Closures, including decreased staffing, employee furloughs, salary reductions and reduced variable compensation accruals, as well as tax credits of approximately $12.0 million associated with recent COVID-19 related legislation passed in the U.S., Canada and Australia, partially offset by incremental expenses from Peak Resorts, Falls Creek and Hotham of approximately $50.7 million.

Retail cost of sales decreased 20.5% compared to a decrease in retail sales of 20.1%.

Resort related fees decreased 22.0% primarily due to decreases in revenue on which those fees are based, partially offset by incremental expenses from Peak Resorts of approximately $4.3 million.

General and administrative expense increased 2.7% primarily due to incremental expenses from Peak Resorts, Falls Creek and Hotham of approximately $18.9 million, partially offset by a decrease in allocated corporate overhead costs, a decrease in variable compensation accruals primarily as a result of the Resort Closures and tax credits of approximately $3.3 million associated with recent COVID-19 related legislation passed in the U.S., Canada and Australia.

Other expense increased 2.1% primarily due to incremental operating expenses from Peak Resorts, Falls Creek and Hotham of approximately $42.2 million, partially offset by decreases in variable operating expenses associated with the Resort Closures, as well as a decrease in acquisition and integration related expenses.

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

Fiscal 2019 compared to Fiscal 2018

The results reflect an increase in Mountain Reported EBITDA of $87.0 million, or 14.7%, primarily as a result of strong North American pass sales growth for the 2018/2019 North American ski season, strong growth in visitation and spending at our western U.S.

10 unchanged sentences

Total ETP decreased $2.42, or 3.4%, primarily due to higher skier visitation by season pass holders, lower ETP from the acquired Triple Peaks, Stevens Pass, Falls Creek and Hotham resorts and the new Military Epic Pass, partially offset by price increases in both our lift ticket and pass products.

Ski school revenue increased $25.2 million, or 13.2%, and dining revenue increased $20.4 million, or 12.7%, primarily as a result of incremental revenue at Triple Peaks, Stevens Pass, Falls Creek and Hotham and increased revenue at our other U.S.

resorts primarily as a result of higher skier visitation.

The remaining increases were primarily due to higher skier visitation.

Retail/rental revenue increased $23.8 million, or 8.0%, of which retail revenue increased $13.6 million, or 6.7%, and rental revenue increased $10.2 million, or 11.0%.

The increase in both retail revenue and rental revenue was primarily attributable to higher sales volumes at stores proximate to our western U.S.

resorts and other stores in Colorado, as well as incremental revenue from Triple Peaks, Stevens Pass, Falls Creek and Hotham.

resorts and other stores in Colorado, as well as incremental revenue from Triple Peaks, Stevens Pass, Falls Creek and Hotham of approximately $13.1 million.

These increases were partially offset by removing the low-margin golf product line from our Colorado city stores, store closures and a decrease in sales at Whistler Blackcomb.

Other revenue is also comprised of Australian resort lodging and transportation revenue.

For Fiscal 2019, other revenue increased $11.0 million, or 5.6%, primarily attributable to incremental revenue from Triple Peaks, Stevens Pass, Falls Creek and Hotham, as well as increases in marketing revenue and mountain activities and services revenue.

Other revenue is also comprised of Australian ski area lodging and transportation revenue.

For Fiscal 2019, other revenue increased $11.0 million, or 5.6%, primarily attributable to incremental revenue from Triple Peaks, Stevens Pass, Falls Creek and Hotham of $6.0 million, as well as increases in marketing revenue and mountain activities and services revenue.

Operating expense increased $146.7 million, or 13.0%, which was primarily attributable to the inclusion of Triple Peaks, Stevens Pass, Falls Creek and Hotham, whose operating expenses were recorded prospectively from their respective dates of acquisition.

Additionally, operating expense includes $16.4 million and $10.2 million of acquisition and integration related expenses for Fiscal 2019 and Fiscal 2018, respectively.

Labor and labor-related benefits increased 14.4% primarily due to incremental labor expenses from Triple Peaks, Stevens Pass, Falls Creek and Hotham and increased staffing levels at our western U.S.

Labor and labor-related benefits increased 14.4% primarily due to incremental labor expenses from Triple Peaks, Stevens Pass, Falls Creek and Hotham of $41.0 million and increased staffing levels at our western U.S.

resorts as compared to the prior year due to historic low snowfall during the prior year period, as well as wage increases associated with our minimum wage initiatives, which were in excess of our historical minimum wage increases, and higher variable compensation accruals.

Retail cost of sales increased 9.2% compared to an increase in retail sales of 6.7%.

Resort related fees increased 10.5% primarily due to incremental expenses from Triple Peaks and Stevens Pass as well as increases in revenue on which those fees are based.

General and administrative expense increased 8.9% primarily due to incremental expenses from Triple Peaks, Stevens Pass, Falls Creek and Hotham, an increase in variable compensation accruals and an increase in allocated corporate overhead costs primarily associated with marketing and information technology.

Other expense increased 16.0% primarily due to incremental expenses from Triple Peaks, Stevens Pass, Falls Creek and Hotham, as well as increases in season pass alliance expense, acquisition and integration related expenses, employee housing expense, fuel expense and rent expense.

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

Fiscal 2018 compared to Fiscal 2017

The results reflected an increase in Mountain Reported EBITDA of $25.3 million, or 4.5%, primarily as a result of strong North American pass sales growth for the 2017/2018 North American ski season and the incremental operations of Stowe (acquired in June 2017).

Our results across all lines of business at our western U.S.

resorts during Fiscal 2018 were impacted by challenging ski conditions as a result of historically low snowfall for the first half of the 2017/2018 ski season, although conditions progressively improved during the third quarter of Fiscal 2018.

Total skier visitation increased 2.5%, which was primarily the result of incremental skier visitation at Stowe and an increase in skier visitation at Whistler Blackcomb and Perisher, partially offset by lower skier visitation to our western U.S.

The Fiscal 2018 and Fiscal 2017 results included $10.2 million and $10.8 million of acquisition and integration related expenses, respectively.

Lift revenue increased $62.0 million, or 7.6%, primarily due to an increase in pass revenue and incremental revenue from Stowe.

Pass revenue increased 17.7%, which was driven by a combination of an increase in both pricing and units sold, which was favorably impacted by increased pass sales to Destination guests.

Non-pass revenue was flat, which was primarily the result of incremental non-pass revenue from Stowe and an increase in non-pass revenue from Whistler Blackcomb, as well as an increase in ETP excluding season pass holders of 2.4%, offset by a decrease in non-pass skier visitation at our western U.S.

Total ETP increased $3.38, or 5.0%, primarily due to price increases in both our lift ticket products and pass products and slightly lower average visitation by pass product holders during the 2017/2018 North American ski season as compared with the 2016/2017 North American ski season.

Ski school revenue increased $12.2 million, or 6.8%, primarily as a result of increased revenue at Whistler Blackcomb and Park City, as well as incremental revenue from Stowe.

Dining revenue increased $10.8 million, or 7.2%, primarily as a result of incremental revenue from Stowe and increased revenue from Whistler Blackcomb, reflecting a full year of operations as compared to Fiscal 2017, which included operations from the date of acquisition, October 17, 2016, through July 31, 2017.

However, these increases were partially offset by lower revenue at our western U.S.

resorts, which experienced delays in the opening of certain on-mountain dining venues as a result of challenging weather conditions for the first half of the 2017/2018 North American ski season.

Retail/rental revenue increased $3.0 million, or 1.0%, of which rental revenue increased $2.9 million, or 3.2%, and retail revenue was relatively flat.

Both rental and retail revenue were positively impacted by an increase in revenue at Whistler Blackcomb and incremental revenue from Stowe, partially offset by decreased revenue at stores proximate to our western U.S.

resorts and other city stores.

Other revenue is also comprised of Perisher lodging and transportation revenue.

For Fiscal 2018, other revenue increased $23.2 million, or 13.5%, primarily attributable to incremental summer activities and events revenue at Whistler Blackcomb and the inclusion of Stowe operations.

Operating expense for Fiscal 2018 increased $85.5 million, or 8.2%, which was primarily attributable to the inclusion of Stowe operations and incremental operating expenses from Whistler Blackcomb as a result of reflecting a full year of operations as compared to Fiscal 2017, which included operations from the date of acquisition, October 17, 2016, through July 31, 2017.

Labor and labor-related benefits increased 10.1% primarily due to incremental expense from Whistler Blackcomb and Stowe, as well as normal wage adjustments, partially offset by lower performance-based variable compensation.

Resort related fees increased 4.3% primarily due to higher revenue on which those fees are based and incremental expenses from Stowe.

General and administrative expense increased 7.3% due to higher corporate overhead costs, including incremental expenses from Stowe, partially offset by lower estimated performance-based variable compensation.

Other expense increased 11.4% primarily due to incremental expenses from Whistler Blackcomb and Stowe, as well as increases in repairs and maintenance expense, utilities expense (primarily related to increased snowmaking operations), food and beverage cost of sales commensurate with increases in dining revenue and property taxes, partially offset by a decrease in rent expense.

Resort related fees increased 10.5% primarily due to incremental expenses from Triple Peaks and Stevens Pass of $5.3 million as well as increases in revenue on which those fees are based.

General and administrative expense increased 8.9% primarily due to incremental expenses from Triple Peaks, Stevens Pass, Falls Creek and Hotham of $12.4 million, an increase in variable compensation accruals and an increase in allocated corporate overhead costs primarily associated with marketing and information technology.

Other expense increased 16.0% primarily due to incremental expenses from Triple Peaks, Stevens Pass, Falls Creek and Hotham of $26.6 million, as well as increases in season pass alliance expense, acquisition and integration related expenses, employee housing expense, fuel expense and rent expense.

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

18 unchanged sentences

Owned hotel and managed condominium statistics (combined) (1)

(1) RevPAR for Fiscal 2020 declined from the prior comparative period primarily due to the Resort Closures.

Owned hotel and managed condominium statistics (combined) for Fiscal 2019 declined from the prior comparative period primarily due to the inclusion of properties acquired through the Triple Peaks acquisition, prospectively from the date of acquisition, as well as a new property management contract for units proximate to our Tahoe resorts.

Lodging Reported EBITDA includes $3.2 million of stock-based compensation expense for each of Fiscal 2019, Fiscal 2018 and Fiscal 2017.

Lodging Reported EBITDA includes $3.4 million , $3.2 million and $3.2 million of stock-based compensation expense for Fiscal 2020, Fiscal 2019 and Fiscal 2018, respectively.

Fiscal 2020 compared to Fiscal 2019

Lodging Reported EBITDA for Fiscal 2020 decreased $24.8 million , or 88.4% , primarily due to the impacts of the COVID-19 pandemic and the associated Resort Closures.

Primarily as a result of the Resort Closures, revenue from owned hotel rooms, managed condominium rooms, dining, transportation, golf and other revenue each decreased.

The decreases resulting from the Resort Closures were partially offset by $13.7 million of incremental revenue from Peak Resorts and Triple Peaks.

Operating expense (excluding reimbursed payroll costs) decreased 13.8% .

Labor and labor related benefits decreased 15.9% primarily due to cost actions associated with the Resort Closures, including decreased staffing, employee furloughs, salary reductions and reduced variable compensation accruals, as well as tax credits of approximately $2.2 million associated with recent COVID-19 related legislation passed in the U.S., Canada and Australia, partially offset by $6.4 million of incremental expenses from Peak Resorts and Triple Peaks.

General and administrative expense decreased 4.8% due to lower allocated corporate overhead costs primarily associated with a reduction in variable compensation accruals, as well as tax credits of approximately $0.5 million associated with recent COVID-19 related legislation passed in the U.S., Canada and Australia.

Other expenses decreased 14.7% primarily related to lower variable expenses associated with the impact of the Resort Closures, partially offset by $4.7 million of incremental expenses from Peak Resorts and Triple Peaks.

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.

Fiscal 2019 compared to Fiscal 2018

Lodging Reported EBITDA for Fiscal 2019 increased $3.1 million, or 12.4%, primarily due to the incremental operations of Triple Peaks.

Revenue from managed condominium rooms increased $16.1 million, or 22.8%, primarily due to incremental revenue from Okemo and Crested Butte, as well as revenue from incremental managed Tahoe lodging properties that we did not manage in the prior year.

Dining revenue increased $5.2 million, or 10.7%, primarily due to incremental revenue from our Okemo and Crested Butte lodging properties and an increase in dining revenue at our Park City lodging properties.

Golf revenue increased $1.5 million, or 8.5%, primarily due to incremental revenue from our golf courses at Okemo, as well as higher revenue at our golf courses in Beaver Creek and at GTLC.

Other revenue increased $7.0 million, or 14.8%, primarily due to an increase in allocated corporate

revenue, incremental revenue from our lodging properties at Okemo and Crested Butte, a business interruption insurance recovery related to a closed event facility in Breckenridge and increases in ancillary revenue.

Revenue from managed condominium rooms increased $16.1 million, or 22.8%, primarily due to incremental revenue from Okemo and Crested Butte of $11.7 million, as well as revenue from incremental managed Tahoe lodging properties that we did not manage in the prior year.

Dining revenue increased $5.2 million, or 10.7%, primarily due to incremental revenue from our Okemo and Crested Butte lodging properties of $4.3 million and an increase in dining revenue at our Park City lodging properties.

Golf revenue increased $1.5 million, or 8.5%, primarily due to incremental revenue from our golf courses at Okemo of $0.8 million, as well as higher revenue at our golf courses in Beaver Creek and at GTLC.

Other revenue increased $7.0 million, or 14.8%, primarily due to an increase in allocated corporate revenue, incremental revenue from our lodging properties at Okemo and Crested Butte of $2.4 million, a business interruption insurance recovery related to a closed event facility in Breckenridge and increases in ancillary revenue.

Operating expense (excluding reimbursed payroll costs) increased 10.8%.

Labor and labor-related benefits increased 11.7%, primarily due to incremental labor expenses from Okemo, Crested Butte and the incremental managed Tahoe lodging properties that we did not manage in the prior year, as well as wage increases associated with our minimum wage initiatives, which were in excess of our historical minimum wage increases.

Labor and labor-related benefits increased 11.7%, primarily due to incremental labor expenses from Okemo, Crested Butte and the incremental managed Tahoe lodging properties that we did not manage in the prior year of $11.3 million, as well as wage increases associated with our minimum wage initiatives, which were in excess of our historical minimum wage increases.

General and administrative expense increased 9.4% due to higher corporate overhead costs.

Other expense increased 10.1% primarily due to incremental expenses from Okemo and Crested Butte, as well as an increase in variable operating expenses associated with increases in revenue.

Revenue from payroll cost reimbursements and the corresponding reimbursed payroll costs relates 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.

Fiscal 2018 compared to Fiscal 2017

Lodging Reported EBITDA for Fiscal 2018 decreased $2.1 million, or 7.7% primarily due to general cost increases and a one-time benefit recorded in Fiscal 2017 for association fees with respect to a lodging property at Park City.

Revenue from owned hotel rooms increased $1.3 million, or 2.1%, primarily due to an increase in occupancy at Flagg Ranch, which incurred an early closure in Fiscal 2017 as a result of a forest fire in Grand Teton National Park, as well as an increase in revenue at GTLC, partially offset by decreased revenue at our owned Colorado lodging properties as a result of lower winter visitation.

Revenue from managed condominium rooms increased $4.5 million, or 6.9%, primarily due to increased revenue at our Colorado managed properties as a result of increased demand, partially offset by a decrease in ADR, as well as incremental revenue from a Park City lodging property which was temporally closed for renovations in the prior year.

Additionally, managed condominium rooms revenue was positively impacted by incremental revenue at Whistler Blackcomb.

Transportation revenue decreased $1.1 million, or 4.8%, primarily due to decreased passenger volume.

Other revenue increased $1.3 million, or 2.9%, primarily due to increases in conference services revenue and ancillary revenue, partially offset by a business interruption insurance recovery recorded in Fiscal 2017 related to the early closure of our Flagg Ranch property in September 2016, as discussed above.

Operating expense (excluding reimbursed payroll costs) increased $8.6 million, or 3.6%.

Labor and labor-related benefits increased $4.6 million, or 3.9%, primarily resulting from higher labor expense for Park City and Flagg Ranch, which were both closed for a portion of the prior year period, incremental expenses from Whistler Blackcomb and normal wage increases, partially offset by lower performance-based variable compensation.

Other expense increased $3.5 million, or 4.2%, primarily due to a one-time benefit for association fees with respect to a lodging property at Park City that was recorded in Fiscal 2017, as well as increases in variable operating expenses and an increase in property taxes.

Other expense increased 10.1% primarily due to incremental expenses from Okemo and Crested Butte of $6.0 million, as well as an increase in variable operating expenses associated with increases in revenue.

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.

12 unchanged sentences

Real Estate Reported EBITDA

During Fiscal 2020, we closed on the sale of a development land parcel for $4.1 million which was recorded within Real Estate net revenue, with a corresponding cost of sale (including sales commission) of $3.9 million.

Other, net operating expense of $5.3 million was primarily comprised of general and administrative costs, such as labor and labor-related benefits, professional services and allocated corporate overhead costs.

We closed on two land sales during the third quarter of Fiscal 2019 with third party developers at Keystone (One River Run site) and Breckenridge (East Peak 8 site) for proceeds of approximately $16.0 million, including $4.8 million associated with the sale of density for the Breckenridge property.

4 unchanged sentences

Real Estate Reported EBITDA also included a gain on sale of real property of $0.6 million for the sale of land parcels.

During Fiscal 2018, we closed on the sales of development land parcels for $3.5 million which were recorded within Real Estate net revenue.

During Fiscal 2018, we closed on the sales of development land parcels for $3.5 million which were recorded within Real Estate net revenue, with a corresponding cost of sale (including sales commissions) of $3.9 million.

Other, net operating expense included the recognition of a $5.5 million benefit (non-cash in the period) related to a legal settlement in Fiscal 2015 for which cash proceeds were received and established as a liability for estimated future remediation costs of a construction development.

All known items have been remediated and, based on continued monitoring, the Company has concluded that the need for further remediation is remote.

Additionally, other, net operating expense included general and administrative costs, such as labor and labor-related benefits, professional services and allocated corporate costs.

All known items were remediated in Fiscal 2018 and, based on continued monitoring, the Company concluded that the need for further remediation is remote.

Additionally, other, net operating expense included general and administrative costs, such as labor and labor-related benefits, professional services and allocated corporate overhead costs.

Real Estate Reported EBITDA also included a gain on sale of real property of $0.5 million for the sale of a land parcel.

Real Estate segment net revenue was primarily driven by the closing of four condominium units at The Ritz-Carlton Residences, Vail ($13.6 million of revenue with an average selling price of $3.4 million and an average price per square foot of $1,345) and two condominium units at One Ski Hill Place in Breckenridge ($2.3 million of revenue with an average sales price of $1.1 million and an average price per square foot of $983).

The average price per square foot of both of these projects is driven by their premier locations and the comprehensive and exclusive amenities related to these projects.

All remaining condominium units were sold in Fiscal 2017.

Operating expense included cost of sales of $13.4 million resulting from the closing of four condominium units at The Ritz-Carlton Residences, Vail (average cost per square foot of $1,131) and two condominium units at One Ski Hill Place (average cost per square foot of $838).

Additionally, sales commissions of approximately $1.0 million were incurred commensurate with revenue recognized.

Other operating expense of $9.5 million was primarily comprised of a $4.3 million one-time charge related to the resolution of a financial contingency to the Town of Vail for incremental parking capacity, as well as general and administrative costs, which includes marketing expense for the real estate available for sale, carrying costs for units available for sale and overhead costs, such as labor and labor-related benefits, professional services and allocated corporate costs.

In addition, we recorded a gain on sale of real property of $6.5 million for a land parcel in Breckenridge which sold for $9.3 million during Fiscal 2017.

In addition to segment operating results, the following items contributed to our overall financial position (in thousands).

In addition to segment operating results, the following items contributed to our overall financial position and results of operations (in thousands).

Year Ended July 31,

1 unchanged sentence

Depreciation and amortization

Asset impairments

Change in fair value of contingent consideration

Investment income and other, net

Interest expense, net

Foreign currency (loss) gain on intercompany loans

Foreign currency loss on intercompany loans

(Provision) benefit from income taxes

Effective tax rate (provision) benefit

Depreciation and amortization .

Depreciation and amortization expense for Fiscal 2019 and Fiscal 2018 increased over the applicable prior fiscal year primarily due to assets acquired in the Stevens Pass, Triple Peaks, Falls Creek and Hotham acquisitions (each acquired in Fiscal 2019), in addition to assets acquired in the Stowe acquisition (acquired in Fiscal 2017) and discretionary capital projects completed at our resorts in each fiscal year.

Depreciation and amortization expense for Fiscal 2020 and Fiscal 2019 increased over the applicable prior fiscal year primarily due to assets acquired in the Peak Resorts acquisition (acquired in Fiscal 2020), as well as due to assets acquired in the Falls Creek, Hotham, Triple Peaks and Stevens Pass acquisitions (each acquired in Fiscal 2019) and discretionary capital projects completed at our resorts in each fiscal year.

Asset impairments.

We recorded an asset impairment of approximately $28.4 million during Fiscal 2020 as a result of the effects of the COVID-19 pandemic on our Colorado resort ground transportation company, with corresponding reductions to goodwill, net of $25.7 million and intangible assets, net and property, plant and equipment, net of $2.7 million.

See Notes to the Consolidated Financial Statements for additional information.

Change in fair value of contingent consideration.

We recorded a gain of $3.0 million during Fiscal 2020 primarily related to the estimated Contingent Consideration payments for Fiscal 2020 and Fiscal 2021.

We recorded a loss of $5.4 million during Fiscal 2019 primarily related to the estimated Contingent Consideration payment for Fiscal 2019.

We recorded a gain of $1.9 million during Fiscal 2018 primarily related to a decrease in the estimated Contingent Consideration payment for Fiscal 2018.

A loss of $16.3 million was recorded during Fiscal 2017 related to an increase in the estimated fair value of the future participating contingent payments under the lease for Park City.

The fair value of contingent consideration is based on assumptions for EBITDA of Park City in future periods, as calculated under the lease on which participating payments are determined.

The estimated fair value of the contingent consideration was $27.2 million and $21.9 million as of July 31, 2019 and 2018, respectively.

Investment income and other, net.

Investment income and other, net for Fiscal 2017 included various nonrecurring transactions, including a $3.4 million gain recognized on short-term foreign currency forward contracts that were entered into in conjunction with funding the cash consideration required for the Whistler Blackcomb acquisition, a $0.9 million gain recorded for the sale of a lodging property and a $0.8 million non-cash gain recognized on an investment in Whistler Blackcomb shares that were held prior to the acquisition.

The estimated fair value of contingent consideration is based on assumptions for EBITDA of Park City in future periods, as calculated under the lease on which participating payments are determined, and was $17.8 million and $27.2 million as of July 31, 2020 and 2019, respectively.

Interest expense, net.

Interest expense, net for Fiscal 2019 increased compared to Fiscal 2018 primarily due to interest expense associated with incremental term loan borrowings under the Vail Holdings Credit Agreement of $265.6 million during Fiscal 2019, which were used to fund the Stevens Pass and Triple Peaks acquisitions in August 2018 and September 2018, respectively, as well as an increase in interest rates.

Interest expense, net for Fiscal 2018 increased compared to Fiscal 2017 primarily due to interest expense associated with incremental term loan borrowings under the Vail Holdings Credit Agreement of $509.4 million during Fiscal 2017, which were used to fund the cash consideration portion of the Whistler Blackcomb acquisition in October 2016, in addition to the Whistler Credit Agreement which was assumed as part of the Whistler Blackcomb acquisition, and an increase in interest rates.

Foreign currency (loss) gain on intercompany loans.

Foreign currency (loss) gain on intercompany loans was associated with an intercompany loan from Vail Holdings, Inc.

to Whistler Blackcomb in the amount of $210.0 million that was funded, effective as of November 1, 2016, in connection with the acquisition of Whistler Blackcomb.

This intercompany loan requires foreign currency remeasurement to Canadian dollars, the functional currency for Whistler Blackcomb.

Interest expense, net for Fiscal 2020 increased compared to Fiscal 2019 primarily due to debt obligations assumed in the Peak Resorts acquisition;

borrowings under our 6.25% unsecured bond offering which was completed on May 4, 2020;

incremental term loan borrowings under the Vail Holdings Credit Agreement of $335.6 million, which were used to fund the Peak Resorts acquisition in September 2019;

and incremental borrowings under the revolver components of our Vail Holdings Credit Agreement and Whistler Credit Agreement, which were almost entirely drawn on during Fiscal 2020 as a precautionary measure in order to increase our cash position and financial flexibility in light of the financial market conditions resulting from the COVID-19 pandemic and were subsequently paid down, partially offset by a decrease in variable interest rates.

Foreign currency loss on intercompany loans.

Foreign currency loss on intercompany loans for Fiscal 2020 increased compared to Fiscal 2019 and decreased for Fiscal 2019 as compared to Fiscal 2018 as a result of the Canadian dollar fluctuating relative to the U.S.

dollar, and was associated with an intercompany loan from Vail Holdings, Inc.

to Whistler Blackcomb in the original amount of $210.0 million that was funded, effective as of November 1, 2016, in connection with the acquisition of Whistler Blackcomb.

This intercompany loan, which had an outstanding balance of approximately $137.1 million as of July 31, 2020, 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.

(Provision) benefit from income taxes.

Our effective tax rate (provision) benefit was (18.9%), 18.0%, and (33.5%) in Fiscal 2019, Fiscal 2018 and Fiscal 2017, respectively.

Our tax (provision) benefit and effective tax rate are driven primarily by the amount of pre-tax income, which is adjusted for items that are deductible or non-deductible for tax purposes only (i.e.

permanent items), excess tax benefits from employee share awards, enacted tax legislation and taxable income generated by state and foreign jurisdictions that varies from the consolidated pre-tax income and the amount of net income attributable to noncontrolling interests.

The increase in the effective tax rate provision during Fiscal 2019 compared to Fiscal 2018 was primarily due to a one-time, net

tax benefit of $61.0 million recorded during Fiscal 2018 as a result of the Tax Act (discussed further below), as well as a reduction in excess tax benefits from employee share awards that were exercised (stock appreciation awards) and that vested (restricted stock awards), which are recorded within (provision) benefit from income taxes on the Company’s Consolidated Statements of Operations prospectively from August 1, 2017 as a result of accounting guidance that became effective for Fiscal 2018.

As a result of adopting this guidance, we recorded $12.9 million and $71.1 million of excess tax benefits within (provision) benefit from income taxes on our Consolidated Statement of Operations for Fiscal 2019 and Fiscal 2018, respectively.

Our effective tax rate was a (provision) benefit of (6.3%), (18.9%) and 18.0% in Fiscal 2020, Fiscal 2019 and Fiscal 2018, respectively.

Our tax (provision) benefit and effective tax rate are driven primarily by (i) anticipated pre-tax book income for the full fiscal year, adjusted for items that are deductible/non-deductible for tax purposes only

(i.e., permanent items);

(ii) excess tax benefits from employee share awards and enacted tax legislation, which are both recorded as discrete items;

(iii) taxable income generated by state and foreign jurisdictions that varies from the consolidated pre-tax book income, (iv) the amount of net income attributable to noncontrolling interests and (v) discrete items.

The decrease in the effective tax rate provision during Fiscal 2020 compared to Fiscal 2019 was primarily due to lower full year pre-tax net income, as well as a one-time, provisional $3.8 million benefit related to NOL carryback provision of the CARES Act, partially offset by a decrease in excess tax benefits from employee share awards that were exercised (stock appreciation rights) and that vested (restricted stock awards), which are recorded within (provision) benefit from income taxes on the Company’s Consolidated Statements of Operations.

The increase in the effective tax rate provision during Fiscal 2019 compared to Fiscal 2018 was primarily due to a one-time, net tax benefit of $61.0 million recorded during Fiscal 2018 as a result of U.S.

federal tax reform, which became effective on January 1, 2018, as well as a reduction in excess tax benefits from employee share awards that were exercised (stock appreciation awards) and that vested (restricted stock awards), which are recorded within (provision) benefit from income taxes on the Company’s Consolidated Statements of Operations.

Excess tax benefits totaled $7.9 million, $12.9 million and $71.1 million for Fiscal 2020, Fiscal 2019 and Fiscal 2018, respectively.

On December 22, 2017, the U.S.

11 unchanged sentences

Reconciliation of Segment Earnings

The following table reconciles segment Reported EBITDA to net income attributable to Vail Resorts, Inc.

for Fiscal 2019, Fiscal 2018 and Fiscal 2017 (in thousands):

The following table reconciles net income attributable to Vail Resorts, Inc.

to Total Reported EBITDA for Fiscal 2020, Fiscal 2019 and Fiscal 2018 (in thousands):

Year Ended July 31,

Net income attributable to Vail Resorts, Inc.

Net income attributable to noncontrolling interests

Provision (benefit) from income taxes

Income before provision (benefit) from income taxes

Depreciation and amortization

Asset impairments

(Gain) loss on disposal of fixed assets and other, net

Change in fair value of contingent consideration

Investment income and other, net

Foreign currency loss on intercompany loans

Interest expense, net

Total Reported EBITDA

Mountain Reported EBITDA

3 unchanged sentences

Total Reported EBITDA

Depreciation and amortization

Loss on disposal of fixed assets and other, net

Change in fair value of contingent consideration

Investment income and other, net

Foreign currency (loss) gain on intercompany loans

Interest expense, net

Income before (provision) benefit from income taxes

(Provision) benefit from income taxes

Net income attributable to noncontrolling interests

Net income attributable to Vail Resorts, Inc.

The following table reconciles Net Debt (defined as long-term debt, net plus long-term debt due within one year less cash and cash equivalents) to long-term debt, net (in thousands):

The following table reconciles long-term debt, net to Net Debt (defined as long-term debt, net plus long-term debt due within one year less cash and cash equivalents) (in thousands):

Long-term debt, net

6 unchanged sentences

Net cash used in investing activities

Net cash (used in) provided by financing activities

Historically, we have lower cash available at our fiscal year-end (as well as at the end of our first fiscal quarter of each year) as compared to our second and third fiscal quarter-ends, primarily due to the seasonality of our Mountain segment operations.

Net cash provided by (used in) financing activities

Historically, we have lower cash available at the end of each first and fourth fiscal quarter-end as compared to our second and third fiscal quarter-ends, primarily due to the seasonality of our Mountain segment operations, although our available cash balance as of July 31, 2020 is higher than our historical July 31 balance as a result of proceeds reflected in the net cash provided by financing activities for fiscal 2020 from the Notes offering, as discussed further below.

Fiscal 2020 compared to Fiscal 2019

We generated $395.0 million of cash from operating activities during Fiscal 2020, a decrease of $239.3 million when compared to $634.2 million of cash generated during Fiscal 2019.

The decrease in operating cash flows was primarily a result of decreased Mountain and Lodging segment operating results in Fiscal 2020, primarily due to the Resort Closures;

a decrease in accounts payable and accrued liabilities due to declines associated with the Resort Closures (excluding accounts payable and accrued liabilities assumed through acquisitions) and an increase in cash interest payments of approximately $17.5 million primarily associated with debt assumed in the Peak Resorts acquisition and incremental term loan and revolver borrowings under our Vail Holdings Credit Agreement.

These decreases were partially offset by increased North American pass product sales and receivable collections for the 2019/2020 North American ski season as compared to the prior year and a decrease in estimated tax payments of $23.1 million.

Additionally we generated approximately $4.4 million of proceeds from real estate development land parcel sales in Fiscal 2020 compared to $0.1 million in proceeds from real estate development project closings that occurred in the prior year.

Cash used in investing activities for Fiscal 2020 decreased by $103.3 million, primarily due to cash payments of $327.6 million, net of cash acquired, related to the acquisition of Peak Resorts during Fiscal 2020, as compared to cash payments of $419.0 million, net of cash acquired, related to the acquisitions of Triple Peaks, Stevens Pass, Falls Creek and Hotham during Fiscal 2019.

Additionally, capital expenditures decreased by $19.7 million primarily as a result of actions associated with the deferral of discretionary capital projects related to the Company’s decision to prioritize near-term liquidity.

Cash provided by financing activities increased by $475.8 million during Fiscal 2020 compared to Fiscal 2019, primarily due to (i) the $600.0 million issuance of the Notes in Fiscal 2020;

(ii) an increase in proceeds from incremental borrowings under the term loan portion of our Vail Holdings Credit Agreement from $265.5 million during Fiscal 2019, which were used to fund the Triple Peaks and Stevens Pass acquisitions, to $335.6 million during Fiscal 2020, which were used to fund the Peak Resorts acquisition;

(iii) an increase in net borrowings under the revolver component of our Whistler Credit Agreement of $24.1 million, primarily relating to funds which were drawn as a precautionary measure in order to increase our cash position and financial flexibility in light of the financial market conditions resulting from the COVID-19 pandemic;

(iv) a decrease in repurchases of common stock of $38.6 million;

and (v) a decrease in dividend payments of $47.8 million associated with the Company’s decision to prioritize near-term liquidity.

These increases in cash provided by financing activities were partially offset by (i) an increase in net payments on borrowings under the revolver component of our Vail Holdings Credit Agreement of $286.0 million;

increase in financing cost payments of $8.8 million, primarily associated with the issuance of the Notes;

and (iii) a payment for contingent consideration with regard to our lease for Park City.

Fiscal 2019 compared to Fiscal 2018

We generated $634.2 million of cash from operating activities during Fiscal 2019, an increase of $85.7 million when compared to $548.5 million of cash generated during Fiscal 2018.

The increase in operating cash flows was primarily a result of improved Mountain segment operating results in Fiscal 2019, including operating benefits from the recent acquisitions of Triple Peaks, Stevens Pass, Falls Creek and Hotham, as compared to Fiscal 2018.

The increase in operating cash flows was primarily a result of improved Mountain segment operating results in Fiscal 2019, including operating benefits from the acquisitions of Triple Peaks, Stevens Pass, Falls Creek and Hotham, as compared to Fiscal 2018.

Additionally, the increase in operating cash flows was a result of an increase in accounts payable.

4 unchanged sentences

These decreases in cash used in financing activities were partially offset by an increase in repurchases of common stock of $59.2 million, an increase in dividends paid of $56.4 million and payments for commitments in conjunction with the Canyons transaction of $9.5 million.

Fiscal 2018 compared to Fiscal 2017

We generated $548.5 million of cash from operating activities during Fiscal 2018, an increase of $77.5 million when compared to $471.0 million of cash generated during Fiscal 2017.

The increase in operating cash flows was primarily a result of improved Mountain segment operating results in Fiscal 2018, including operating benefits from the recent acquisitions of Stowe and Whistler Blackcomb, as compared to Fiscal 2017.

Additionally, the increase in operating cash flows was a result of an increase in accounts payable and a decrease in estimated tax payments primarily as a result of an increase in excess tax benefits from employee share awards that vested (restricted stock awards) or were exercised (stock appreciation awards), as applicable, during Fiscal 2018 and the enactment of the Tax Act.

These increases were partially offset by an increase in cash interest payments during Fiscal 2018 from incremental term loan borrowings under our Vail Holdings Credit Agreement and borrowings under the Whistler Credit Agreement.

Additionally, we generated $3.3 million of proceeds from real estate development land parcel sales during Fiscal 2018 compared to $14.9 million in proceeds (net of sales commissions and deposits previously received) from real estate development project closings that occurred in Fiscal 2017.

Cash used in investing activities for Fiscal 2018 decreased by $542.1 million, primarily due to cash payments during Fiscal 2017 related to the acquisitions of Whistler Blackcomb for $506.2 million, net of cash acquired (cash portion of consideration), and Stowe for $40.7 million, as well as a decrease in capital expenditures of $3.8 million during Fiscal 2018 compared to Fiscal 2017, partially offset by a reduction in cash received from the sale of real property.

Cash used in financing activities increased $606.3 million during Fiscal 2018, compared to Fiscal 2017, primarily due to the reduction of net proceeds from borrowings under our Vail Holdings Credit Agreement during Fiscal 2017, which was used to fund

a portion of the cash consideration for the Whistler Blackcomb acquisition.

Cash payments made on behalf of employees for taxes related to exercises of share awards increased $87.8 million and dividends paid increased $57.9 million during Fiscal 2018, compared to Fiscal 2017.

Additionally, cash outflows related to repurchases of common stock in Fiscal 2018 increased by $25.6 million as compared to Fiscal 2017.

Significant Sources of Cash

We had $391.0 million of cash and cash equivalents as of July 31, 2020 , compared to $108.9 million as of July 31, 2019 .

We generated $634.2 million of cash from operating activities during Fiscal 2019 compared to $548.5 million and $471.0 million generated during Fiscal 2018 and Fiscal 2017, respectively.

We currently anticipate that our Mountain and Lodging segment operating results will continue to provide a significant source of future operating cash flows (primarily those generated in our second and third fiscal quarters).

In addition to our $108.9 million of cash and cash equivalents at July 31, 2019, we had $214.4 million available under the revolver component of our Vail Holdings Credit Agreement as of July 31, 2019 (which represents the total commitment of $500.0 million less outstanding borrowings of $208.0 million and certain letters of credit outstanding of $77.6 million).

We generated $395.0 million of cash from operating activities during Fiscal 2020 compared to $634.2 million and $548.5 million generated during Fiscal 2019 and Fiscal 2018, respectively, with the decrease in Fiscal 2020 primarily resulting from operational impacts of the COVID-19 pandemic, including the Resort Closures.

Although we cannot predict the future impact associated with the COVID-19 pandemic on our business, 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 $391.0 million of cash and cash equivalents at July 31, 2020, we had $418.8 million available under the revolver component of our Vail Holdings Credit Agreement as of July 31, 2020 (which represents the total commitment of $500.0 million less certain letters of credit outstanding of $81.2 million ).

Also, to further support the liquidity needs of Whistler Blackcomb, we had C $221.1 million ( $165.1 million ) available under the revolver component of our Whistler Credit Agreement (which represents the total commitment of C $300.0 million ( $224.0 million ) less outstanding borrowings of C $78.0 million ( $58.2 million ) and a letter of credit outstanding of C $0.9 million ( $0.7 million )).

We expect that our liquidity needs in the near term will be met by continued use of operating cash flows and borrowings under both the Vail Holdings Credit Agreement and Whistler Credit Agreement, if needed.

We believe that our liquidity needs in the near term will be met by 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, which we expect will provide us with sufficient liquidity to fund our operations through at least the 2021/2022 ski season, even in the event of extended resort shutdowns.

The Vail Holdings Credit Agreement and the Whistler Credit Agreement provide adequate flexibility and are priced favorably with any new borrowings currently priced at LIBOR plus 2.5% and Bankers Acceptance Rate plus 1.75%, respectively.

2 unchanged sentences

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.

On April 1, 2020, we announced that we would be reducing our capital plan for calendar 2020 as compared to our previously issued guidance by approximately $80 million to $85 million, with the vast majority of these savings coming from the deferral of many of our discretionary capital projects.

We are planning to defer all new chair lifts, terrain expansions and other mountain base area improvements, while continuing the vast majority of our maintenance capital spending.

Accordingly we now anticipate that we will spend approximately $125 million to $130 million on resort capital expenditures during calendar year 2020.

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, as well as certain incremental discretionary improvements at our Resorts and throughout our owned hotels.

Normal discretionary capital expenditures primarily include investments that will allow us to maintain our high-quality standards, 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 $139 million to $143 million on resort capital expenditures during calendar year 2019, excluding one-time items associated with integrations, the one-time Triple Peaks and Stevens Pass transformation plan, real estate related capital and reimbursable investments.

We expect that our total calendar year 2019 capital plan will be approximately $190 million to $195 million, including items noted above for integration and acquisitions, real estate related projects and approximately $18 million of reimbursable investments associated with insurance recoveries and tenant improvements.

Included in these estimated capital expenditures are approximately $85 million to $90 million of maintenance capital expenditures, which are necessary to maintain appearance and level of service appropriate to our resort operations.

Discretionary expenditures for calendar year 2019 include, among other projects, significant investments in our snowmaking systems in Colorado that will transform the early-season terrain experience at Vail, Keystone and Beaver Creek;

technology investments to increase lift ticket express fulfillment capacity through new mobile technology across our 17 North American Resorts to allow skiers and snowboarders who purchased tickets in advance to bypass the ticket window entirely;

and a new permanent Tombstone BBQ restaurant at Park City.

We also plan to make significant one-time investments across the recently acquired resorts of Crested Butte, Okemo, Mount Sunapee and Stevens Pass, which will include replacing and upgrading the Daisy and Brooks lifts at Stevens Pass and the Teocalli Lift at Crested Butte and on-mountain restaurant upgrades at Okemo.

We plan to spend approximately $14 million in the first phase of a two-year, $35 million investment program for these newly acquired resorts.

Additionally, we plan to spend approximately $7 million in capital for the integration of Triple Peaks and Stevens Pass, $2 million in capital for the integration of Peak Resorts and $1 million in capital for the integration of Falls Creek and Hotham.

The calendar year 2019 capital plan also includes $3 million of investment related to our sustainability commitment focused on energy efficiency opportunities in snowmaking as well as other electrical and lighting applications.

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.

Approximately $79.0 million was spent for capital expenditures in calendar year 2019 as of July 31, 2019, leaving approximately $111.0 million to $116.0 million to spend in the remainder of calendar year 2019, including anticipated investments for integration and acquisitions, summer capital, real estate related projects and reimbursable investments associated with insurance recoveries and tenant improvements.

Approximately $51 million was spent for capital expenditures in calendar year 2020 as of July 31, 2020, leaving approximately $74 million to $79 million to spend in the remainder of calendar year 2020.

Pursuant to the Third Amendment and discussed further below, we are prohibited, during the Financial Covenants Temporary Waiver Period, from making capital expenditures in excess of $200.0 million per twelve-month period ending January 31, other than non-recurring extraordinary capital expenditures incurred in connection with emergency repairs, life safety repairs, or ordinary course maintenance repairs.

Acquisition of Peak Resorts

On September 23, 2019, we entered into an amendment to our Vail Holdings Credit Agreement in which the term loan was increased by approximately $335.6 million, and we utilized the proceeds to fund the acquisition of 100 percent of the outstanding stock of Peak Resorts on September 24, 2019 at a purchase price of $11.00 per share or approximately $265 million, and to prepay certain portions of the debt assumed in connection with the acquisition.

Acquisitions of Hotham and Falls Creek

On April 4, 2019, we utilized cash on hand to acquire ski field leases and related infrastructure used to operate two resorts in Victoria, Australia.

The Company acquired Australian Alpine Enterprises Holdings Pty.

Acquisitions of Stevens Pass and Triple Peaks

On August 15, 2018, we borrowed $70.0 million under the term loan of our Vail Holdings Credit Agreement, primarily to fund the acquisition of Stevens Pass, which was acquired for a cash purchase price of $64.0 million.

On September 27, 2018, we acquired Triple Peaks for a cash purchase price of approximately $74.1 million, after adjustments for certain agreed-upon terms.

In addition, contemporaneous with the closing of the transaction, Triple Peaks paid $155.0 million to pay the remaining obligations for the leases that all three resorts had with Ski Resort Holdings, with funds provided by the Company.

Accordingly, the total purchase price, including repayment of lease obligations, was $229.1 million, for which we utilized cash on hand and borrowed $195.6 million under the term loan of our Vail Holdings Credit Agreement to fund the transaction and associated acquisition related expenses.

As of July 31, 2019, principal payments on the majority of our long-term debt ($1,379.5 million of the total $1,580.1 million debt outstanding as of July 31, 2019) are not due until fiscal year 2024 and beyond.

On September 23, 2019, we entered into an amendment to our Vail Holdings Credit Agreement in which we incurred additional term loans of approximately $335.6 million, and we utilized the proceeds to fund the acquisition of 100% of the outstanding stock of Peak Resorts on September 24, 2019 at a purchase price of $11.00 per share or approximately $264.5 million, and to prepay certain portions of Peak Resorts’ outstanding debt and lease obligations that were required to be repaid in order to complete the transaction.

As of July 31, 2020, principal payments on the majority of our long-term debt ( $2.1 billion of the total $2.4 billion debt outstanding as of July 31, 2020) are not due until fiscal year 2025 and beyond.

As of July 31, 2020 and 2019, total long-term debt, net (including long-term debt due within one year) was $2,450.8 million and $1,576.3 million , respectively.

Net Debt (defined as long-term debt, net plus long-term debt due within one year less cash and cash equivalents) increased from $1,094.6 million as of July 31, 2018 to $1,467.4 million as of July 31, 2019, primarily due to $265.6 million in incremental term loans utilized to fund the Stevens Pass and Triple Peaks acquisitions, as discussed above, resulting from the August 15, 2018 amended and restated Vail Holdings Credit Agreement.

On April 15, 2019, we entered into the First Amendment to the Vail Holdings Credit Agreement, which primarily extended the maturity date for the outstanding term loans and revolver facility to April 15, 2024, increased the amount of dividends we are permitted to pay in each fiscal quarter under the agreement and increased the amount of the revolver facility from $400.0 million to $500.0 million.

Subsequently, on September 23, 2019, we entered into the Second Amendment to the Vail Holdings Credit Agreement, which increased the term loan facility by approximately $335.6 million in connection with the closing of the Peak Resorts acquisition and to prepay certain portions of the debt assumed in the acquisition, as discussed above.

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 in an aggregate principal amount of up to $1.25 billion.

Additionally, during Fiscal 2019, we entered into an amendment of the Whistler Credit Agreement which extended the maturity date of the revolving credit facility to December 2023.

No other material terms of the Whistler Credit Agreement were altered.

We expect that our liquidity needs in the near term will be met by continued use of operating cash flows and borrowings under both the Vail Holdings Credit Agreement and Whistler Credit Agreement.

Our debt service requirements can be impacted by changing interest rates as we had approximately $1.2 billion of variable-rate debt outstanding as of July 31, 2019.

A 100-basis point change in LIBOR would cause our annual interest payments to change by approximately $12.2 million .

Net Debt (defined as long-term debt, net plus long-term debt due within one year less cash and cash equivalents) increased from $1,467.4 million as of July 31, 2019 to $2,059.8 million as of July 31, 2020, primarily as a result of $335.6 million in incremental term loans, as discussed above, resulting from the September 23, 2019 amendment of our Vail Holdings Credit Agreement and the assumption of certain debt obligations of Peak Resorts, which have maturities ranging from 2021 through 2036 and were recorded at their estimated fair values of approximately $184.7 million.

See Notes to the Consolidated Financial Statements for additional information.

On April 28, 2020, through a wholly-owned subsidiary, we entered into the Third Amendment.

Pursuant to the Third Amendment, among other terms, we are exempt from complying with the Vail Holdings Credit Agreement’s maximum leverage ratio and minimum interest coverage ratio financial maintenance covenants for the Financial Covenants Temporary Waiver Period, after which we will again be required to comply with such covenants starting with the fiscal quarter ending April 30, 2022 (or such earlier fiscal quarter as elected by us).

After the Financial Covenants Temporary Waiver Period:

the maximum leverage ratio permitted under the maximum leverage ratio financial maintenance covenant reduces each quarter after the expiration of the Financial Covenants Temporary Waiver Period as follows:

(A) first full fiscal quarter:

6.25 to 1.00;

(B) second full fiscal quarter:

5.75 to 1.00;

5.25 to 1.00;

(D) fourth full fiscal quarter and for each fiscal quarter thereafter:

5.00 to 1.00.

the minimum interest coverage ratio permitted under the minimum interest coverage ratio financial maintenance covenant will be 2.00 to 1.00.

In addition, we are required to comply with a monthly minimum liquidity test (liquidity is defined as unrestricted cash and temporary cash investments of VRI and its restricted subsidiaries and available commitments under our Vail Holdings Credit Agreement revolver) of not less than $150.0 million, during the period that began on July 31, 2020 and ending on the date we deliver a compliance certificate for the Company and its subsidiaries’ first fiscal quarter following the end of the Financial Covenants Temporary Waiver Period.

We are also prohibited from the following activities during the Financial Covenants Temporary Waiver Period (unless approval is obtained by a majority of the lenders under the Vail Holdings Credit Agreement):

paying any dividends or making share repurchases, unless (x) no default or potential default exists under the Vail Holdings Credit Agreement and (y) the Company has liquidity (as defined above) of at least $400.0 million, and the aggregate amount

of dividends paid and share repurchases made by the Company during the Financial Covenants Temporary Waiver Period may not exceed $38.2 million in any fiscal quarter;

making capital expenditures in excess of $200.0 million per 12-month period ending January 31, other than non-recurring extraordinary capital expenditures incurred in connection with emergency repairs, life safety repairs or ordinary course maintenance repairs;

incurring any indebtedness secured by the collateral under the Vail Holdings Credit Agreement other than pursuant to the existing revolving commitments under the Credit Agreement;

making non-ordinary course investments in unrestricted subsidiaries unless the Company has liquidity (as defined above) of at least $300.0 million;

making investments in non-subsidiaries in excess of $50.0 million in the aggregate;

acquiring all or a majority of the capital stock or all or any substantial portion of the assets of any entity or merging or consolidating with another entity.

During the Financial Covenants Temporary Waiver Period, borrowings under the Vail Holdings Credit Agreement, including the term loan facility, bears interest annually at LIBOR plus 2.50% and, for amounts in excess of $400.0 million, LIBOR is subject to a floor of 0.75%.

In addition, pursuant to the Third Amendment, the amount by which we are able to increase availability (under the revolver or in the form of term loans) was increased to an aggregate principal amount not to exceed the greater of (i) $2.25 billion and (ii) the product of 3.25 and the trailing four-quarter Adjusted EBITDA (as defined in the Vail Holdings Credit Agreement).

On May 4, 2020, we completed our offering of $600 million aggregate principal amount of 6.25% senior notes due 2025 at par (the “Notes”).

The Notes are unsecured senior obligations of the Company and are guaranteed by certain of our domestic subsidiaries.

A portion of the net proceeds was utilized to pay down the outstanding balance of the revolver component of our Vail Holdings Credit Agreement in its entirety (which will continue to be available to the Company to borrow including throughout the Financial Covenants Temporary Waiver Period) and to pay the fees and expenses associated with the offering, with the remaining proceeds intended to be used for general corporate purposes.

We will pay interest on the Notes on May 15 and November 15 of each year commencing on November 15, 2020.

The Notes will mature on May 15, 2025.

The Notes are redeemable, in whole or in part, at any time on or after May 15, 2022 at the redemption prices specified in an Indenture dated as of May 4, 2020 (the “Indenture”) plus accrued and unpaid interest.

Prior to May 15, 2022, we may redeem some or all of the Notes at a redemption price of 100% of the principal amount, plus accrued and unpaid interest, plus a “make-whole” premium as specified in the Indenture.

In addition, prior to May 15, 2022, we may redeem up to 35% of the aggregate principal amount of the Notes with an amount not to exceed the net cash proceeds from certain equity offerings at the redemption price of 106.25% of the principal amount of the notes to be redeemed, plus accrued and unpaid interest.

The Notes rank equally in right of payment with existing and future senior indebtedness of the Company and the guarantors (as defined in the Indenture).

The Indenture contains covenants that, among other things, restrict the ability of the Company and the guarantors of the Notes to incur liens on assets;

merge or consolidate with another company or sell, assign, transfer, lease, convey or otherwise dispose of all or substantially all of the Company’s assets or engage in Sale and Leaseback Transactions (as defined in the Indenture).

The Indenture does not contain any financial maintenance covenants.

Certain of the covenants will not apply to the Notes so long as the Notes have investment grade ratings from two specified rating agencies and no event of default has occurred and is continuing under the Indenture.

The Indenture includes customary events of default, including failure to make payment, failure to comply with the obligations set forth in the Indenture, certain defaults on certain other indebtedness, certain events of bankruptcy, insolvency or reorganization, and invalidity of the guarantees of the Notes issued pursuant to the Indenture.

The Indenture requires that, upon the occurrence of a Change of Control (as defined in the Indenture), the Company shall offer to purchase all of the outstanding Notes at a purchase price in cash equal to 101% of the outstanding principal amount of the Notes, plus accrued and unpaid interest.

If the Company or certain of its subsidiaries dispose of assets, under certain circumstances, the Company will be required to either invest the net cash proceeds from such assets sales in its business within a specified period of time, repay certain senior secured debt or debt of its non-guarantor subsidiaries, or make an offer to purchase a principal amount of the Notes equal to the excess net cash proceeds at a purchase price of 100% of their principal amount, plus accrued and unpaid interest.

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 $1.25 billion.

We expect that our liquidity needs in the near term will be met by continued use of operating cash flows and borrowings under the Notes, the Vail Holdings Credit Agreement and the Whistler Credit Agreement.

Our debt service requirements can be impacted by changing interest rates as we had approximately $0.9 billion of net variable-rate debt outstanding as of July 31, 2020, after consideration of $400.0 million in interest rate swaps which convert variable-rate debt to fixed-rate debt.

A 100-basis point change in LIBOR would cause our annual interest payments on our net variable-rate debt to change by approximately $9.1 million .

Additionally, the annual payments associated with the financing of the Canyons transaction increase by the greater of CPI less 1%, or 2%.

1 unchanged sentence

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, the flexibility of investment activities and the ability to obtain favorable future financing.

We can respond to liquidity impacts of changes in the business and economic environment by managing our capital expenditures, the timing of new real estate development activity and the payment of our regular quarterly cash dividend of common stock.

We can respond to liquidity impacts of changes in the business and economic environment, including the COVID-19 pandemic, 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.

Share Repurchase Program

1 unchanged sentence

On March 6, 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 additional Vail Shares (July 16, 2008) and 1,500,000 Vail Shares (December 4, 2015), for a total authorization to repurchase shares of up to 7,500,000 Vail Shares.

During Fiscal 2019, we repurchased 353,007 shares of common stock at a cost of $85.0 million .

During Fiscal 2020, we repurchased 256,418 Vail shares at a cost of $46.4 million .

Since the inception of this stock repurchase program through July 31, 2020, we have repurchased 6,161,141 Vail Shares at a cost of approximately $404.4 million .

As of July 31, 2020, 1,338,859 Vail Shares remained available to repurchase under the existing repurchase authorization.

Pursuant to the Third Amendment and as discussed above, we are prohibited from repurchasing shares of common stock during the Financial Covenants Temporary Waiver Period unless (x) no default or potential default exists under the Vail Holdings Credit Agreement and (y) the Company has liquidity (as defined above) of at least $400.0 million, and the aggregate amount of dividends paid and share repurchases made by the Company during the Financial Covenants Temporary Waiver Period may not exceed $38.2 million in any fiscal quarter.

Vail Shares purchased pursuant to the repurchase program will be held as treasury shares and may be used for the issuance of shares under the Company’s share award plan.

3 unchanged sentences

Dividend Payments

In fiscal year 2011, our Board of Directors approved the commencement of a regular quarterly cash dividend on our common stock at an annual rate of $0.60 per share, subject to quarterly declaration.

Since the initial commencement of a regular quarterly cash dividend, our Board of Directors has annually approved an increase to our cash dividend on our common stock and on March 7, 2019, our Board of Directors approved a 20% increase in our quarterly cash dividend to $1.76 per share (or approximately $71.0 million per quarter based upon shares outstanding as of July 31, 2019).

For the year ended July 31, 2019, we paid cash dividends of $6.46 per share ( $260.6 million in the aggregate.) These dividends were funded through available cash on hand and borrowing under the revolving portion of our Vail Holdings Credit Agreement.

Subject to the discretion of our Board of Directors, applicable law and contractual restrictions, we anticipate paying regular quarterly cash dividends on our common stock for the foreseeable future.

We announced on April 1, 2020 that we would be suspending the declaration of our quarterly dividend for at least the next two quarters in response to the impacts of the COVID-19 pandemic.

Subsequently, pursuant to the Third Amendment and as discussed above, we are prohibited from paying any dividends during the Financial Covenants Temporary Waiver Period unless (x) no default or potential default exists under the Vail Holdings Credit Agreement and (y) the Company has liquidity (as defined above) of at least $400.0 million, and the aggregate amount of dividends paid and share repurchases made by the Company during the Financial Covenants Temporary Waiver Period may not exceed $38.2 million in any fiscal quarter.

For the year ended July 31, 2020, we paid cash dividends of $5.28 per share ( $212.7 million in the aggregate).

These dividends were funded through available cash on hand and borrowings under the revolving portion of our Vail Holdings Credit Agreement.

The amount, if any, of the 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.

2 unchanged sentences

The most restrictive of those covenants include the following covenants:

for the Vail Holdings Credit Agreement, Net Funded Debt to Adjusted EBITDA ratio and the Interest Coverage ratio (each as defined in the Vail Holdings Credit Agreement) and for the Whistler Credit Agreement Consolidated Total Leverage Ratio and Consolidated Interest Coverage Ratio (each as defined in the Whistler Credit Agreement).

for the Vail Holdings Credit Agreement, 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).

In addition, our financing arrangements limit our ability to make certain restricted payments, pay dividends on or redeem or repurchase stock, make certain investments, make certain affiliate transfers and may limit our ability to enter into certain mergers, consolidations or sales of assets and incur certain indebtedness.

1 unchanged sentence

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.

Pursuant to the Third Amendment and as discussed above in further detail, we are exempt from complying with the restrictive covenants of the Vail Holdings Credit Agreement during the Financial Covenants Temporary Waiver Period, but are required to comply with a monthly minimum liquidity test during such period.

We were in compliance with all restrictive financial covenants in our debt instruments as of July 31, 2020.

We expect that we will continue to meet all applicable financial maintenance covenants in our credit agreements throughout the year ending July 31, 2020.

We expect that we will continue to meet all applicable financial maintenance covenants in effect in our credit agreements throughout the year ending July 31, 2021.

However, there can be no assurance that we will continue to meet such financial covenants.

3 unchanged sentences

As part of our ongoing operations, we enter into arrangements that obligate us to make future payments under contracts such as debt agreements, lease agreements and construction agreements in conjunction with our resort capital expenditures.

Debt obligations, which totaled $1,580.1 million as of July 31, 2019, are recognized as liabilities in our Consolidated Balance Sheet.

Debt obligations, which totaled $2.4 billion as of July 31, 2020, are recognized as liabilities in our Consolidated Balance Sheet.

Obligations under construction contracts are not recognized as liabilities in our Consolidated Balance Sheet until services and/or goods are received which is in accordance with GAAP.

Additionally, operating lease and service contract obligations, which totaled $370.1 million as of July 31, 2019, are not recognized as liabilities in our Consolidated Balance Sheet, which is in accordance with GAAP.

A summary of our contractual obligations as of July 31, 2020 is presented below (in thousands):

7 unchanged sentences

Total Contractual Cash Obligations

The fixed-rate interest payments, as well as long-term debt payments, included in the table above, assume that all debt outstanding as of July 31, 2019 will be held to maturity.

(1) The fixed-rate interest payments (including payments that are required under interest rate swaps that we have entered into) as well as long-term debt payments, included in the table above, assume that all debt outstanding as of July 31, 2020 will be held to maturity.

Interest payments associated with variable-rate debt have not been included in the table.

2 unchanged sentences

Included in Long-Term Debt (Outstanding Principal) are $11.2 million of proceeds resulting from real estate transactions accounted for as a financing arrangements.

Fiscal 2020 payments shown above include approximately $6.2 million of proceeds, which are expected to be recognized on the Company’s Statement of Operations during the year ending July 31, 2020 as a result of the anticipated resolution of continuing involvement, with no associated cash outflow (see Notes to Consolidated Financial Statements for additional information).

Fiscal 2021 payments shown above include approximately $6.2 million of proceeds, which are expected to be recognized on the Company’s Statement of Operations during the year ending July 31, 2021 as a

result of the anticipated resolution of continuing involvement, with no associated cash outflow (see Notes to Consolidated Financial Statements for additional information).

(2) Reflects principal and interest expense payments associated with the remaining lease term of the Canyons obligation, initially 50 years, assuming a 2% per annum (floor) increase in payments.

1 unchanged sentence

(3) The payments under noncancelable operating leases included in the table above reflect the applicable minimum lease payments and exclude any potential contingent rent payments.

Purchase obligations and other primarily include amounts which are classified as trade payables, accrued payroll and benefits, accrued fees and assessments, contingent consideration liability, accrued taxes (including taxes for uncertain tax positions) on our Consolidated Balance Sheet as of July 31, 2019;

(4) Purchase obligations and other primarily include amounts which are classified as trade payables ( $59.7 million ), accrued payroll and benefits ( $69.3 million ), accrued fees and assessments ($26.1 million), contingent consideration liability ($17.8 million), and accrued taxes (including taxes for uncertain tax positions) ($117.2 million) on our Consolidated Balance Sheet as of July 31, 2020;

and, other commitments for goods and services not yet received, including construction contracts and minimum commitments under season pass alliance agreements, not included on our Consolidated Balance Sheet as of July 31, 2020 in accordance with GAAP.

20 unchanged sentences

Goodwill and indefinite-lived intangible assets are tested for impairment at least annually as of May 1.

Based upon our annual impairment test performed during the fourth fiscal quarter of Fiscal 2019, the estimated fair value of our reporting units and indefinite-lived intangible assets were in excess of their respective carrying values, and as such no impairment of goodwill or indefinite-lived intangible assets existed.

As a result of the coronavirus (COVID-19) pandemic and the impact it has had on our operations during Fiscal 2020, and the expected continuing impact of the pandemic on future operations, we determined that it was appropriate to test certain assets within our Colorado resort ground transportation company for impairment.

Our testing for goodwill and indefinite-lived intangible asset impairment consists of a comparison of the estimated fair value of those assets with their net carrying values.

If the net carrying value of the assets exceed their estimated fair value, an impairment will be recognized for indefinite-lived intangibles, including goodwill, in an amount equal to that excess;

otherwise, no impairment loss is recognized.

We recorded an impairment of approximately $28.4 million related to our Colorado resort ground transportation company during Fiscal 2020, which was recorded within asset impairments on our Consolidated Statement of Operations, with corresponding reductions to goodwill, net of $25.7 million and to intangible assets, net and property, plant and equipment, net of $2.7 million.

See Notes to Consolidated Financial Statements for additional information.

As of July 31, 2020, we determined that no other impairment of goodwill or indefinite-lived intangible assets existed.

Fair value determinations require considerable judgment and are sensitive to changes in underlying assumptions and factors.

2 unchanged sentences

(1) prolonged adverse weather conditions resulting in a sustained decline in guest visitation;

(2) a prolonged weakness in the general economic conditions in which guest visitation and spending is adversely impacted;

(2) a prolonged weakness in the general economic conditions in which guest visitation and spending is adversely impacted (particularly with regard to the ongoing COVID-19 pandemic);

and (3) volatility in the equity and debt markets which could result in a higher discount rate.

While historical performance and current expectations have resulted in estimated fair values of our reporting units in excess of carrying values, if our assumptions are not realized, it is possible that an impairment charge may need to be recorded in the future.

While historical performance and current expectations have resulted in estimated fair values of our reporting units in excess of carrying values (with the exception of our Colorado resort ground transportation company, as discussed above), if our assumptions are not realized, it is possible that an additional impairment charge may need to be recorded in the future.

However, it is not possible at this time to determine if an impairment charge would result or if such a charge would be material.

15 unchanged sentences

We believe the estimates and judgments discussed herein are reasonable and we have adequate reserves for our tax contingencies for uncertain tax positions.

Our reserves for uncertain tax positions, including any income tax related interest and penalties ($78.5 million as of July 31, 2019), relate to the treatment of the Talisker lease payments as payments of debt obligations and that the tax basis in Canyons goodwill is deductible.

Our reserves for uncertain tax positions, including any income tax related interest and penalties ($76.5 million as of July 31, 2020), relate to the treatment of the Canyons obligation lease payments as payments of debt obligations and that the tax basis in Canyons goodwill is deductible.

Actual results could differ and we may be exposed to increases or decreases in those reserves and tax provisions that could be material.

37 unchanged sentences

The lease has an initial term of 50 years with six 50-year renewal options.

The lease provides for $25.0 million in annual payments, which increase each year by an inflation linked index of CPI less 1%, with a floor of 2% per annum.

The lease provides for $25.0 million in annual payments, which increase each year by an inflation linked index of CPI less 1%, with a floor of 2% per

As lease payments increase annually, there can be no assurance that these increases will be offset by increased cash flow generated from operations at Park City.

2 unchanged sentences

In particular, revenue and profits for our North America mountain and most of our lodging operations are substantially lower and historically result in losses from late spring to late fall.

Conversely, peak operating seasons for our NPS concessionaire properties, our mountain resort golf courses and Perisher’s ski season occur during the North American summer months while the North American winter months result in operating losses.

Revenue and profits generated by NPS concessionaire properties summer operations, golf operations and Perisher’s ski operations are not sufficient to fully offset our off-season losses from our North American mountain and other lodging operations.

Conversely, peak operating seasons for our NPS concessionaire properties, our mountain resort golf courses and our Australian resorts’ ski season generally occur during the North American summer months while the North American winter months result in operating losses.

Revenue and profits generated by NPS concessionaire properties summer operations, golf operations and Australian resorts’ ski operations are not sufficient to fully offset our off-season losses from our North American mountain and other lodging operations.

During Fiscal 2020, there were several interruptions to our normal North American and Australian ski seasons as a result of the COVID-19 pandemic, which resulted in early resort closures.

During Fiscal 2020, approximately 83% of total combined Mountain and Lodging segment net revenue (excluding Lodging segment revenue associated with reimbursement of payroll costs) was earned during the second and third fiscal quarters.

1 unchanged sentence

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis