What changed in this filing

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Item 1A. Risk Factors

2022-09-28 compared with 2021-09-23 · 129 added, 142 removed, 299 unchanged (48% of the section changed)

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Risks Related to Our Business

The ongoing COVID-19 pandemic has had, and could continue to have, a significant negative impact on our financial condition and operations.

Further, the spread of COVID-19 has caused severe disruptions in the U.S.

and global economies and financial markets and could potentially create widespread business continuity issues of an as yet unknown magnitude and duration.

Any future outbreak of any COVID-19 variants or any other highly infectious or contagious disease could have a similar impact.

The outbreak and continuing spread of COVID-19 has disrupted our business, and has had and could continue to have a significant negative impact on our business, financial performance and condition, operating results, liquidity and cash flows.

Governmental authorities have issued and continue to issue a variety of mandates in an effort to slow the spread of COVID-19, including travel restrictions, border closures, restrictions on public gatherings, occupancy limits, “shelter at home’’ orders and advisories, and quarantine requirements.

The outbreak of COVID-19 has impacted global economic activity and caused significant volatility in financial markets, with particular risk to the travel and leisure industry, which is disproportionately impacted by travel restrictions and other public health restrictions.

In response to the continued challenges associated with the spread of COVID-19, we have had to close certain Resorts at various times.

For example, on March 30, 2021, towards the end of the North American operating season and following an order from the government of British Columbia as a result of an increase in COVID-19 cases in the region, we closed Whistler Blackcomb.

Our other North American Resorts were generally operational throughout the 2020/2021 ski season, after closing early in the 2019/2020 season, and were open for 2021 summer activities.

Our Australian Resorts were open for their 2021 winter season, however there were border closures, travel restrictions and public health orders in place throughout the country that impacted visitation to our Australian ski areas and caused periodic Resort closures.

We are also monitoring public health orders and regulations that affect or may affect our winter operations for the 2021/2022 North American ski season.

Our operations continue to be negatively impacted by COVID-19 and associated government mandated restrictions, including capacity limitations, border closures and travel restrictions, and mask and social distancing requirements.

Additionally, we may impose our own COVID-19 related restrictions in addition to what is required by state and local governments in the interest of safety for our guests, employees and resort communities.

Factors that could negatively impact ou r ability to successfully operate during the current COVID-19 pandemic or another pandemic include:

• our ability to open and keep open our Resorts during their respective ski seasons, including our North American Resorts for their upcoming winter season ;

• our ability to attract and retain guests given the risks, or perceived risks, of gathering in public places ;

• changes in consumer preferences during the pandemic;

• the willingness of guests to travel or purchase advance commitment products, such as our portfolio of pass products ;

• existing or future restrictions imposed by governmental authorities, including quarantines, capacity limitations, vaccination mandates for visitors from certain areas, and indoor dining or other restrictions that may affect our operations or the ability of our guests to return to our Resorts ;

• actual or perceived deterioration or weakness in economic conditions, unemployment levels, the job or housing markets, consumer debt levels or consumer confidence, as well as other adverse economic or market conditions due to COVID-19 or otherwise, and their collective impacts on demand for travel and leisure ;

• our ability to incentivize and retain our current employees, and hire sufficient future seasonal employees;

• the risk of lawsuits related to COVID-19 or another pandemic;

• our ability to access debt and equity capital on attractive terms, or at all;

• the impact of disruption and instability in the global financial markets or deterioration in credit and financing conditions on our access to capital necessary to fund operating costs, including maintenance capital spending, or to address maturing liabilities.

The extent and duration of the impact of COVID-19 on our business, consolidated results of operations, consolidated financial position and consolidated cash flows, will depend largely on future developments, including the duration of the virus (including any variants, which may be more contagious and/or impact the effectiveness of approved vaccines ), vaccination rates in areas where our Resorts are located or our guests reside, any continuing or newly imposed travel restrictions or vaccination requirements in connection with travel, the related impact on factors affecting guest behavior, including consumer confidence and spending, and when we will be able to resume normal operations, all of which are highly uncertain and cannot be predicted.

COVID-19 continues to present material uncertainty and risk with respect to our business, financial performance and condition, operating results, liquidity and cash flows.

To the extent the COVID-19 pandemic adversely affects our business and financial results, it may also have the effect of heightening many of the other risks described in the Risk Factors presented in this Annual Report on Form 10-K, and our subsequent filings with the SEC.

Any future outbreak of any other highly infectious or contagious disease could have a similar impact.

Our Epic Coverage program may require us to provide significant refunds to our pass product holders, which would result in reduced revenue and also exposes us to the risk of customer complaints and negative perception about our pass products.

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Any complaints posted by customers on social media platforms, even if inaccurate, may harm our reputation, and may divert management’s time and attention away from other business matters.

Leisure travel is particularly susceptible to various factors outside of our control, including terrorism, the uncertainty of military conflicts, the cost and availability of travel options and changing consumer preferences or willingness to travel.

Our business is sensitive to the willingness of our guests to travel.

Acts of terrorism, pandemics, political events and developments in military conflicts in areas of the world from which we draw our guests could depress the public’s propensity to travel and cause severe disruptions in both domestic and international air travel and consumer discretionary spending, which could reduce the number of visitors to our Resorts and have an adverse effect on our results of operations.

Many of our guests travel by air and the impact of higher prices for commercial airline services, availability of air services and willingness of guests to travel by air could cause a decrease in visitation by Destination guests to our Resorts.

A significant portion of our guests also travel by vehicle and higher gasoline prices or willingness of guests to travel generally due to safety or traffic concerns could cause a decrease in visitation by guests who would typically drive to our Resorts.

Higher cost of travel may also affect the amount that guests are willing to spend at our Resorts and could negatively impact our revenue particularly for lodging, ski school, dining and retail/rental.

Additionally, our success depends on our ability to attract visitors to our Resorts.

Changes in consumer tastes and preferences, particularly those affecting the popularity of skiing and snowboarding, and other social and demographic trends could adversely affect the number of skier visits during a ski season.

A significant decline in skier visits compared to historical levels would have a material adverse effect on our business, prospects, financial condition, results of operations and cash flows.

We are subject to the risk of prolonged weakness in general economic conditions including adverse effects on the overall travel and leisure related industries.

Skiing, travel and tourism are discretionary recreational activities that can entail a relatively high cost of participation and may be adversely affected by economic slowdown or recession.

Economic conditions in North America, Europe and parts of the rest of the world, including high unemployment, erosion of consumer confidence, sovereign debt issues and financial instability in the global markets, could have negative effects on the travel and leisure industry and on our results of operations.

See “Risks Related to Our Business—The ongoing COVID-19 pandemic has had, and could continue to have, a significant negative impact on our financial condition and operations.

Further, the spread of COVID-19 has caused severe disruptions in the U.S.

and global economies and financial markets and could potentially create widespread business continuity issues of an as yet unknown magnitude and duration.

Any future outbreak of any COVID-19 variants or other highly infectious or contagious disease could have a similar impact.” As a result of these and other economic uncertainties, we have experienced and may continue to experience in the future, a change in booking trends including where guest reservations are made much closer to the actual date of stay, a decrease in the length of stay, a decrease in consumer spending and/or a decrease in group bookings.

Economic conditions in North America, Europe and parts of the rest of the world, including inflationary pressures, supply chain disruption, geopolitical uncertainties, increased labor costs and shortages, increased fuel prices, high unemployment, erosion of consumer confidence, health pandemics (such as the ongoing impact of COVID-19), sovereign debt issues and financial instability in the global markets, among other factors, could have negative effects on the travel and leisure industry and on our results of operations.

As a result of these and other economic uncertainties, we have experienced and may continue to experience in the future, a change in booking trends including where guest reservations are made much closer to the actual date of stay, a decrease in the length of stay, a decrease in consumer spending and/or a decrease in group bookings.

We cannot predict what further impact these uncertainties may continue to have on overall travel and leisure or more specifically, on our guest visitation, guest spending or other related trends and the ultimate impact it will have on our results of operations.

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To the extent there are material changes in exchange rates relative to the U.S.

dollar or travel restrictions in place due to COVID-19, it could impact the volume of international visitation, which could have a significant impact on our operating results.

dollar or travel restrictions in place due to inflation, geopolitical conflicts or COVID-19, it could impact the volume of international visitation, which could have a significant impact on our operating results.

The ongoing COVID-19 pandemic has had, and may continue to have, a significant negative impact on the travel and leisure industry generally and, as a result, on our financial condition and operations.

The COVID-19 pandemic has been and continues to be a complex and evolving situation and has resulted in significant disruption and additional risks to our business;

the lodging, hospitality, resort and travel industries;

and the global economy.

expect the impact of the disruptions resulting from the impact of the COVID-19 pandemic, including the extent of their adverse impact on global economic activity, the volatility of financial markets, the travel and leisure industry, and our financial and operational results, will continue to be dictated by the length of time such disruptions continue.

Although all our properties are currently open, we cannot predict whether future closures would be appropriate or could be mandated.

Even once travel advisories and restrictions are modified or cease to be necessary, demand for travel and leisure may remain weak for a significant length of time and we cannot predict if or when our properties will return to pre-outbreak levels of visitation.

In particular, future demand for travel and leisure may be negatively impacted by the adverse changes in the perceived or actual economic climate, including higher unemployment rates, declines in income levels and loss of personal wealth from the impact of the COVID-19 Pandemic

While our North American Resorts were operational throughout the 2021/2022 ski season, Whistler Blackcomb was disproportionately impacted by COVID-19 related travel restrictions, which created challenging results for international destination visitation to the resort.

Additionally, the significant increase in COVID-19 cases associated with the Omicron variant during the second quarter Fiscal 2022 negatively impacted our operational results due to staffing challenges and lower overall skier visitation, consistent with the broader travel and leisure sector at that time.

Our Australian Resorts were open for their 2022 winter season, however, there were public health orders in place until July 6, 2022 which required those arriving from outside of the country to undertake a PCR test upon arrival (and incur a negative test result to avoid a mandatory quarantine), which may have impacted early season visitation.

We continue to monitor public health orders and regulations that affect or may affect our winter operations for the 2022/2023 North American ski season.

The COVID-19 pandemic has had, and may continue to have, a material adverse effect on our business, financial performance and condition, operating results, liquidity and cash flows.

Given the uncertainty around the extent and timing of the potential future spread or mitigation of the COVID-19 pandemic and around the imposition or relaxation of protective measures, we cannot reasonably estimate the impact on our business, financial performance and condition, operating results, liquidity and cash flows.

Any future outbreak of any other highly infectious or contagious disease could have a similar impact.

We are vulnerable to unfavorable weather conditions and the impact of natural disasters.

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On the other hand, excessive natural snowfall may significantly increase the costs incurred to groom trails and may make it difficult for guests to access our mountain Resorts.

Additionally, there is scientific research that emissions of greenhouse gases continue to alter the composition of the global atmosphere in ways that are affecting and are expected to continue affecting the global climate.

The effect of climate change, including any impact of global warming, could have a material adverse effect on our results of operations as a result of decreased snowfall, increased weather variability and/or warmer overall temperatures, which would likely adversely affect skier visits and our revenue and profits.

For instance, revenues and profits generated from mountain summer activities/sightseeing and golf peak season operations are not nearly sufficient to off-set off-season losses from our other mountain and lodging operations.

This impact could be exacerbated by climate change.

There can be no assurance that our Resorts will receive seasonal snowfalls near their historical averages.

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Conversely, during the 2018/2019 North American ski season, our western U.S.

Resorts experienced above-average snowfall while through December 31, 2019 for the 2019/2020 North American ski season, our Pacific Northwest Resorts (Whistler Blackcomb and

Stevens Pass) experienced the lowest snowfall in over 30 years.

Resorts experienced above-average snowfall while through December 31, 2019 for the 2019/2020 North American ski season, our Pacific Northwest Resorts (Whistler Blackcomb and Stevens Pass) experienced the lowest snowfall in over 30 years.

During the 2020/2021 North American ski season, snowfall levels were well below average at our Colorado, Utah and Tahoe Resorts through the holiday season.

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Unfavorable weather conditions can adversely affect our Resorts and lodging properties as guests tend to delay or postpone vacations if conditions differ from those that are typical at such Resorts for a given season.

Although we have created geographic diversification to help mitigate the impact of weather variability, there is no way for us to predict future weather patterns or the impact that weather patterns may have on our results of operations or visitation.

Although we have created

geographic diversification to help mitigate the impact of weather variability, there is no way for us to predict future weather patterns or the impact that weather patterns may have on our results of operations or visitation.

A severe natural disaster, such as a forest fire, may interrupt our operations, damage our properties, reduce the number of guests who visit our Resorts in affected areas and negatively impact our revenue and profitability.

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A severe forest fire or other severe impacts from naturally occurring events could negatively impact the natural beauty of our Resorts and have a long-term negative impact on our overall guest visitation as it would take several years for the environment to recover.

The effect of climate change, including any impact of global warming, could have a material adverse effect on our results of operations as a result of increased weather variability and/or warmer overall temperatures, which would likely adversely affect skier visits and our revenue and profits.

Leisure travel is particularly susceptible to various factors outside of our control, including terrorism, the uncertainty of military and geopolitical conflicts, the cost and availability of travel options and changing consumer preferences or willingness to travel.

Our business is sensitive to the willingness of our guests to travel.

Pandemics, acts of terrorism, political events and developments in military and geopolitical conflicts in areas of the world from which we draw our guests could depress the public’s propensity to travel and cause severe disruptions in both domestic and international air travel and consumer discretionary spending, which could reduce the number of visitors to our Resorts and have an adverse effect on our results of operations.

The ongoing Russian invasion of Ukraine and its resulting impacts, including supply chain disruptions, increased fuel prices, international sanctions and other measures that have been imposed, as well as resulting economic volatility and uncertainty, have increased the cost of travel, which may adversely affect our business.

Additionally, our success depends on our ability to attract visitors to our Resorts.

A significant decline in skier visits compared to historical levels would have a material adverse effect on our business, prospects, financial condition, results of operations and cash flows.

Cyberattacks or other interruptions to or disruption of our information technology systems and services could disrupt our business.

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Maintaining the integrity and security of data can be costly and is critical to our business, and our guests and employees have a high expectation that we will adequately protect their personal information.

A significant theft,

loss, loss of access to, or fraudulent use of customer, employee, or company data held by us or our service providers could adversely impact our reputation, and could result in significant remedial and other expenses, fines, and/or litigation.

A significant theft, loss, loss of access to, or fraudulent use of customer, employee, or company data held by us or our service providers could adversely impact our reputation, and could result in significant remedial and other expenses, fines, and/or litigation.

Our business is highly seasonal.

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For Fiscal 2022, approximately 83% of total combined Mountain and Lodging segment net revenue (excluding Lodging segment revenue associated with reimbursement of payroll costs) was earned during our second and third fiscal quarters.

This seasonality is partially mitigated by the sale of pass products (which for Fiscal 2021 accounted for approximately 61% of the total lift revenue) predominately occurring during the period prior to the start of the ski season as the cash from those sales is collected in advance and revenue is mostly recognized in the second and third quarters.

This seasonality is partially mitigated by the sale of pass products (which for Fiscal 2022 accounted for approximately 61% of the total lift revenue) predominately occurring during the period prior to the start of the ski season as the cash from those sales is collected in advance and revenue is primarily recognized in the second and third fiscal quarters.

In addition, the timing of major holidays and school breaks can impact vacation patterns and therefore visitation at our destination mountain Resorts and regional ski areas.

If we were to experience an adverse event or realize a significant deterioration in our operating results during our peak periods (our fiscal second and third quarters) we would be unable to fully recover any significant declines due to the seasonality of our business (for example, the outbreak of the COVID-19 pandemic which has resulted in Resort closures).

See “Risks Related to Our Business—The ongoing COVID-19 pandemic has had, and could continue to have, a significant negative impact on our financial condition and operations.

Further, the spread of COVID-19 has caused severe disruptions in the U.S.

and global economies and financial markets and could potentially create widespread business continuity issues of an as yet unknown magnitude and duration.

Any future outbreak of any COVID-19 variant or other highly infectious or contagious disease could have a similar impact.”.

See “Risks Related to Our Business— The ongoing COVID-19 pandemic has had, and may continue to have, a significant negative impact on the travel and leisure industry generally and, as a result, on our financial condition and operations.

” Operating results for any three-month period are not necessarily indicative of the results that may be achieved for any subsequent quarter or for a full fiscal year (see Notes to Consolidated Financial Statements).

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• reputation.

There are many competing options for our guests, including other major resorts in Colorado, Utah, California, Nevada, the Pacific Northwest, Northeast, Southwest and British Columbia, Canada, and other major destination ski areas worldwide.

Our guests can choose from any of these alternatives, as well as non-skiing vacation options and destinations around the world.

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Any future outbreak of any COVID-19 variant or other highly infectious or contagious disease could have a similar impact.” As such, our margins, profits and cash flows may be materially reduced due to declines in revenue given our relatively high fixed cost structure.

In addition, increases in expenses as a result of inflation or other economic factors may adversely impact wages and other labor costs, energy, healthcare, insurance, transportation and fuel, cost of goods, property taxes, minimum lease payments and other expenses included in our fixed cost structure, which may also reduce our margin, profits and cash flows.

In addition, inflation has accelerated in the U.S.

and globally due in part to global supply chain issues, the Ukraine-Russia war, a rise in energy prices, and strong consumer demand, as economies continue to reopen from restrictions related to the COVID-19 pandemic.

Increases in expenses as a result of this inflationary environment and other economic factors may adversely impact wages and other labor costs, energy, healthcare, insurance, transportation and fuel, cost of goods, property taxes, minimum lease payments and other expenses and operating costs included in our fixed cost structure, which may also reduce our margin, profits and cash flows.

We may not be able to fund resort capital expenditures.

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We cannot always predict where capital will need to be expended in a given fiscal year and capital expenditures can increase due to circumstances beyond our control.

In March 2021, we announced our full capital plan for calendar year 2021, pursuant to which we anticipated we would spend approximately $135 million to $140 million, including one-time items associated with integrations of $5 million and approximately $12 million of reimbursable investments.

We currently anticipate that we will spend approximately $323 million to $333 million on capital projects in calendar year 2022.

Our ability to fund capital expenditures will depend on our ability to generate sufficient cash flow from operations and/or to borrow from third parties in the debt or equity markets.

We cannot provide assurances that our operations will be able to generate sufficient cash flow to fund such capital expenditures, or that we will be able to obtain sufficient financing on adequate terms, or at all.

Our ability to generate cash flow and to obtain third-party financing will depend upon many factors, including:

• our future operating performance;

• general economic conditions and economic conditions affecting the resort industry, the ski industry and the capital markets;

• general economic conditions, including interest rates, and economic conditions affecting the resort industry, the ski industry and the capital markets;

• competition;

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Resort operations require permits and approvals from certain federal, state and local authorities, including the Forest Service, U.S.

Army Corps of Engineers, the States of Vermont and New Hampshire and the NPS.

Virtually all of our ski trails and related activities, including our summer activities, at Vail Mountain, Breckenridge, Keystone, Crested Butte, Stevens Pass, Heavenly, Kirkwood, Mount Snow, Wildcat, a majority of Beaver Creek and portions of Attitash are located on National Forest land.

Army Corps of Engineers, the States of Vermont, New Hampshire and Pennsylvania and the NPS.

Virtually all of our ski trails and related activities, including our summer activities, at Vail Mountain, Breckenridge, Keystone, Crested Butte,

Stevens Pass, Heavenly, Kirkwood, Mount Snow, Wildcat, a majority of Beaver Creek and portions of Attitash are located on National Forest land.

The Forest Service has granted us permits to use these lands, but maintains the right to review and approve many operational matters, as well as the location, design and construction of improvements in these areas.

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Furthermore, Congress may materially increase the fees we pay to the Forest Service for use of these National Forest lands.

Stowe and Okemo are partially located on land we lease from the State of Vermont, and Mount Sunapee is located on land we lease from the State of New Hampshire.

Stowe and Okemo are partially located on land we lease from the State of Vermont, Mount Sunapee is located on land we lease from the State of New Hampshire and Laurel Mountain is located on land we lease from the State of Pennsylvania.

We are required to seek approval from such states for certain developments and improvements made to the resort.

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We entered into a transaction agreement, master lease agreement and ancillary transaction documents with affiliate companies of Talisker Corporation (“Talisker”), and the initial lease term for our Park City resort with Talisker expires in May 2063 with six 50-year renewal options.

Additionally, GTLC and Flagg Ranch operate under concessionaire agreements with the NPS that expire on December 31, 2023 and October 31, 2028, respectively.

Additionally, GTLC and Flagg Ranch operate under concession agreements with the NPS that expire on December 31, 2023 and October 31, 2028, respectively.

There is no guarantee that at the end of the lease/license or agreements under which we operate our Resorts we will renew or, if desired, be able to negotiate new terms that are favorable to us.

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We rely on foreign government leases and landlord approvals, and are subject to certain related laws and regulations, at our international resorts.

Our international Resort operations require permits and approvals from certain foreign authorities, including the Province of British Columbia and the New South Wales and Victoria, Australia governments.

Our international Resort operations require permits and approvals from certain foreign authorities, including the (i) Province of British Columbia, (ii) the New South Wales and Victoria, Australia governments and (iii) the DDPS, the municipality of Tujetsch and the FOT in Switzerland.

Our operations at Whistler Blackcomb are located on Crown Land within the traditional territory of the Squamish and Lil’wat Nations, and the operations and future development of both Whistler Mountain and Blackcomb Mountain are governed by Master Development Agreements, which expire on February 23, 2077.

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The ARM Act established the Falls Creek RMB and the Hotham RMB, which is responsible for the management and collection of fees from Falls Creek and Hotham, respectively, and the ARM Regulations give each of the Falls Creek RMB and the Hotham RMB certain discretion over the operations of Falls Creek and Hotham, respectively, including the authority to (i) declare the snow season, (ii) temporarily close the applicable resort if entry would be a significant danger to public safety and (iii) determine which portions of the applicable resort are open to the public and the activities that are permitted on those portions of such resort.

Portions of our operations at Andermatt-Sedrun are located on land owned by (i) the DDPS and subject to two leasehold agreements with ASA, each with a term of 50 years expiring on April 10, 2067 and March 13, 2068;

and (ii) the municipality of Tujetsch by means of a personal easement agreement which expires on October 12, 2032 with an option to apply for renewal.

We also hold a passenger transport concessions from the FOT, for a total of 12 cableway installations by means of a plan approval dated May 3, 2014.

Each passenger transport concession has a separate expiration date between 2026 and 2042, and we will then be able to apply for an extension or new concession.

There is no guarantee that at the end of the initial lease/license or agreements under which we operate our Resorts we will renew or, if desired, be able to negotiate new terms that are favorable to us.

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In addition, most projects to improve, upgrade or expand our ski areas are subject to environmental review under the NEPA, FRPA, Act 250, the CEQA, the Australian NPW Act, the Australian EPA Act or the Australian EP Act, as applicable.

Our ski area improvement proposals may not be approved or may be approved with modifications that substantially increase the cost or decrease the

desirability of implementing the project.

Our ski area improvement proposals may not be approved or may be approved with modifications that substantially increase the cost or decrease the desirability of implementing the project.

From time to time our operations are subject to inspections by environmental regulators or other regulatory agencies.

We are also subject to worker health and safety requirements as well as various state and local public health laws, rules, regulations and orders related to COVID-19, including mask and social distancing requirements.

We are also subject to worker health and safety requirements as well as various state and local public health laws, rules, regulations and orders related to COVID-19, including vaccination, mask and social distancing requirements.

We believe our operations are in substantial compliance with applicable material environmental, health and safety requirements.

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If any of these events occur, our business and financial performance could suffer.

We may not be able to hire, train, reward and retain adequate team members and determine and maintain adequate staffing, including our seasonal workforce, which may impact our ability to achieve our operating, growth and financial objectives.

We may not be able to hire, train, reward and retain adequate team members and determine and maintain adequate staffing, including our seasonal workforce, which may impact labor costs and our ability to achieve our operating, growth and financial objectives.

Our long-term growth and profitability depend partially on our ability to recruit and retain high-quality employees to work in and manage our Resorts.

Adequate staffing and retention of qualified employees is a critical factor affecting our guests’ experiences in our Resorts.

Maintaining adequate staffing requires precise workforce planning which has been complicated and is unpredictable due the impacts of the COVID-19 pandemic on guest preferences and on labor markets.

The market for the most qualified talent continues to be competitive and we must provide competitive wages, benefits and workplace conditions to attract and retain our most qualified employees.

Year round employees may seek other employment and seasonal employees may decline to return, to be re-hired, or to be hired for the first time.

Personal or public health concerns related to COVID-19 might make some employees and potential candidates reluctant to work in enclosed environments such as our hotels, restaurants and retail/rental stores.

Resort-area housing could be even more limited than usual, making it difficult for employees to obtain available, affordable housing.

Our mountain and lodging operations are highly dependent on a large seasonal workforce.

We recruit year-round to fill thousands of seasonal staffing needs each season and work to manage seasonal wages and the timing of the hiring process to ensure the appropriate workforce is in place.

Furthermore, we cannot guarantee that we will be able to recruit and hire adequate seasonal personnel as the business requires.

Changes in immigration laws could also impact our workforce because we recruit and hire foreign nationals as part of our seasonal workforce.

For example, as a result of a 2020 executive order in the United States suspending the issuance of several visas for foreign workers, we were unable to hire foreign nationals for the 2020/2021 North America ski season.

A shortage of international workers based on immigration and cultural exchange limitations, failure to recruit and retain new domestic employees in a timely manner, higher than expected attrition levels, or increased wages all

could affect our ability to open and operate parts of our Resorts, deliver guest service at traditional margins or achieve our labor cost objectives.

We are subject to risks associated with our workforce, including increased labor costs.

We are subject to various federal, state and foreign laws governing matters such as minimum wage requirements, sick leave pay, overtime compensation and other working conditions, work authorization requirements, discrimination and family and medical leave.

In addition, our mountain and lodging operations are highly dependent on a large seasonal workforce.

Maintaining adequate staffing is complicated and unpredictable due to the impacts of the COVID-19 pandemic and the constrained labor market.

For example, in December 2021 and January 2022, daily exclusions of COVID-symptomatic employees reduced our total workforce and significantly increased volatility in our staffing levels, resulting in the temporary closure of some ski lifts and dining facilities at certain Resorts.

The market for the most qualified talent continues to be highly

competitive and we must provide competitive wages, benefits and workplace conditions to attract and retain the most qualified employees, particularly during a time when we have seen significant wage inflation in the market for employees.

In addition, in many communities, the supply of resort-area housing is constrained due to market conditions, making it difficult for our employees to obtain available, affordable housing.

Further, zoning regulations, protracted approval processes and local anti-development sentiment can prevent or substantially delay new housing projects that we or other parties may pursue to meet the demand for new affordable housing stock.

Changes in immigration laws could also impact our workforce because we typically recruit and hire foreign nationals as part of our seasonal workforce.

For example, due in part to certain federal vaccination requirements for foreign workers and embassy closures as a result of COVID-19, we were unable to hire the number of foreign workers we anticipated for the 2021/2022 season.

A shortage of international workers, failure to adequately recruit and retain new domestic employees, higher than expected attrition levels, or increased wages all could affect our ability to open and operate parts of our Resorts, deliver guest service at traditional margins or achieve our labor cost objectives.

We are also subject to various federal, state and foreign laws governing matters such as minimum wage requirements, sick leave pay, overtime compensation and other working conditions, work authorization requirements, discrimination and family and medical leave.

Cost of labor and labor-related benefits are primary components in the cost of our operations.

Labor shortages, affordable employee housing shortages and increased employee turnover and health care mandates could also increase our labor costs and labor-related benefits.

As minimum wage rates increase, including further potential federal and state legislative changes to the minimum wage rate, we may need to increase not only the wages of our minimum wage employees but also the wages paid to employees at wage rates that are above the minimum wage.

During Fiscal 2021, we announced a substantial investment in our employees by increasing the minimum wage to $15 at our Resorts across Colorado, California, Utah, Washington, New York and Vermont, as well as other increases at our Resorts in the eastern U.S.

From time to time, we have also experienced non-union employees attempting to unionize.

Labor shortages, affordable employee housing shortages, increased employee turnover and health care mandates can increase our labor costs.

We are subject to mandated minimum wage rates and also experience market-driven pressures to pay wages even higher than mandated minimum wages.

This can result in increases not only to the wages of our minimum wage employees but also to the wages paid to employees at wage rates that are above the minimum wage.

During Fiscal 2021, we implemented minimum wage increases across many of our Resorts, and in January 2022 we announced a new end of season bonus program of $2 per hour for all hours worked by qualifying employees during the applicable time period.

For the 2022/2023 North American ski season, we will be increasing our minimum wage to $20 per hour and announced a substantial investment in our human resource department to support our effort to return to normal staffing levels.

The increase in wages and a return to normal staffing is expected to result in an approximately $175 million increase in expected labor expense in Fiscal 2023 compared to Fiscal 2022.

From time to time, we have experienced non-union employees attempting to unionize.

While only a very small portion of our employees are unionized at present, we may experience additional union activity in the future, which could lead to disruptions in our business, increases in our operating costs and/or constraints on our operating flexibility.

These potential labor impacts could adversely impact our results of operations.

If we do not retain our key personnel, our business may suffer.

The success of our business is heavily dependent on the leadership of key management personnel, including our senior executive officers.

If any of these persons were to leave, it could be difficult to replace them, and our business could be harmed.

We do not maintain “key-man” life insurance on any of our employees.

For additional details, see “Business—Human Capital Management.”

We have recently acquired the Seven Springs Resorts, which were not subject to rules and regulations promulgated under the Sarbanes-Oxley Act of 2002, as amended ("Sarbanes-Oxley"), and they may therefore lack the internal controls that would be required of a U.S.

public company, which could ultimately affect our ability to ensure compliance with the requirements of Section 404 of Sarbanes-Oxley.

We have recently acquired the Seven Springs Resorts, which were not previously subject to the rules and regulations promulgated under Sarbanes-Oxley and accordingly were not required to establish and maintain an internal control infrastructure meeting the standards promulgated under Sarbanes-Oxley.

Our assessment of and conclusion on the effectiveness of our internal control over financial reporting as of July 31, 2022 did not include certain elements of the internal controls of the Seven Springs Resorts, which were acquired on December 31, 2021.

Although our management will continue to review and evaluate the effectiveness of our internal controls in light of this acquisition, we cannot provide any assurances that there will be no significant deficiencies or material weaknesses in our internal control over financial reporting.

Any significant deficiencies or material weaknesses in the internal control structure of our acquired businesses may cause significant deficiencies or material weaknesses in our internal control over financial reporting, which could have a material adverse effect on our business and our ability to comply with Section 404 of Sarbanes-Oxley.

Our business depends on the quality and reputation of our brands, and any deterioration in the quality or reputation of these brands, including as a result of misappropriation of our intellectual property or the risk of accidents occurring at our mountain resorts or competing mountain resorts, may reduce visitation and negatively impact our operations.

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Our ability to attract and retain guests depends, in part, upon the external perceptions of the Company, the quality and safety of our Resorts, services and activities, including summer activities, and our corporate and management integrity.

While we maintain and promote an on-mountain safety program, there are inherent risks associated with our Resort activities.

While we maintain and promote an on-

mountain safety program, there are inherent risks associated with our Resort activities.

From time to time in the past, accidents and other injuries have occurred on Resort property.

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We continually evaluate potential acquisitions both domestically and internationally and intend to actively pursue acquisition opportunities, some of which could be significant.

As a result, we face various risks from acquisitions, including:

As a result, we face various risks from acquisitions, including our recent acquisitions of the Seven Springs Resorts and Andermatt-Sedrun, some of which include:

• our evaluation of the synergies and/or long-term benefits of an acquired business;

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• potential impairment of goodwill, intangible or tangible assets;

• additional risks with respect to current and potential international operations, including by unique laws, regulations and business practices of foreign jurisdictions;

• unanticipated problems or liabilities.

In addition, we run the risk that any new acquisitions may fail to perform in accordance with expectations, and that estimates of the costs of improvements and integration for such properties may prove inaccurate.

Our international operations subject us to additional risks.

As a result of the acquisitions of Whistler Blackcomb in Canada and Perisher, Hotham and Falls Creek in Australia, and potential future international acquisitions, we have and may continue to increase our operations outside of the United States.

We are accordingly subject to a number of risks relating to doing business internationally, any of which could significantly harm our business.

These risks include:

• restriction on the transfer of funds to and from foreign countries, including potentially negative tax consequences;

• currency exchange rates;

• increased exposure to general market and economic conditions outside the United States;

• additional political risk;

We are subject to additional risks with respect to our current and potential international operations and properties.

As a result of the acquisitions of Whistler Blackcomb in Canada, Perisher, Hotham and Falls Creek in Australia, and Andermatt-Sedrun in Switzerland, and potential future international acquisitions, we have and may continue to increase our operations outside of the United States.

We are accordingly subject to a number of risks relating to doing business internationally.

We also intend to consider strategic growth opportunities for our portfolio globally through acquisitions in attractive international markets to service demonstrable demand where we believe the anticipated risk-adjusted returns are consistent with our investment objectives.

Our international operations and properties and in particular our newly acquired European properties (following the Andermatt-Sedrun acquisition), could be affected by factors peculiar to the laws, regulations and business practices of those jurisdictions.

These laws, regulations and business practices expose us to risks that are different than or in addition to those commonly found in the United States.

Risks relating to our international operations and properties include:

• changing governmental rules and policies, including changes in land use and zoning laws;

• enactment of laws relating to international ownership and laws restricting the ability to remove profits earned from activities within a particular country to a person’s or company’s country of origin;

• changes in laws or policies governing foreign trade or investment and use of foreign operations or workers, and any negative sentiments towards multinational companies as a result of any such changes to laws, regulations or policies or due to trends such as political populism and economic nationalism;

• variations in currency exchange rates and the imposition of currency controls;

• adverse market conditions caused by terrorism, civil unrest, natural disasters, infectious disease and changes in international, national or local governmental or economic conditions;

• business disruptions arising from public health crises and outbreaks of communicable diseases, including the recent coronavirus outbreak;

• the willingness of U.S.

or international lenders to make loans in certain countries and changes in the availability, cost and terms of secured and unsecured debt resulting from varying governmental economic policies;

• the imposition of unique tax structures and changes in tax rates and other operating expenses in particular countries, including the potential imposition of adverse or confiscatory taxes;

• the potential imposition of restrictions on currency conversions or the transfer of funds;

• general political and economic instability;

• compliance with international laws and regulations (including anti-corruption regulations, such as the U.S.

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• data security, including requirements that local customer data be stored locally and not transferred to other jurisdictions;

• foreign tax treaties and policies.

• our limited experience and expertise in foreign countries, particularly European countries, relative to our experience and expertise in the United States;

If any of the foregoing risks were to materialize, they could materially and adversely affect us.

We may be adversely impacted by the effects of high or prolonged inflation.

Inflation increases the cost of goods we purchase and services we buy, the cost of capital projects and wages and benefits for our workforce.

Although we may take measures to mitigate the impact of inflation through pricing actions or cost reduction measures, if we are not able to offset inflationary costs, our results of operations will be negatively impacted and possibly in a material manner.

As a result, the impact of high and prolonged inflation could have a material adverse effect on our business, financial condition, or results of operations.

Inflationary pressures also increase the cost of living and cost of travel, which decreases consumers’ disposable income and could impact our guests’ discretionary spending habits or willingness to visit our Resorts, which could reduce customer demand for the products and services that we offer and negatively impact our revenues and operating cash flow.

Exchange rate fluctuations could result in significant foreign currency gains and losses and affect our business results.

We are exposed to currency translation risk because the local currency utilized in the operations of Whistler Blackcomb, Perisher, Hotham and Falls Creek are different than our functional currency, the U.S.

As a result, changes in foreign exchange rates, in particular between the Canadian dollar, Australian dollar and the U.S.

We are exposed to currency translation risk because the local currency utilized in the operations of Whistler Blackcomb, Perisher, Hotham, Falls Creek and Andermatt-Sedrun are different than our functional currency, the U.S.

As a result, changes in foreign exchange rates, in particular between the Canadian dollar, Australian dollar, Swiss franc and the U.S.

dollar, affect the amounts we record for our foreign assets, liabilities, revenues and expenses, and could have a negative effect on our financial results.

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If our effective tax rates were to increase or if the ultimate determination of our taxes owed is for an amount in excess of amounts previously accrued, our financial condition, operating results and cash flows could be adversely affected.

Risks Relating to Our Capital Structure

Our stock price is highly volatile.

The market price of our stock is highly volatile and subject to wide fluctuations in response to factors such as the following, some of which are beyond our control:

• quarterly variations in our operating results;

• operating results that vary from the expectations of securities analysts and investors;

• change in valuations, including our real estate held for sale;

• changes in the overall travel, gaming, hospitality and leisure industries;

• changes in expectations as to our future financial performance, including financial estimates by securities analysts and investors or such guidance provided by us;

• announcements by us or companies in the travel, gaming, hospitality and leisure industries of significant contracts, acquisitions, dispositions, strategic partnerships, joint ventures, capital commitments, plans, prospects, service offerings or operating results;

• additions or departures of key personnel;

• future sales of our securities;

• trading and volume fluctuations;

• other risk factors as discussed herein;

• other unforeseen events.

Stock markets in the U.S.

have often experienced extreme price and volume fluctuations that are unrelated to the performance of any specific company or industry.

Market fluctuations, as well as general political and economic conditions including acts of terrorism, military conflicts, outbreak of a contagious disease, prolonged economic uncertainty, a recession or interest rate or currency rate fluctuations, could adversely affect the market price of our stock.

Risks Relating to Ownership of our Common Stock

We cannot provide assurance that we will pay dividends, or if paid, that dividend payments will be consistent with historical levels.

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For example, on April 1, 2020, in response to actions taken in response to COVID-19, we announced that our Board of Directors suspended our quarterly dividend for at least two quarters, which such suspension continued throughout Fiscal 2021.

Additionally, during the period that we are subject to the Financial Covenants Temporary Waiver Period (See “Risks Relating to Our Capital Structure—Restrictions imposed by the terms of our indebtedness may prevent or limit our future business plans.”), we are prohibited from paying any dividends or making share repurchases, unless (x) no default or potential default exists under the Vail Holdings Credit Agreement and (y) we have liquidity of at least $300.0 million, and the aggregate amount of dividends paid and share repurchases made by us during the Financial Covenants Temporary Waiver Period may not exceed $38.2 million in any fiscal quarter.

Additionally, during the period that we were subject to the Financial Covenants Temporary Waiver Period (See “Risks Relating to Ownership of our Common Stock—Restrictions imposed by the terms of our indebtedness may prevent or limit our future business plans.”), we were prohibited from paying any dividends or making share repurchases, unless (x) no default or potential default existed under the Vail Holdings Credit Agreement and (y) we had liquidity of at least $300.0 million, and the aggregate amount of dividends paid and share repurchases made by us during the Financial Covenants Temporary Waiver Period could not exceed $38.2 million in any fiscal quarter.

If we do not pay dividends, the price of our common stock must appreciate for investors to realize a gain on their investment in Vail Resorts, Inc.

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On September 22, 2022, our Board of Directors approved a cash dividend of $1.91 per share payable on October 24, 2022 to stockholders of record as of October 5, 2022.

Additionally, a Canadian dollar equivalent dividend on the Exchangeco Shares will be payable on October 22, 2021 to the shareholders of record as of October 5, 2021.

We expect to fund the dividend with available cash on hand and will do so pursuant to the restrictions under the Financial Covenants Temporary Waiver Period.

Our indebtedness could adversely affect our financial condition and our ability to operate our business, to react to changes in the economy or our industry, to fulfill our obligations under our various notes, to pay our other debts, and could divert our cash flow from operations for debt payments.

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As of July 31, 2022, we had $2.8 billion in total indebtedness outstanding.

This amount includes (i) $575.0 million in aggregate principal amount of 0.0% convertible notes due 2026 (the “0.0% Convertible Notes”), (ii) $600.0 million aggregate principal amount of our unsecured senior notes issued on May 4, 2020 (the “6.25% Notes”), (iii) $1.1 billion of indebtedness pursuant to the term loan facility under the Vail Holdings Credit Agreement, (iv) $44.9 million of indebtedness under our credit agreement at Whistler Blackcomb (the “Whistler Credit Agreement”), (v) $351.8 million with respect to our obligation associated with the Canyons long-term lease, (vi) $114.2 million with respect to the EPR Secured Notes under the master credit and security agreements and other related agreements with EPT Ski Properties, Inc.

and its affiliates (“EPR’’), as amended (collectively, the “EPR Agreements’’ and together with the Vail Holdings Credit Agreement and the Whistler Credit Agreement, the “Credit Agreements,’’ and such facilities, the “Credit Facilities’’) and (vii) $51.5 million with respect to the EB-5 development notes under the U.S.

EB-5 Program.

This amount includes (i) $575.0 million in aggregate principal amount of 0.0% convertible notes due 2026 (the “0.0% Convertible Notes”), (ii) $600.0 million aggregate principal amount of our unsecured senior notes issued on May 4, 2020 (the “6.25% Notes”), (iii) $1.1 billion of indebtedness pursuant to the term loan facility under the Vail Holdings Credit Agreement, (iv) $11.7 million of indebtedness under our credit agreement at Whistler Blackcomb (the “Whistler Credit Agreement”), (v) $357.6 million with respect to our obligation associated with the Canyons long-term lease and (vi) $114.2 million with respect to the EPR Secured Notes under the master credit and security agreements and other related agreements with EPT Ski Properties, Inc.

and its affiliates (“EPR”), as amended (collectively, the “EPR Agreements” and together with the Vail Holdings Credit Agreement and the Whistler Credit Agreement, the “Credit Agreements,” and such facilities, the “Credit Facilities”).

Our borrowings under the Vail Holdings Credit Agreement are subject to interest rate changes substantially increasing our risk to changes in interest rates.

Borrowings under the Vail Holdings Credit Agreement, including

the term loan facility, currently bear interest annually at a rate of LIBOR plus 2.50% and, for amounts in excess of $400.0 million, LIBOR is subject to a floor of 0.25% (during the Financial Covenants Temporary Waiver Period, as defined below).

Subsequent to the expiration of the Financial Covenants Temporary Waiver Period (as defined below), interest rate margins may fluctuate based upon the ratio of our Net Funded Debt to Adjusted EBITDA on a trailing four-quarter basis.

Following the Fifth Amendment to the Vail Holdings Credit Agreement, dated as of August 31, 2022 (the “Fifth Amendment”), borrowings under the Vail Holdings Credit Agreement, including the term loan facility, bear interest annually at a rate of SOFR, which replaced LIBOR as the reference interest rate under the Fifth Amendment, plus a spread of 0.1%, plus 1.25%.

We also have, on a cumulative basis, minimum lease payment obligations under operating leases of approximately $273.7 million as of July 31, 2022 .

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• transfer or sell assets.

On April 28, 2020 and most recently amended on December 18, 2020, we entered into an amendment to the Vail Holdings Credit Agreement, pursuant to which we are exempt from complying with the agreement’s maximum leverage ratio and minimum interest coverage ratio financial maintenance covenants for each of the fiscal quarters ending July 31, 2020 through January 31, 2022 (unless we make a one-time irrevocable election to terminate such exemption period prior to such date) (such period, 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).

Additionally, pursuant to this amendment, we are required to comply with a monthly minimum liquidity test (defined as unrestricted cash and temporary cash investments of Vail Resorts, Inc.

and its restricted subsidiaries and available commitments under our revolving credit facility) of not less than $150.0 million until such date that Vail Holdings, Inc.

delivers a compliance certificate for the Company and its subsidiaries’ first fiscal quarter following the end of the Financial Covenants Temporary Waiver Period.

During the Financial Covenants Temporary Waiver Period, we are prohibited from taking the following actions (unless majority approval of the lenders is obtained 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 of at least $300.0 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;

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

• making certain non-ordinary course investments in similar businesses, joint ventures and unrestricted subsidiaries unless the Company has liquidity of at least $300.0 million.

On December 18, 2020, we entered into an amendment to the Vail Holdings Credit Agreement, pursuant to which we were exempted from complying with certain financial maintenance covenants for the fiscal quarters ending through January 31, 2022 (unless we made a one-time irrevocable election to terminate such exemption period prior to such date) (such period, the “Financial Covenants Temporary Waiver Period”), and we were prohibited from undertaking certain activities during such period.

On October 31, 2021, we exited the Financial Covenants Temporary Waiver Period.

As a result, we were required to comply with the financial maintenance covenants in the Vail Holdings Credit Agreement starting with the fiscal quarter ended October 31, 2021, and we are no longer subject to the covenant modifications that were applicable during the Financial Covenants Temporary Waiver Period.

The indenture governing the 6.25% Notes contains a number of significant restrictions and covenants that limit our ability to:

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We may not have or be able to obtain sufficient funds to make these accelerated payments.

If we are forced to refinance these borrowings on less favorable terms or cannot refinance these borrowings, our results of operations and financial condition could be adversely affected.

we are forced to refinance these borrowings on less favorable terms or cannot refinance these borrowings, our results of operations and financial condition could be adversely affected.

We may not continue to repurchase our common stock pursuant to our share repurchase program, and any such repurchases may not enhance long-term stockholder value.

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Additionally, our share repurchase program could diminish our cash reserves, which may impact our ability to finance future growth and to pursue possible future strategic opportunities and acquisitions.

There can be no assurance that any share repurchases will enhance stockholder value because the market price of

our common stock may decline below levels at which we repurchased shares of stock.

Further, the U.S.

has implemented a 1% excise tax on certain corporate share repurchases beginning in January 2023, which could adversely impact our share repurchases.

There can be no assurance that any share repurchases will enhance stockholder value because the market price of our common stock may decline below levels at which we repurchased shares of stock.

Although our share repurchase program is intended to enhance long-term stockholder value, there is no assurance that it will do so and short-term stock price fluctuations could reduce the program’s effectiveness.

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• impede the ability of the holders of our securities to change our management.

For instance, provisions of the indentures governing our indebtedness stipulate that the Company must repurchase the senior notes at the option of their holders upon the event of a change in control of the Company.

Further, a change of control would constitute an event of default under our credit agreements.

UNRESOLVED STAFF COMMENTS.

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 1A. Risk Factors