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The MD&A includes discussion of financial performance within each of our three segments.
−Removed: 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) in the following discussion because we consider this measurement to be a significant indication of our financial performance.
+Added: We have chosen to specifically include segment Reported EBITDA (defined as segment net revenue less segment operating expense, plus segment equity investment income or loss, and for the Real Estate segment, plus gain or loss on sale of real property) in the following discussion because we consider this measurement to be a significant indication of our financial performance.
We utilize segment Reported EBITDA in evaluating our performance and in allocating resources to our segments.
1 unchanged sentence
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.
−Removed: Resort Reported EBITDA (defined as the combination of segment Reported EBITDA of our Mountain and Lodging segments), Total Reported EBITDA (which is Resort Reported EBITDA plus segment Reported EBITDA from our Real Estate segment) and Net Debt are not measures of financial performance or liquidity defined under accounting principles generally accepted in the United States (“GAAP”).
+Added: Resort Reported EBITDA (defined as the combination of segment Reported EBITDA of our Mountain and Lodging segments), Total Reported EBITDA (which is Resort Reported EBITDA plus segment Reported EBITDA from
+Added: our Real Estate segment) and Net Debt are not measures of financial performance or liquidity defined under accounting principles generally accepted in the United States (“GAAP”).
Refer to the end of the Results of Operations section for a reconciliation of net income attributable to Vail Resorts, Inc.
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Mountain Segment
−Removed: In the Mountain segment, the Company operates the following 41 destination mountain resorts and regional ski areas:
+Added: In the Mountain segment, the Company operates the following 41 destination mountain resorts and regional ski areas (collectively, “Resorts”):
*Denotes a destination mountain resort, which generally receives a meaningful portion of skier visits from long-distance travelers, as opposed to our regional ski areas, which tend to generate skier visits predominantly from their respective local markets.
Additionally, we operate ancillary services, primarily including ski school, dining and retail/rental operations, and for our Australian ski areas, including lodging and transportation operations.
−Removed: Mountain segment revenue is seasonal, with the majority of revenue earned from our North American ski operations occurring in our second and third fiscal quarters and the majority of revenue earned from our Australian ski operations occurring in our first and fourth fiscal quarters.
−Removed: Our North American destination mountain resorts and regional ski areas (collectively, “Resorts”) typically experience their peak operating season for the Mountain segment from mid-December through mid-April, and our Australian ski areas typically experience their peak operating season from June to earl y October .
+Added: Mountain segment revenue is seasonal, with the majority of revenue earned from our North American and European ski operations occurring in our second and third fiscal quarters and the majority of revenue earned from our Australian ski operations occurring in our first and fourth fiscal quarters.
+Added: Our North American and European Resorts typically experience their peak operating season for the Mountain segment from mid-December through mid-April, and our Australian ski areas typically experience their peak operating season from June to earl y October .
Our largest source of Mountain segment revenue comes from the sale of lift tickets (including pass products), which represented approximately 56%, 59% and 63% of Mountain segment net revenue for Fiscal 2023, the fiscal year ended July 31, 2022 (“Fiscal 2022”) and the fiscal year ended July 31, 2021 (“Fiscal 2021”), respectively.
Lift revenue is driven by volume and pricing.
−Removed: Pricing is impacted by both absolute pricing, as well as the demographic mix of guests, which impacts the price points at which various products are purchased.
+Added: Pricing is impacted by absolute pricing, as well as both the demographic and geographic mix of guests, which impacts the price points at which various products are purchased.
The demographic mix of guests that visit our North American Resorts is divided into two primary categories:
(i) out-of-state and international (“Destination”) guests and (ii) in-state and local (“Local”) guests.
+Added: The geographic mix depends on levels of visitation to our destination mountain resorts versus our regional ski areas.
For the 2022/2023 North American ski season, Destination guests comprised approximately 57% of our North American destination mountain resort skier visits (excluding complimentary access), while Local guests comprised approximately 43% of our North American destination mountain resort skier visits (excluding complimentary access), which compares to 58% and 42%, respectively, for the 2021/2022 North American ski season and approximately 52% and 48%, respectively, for the 2020/2021 North American ski season.
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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.
−Removed: Additionally, Destination guest visitation is less likely to be impacted by changes in the weather during the current season, but may be more impacted by adverse economic conditions, the global geopolitical climate or weather conditions in the immediately preceding ski season.
+Added: Additionally, Destination guest visitation is less likely to be impacted by changes in the weather during the current season, but may be more impacted by adverse economic conditions, the global geopolitical climate, travel disruptions or weather conditions in the immediately preceding ski season.
Local guests tend to be more value-oriented and weather-sensitive.
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The Epic Day Pass is a customizable one to seven day pass product purchased in advance of the season, for those skiers and riders who expect to ski a certain number of days during the season, and which is available in three tiers of resort access offerings.
−Removed: Our pass products provide a compelling value proposition to our guests, which in turn assists us in developing a loyal base of customers who commit to ski at our Resorts 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.
+Added: Our pass products provide a compelling value proposition to our guests, which in turn assists us in developing a loyal base of customers who commit to ski at our Resorts generally in advance of the ski season and typically ski more days each season at our Resorts than those guests who do not buy pass products.
Additionally, we enter into strategic long-term pass alliance agreements with third-party mountain resorts, which further increase the value proposition of our pass products.
−Removed: For the 2022/2023 ski season, our pass alliances include Telluride Ski Resort in Colorado, Hakuba Valley and Rusutsu Resort in Japan, Resorts of the Canadian Rockies in Canada, Les 3 Vallées in France, Verbier 4 Vallées in Switzerland, Skirama Dolomiti in Italy and Ski Arlberg in Austria.
−Removed: Our pass program drives strong customer loyalty;
−Removed: mitigates exposure to more weather sensitive guests;
−Removed: generates additional ancillary spending;
−Removed: and provides cash flow in advance of winter season operations.
+Added: For the 2023/2024 ski season, our pass alliances include Telluride Ski Resort in Colorado, Hakuba Valley and Rusutsu Resort in Japan, Resorts of the Canadian Rockies in Canada, Les 3 Vallées in France, Disentis Ski Area and Verbier 4 Vallées in Switzerland, Skirama Dolomiti in Italy and Ski Arlberg in Austria.
+Added: Our pass program drives strong customer loyalty, mitigates exposure to more weather sensitive guests, generates additional ancillary spending and provides cash flow in advance of winter season operations.
In addition, our pass program attracts new guests to our Resorts.
All of our pass products, including the Epic Pass and Epic Day Pass, are predominately sold prior to the start of the ski season.
−Removed: Pass product revenue, although primarily collected prior to the ski season, is recognized in the Consolidated Statements of Operations throughout the ski season on a straight-line basis using skiable days (see Notes to the Consolidated Financial Statements for additional information).
−Removed: Lift revenue consists of pass product lift revenue (“pass revenue”) and non-pass lift product revenue (“non-pass revenue”).
−Removed: Approximately 61%, 61% and 51% of total lift revenue was derived from pass revenue for Fiscal 2022, Fiscal 2021 and Fiscal 2020, respectively (including the impact of the deferral of pass product revenue from Fiscal 2020 to Fiscal 2021 as a result of credits offered to 2019/2020 North American pass product holders who purchased 2020/2021 pass products).
−Removed: Additionally, lift revenue for Fiscal 2021 was impacted by restrictions which only allowed pass product holders to access our Resorts during the early portion of the 2020/2021 North American ski season, as well as our use of a reservation system, which limited capacity for both pass product holders and non-pass lift tickets.
+Added: Pass product revenue, although primarily collected prior to the ski season, is recognized on the Company’s Consolidated Statements of Operations throughout the ski season on a straight-line basis using the skiable days of the season to date relative to the total estimated skiable days of the season.
+Added: Lift revenue consists of pass product lift revenue (“pass revenue”) and non-pass product lift revenue (“non-pass revenue”).
+Added: Approximately 61% of total lift revenue was derived from pass revenue for each of Fiscal 2023, Fiscal 2022, and Fiscal 2021 (including the impact of the deferral of pass product revenue from Fiscal 2020 to Fiscal 2021 as a result of credits offered to 2019/2020 North American pass product holders who purchased 2020/2021 pass products).
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;
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We have identified the following important factors (as well as risks and uncertainties associated with such factors) that could impact our future financial performance or condition:
−Removed: • COVID-19 has led to travel restrictions and other adverse economic impacts in global and local economies.
−Removed: Our operations for Fiscal 2022 continued to be negatively impacted by COVID-19 and associated government-mandated restrictions, including capacity limitations, vaccination requirements and mask and social distancing requirements.
−Removed: 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 the safety of our guests, employees and resort communities.
−Removed: The ongoing impacts of COVID-19 and associated regional shutdowns resulted in periodic closures of our Australian ski areas during their 2021 ski seasons.
−Removed: Although conditions have improved relative to the prior year, we are uncertain as to the ultimate severity and duration of the COVID-19 pandemic as well as the related global or other travel restrictions and other adverse impacts.
−Removed: We have experienced a negative change in performance and our future performance could also be negatively impacted.
−Removed: 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 fluctuating commodity prices.
−Removed: While we anticipate improvements as compared to Fiscal 2022 and Fiscal 2021, we cannot predict the ultimate impact that the global economic uncertainty as a result of COVID-19 will have on overall travel and leisure spending or more specifically, on our guest visitation, guest spending or other related trends for the upcoming 2022/2023 North American ski season.
+Added: • The economies in the countries in which we operate and from which we attract our guests may be impacted by economic challenges associated with rising inflation, increasing interest rates, financial institution disruptions and/or fluctuating commodity prices that could adversely impact our business, including decreased guest spending or visitation or increased costs of operations.
+Added: Skiing, travel and tourism are discretionary recreational activities that can entail a relatively high cost of participation.
+Added: As a result, economic downturns and other negative impacts to consumer discretionary spending may have a pronounced impact on visitation to our Resorts.
+Added: We cannot predict the extent to which we may be impacted by such potential economic challenges, whether in North America or globally.
• The timing and amount of snowfall can have an impact on Mountain and Lodging revenue, particularly with regard to skier visits and the duration and frequency of guest visitation.
−Removed: 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.
−Removed: Additionally, our pass products provide a compelling value proposition to our guests, which in turn create a guest commitment predominately prior to the start of the ski season.
−Removed: In March 2022, we began our pass product sales program for the 2022/2023 North American ski season.
+Added: To help mitigate the impact of weather variability, 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.
+Added: Additionally, our pass products provide a compelling value proposition to our guests, which in turn creates a guest commitment predominately prior to the start of the ski season.
+Added: In March 2023, we began selling pass products for the 2023/2024 North American and European ski seasons.
Pass product sales through September 22, 2023 for the upcoming 2023/2024 North American ski season increased approximately 7% in units and approximately 11% in sales dollars as compared to the prior year through September 23, 2022.
−Removed: Pass product sales are adjusted to include pass product sales for the Seven Springs Resorts in both periods and to eliminate the impact of foreign currency by applying an exchange rate of $0.76 between the Canadian dollar and U.S.
−Removed: dollar to both periods for Whistler Blackcomb pass product sales.
−Removed: We cannot predict if this favorable trend will continue through the remainder of the 2022 North American pass product sales campaign or the overall impact that pass product sales will have on lift revenue for the 2022/2023 North American ski season.
−Removed: • The 2021/2022 North American ski season got off to a slow start with challenging early season conditions which persisted through the holiday period, but results were strong from January through the remainder of the season.
−Removed: We had particularly strong Destination visitation this year, which was further supported by lift ticket sales at our Colorado and Utah resorts that exceeded our expectations through the spring.
−Removed: Our results at Whistler Blackcomb were also stronger than expected after the holiday period due to the easing of travel restrictions in Canada in late February.
−Removed: Additionally, after the holiday period, performance at our eastern U.S.
−Removed: ski areas was in-line with our expectations while our Tahoe resorts were impacted by challenging spring conditions, resulting in performance below our expectations.
−Removed: Throughout the season, our ancillary businesses continued to be capacity constrained by staffing and, in the case of dining, by operational restrictions associated with COVID-19.
−Removed: During the fourth quarter of Fiscal 2022, our Australian resorts experienced record visitation, driven by strong demand following two years of COVID-19 related disruptions, continued momentum in advance commitment pass product sales following the addition of Hotham and Falls Creek in April 2019, and favorable early season conditions that continued throughout the quarter.
−Removed: We cannot predict the impact that COVID-19 limitations and restrictions, future weather conditions or continued staffing challenges may have on our skier visitation and results of operations for the year ending July 31, 2023 (“Fiscal 2023”) and beyond.
−Removed: • As of July 31, 2022, we had $1,107.4 million of cash and cash equivalents as well as $417.4 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 December 18, 2020 (the “Vail Holdings Credit Agreement”), which represents the total commitment of $500.0 million less certain letters of credit outstanding of $82.6 million.
+Added: Pass product sales are adjusted to eliminate the impact of foreign currency by applying an exchange rate of $0.74 between the Canadian dollar and U.S.
+Added: dollar in both periods for Whistler Blackcomb pass product sales.
+Added: We cannot predict if this favorable trend will continue through the remainder of the 2023 North American pass product sales campaign or the overall impact that pass product sales will have on lift revenue for the 2023/2024 North American and European ski seasons.
+Added: • Our overall results throughout the 2022/2023 North American ski season highlight the stability of the advance commitment from season pass products in a season with challenging conditions, including travel disruptions during the peak holiday period, abnormal weather conditions which significantly reduced operating days, terrain availability, and activity offerings across our 26 Midwest, Mid-Atlantic and Northeast resorts (collectively, “Eastern” U.S.
+Added: resorts), and severe weather disruptions at our Tahoe resorts.
+Added: Our ancillary businesses, including ski school, dining, and retail/rental, experienced strong growth compared to the prior year period, when those businesses were impacted by capacity constraints driven by staffing, and in the case of dining, by operational restrictions associated with COVID-19.
+Added: Our dining business rebounded strongly from the prior year, though underperformed expectations for the year as guest dining behavior did not fully return to pre-COVID levels following two years of significant operational restrictions associated with COVID-19.
+Added: The return to normal staffing levels enabled our mountain resorts to deliver a strong guest experience resulting in a significant improvement in guest satisfaction scores, which exceeded pre-COVID-19 levels at our destination mountain resorts.
+Added: • Given that we operate in the travel and leisure industry, we are subject to risks related to public health emergencies, including the potential outbreak and spread of contagious disease.
+Added: Public health emergencies may lead to adverse economic impacts in global and local economies, including the economies in which we operate, which may in turn impact consumer demand, the willingness or ability of guests to travel, guest visitation, staffing levels or financial results.
+Added: We cannot predict the ultimate impact that any potential public health emergency may have on our guest visitation, guest spending, staffing capabilities, other related trends or overall results of operations.
+Added: • As of July 31, 2023, we had $563.0 million of cash and cash equivalents as well as $421.0 million available under the revolver component of the Vail Holdings Credit Agreement, which represents the total commitment of $500.0 million less certain letters of credit outstanding of $79.0 million.
Additionally, we have a credit facility which supports the liquidity needs of Whistler Blackcomb (the “Whistler Credit Agreement”).
−Removed: As of July 31, 2022, we had C$281.6 million ($220.0 million) available under the revolver component of the Whistler Credit Agreement which represents the total commitment of C$300.0 million ($234.3 million) less outstanding borrowings of C$15.0 million ($11.7 million) and letters of credit outstanding of C$3.4 million ($2.6 million).
+Added: As of July 31, 2023, we had C$296.6 million ($224.9 million) available under the revolver component of the Whistler Credit Agreement which represents the total commitment of C$300.0 million ($227.5 million) less letters of credit outstanding of C$3.4 million ($2.6 million).
We believe that our existing cash and cash equivalents, availability under our credit agreements and the expected positive cash flow from operating activities of our Mountain and Lodging segments less resort capital expenditures will continue to provide us with sufficient liquidity to fund our operations.
−Removed: • On December 31, 2021, through a wholly-owned subsidiary, we acquired Seven Springs Mountain Resort, Hidden Valley Resort and Laurel Mountain Ski Area in Pennsylvania (collectively, the “Seven Springs Resorts”) from Seven Springs Mountain Resort, Inc.
−Removed: and its affiliates for a purchase price of approximately $116.5 million, after adjustments for certain agreed-upon terms, which we funded with cash on hand.
−Removed: The acquisition included the mountain operations of the Seven Springs Resorts, including base area skier services (food and beverage, retail and rental, lift ticket offices and ski and snowboard school facilities), as well as hotel, conference center and other related operations.
−Removed: We cannot predict the ultimate impact the acquisition of the Seven Springs Resorts will have on our future results from operations.
• On August 3, 2022, through a wholly-owned subsidiary, we acquired a 55% controlling interest in Andermatt-Sedrun Sport AG (“Andermatt-Sedrun”) from Andermatt Swiss Alps AG (“ASA”).
Andermatt-Sedrun controls and operates all of Andermatt-Sedrun's mountain and ski-related assets, including lifts, most of the restaurants and a ski school operation at the ski area.
−Removed: We invested CHF 149.3 million ($155.7 million), comprised of a CHF 110.0 million ($114.4 million) investment into Andermatt-Sedrun for use in capital investments to enhance the guest experience on the mountain and CHF 39.3 million ($41.3 million) paid to ASA.
−Removed: The proceeds paid to ASA will be fully reinvested into the real estate developments in the base area.
−Removed: ASA retains a 40% ownership stake, with a group of existing shareholders comprising the remaining 5% ownership.
−Removed: We will provide unlimited and unrestricted access to Andermatt-Sedrun on the Epic Pass for the 2022/2023 ski season, as well as provide access on other pass products.
+Added: The total consideration we paid was comprised of a $114.4 million (CHF 110.0 million) investment into Andermatt-Sedrun for use in capital investments to enhance the guest experience on the mountain and $41.3 million (CHF 39.3 million) paid to ASA.
+Added: As of August 3, 2022 the total fair value of the consideration paid was $155.4 million (CHF 149.3 million).
+Added: The proceeds paid to ASA will be fully reinvested into real estate developments in the base area.
+Added: ASA retains a 40% ownership stake in Andermatt-Sedrun, with a group of existing shareholders comprising the remaining 5% ownership.
We cannot predict the ultimate impact the acquisition of Andermatt-Sedrun will have on our future results from operations.
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Real Estate Reported EBITDA $ (1,728) $ (3,927) $ (4,582)
−Removed: (1) Segment results for Fiscal 2021 and Fiscal 2020 have been retrospectively adjusted to reflect current period presentation.
−Removed: See Notes to the Consolidated Financial Statements for additional information.
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.
−Removed: The consolidated results of operations, including any consolidated financial metrics pertaining thereto, include the operations of the Seven Springs Resorts (acquired December 31, 2021) prospectively from the date of acquisition.
−Removed: COVID-19 in general had an adverse impact on our results of operations for Fiscal 2022, Fiscal 2021 and Fiscal 2020 as further described below in our segment results of operations.
−Removed: The sections titled “Fiscal 2022 compared to Fiscal 2021” and “Fiscal 2021 compared to Fiscal 2020” in each of the Mountain and Lodging segment discussions below provide comparisons of financial and operating performance for Fiscal 2022 to Fiscal 2021 and Fiscal 2021 to Fiscal 2020, respectively, unless otherwise noted.
+Added: The consolidated results of operations, including any consolidated financial metrics pertaining thereto, include the operations of Andermatt-Sedrun (acquired August 3, 2022) and Seven Springs Mountain Resort, Hidden Valley Resort and Laurel Mountain Ski Area in Pennsylvania (collectively, the “Seven Springs Resorts,” acquired December 31, 2021) prospectively from their respective dates of acquisition.
+Added: COVID-19 in general had an adverse impact on our results of operations for Fiscal 2022 and Fiscal 2021.
+Added: The sections titled “Fiscal 2023 compared to Fiscal 2022” in each of the Mountain and Lodging segment discussions below provide comparisons of financial and operating performance for Fiscal 2023 to Fiscal 2022, unless otherwise noted.
+Added: Discussion of our financial results for Fiscal 2022 compared to Fiscal 2021 can be found in our Annual Report on Form 10-K for Fiscal 2022, which was filed on September 28, 2022.
Mountain Segment
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2023 2022 2021 2023/2022 2022/2021
−Removed: 2022/2021 2021/2020
Mountain net revenue:
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ETP $ 73.20 $ 75.74 $ 72.49 (3.4) % 4.5 %
−Removed: (1) Segment results for Fiscal 2021 and Fiscal 2020 have been retrospectively adjusted to reflect current period presentation.
−Removed: See Notes to the Consolidated Financial Statements for additional information.
Mountain Reported EBITDA includes $21.2 million, $20.9 million and $20.3 million of stock-based compensation expense for Fiscal 2023, Fiscal 2022 and Fiscal 2021, respectively.
Fiscal 2023 compared to Fiscal 2022
−Removed: Mountain Reported EBITDA increased $258.4 million, or 46.8%, primarily due to strong North American pass product sales growth for the 2021/2022 North American ski season and fewer COVID-19 related limitations and restrictions on our North American operations compared to the prior year.
−Removed: Visitation across our North American Resorts increased relative to prior year levels, but was partially offset by the negative impact of delayed Resort openings due to challenging early season conditions.
−Removed: Additionally, our Australian resorts had strong visitation during the fourth quarter of Fiscal 2022, compared to being negatively impacted by limitations and restrictions during the 2021 Australian ski season.
−Removed: These increases were partially offset by an increase in variable expenses associated with the increase in revenue and visitation, and an increase in general and administrative expenses primarily due to cost discipline efforts in the prior year associated with lower levels of operations.
−Removed: Mountain segment results for Fiscal 2022 also include acquisition and integration related expenses, including expenses associated with the acquisitions of the Seven Springs Resorts and Andermatt-Sedrun, of $7.7 million, compared to $1.0 million of acquisition and integration related expenses for Fiscal 2021.
−Removed: Lift revenue increased $233.6 million, or 21.7%, primarily due to an increase in pass revenue and an increase in non-pass lift ticket purchases.
−Removed: Pass revenue increased 21.5%, which was primarily driven by increased pass product sales for the 2021/2022 North American ski season compared to the 2020/2021 North American ski season, which were favorably impacted by increased pass product sales to new pass holders and Destination guests.
−Removed: Non-pass revenue increased 22.0% primarily due to an increase in visitation, which was significantly impacted by COVID-19 related capacity limitations in the prior year, as well as an increase in non-pass ETP of 8.2%.
−Removed: The increase in non-pass lift revenue was partially offset by delayed North American Resort openings as a result of challenging early season conditions, which negatively impacted visitation.
−Removed: Ski school revenue increased $79.4 million, or 55.1%;
−Removed: dining revenue increased $71.5 million, or 77.6%;
−Removed: and retail/rental revenue increased $83.8 million, or 36.7%.
−Removed: Each increased primarily due to fewer COVID-19 related limitations and restrictions on our North American winter operations as compared to the prior year, as well as an increase in demand over the prior year.
−Removed: Other revenue mainly consists of summer visitation and other mountain activities revenue, employee housing revenue, guest services revenue, commercial leasing revenue, marketing revenue, private club revenue (which includes both club dues and amortization of initiation fees), municipal services revenue and other recreation activity revenue.
−Removed: Other revenue also includes Australian ski area lodging and transportation revenue.
−Removed: Other revenue increased $42.0 million, or 25.9%, primarily as a result of increased visitation and fewer COVID-19 related limitations and restrictions on our North American operations as compared to the prior year.
−Removed: Operating expense increased $247.8 million, or 21.4%, which was primarily attributable to increased variable expenses associated with increases in revenue, and the impact of cost discipline efforts in the prior year associated with lower levels of operations, including limitations, restrictions and closures resulting from COVID-19.
−Removed: Additionally, operating expense for Fiscal 2022 includes acquisition and integration related expenses, including expenses associated with the acquisitions of the Seven Springs Resorts and Andermatt-Sedrun, of $7.7 million, compared to $1.0 million of acquisition and integration related expense for Fiscal 2021.
−Removed: Labor and labor-related benefits increased 22.5%, primarily due to increased staffing associated with an increase in visitation and the impact of COVID-19 related cost actions in the prior year, including salary reductions, as well as a decrease of $16.5 million in tax credits from COVID-19 related legislation in Canada.
−Removed: Retail cost of sales increased 28.2%, compared to an increase in retail sales of 36.3%, reflecting increased margins on a higher mix of newer, higher-margin retail products.
−Removed: Resort related fees increased 33.1%, primarily due to increases in revenue on which those fees are based.
−Removed: General and administrative expense increased 15.5%, primarily due to an increase in corporate overhead costs due to cost reduction measures in the prior year to offset the impacts of COVID-19, as well as a decrease of $5.2 million in tax credits associated with COVID-19 related legislation in Canada and Australia.
−Removed: Other expense increased 20.3%, primarily due to increases in variable operating expenses associated with increased revenues and visitation, as well as an increase in acquisition and integration related expenses of $6.7 million.
−Removed: Mountain equity investment income, net primarily includes our share of income from the operations of a real estate brokerage company.
−Removed: Mountain equity investment income from the real estate brokerage company decreased $4.1 million, or 61.5%, for Fiscal 2022 compared to Fiscal 2021 primarily due to a lower number of real estate sales.
−Removed: Fiscal 2021 compared to Fiscal 2020
−Removed: Mountain Reported EBITDA increased $49.3 million, or 9.8%, primarily due to the impact of the Fiscal 2020 Resort Closures, including the deferral of $120.9 million of pass product revenue from Fiscal 2020 to Fiscal 2021 as a result of the Credit Offer to 2019/2020 North American pass product holders, as well as cost discipline efforts in Fiscal 2021 associated with lower levels of operations.
−Removed: These increases were partially offset by limitations and restrictions on our North American winter operations and closures, limitations and restrictions at Perisher, Falls Creek and Hotham during both the 2020 and 2021 Australian ski seasons.
−Removed: Additionally, Whistler Blackcomb’s performance was negatively impacted in Fiscal 2021 due to the continued closure of the Canadian border to international guests and was further impacted by the resort closing earlier than expected on March 30, 2021 following a provincial health order issued by the government of British Columbia.
−Removed: Mountain segment results also include $1.0 million and $13.6 million of acquisition and integration related expenses for Fiscal 2021 and Fiscal 2020, respectively, which are recorded within Mountain other operating expense.
−Removed: Additionally, operating results from Whistler Blackcomb, which are translated from Canadian dollars to U.S.
−Removed: dollars, were favorably affected by increases in the Canadian dollar exchange rate relative to the U.S.
−Removed: dollar for Fiscal 2021 as compared to Fiscal 2020, resulting in a decrease in Mountain Reported EBITDA of approximately $2.0 million, which the Company calculated by applying current period foreign exchange rates to the prior period results.
−Removed: Lift revenue increased $163.5 million, or 17.9%, primarily due to the Company operating for the full U.S.
−Removed: ski season in Fiscal 2021 as compared to the shortened operating season in Fiscal 2020 as a result of the Resort Closures, including the deferral impact of the Credit Offer from Fiscal 2020 to Fiscal 2021, partially offset by limitations and restrictions on our North American winter operations in Fiscal 2021 due to the ongoing impacts of COVID-19, which resulted in a decrease in non-pass visitation.
−Removed: Pass product revenue increased 40.6%, primarily as a result of strong North American pass sales growth for the 2020/2021 ski season, including the deferral impact of the Credit Offer which was recognized primarily during Fiscal 2021.
−Removed: Non-pass revenue decreased 5.7% due to reduced non-pass visitation to our Resorts, which were adversely impacted by COVID-19 related capacity limitations and snowfall levels that were well below average at our Colorado, Utah and Tahoe
−Removed: resorts through the holiday season, partially offset by an increase in non-pass ETP of 10.1%.
−Removed: Visitation was particularly impacted in regions where heightened COVID-19 related restrictions were in place, including Whistler Blackcomb, Tahoe and Vermont.
−Removed: Additionally, Whistler Blackcomb’s results were disproportionately impacted as compared to our broader Mountain segment performance in Fiscal 2021 due to the continued closure of the Canadian border to international guests, and was further impacted by the resort closing earlier than expected on March 30, 2021 following a provincial health order issued by the government of British Columbia.
−Removed: Ski school revenue, dining revenue and retail/rental revenue each decreased in Fiscal 2021 compared to Fiscal 2020 primarily due to the limitations and restrictions on our North American operations during Fiscal 2021 as a result of the impacts of COVID-19 on our business.
−Removed: 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.
−Removed: Other revenue is also comprised of Australian ski area lodging and transportation revenue.
−Removed: For Fiscal 2021, other revenue decreased $24.7 million, or 13.3%, primarily due to decreased mountain activities and mountain services revenue as a result of limitations and restrictions on our business in Fiscal 2021 due to COVID-19, as well as a reduction in ski pass insurance revenue as a result of the replacement of our previous ski pass insurance program with Epic Coverage for the 2020/2021 North American ski season, which is free to all pass product holders.
−Removed: Operating expense decreased $68.1 million, or 5.6%, which was primarily attributable to cost discipline efforts in Fiscal 2021 associated with lower levels of operations and limitations, restrictions and closures of Resort operations resulting from COVID-19.
+Added: Mountain Reported EBITDA increased $11.4 million, or 1.4%.
+Added: The increase was driven by:
+Added: (i) an overall increase in skier visitation that benefited our ancillary lines of business, which remained disproportionately impacted by COVID-19 restrictions and limitations in the prior year;
+Added: (ii) an increase in North American pass revenue, which benefited from an increase in pass product sales for the 2022/2023 North American ski season compared to the prior year;
+Added: and (iii) our Australian operations, which experienced record visitation and favorable snow conditions in the 2022 ski season following periodic COVID-19 related closures in the prior year at Perisher, Falls Creek and Hotham.
+Added: These increases were partially offset by:
+Added: (i) increased labor and labor-related benefits and general and administrative expense, primarily as a result of investments in North American employee wages and increased headcount to support more normalized staffing and operations at our Resorts;
+Added: (ii) increased variable expenses associated with increased revenues;
+Added: (iii) increased expenses related to variable weather conditions;
+Added: and (iv) the impact of inflation.
+Added: Mountain segment results also include $3.1 million and $7.7 million of acquisition and integration related expenses for Fiscal 2023 and Fiscal 2022, respectively.
+Added: Lift revenue increased $110.7 million, or 8.4%, due to increases in both pass revenue and non-pass revenue.
+Added: Pass revenue increased 8.5% primarily as a result of an increase in pass product sales for the 2022/2023 North American ski season compared to the prior year, as well as an increase in pass product sales for the 2022 Australian ski season compared to the prior year.
+Added: Non-pass revenue increased 8.3% primarily due to an increase non-pass ETP (excluding Andermatt-Sedrun) of 7.8%, as well as incremental non-pass revenue from Andermatt-Sedrun of $13.2 million.
+Added: Total non-pass ETP, including the impact of Andermatt-Sedrun, increased 4.3%.
+Added: The increase in non-pass revenue also benefited from an increase in visitation at our Australian ski areas in the first quarter of Fiscal 2023, which experienced record visitation and favorable snow conditions during the 2022 ski season following periodic COVID-related closures and restrictions in the prior year.
+Added: Total ETP decreased 3.4% primarily as a result of an increase in the proportion of pass product visitation (which generally results in lower ETP per visit) to total skier visits, driven by a continued migration to advance commitment products, partially offset by the increase in non-pass ETP discussed above.
+Added: Ski school revenue increased $63.6 million, or 28.5%, dining revenue increased $60.9 million, or 37.2%, and retail/rental revenue increased $49.7 million, or 15.9%, each primarily driven by the greater impact of COVID-19 and related limitations and restrictions in the prior year, including staffing challenges which limited our ability to operate at full capacity, as well as increased skier visitation.
+Added: Other revenue mainly consists of revenues from summer visitation and other mountain activities, employee housing, guest services, commercial leasing, marketing, private clubs (which includes both club dues and amortization of initiation fees), municipal services, other recreation activities and Australian ski area lodging and transportation.
+Added: Other revenue increased $42.8 million, or 21.0%, primarily as a result of increased visitation at our Resorts compared to the prior year.
+Added: Additionally, the increase was driven by the greater impact of COVID-19 and related limitations and restrictions in the prior year, which impacted the Company’s ability to operate ancillary services and other on-mountain activities at full capacity, as well as our Australian ski areas, which were disproportionately impacted by restrictions on international travel in the prior year.
+Added: Operating expense increased $314.4 million, or 22.4%, which was primarily attributable to investments in employee wages and salaries and increased headcount to support more normalized staffing and operations at our Resorts, as well as increased variable expenses associated with increased revenue, the impact of inflation and incremental expenses associated with Andermatt-Sedrun and the Seven Springs Resorts.
Additionally, operating expense includes $3.1 million and $7.7 million of acquisition and integration related expenses for Fiscal 2023 and Fiscal 2022, respectively.
−Removed: Labor and labor-related benefits decreased 4.6%%, primarily due to cost discipline efforts in Fiscal 2021 associated with limitations, restrictions and closures of our Resort operations as a result of COVID-19, as well as incremental tax credits of approximately $10.3 million primarily associated with COVID-19 related legislation passed in Canada, partially offset by an increase in variable compensation.
−Removed: Retail cost of sales decreased 20.4% compared to a decrease in retail sales of 23.5%, reflecting a higher mix of aged retail products sold at reduced margins.
−Removed: Resort related fees decreased 7.0% primarily due to decreases in revenue on which those fees are based.
−Removed: General and administrative expense increased 5.8%, primarily due to a $13.2 million charge recorded during the fourth quarter of Fiscal 2021 for a contingent obligation with respect to employment-related litigation, as well as an increase in variable compensation accruals, partially offset by incremental tax credits of approximately $2.7 million primarily associated with COVID-19 related legislation passed in Canada and Australia.
−Removed: Other expense decreased 10.5% primarily due to decreases in variable operating expenses associated with reduced revenues, as well as a decrease in acquisition and integration related expenses of $12.6 million.
−Removed: Mountain equity investment income, net primarily includes our share of income from the operations of a real estate brokerage joint venture.
−Removed: Mountain equity investment income from the real estate brokerage company increased $5.0 million (296.3%) for Fiscal 2021 compared to Fiscal 2020 due to a significant increase in both the number of real estate sales and the average price of those sales.
+Added: Labor and labor-related benefits increased 32.7%, primarily due to investments in wages and salaries for North American employees and increased headcount to support more normalized staffing and operations at our Resorts, as well as an increase in Australian operations as a result of periodic closures during the 2021 ski season, additional labor costs incurred as a result of variable weather conditions, and incremental expenses from Andermatt-Sedrun and the Seven Springs Resorts of $21.0 million for the comparable period they were not owned in the prior year.
+Added: Retail cost of sales increased 19.9%, compared to an increase in retail sales of 16.1%, reflecting decreased margins on retail products driven by higher sales of discounted inventory.
+Added: Resort related fees increased 12.5% primarily as a result of an increase in revenues on which those fees are based.
+Added: General and administrative expense increased 11.5% due to an increase in costs across all corporate functions, which were primarily driven by investments in employee wages and salaries.
+Added: Other expense increased 18.5%, primarily due to increases in variable operating expenses associated with increased revenues, in addition to incremental expenses from Andermatt-Sedrun and the Seven Springs Resorts of $17.3 million for the comparable period they were not owned in the prior year, increased utility costs of $10.0 million primarily associated with higher variable rates and increased snowmaking operations at our Eastern U.S.
+Added: ski areas, and an increase in repairs and maintenance expense of $4.0 million.
+Added: Mountain equity investment income, net primarily includes our share of income from the operations of a real estate brokerage company.
Lodging Segment
2 unchanged sentences
2023 2022 2021 2023/2022 2022/2021
−Removed: 2022/2021 2021/2020
Lodging net revenue:
25 unchanged sentences
RevPar $ 133.48 $ 133.53 $ 85.99 — % 55.3 %
−Removed: (1) Segment results for Fiscal 2021 and Fiscal 2020 have been retrospectively adjusted to reflect current period presentation.
−Removed: See Notes to the Consolidated Financial Statements for additional information.
+Added: (1) Owned hotel RevPAR for Fiscal 2023 declined from the prior comparative period primarily due to the inclusion of properties acquired through the Seven Springs Resorts for the full year-to-date period, compared to only being included for seven months in the prior year period, as well as the sale of the DoubleTree at Breckenridge hotel, which was sold after the 2021/2022 ski season, partially offset by price increases at our other lodging properties.
+Added: For Fiscal 2022, the DoubleTree at Breckenridge contributed $8.6 million of owned hotel revenue.
Lodging Reported EBITDA includes $4.0 million, $3.7 million and $3.8 million of stock-based compensation expense for Fiscal 2023, Fiscal 2022 and Fiscal 2021, respectively.
Fiscal 2023 compared to Fiscal 2022
−Removed: Lodging Reported EBITDA increased $33.8 million, or 418.0%, primarily as a result of fewer COVID-19 capacity-related restrictions and limitations on our North American operations compared to the prior year, which resulted in increased occupancy at our lodging properties as compared to the prior year, as well as an increase in ADR of 16.1% driven by increased pricing at our owned hotels and managed condominiums due to an increase in demand particularly for group visitation.
−Removed: Additionally we benefited from the incremental operations of the Seven Springs Resorts (acquired in December 2021) which generated $5.8 million of EBITDA in the current year.
−Removed: These increases were partially offset by increased general and administrative expenses primarily due to COVID-19 related cost management in the prior year.
−Removed: Revenue from owned hotel rooms, managed condominium rooms, dining, transportation, golf and other revenue each increased primarily as a result of fewer COVID-19 related limitations and restrictions as compared to the prior year, as well as an increase in demand over the prior year and incremental revenue from the Seven Springs Resorts of $18.7 million.
−Removed: Operating expense (excluding reimbursed payroll costs) increased 32.9%, including incremental operating expenses from the Seven Springs Resorts of $12.9 million.
−Removed: Labor and labor related benefits increased 34.4%, primarily due to increased staffing associated with improved North American operations in the current year as a result of fewer COVID-19 related limitations and restrictions and increased demand, as well as the impact of salary reductions in the prior year.
−Removed: General and administrative expense increased 26.0% primarily due to an increase in allocated corporate overhead costs for nearly all functions, which were impacted in the prior year by COVID-19 related cost management.
−Removed: Other expense increased 35.1%, primarily related to higher variable expenses associated with increased revenue.
−Removed: 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.
−Removed: 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.
−Removed: Fiscal 2021 compared to Fiscal 2020
−Removed: Lodging Reported EBITDA for Fiscal 2021 decreased $8.0 million or 8797.8%, primarily as a result of limitations and restrictions on our North American operations in Fiscal 2021 as a result of the impacts of COVID-19, which resulted in reduced occupancy and capacity-related restrictions at our lodging properties compared to Fiscal 2020.
−Removed: Revenue from managed condominium rooms, dining, transportation and other revenue each decreased primarily as a result of the impacts of COVID-19.
−Removed: These decreases were partially offset by increases in revenue from golf, primarily due to strong summer demand in Fiscal 2021, and owned hotel rooms, primarily as a result of increased revenue from GTLC and partially offset by decreases at our other lodging properties as a result of the impacts of COVID-19.
−Removed: Operating expense (excluding reimbursed payroll costs) decreased 6.8%.
−Removed: Labor and labor related benefits decreased 10.9% primarily due to decreased staffing associated with COVID-19.
−Removed: General and administrative expense increased 11.3% due to an increase in allocated corporate overhead costs across all functions, including variable compensation accruals, primarily as a result of lower costs in the prior year associated with the Resort Closures.
−Removed: Other expense decreased 10.4% related to lower variable expenses associated with reduced revenue as a result of COVID-19.
+Added: Lodging Reported EBITDA decreased $13.5 million, or 52.4%, primarily driven by an increase in labor and labor-related benefits and general and administrative expense, including the impacts of investments in employee wages and salaries and increased headcount to support more normalized staffing and operations at our lodging properties.
+Added: Dining revenue increased $13.9 million, or 28.6%, primarily due to incremental revenue from the Seven Springs Resorts of $7.2 million for the comparable period they were not owned in the prior year, as well as increases in revenue at our other lodging properties as a result of fewer COVID-19 related limitations and restrictions as compared to the prior year.
+Added: Golf revenue increased $1.8 million, or 16.1%, primarily associated with an increase in revenue at our golf course in Wyoming.
+Added: Other revenue increased $9.3 million, or 20.0%, primarily due to increases in ancillary revenue associated with the return to more normalized operations, which include lodging property support fees, lodging retail sales, conference services, and spa services.
+Added: Operating expense (excluding reimbursed payroll costs) increased 13.2%.
+Added: Labor and labor-related benefits increased 15.5%, primarily due to investments in employee wages and salaries, and increased headcount to support more normalized staffing and operations at our lodging properties as compared to prior year, as well as incremental costs from the Seven Springs Resorts of $6.8 million for the comparable period they were not owned in the prior year.
+Added: General and administrative expense increased 15.4% compared to the prior year, due to an increase in costs across all corporate functions, and particularly for our central reservations booking services, which were primarily driven by employee wage and salary investments.
+Added: Other expense increased 8.6%, primarily related to increases in variable expenses associated with increased revenues, as well as incremental costs from the Seven Springs Resorts of $4.2 million for the comparable period they were not owned in the prior year.
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.
3 unchanged sentences
Different types of projects have different revenue and profit margins;
−Removed: therefore, as the real estate inventory mix changes, it can greatly impact Real Estate segment net revenue, operating expense, gain on sale of real property and Real Estate Reported EBITDA.
+Added: therefore, as the real estate inventory mix changes, it can greatly impact Real Estate segment net revenue, operating expense, gain or loss on sale of real property and Real Estate Reported EBITDA.
Real Estate segment operating results for Fiscal 2023, Fiscal 2022 and Fiscal 2021 are presented by category as follows (in thousands):
8 unchanged sentences
Real Estate Reported EBITDA $ (1,728) $ (3,927) $ (4,582) 56.0 % 14.3 %
−Removed: We did not close on any significant real estate transactions during Fiscal 2022.
+Added: During Fiscal 2023, we closed on the sale of a land parcel in Keystone for $7.5 million, which was recorded within Real Estate net revenue, with a corresponding cost of sale (including sales commission) of $5.1 million.
Other operating expense of $5.5 million was primarily comprised of general and administrative costs, such as labor and labor-related benefits, professional services and allocated corporate overhead costs.
1 unchanged sentence
Other operating expense of $5.7 million was primarily comprised of general and administrative costs, such as labor and labor-related benefits, professional services and allocated corporate overhead costs.
−Removed: 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.
−Removed: Other 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.
In addition to segment operating results, the following items contributed to our overall financial position and results of operations (in thousands).
1 unchanged sentence
2023 2022 2021 2023/2022 2022/2021
−Removed: Asset impairments $ — $ — $ (28,372) nm (100.0) %
+Added: Depreciation and amortization $ (268,501) $ (252,391) $ (252,585) 6.4 % (0.1) %
Change in estimated fair value of contingent consideration $ (49,836) $ (20,280) $ (14,402) 145.7 % 40.8 %
−Removed: Gain (loss) on disposal of fixed assets and other, net $ 43,992 $ (5,373) $ 838 918.8 % (741.2) %
−Removed: Interest expense, net $ (148,183) $ (151,399) $ (106,721) 2.1 % (41.9) %
+Added: (Loss) gain on disposal of fixed assets and other, net $ (9,070) $ 43,992 $ (5,373) (120.6) % 918.8 %
+Added: Investment income and other, net $ 23,744 $ 3,718 $ 586 538.6 % 534.5 %
Foreign currency (loss) gain on intercompany loans $ (2,907) $ (2,682) $ 8,282 (8.4) % (132.4) %
2 unchanged sentences
Net (income) loss attributable to noncontrolling interest $ (16,955) $ (20,414) $ 3,393 16.9 % (701.7) %
−Removed: Asset impairments.
−Removed: We recorded an asset impairment of approximately $28.4 million during Fiscal 2020 as a result of the effects of COVID-19 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.
−Removed: See Notes to the Consolidated Financial Statements for additional information.
+Added: Depreciation and amortization .
+Added: Depreciation and amortization expense for Fiscal 2023 increased $16.1 million compared to the prior year, primarily due to assets acquired in the acquisition of Andermatt-Sedrun.
Change in estimated fair value of contingent consideration .
−Removed: We recorded losses of $20.3 million and $14.4 million during Fiscal 2022 and Fiscal 2021, respectively, primarily related to an increase in the estimated contingent consideration payment for each respective year, as well as accretion resulting from the passage of time.
−Removed: We recorded a gain of $3.0 million during Fiscal 2020 primarily related to a decrease in the estimated Contingent Consideration payments for Fiscal 2020 and Fiscal 2021 as a result of a decrease in expected results due to the anticipated impacts of COVID-19 at that time.
−Removed: 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 $42.4 million and $29.6 million as of July 31, 2022 and 2021, respectively.
−Removed: Gain (loss) on disposal of fixed assets and other, net .
+Added: We recorded expense of $49.8 million for Fiscal 2023, primarily related to an increase in the expected long-term EBITDA performance for Park City, as well as an increase in the expected contingent rent payment to be made for Fiscal 2023.
+Added: We recorded expense of $20.3 million for Fiscal 2022 primarily related to an increase in the estimated contingent consideration payment for Fiscal 2022.
+Added: (Loss) gain on disposal of fixed assets and other, net.
+Added: Loss on disposal of fixed assets and other, net for Fiscal 2023 included a loss of $5.9 million related to the sale of five retail and rental stores in Telluride, Colorado, as well as other annual disposals of fixed assets.
Gain on disposal of fixed assets and other, net for Fiscal 2022 included (i) $32.2 million from the sale of the DoubleTree at Breckenridge hotel;
2 unchanged sentences
These gains were partially offset by losses on other annual disposals of fixed assets.
−Removed: Interest expense, net.
−Removed: Interest expense, net for Fiscal 2021 increased compared to Fiscal 2020 primarily due to borrowings under our 6.25% unsecured bond offering, which was completed on May 4, 2020 (the “6.25% Notes”) and generated approximately $28.3 million of incremental interest expense in Fiscal 2021, and $12.5 million of non-cash interest expense associated with amortization of the debt discount for the 0.0% Convertible Notes, which were issued in December 2020.
+Added: Investment income and other, net.
+Added: Investment income and other, net for Fiscal 2023 increased $20.0 million compared to Fiscal 2022, primarily as a result of an increase in earned interest rates.
Foreign currency (loss) gain on intercompany loans.
−Removed: Foreign currency (loss) gain on intercompany loans for Fiscal 2022 decreased as compared to Fiscal 2021 and increased for Fiscal 2021 as compared to Fiscal 2020, both as a result of the Canadian dollar fluctuating relative to the U.S.
−Removed: dollar, and was associated with an intercompany loan from Vail Holdings, Inc.
+Added: Foreign currency (loss) gain on intercompany loans is 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.
−Removed: This intercompany loan, which had an outstanding balance of approximately $97.2 million as of July 31, 2022, requires foreign currency remeasurement to Canadian dollars, the functional currency for Whistler Blackcomb.
−Removed: As a result, foreign currency fluctuations associated with the loan are recorded within our results of operations.
+Added: This intercompany loan requires foreign currency remeasurement to Canadian dollars, the functional currency for Whistler Blackcomb.
+Added: As a result, foreign currency fluctuations between the Canadian dollar and U.S.
+Added: dollar associated with the loan are recorded within our results of operations.
Provision for income taxes.
−Removed: The effective tax rate was 19.4%, 0.6% and 6.3% in Fiscal 2022, Fiscal 2021 and Fiscal 2020, respectively.
−Removed: The increase in the effective tax rate during Fiscal 2022 compared to Fiscal 2021 was primarily due to an increase in full fiscal year pre-tax book income, which lessens the tax rate impact from favorable permanent items and favorable discrete items, as well as a shift in income to higher tax rate jurisdictions.
−Removed: The decrease in the effective tax rate provision during Fiscal 2021 compared to Fiscal 2020 was primarily driven by an increase in excess tax benefits from employee share awards that were exercised (stock appreciation rights) and that vested (restricted stock awards).
+Added: The effective tax rate for Fiscal 2023 was 23.7%, compared to 19.4% for Fiscal 2022.
+Added: The increase in the effective tax rate was primarily due to a shift in income to higher tax rate jurisdictions, as well as a reduction in favorable discrete items, including excess tax benefits from employee share awards.
Net (income) loss attributable to noncontrolling interest .
Net (income) loss attributable to noncontrolling interest is primarily associated with the income or loss attributable to the minority shareholder of Whistler Blackcomb, and accordingly, fluctuations are primarily associated with changes in income or loss from Whistler Blackcomb operations.
+Added: Beginning in Fiscal 2023, net income (loss) attributable to noncontrolling interest also includes income or loss attributable to the minority shareholder of Andermatt-Sedrun, for which fluctuations are primarily associated with changes in income or loss from Andermatt-Sedrun operations.
Reconciliation of Non-GAAP Measures
10 unchanged sentences
Depreciation and amortization 268,501 252,391 252,585
−Removed: Asset impairments — — 28,372
−Removed: (Gain) loss on disposal of fixed assets and other, net (43,992) 5,373 (838)
+Added: Loss (gain) on disposal of fixed assets and other, net 9,070 (43,992) 5,373
Change in estimated fair value of contingent consideration 49,836 20,280 14,402
8 unchanged sentences
Total Reported EBITDA $ 833,109 $ 832,987 $ 540,074
−Removed: (1) Segment results for Fiscal 2021 and Fiscal 2020 have been retrospectively adjusted to reflect current period presentation.
−Removed: See Notes to the Consolidated Financial Statements for additional information.
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):
14 unchanged sentences
Fiscal 2023 compared to Fiscal 2022
−Removed: We generated $710.5 million of cash from operating activities during Fiscal 2022, an increase of $185.2 million when compared to $525.3 million of cash generated during Fiscal 2021.
−Removed: The increase in operating cash flows was primarily a result of increased Mountain and Lodging segment operating results during Fiscal 2022 compared to the prior year, including an increase in pass product sales and associated accounts receivable collections, net of refunds, during Fiscal 2022 compared to the prior year, which was impacted by the credits offered to 2019/2020 North American pass product holders who purchased 2020/2021 pass products.
−Removed: These increases were partially offset by (i) a decrease in cash flows from accounts payable and accrued liabilities, primarily associated with the lower level of operations as of the beginning of Fiscal 2021 resulting from COVID-19 and (ii) an increase in inventory purchases during Fiscal 2022 compared to the prior year.
−Removed: Cash used in investing activities for Fiscal 2022 increased by $244.6 million primarily due to (i) cash payments of $116.3 million, net of cash acquired of $0.2 million, related to the acquisition of the Seven Springs Resorts during Fiscal 2022;
−Removed: (ii) a cash deposit of $114.4 million made in July 2022 related to the acquisition of Andermatt-Sedrun, which closed on August 3, 2022;
−Removed: and (iii) an increase in capital expenditures of $77.7 million as a result of the deferral of discretionary capital projects in the prior year related to our decision to prioritize near-term liquidity due to the effects of COVID-19.
−Removed: These increases were partially offset by proceeds of $40.5 million from the sale of the DoubleTree at Breckenridge during Fiscal 2022, as well as proceeds of $10.3 million from the NPS related to partial payments for leasehold surrender interest at GTLC associated with assets that have been fully depreciated and the sale of an administrative building in Avon, CO for $11.3 million.
−Removed: Cash (used in) provided by financing activities decreased by $927.8 million during Fiscal 2022 compared to Fiscal 2021, primarily due to (i) prior year proceeds of $575.0 million from the issuance of our 0.0% Convertible Notes during Fiscal 2021;
−Removed: (ii) an increase in dividends paid of $225.8 million;
−Removed: (iii) an increase in repurchases of common stock of $75.0 million;
−Removed: (iv) a $51.5 million repayment of debt associated with the maturity of the EB-5 Development Notes (as defined in Notes to Consolidated Financial Statements);
−Removed: and (v) an increase in net payments under the revolver component of our Whistler Credit Agreement of $14.8 million.
−Removed: These increases were partially offset by a decrease in financing costs primarily associated with the issuance of the 0.0% Convertible Notes in the prior year.
−Removed: Fiscal 2021 compared to Fiscal 2020
−Removed: We generated $525.3 million of cash from operating activities during Fiscal 2021, an increase of $130.3 million when compared to $395.0 million of cash generated during Fiscal 2020.
−Removed: The increase in operating cash flows was primarily a result of (i) an increase in accounts payable and accrued liabilities (excluding accounts payable and accrued liabilities assumed through acquisitions) primarily due to an increase in accrued trade payables, salaries and wages in Fiscal 2021 due to a return to more normal operations, as compared to significantly lower accruals in the prior year due to the early closure of the 2019/2020 North American ski season for our Resorts, lodging properties and retail stores beginning on March 15, 2020;
−Removed: (ii) an increase in pass product sales and collections as compared to Fiscal 2020, primarily as a result of the impacts of COVID-19, including the extended pass product sales deadline in the prior year and the impact of credits offered to 2019/2020 North American pass product holders who purchased 2020/2021 pass products;
−Removed: and (iii) a decrease in inventories (excluding inventories assumed through acquisitions) as of July 31, 2021 as compared to the beginning of the fiscal year relative to an increase in the prior year period.
−Removed: These increases were partially offset by an increase in cash interest payments of $37.3 million in Fiscal 2021 as compared to the prior year, primarily due to incremental cash interest payments on the 6.25% Notes issued in May 2020, for which the first interest payments were made during Fiscal 2021.
−Removed: Cash used in investing activities for Fiscal 2021 decreased by $389.4 million, primarily due to cash payments of $327.6 million, net of cash acquired, related to the acquisition of Peak Resorts during Fiscal 2020.
−Removed: Additionally, capital expenditures decreased by $57.2 million primarily as a result of the deferral of a significant amount of discretionary capital projects related to our decision during the outbreak of COVID-19 to prioritize near-term liquidity.
−Removed: Cash provided by financing activities increased by $58.4 million during Fiscal 2021 compared to Fiscal 2020, primarily due to (i) proceeds of $575.0 million from the issuance of our 0.0% Convertible Notes during Fiscal 2021;
−Removed: (ii) a decrease in dividends paid of $212.7 million;
−Removed: (iii) a decrease in net payments of $208.0 million under the revolver component of our Vail Holdings Credit Agreement;
−Removed: and (iv) a decrease in repurchases of common stock of $46.4 million.
−Removed: These increases in cash provided by financing activities were partially offset by (i) proceeds of $600.0 million related to the issuance of our 6.25% Notes during Fiscal 2020;
−Removed: (ii) proceeds of $335.6 million from incremental borrowings under the term loan portion of our Vail Holdings Credit Agreement during Fiscal 2020, which were used to fund the Peak Resorts acquisition;
−Removed: (iii) an increase in net payments under the revolver component of our Whistler Credit Agreement of $23.5 million;
−Removed: and (iv) an increase in employee taxes paid for equity award exercises of $19.6 million.
+Added: We generated $639.6 million of cash from operating activities during Fiscal 2023, a decrease of $70.9 million compared to $710.5 million generated during Fiscal 2022.
+Added: The decrease in operating cash flows was primarily a result of (i) an increase in income tax payments of approximately $74.7 million and (ii) an increase in payments for accounts payable and accrued liabilities primarily associated with the lower level of operations as of the beginning of the prior fiscal year.
+Added: These decreases were partially offset by an increase in earned interest on short-term investments of approximately $20.0 million.
+Added: Additionally, we generated $7.5 million of proceeds from real estate land parcel sales during Fiscal 2023.
+Added: Cash used in investing activities for Fiscal 2023 decreased by $74.8 million primarily due to the prior year acquisition of the Seven Springs Resorts for $116.3 million, net of cash acquired.
+Added: Additionally, we made a cash deposit of $114.4 million (CHF 110.0 million) in July 2022 related to the acquisition of Andermatt-Sedrun, which was returned in the current year upon closing of the acquisition on August 3, 2022.
+Added: The cash deposit was invested into Andermatt-Sedrun, which is consolidated in our consolidated financial statements subsequent to the acquisition being completed.
+Added: Accordingly, the deposit is shown as a cash outflow in Fiscal 2022 and a cash inflow in Fiscal 2023.
+Added: These decreases in cash used in investing activities were partially offset by (i) an increase in capital expenditures of approximately $122.1 million as compared to the prior year, driven by our significant investment in lift upgrades in calendar year 2022;
+Added: (ii) $48.8 million of short-term investments in bank deposits in the current year, net of maturities, which were invested in deposits with maturity dates of more than three months at the date of purchase and are therefore not reflected as cash equivalents;
+Added: (iii) $38.6 million of cash paid to ASA upon closing the acquisition of Andermatt-Sedrun, net of cash acquired, on August 3, 2022 and (iv) proceeds in the prior year due to the sale of the DoubleTree at Breckenridge, payment from the NPS related to a leasehold surrender interest at GTLC associated with assets that had been fully depreciated by the Company and the sale of an administrative building in Avon, CO, which did not recur in the current year.
+Added: Cash used in financing activities increased by $422.6 million during Fiscal 2023 compared to Fiscal 2022, primarily due to an increase in repurchases of common stock of $425.0 million and an increase in dividends paid of $88.6 million.
+Added: These increases were partially offset by a decrease in debt repayments, including (i) the prior year repayment associated with the maturity of the EB-5 Development Notes, which were assumed in our acquisition of Peak Resorts, Inc.
+Added: ($51.5 million) and (ii) a reduction in net repayments under the revolver component of our Whistler Credit Agreement ($21.2 million), as well as a decrease in employee taxes paid for share award exercises ($31.8 million).
Significant Sources of Cash
We had $563.0 million of cash and cash equivalents as of July 31, 2023, compared to $1,107.4 million as of July 31, 2022.
−Removed: Although we cannot predict the future impact associated with the COVID-19 pandemic or other economic factors 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.
+Added: The decrease was primarily due to a $425.0 million increase in share repurchases during Fiscal 2023.
+Added: We currently anticipate that our Mountain and Lodging segment operating results will continue to provide a significant source of future operating cash flows.
In addition to our $563.0 million of cash and cash equivalents at July 31, 2023, we had $421.0 million available under the revolver component of our Vail Holdings Credit Agreement as of July 31, 2023 (which represents the total commitment of $500.0 million less certain letters of credit outstanding of $79.0 million).
−Removed: Also, to further support the liquidity needs of Whistler Blackcomb, we had C$281.6 million ($220.0 million) available under the revolver component of our Whistler Credit Agreement (which represents the total commitment of C$300.0 million ($234.3 million) less outstanding borrowings of C$15.0 million ($11.6 million) and letters of credit outstanding of C$3.4 million ($2.6 million)).
+Added: Also, to further support the liquidity needs of Whistler Blackcomb, we had C$296.6 million ($224.9 million) available under the revolver component of our Whistler Credit Agreement (which represents the total commitment of C$300.0 million ($227.5 million) less letters of credit outstanding of
+Added: C$3.4 million ($2.6 million)).
We expect that our liquidity needs in the near term will be met by continued use of our existing cash and cash equivalents, operating cash flows and borrowings under both the Vail Holdings Credit Agreement and Whistler Credit Agreement, if needed.
−Removed: On August 31, 2022, we entered into an amendment of the Vail Holdings Credit Agreement, to extend the maturity date by two years to September 2026.
−Removed: Additionally, in connection with the amendment the reference rate changed from LIBOR to the secured overnight financing rate (“SOFR”) given the anticipated sunset of LIBOR in June of 2023.
−Removed: SOFR is a broad measure of the cost of borrowing cash in the overnight U.S.
−Removed: Treasury repo market and is administered by the Federal Reserve Bank of New York.
−Removed: There were no other material changes in terms.
−Removed: The Vail Holdings Credit Agreement and the Whistler Credit Agreement provide adequate flexibility and are priced favorably with any new borrowings currently priced at SOFR, plus a spread of 0.1%, plus 1.25% for the Vail Holdings Credit Agreement, and Bankers Acceptance Rate plus 1.75% for the Whistler Credit Agreement.
+Added: The Vail Holdings Credit Agreement and the Whistler Credit Agreement provide adequate flexibility and are priced favorably with any new borrowings currently priced at SOFR, plus 1.60% for the Vail Holdings Credit Agreement, and Bankers Acceptance Rate plus 1.75% for the Whistler Credit Agreement.
Significant Uses of Cash
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In addition, we may incur capital expenditures for retained ownership interests associated with third-party real estate development projects.
−Removed: 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, throughout our owned hotels and in technology that can impact the full network.
−Removed: We evaluate additional discretionary capital improvements based on an expected level of return on investment.
−Removed: We currently anticipate we will spend approximately $323 million to $333 million on resort capital expenditures during calendar year 2022.
−Removed: This plan includes the installation of 18 new or replacement lifts across 12 of our resorts, which will meaningfully increase lift capacity at those lift locations.
−Removed: The capital plan includes approximately $9 million for the addition of annual capital expenditures associated with the recently acquired Seven Springs Resorts, approximately $4 million related to the addition of Andermatt-Sedrun and approximately $20 million of incremental spending to complete the one-time capital plans associated with the Peak Resorts and Triple Peaks acquisitions.
−Removed: Also included in these estimated capital expenditures are approximately $105 million to $115 million of maintenance capital expenditures, which are necessary to maintain appearance and level of service appropriate to our resort operations.
+Added: Currently planned capital expenditures primarily include investments that will allow us to maintain our high-quality standards for the guest experience throughout our owned hotels and in technology that can impact the full network.
+Added: Additionally, planned capital expenditures include discretionary improvements at our Resorts which we evaluate based on an expected level of return on investment.
+Added: We currently anticipate we will spend approximately $180 million to $185 million on resort capital expenditures during calendar year 2023 , excluding one-time investments related to integration activities, deferred capital associated with the Keystone and Park City projects, $4 million of reimbursable investments associated with insurance recoveries, and $9 million of growth capital investments at Andermatt-Sedrun.
+Added: Including these one-time items, our total capital plan for calendar year 2023 is expected to be approximately $204 million to $209 million.
+Added: Included in these estimated capital expenditures are approximately $112 million to $117 million of maintenance capital expenditures (excluding Andermatt-Sedrun), which are necessary to maintain appearance and level of service appropriate to our resort operations.
We currently plan to utilize cash on hand, borrowings available under our credit agreements and/or cash flow generated from future operations to provide the cash necessary to complete our capital plans .
Approximately $108 million was spent for capital expenditures in calendar year 2023 as of July 31, 2023, leaving approximately $96 million to $101 million to spend in the remainder of calendar year 2023.
−Removed: On December 31, 2021, we acquired the assets of the Seven Springs Resorts for a purchase price of approximately $116.5 million, after adjustments for certain agreed-upon terms, which was funded with cash on hand.
−Removed: On August 3, 2022, we acquired a majority stake in Andermatt-Sedrun Sport AG, for a purchase price of CHF 149.3 million ($155.7 million), which was funded with cash on hand.
−Removed: During Fiscal 2022, we made a cash deposit of CHF 110.0 million ($114.4 million) to escrow as a required prepayment in connection with the acquisition, and the remaining CHF 39.3 million ($41.3 million) was paid subsequent to July 31, 2022.
−Removed: As of August 3, 2022, the value of the total consideration paid to the seller was $155.4 million.
+Added: On August 3, 2022, we acquired a majority stake in Andermatt-Sedrun, which was funded with cash on hand.
+Added: The purchase price was comprised of a $114.4 million (CHF 110.0 million) investment into Andermatt-Sedrun for use in capital investments to enhance the guest experience on the mountain and $41.3 million (CHF 39.3 million) paid to the seller.
+Added: As of August 3, 2022, the value of the total consideration paid was $155.4 million (CHF 149.3 million).
As of July 31, 2023, principal payments on the majority of our long-term debt ($2.1 billion of the total $2.8 billion debt outstanding as of July 31, 2023) are not due until fiscal year 2026 and beyond.
As of July 31, 2023 and 2022, total long-term debt, net (including long-term debt due within one year) was $2.8 billion and $2.7 billion, respectively.
−Removed: Net Debt (defined as long-term debt, net plus long-term debt due within one year less cash and cash equivalents) was $1.6 billion as of both July 31, 2022 and 2021.
+Added: Net Debt (defined as long-term debt, net plus long-term debt due within one year less cash and cash equivalents) was $2.3 billion and $1.6 billion as of July 31, 2023 and 2022, respectively, and the increase was primarily associated with the use of cash to fund increased share repurchases under our share repurchase program during Fiscal 2023.
As of July 31, 2023, the Vail Holdings Credit Agreement provides for (i) a revolving loan facility in an aggregate principal amount of $500.0 million and (ii) a term loan facility of $1.0 billion.
We expect that our liquidity needs in the near term will be met by continued use of our existing cash and cash equivalents, operating cash flows and borrowings under the Vail Holdings Credit Agreement and the Whistler Credit Agreement, if needed.
−Removed: Our debt service requirements can be impacted by changing interest rates as we had approximately $0.7 billion of net variable-rate debt outstanding as of July 31, 2022, after consideration of $400.0 million in interest rate swaps which convert variable-rate debt to fixed-rate debt.
−Removed: A 100-basis point change in LIBOR (or its successor, SOFR) would cause our annual interest payments on our net variable-rate debt to change by approximately $7.4 million.
+Added: Our debt service requirements can be impacted by changing interest rates as we had approximately $0.7 billion of net variable-rate debt outstanding as of July 31, 2023, after consideration of $400.0 million in interest rate swaps which effectively convert variable-rate debt to fixed-rate debt.
+Added: A 100-basis point change in our borrowing rates would cause our annual interest payments on our net variable-rate debt to change by approximately $6.7 million.
Additionally, the annual payments associated with the financing of the Canyons transaction increase by the greater of CPI less 1%, or 2%.
The fluctuation in our debt service requirements, in addition to interest rate and inflation changes, may be impacted by future borrowings under our credit agreements or other alternative financing arrangements we may enter into.
−Removed: 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.
−Removed: We can respond to liquidity impacts of changes in the business and economic environment, by managing our capital expenditures, variable operating expenses, the timing of new real estate development activity and the payment of cash dividends on our common stock.
+Added: Our long term liquidity needs depend upon operating results that impact the borrowing capacity under our credit agreements.
+Added: We can respond to liquidity impacts of changes in the
+Added: business and economic environment by managing our capital expenditures, variable operating expenses, the timing of new real estate development activity and the payment of cash dividends on our common stock.
Material Cash Requirements
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(1) Long-term debt includes principal payments, fixed-rate interest payments (including payments that are required under interest rate swaps) and estimated variable interest payments utilizing interest rates in effect at July 31, 2023, and assumes all debt outstanding as of July 31, 2023 will be held to maturity.
−Removed: The future annual interest obligations noted herein are estimated only in relation to debt outstanding as of July 31, 2022, and do not reflect interest obligations on potential future debt or refinancing (including the impact of the Fifth Amendment, which we entered into in August 2022 and which extended the maturity date of our Vail Holdings Credit Agreement by two years to September 2026 (see Notes to Consolidated Financial Statements for additional information)).
−Removed: Long-term debt also includes $12.8 million of proceeds resulting from real estate transactions accounted for as a financing arrangements.
−Removed: Fiscal 2023 payments shown above include approximately $6.2 million of proceeds, which are expected to be recognized on the Company’s Statement of Operations during Fiscal 2023 as a result of the anticipated resolution of continuing involvement, with no associated cash outflow (see Notes to Consolidated Financial Statements for additional information).
+Added: The future annual interest obligations noted herein are estimated only in relation to debt outstanding as of July 31, 2023, and do not reflect interest obligations on potential future debt or refinancing.
+Added: Long-term debt also includes $12.8 million of proceeds resulting from real estate transactions accounted for as financing arrangements, which are expected to be recognized on the Company’s Statements of Operations in future years as a result of the anticipated resolution of continuing involvement, with no associated cash outflow.
(2) Purchase obligations and other primarily includes amounts which are classified as trade payables ($148.5 million), accrued payroll and benefits ($99.4 million), accrued fees and assessments ($27.6 million), contingent consideration liability ($73.3 million) and accrued taxes (including taxes for uncertain tax positions) ($140.3 million) on our Consolidated Balance Sheet as of July 31, 2023.
These amounts also include other commitments for goods and services not yet received, including construction contracts and minimum commitments under season pass alliance agreements, which are not included on our Consolidated Balance Sheet as of July 31, 2023 in accordance with GAAP.
−Removed: Purchase obligations and other does not include any amounts associated with the acquisition of Andermatt-Sedrun, which was acquired on August 3, 2022.
Share Repurchase Program
Our share repurchase program is conducted under authorizations made from time to time by our Board of Directors.
−Removed: On March 6, 2006, our Board of Directors initially authorized the repurchase of up to 3,000,000 shares of 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.
−Removed: During Fiscal 2022, we repurchased 304,567 shares of common stock at an average price of $246.27 for a total cost of $75.0 million.
+Added: On March 9, 2006, our Board of Directors initially authorized the repurchase of up to 3,000,000 shares of Vail Shares and later authorized additional repurchases of up to 3,000,000 additional Vail Shares (July 16, 2008), 1,500,000 Vail Shares (December 4, 2015), and 2,500,000 Vail Shares (March 7, 2023), for a total authorization to repurchase shares of up to 10,000,000 Vail Shares.
+Added: During Fiscal 2023, we repurchased 2,182,594 shares (at an average price of $229.09) for a total cost of approximately $500.0 million, excluding accrued excise tax.
Since the inception of this stock repurchase program through July 31, 2023, we have repurchased 8,648,302 Vail Shares at a cost of approximately $979.4 million.
5 unchanged sentences
Dividend Payments
+Added: During Fiscal 2023, we paid cash dividends of $7.94 per share ($314.4 million).
During Fiscal 2022, we paid cash dividends of $5.58 per share ($225.8 million, including cash dividends paid to Exchangeco shareholders).
−Removed: We did not pay cash dividends during Fiscal 2021.
On September 27, 2023, our Board of Directors approved a cash dividend of $2.06 per share payable on October 26, 2023 to stockholders of record as of October 10, 2023.
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and for the EPR Secured Notes, Maximum Leverage Ratio and Consolidated Fixed Charge Ratio (each as defined in the EPR Agreements).
+Added: Additionally, the New Regional Policy loan between Andermatt-Sedrun and the Canton of Uri and Canton of Graubünden dated June 24, 2016 includes restrictive covenants requiring certain minimum financial results (as defined in the agreement).
In addition, our financing arrangements limit our ability to make certain restricted payments, pay dividends on or redeem or repurchase stock, make certain investments, make certain affiliate transfers and may limit our ability to enter into certain mergers, consolidations or sales of assets and incur certain indebtedness.
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The carrying value of goodwill and indefinite-lived intangible assets are evaluated for possible impairment on an annual basis or between annual tests if an event occurs or circumstances change that would more likely than not reduce the estimated fair value of a reporting unit or indefinite-lived intangible asset below its carrying value.
−Removed: Other intangible assets are evaluated for impairment only when there is evidence that events or changes in circumstances indicate that the carrying amount of these assets may not be recoverable.
+Added: Definite-lived intangible assets are evaluated for impairment only when there is evidence that events or changes in circumstances indicate that the carrying amount of these assets may not be recoverable.
Judgments and Uncertainties
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We perform a qualitative analysis to determine whether it is more likely than not that the fair value of a reporting unit or indefinite-lived intangible asset exceeds the carrying amount.
−Removed: If it is determined, based on qualitative factors, that the fair value of the reporting unit or indefinite-lived intangible asset may be more likely than not less than carrying amount, or if significant changes to macro-economic factors related to the reporting unit or intangible asset have occurred that could materially impact fair value since the previous quantitative analysis was performed, a quantitative impairment test would be required, in which we would determine the estimated fair value of our reporting units using a discounted cash flow analysis and determine the estimated fair value of indefinite-lived intangible assets primarily using the income approach based upon estimated future revenue streams.
−Removed: These analyses require significant judgments, including estimation of future cash flows, which is dependent on internal forecasts, available industry/market data (to the extent available), estimation of the long-term rate of growth for our business including expectations and assumptions regarding the impact of general economic conditions on our business, estimation of the useful life over which cash flows will occur (including terminal multiples), determination of the respective weighted average cost of capital and market participant assumptions.
−Removed: Changes in these estimates and assumptions could materially affect the determination of estimated fair value and impairment for each reporting unit or indefinite-lived intangible asset.
+Added: If it is determined, based on qualitative factors, that the fair value of the reporting unit or indefinite-lived intangible asset is more likely than not less than its carrying amount, or if significant changes to macro-economic factors related to the reporting unit or intangible asset have occurred that could materially impact the estimated fair value since the previous quantitative analysis was performed, a quantitative impairment test would be required.
+Added: The quantitative test includes determination of the estimated fair value of our reporting units using a discounted cash flow analysis and determination of the estimated fair value of indefinite-lived intangible assets primarily using the income approach based upon estimated future revenue streams.
+Added: These analyses require significant judgments, including estimation of future cash flows, which is dependent on internal forecasts, available industry/market data (to the extent available), estimation of the long-term rate of growth for our business including expectations and assumptions regarding the impact of general economic conditions on our business, estimation of terminal value, determination of the respective weighted average cost of capital and market participant assumptions.
+Added: Changes in these estimates and assumptions could materially affect the determination of estimated fair value and the amount of any potential impairment for each reporting unit or indefinite-lived intangible asset.
Effect if Actual Results Differ From Assumptions
Goodwill and indefinite-lived intangible assets are tested for impairment at least annually as of May 1.
−Removed: 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.
−Removed: If the net carrying value of the assets exceed their estimated fair value, an impairment will be recognized for indefinite-lived intangible assets, including goodwill, in an amount equal to that excess;
+Added: If the net carrying value of the reporting units or assets exceed their estimated fair value, an impairment will be recognized in an amount equal to that excess;
otherwise, no impairment loss is recognized.
−Removed: During Fiscal 2022, we primarily performed qualitative analyses of our reporting units and indefinite-lived intangible assets and determined that the estimated fair value of all material reporting units and indefinite-lived intangible assets significantly exceeded their respective carrying values.
+Added: During Fiscal 2023, we performed qualitative analyses of our reporting units and indefinite-lived intangible assets and determined that the estimated fair value of all material reporting units and indefinite-lived intangible assets significantly exceeded their respective carrying values.
Fair value determinations require considerable judgment and are sensitive to changes in underlying assumptions and factors.
−Removed: As a result, there can be no assurance that the estimates and assumptions made for purposes of the annual goodwill impairment test will prove to be an accurate prediction of the future.
+Added: As a result, there can be no assurance that the estimates and assumptions made for purposes of the annual goodwill or indefinite-lived asset impairment tests are accurate.
Examples of events or circumstances that could reasonably be expected to negatively affect the underlying key assumptions and ultimately impact the estimated fair value of our reporting units may include such items as:
(1) prolonged adverse weather conditions resulting in a sustained decline in guest visitation;
−Removed: (2) a prolonged weakness in the general economic conditions in which guest visitation and spending is adversely impacted (particularly with regard to COVID-19 or other potential future pandemics);
+Added: (2) a prolonged weakness in the general economic conditions in which guest visitation and spending is adversely impacted;
and (3) volatility in the equity and debt markets which could result in a higher discount rate.
−Removed: While historical performance and current expectations have generally 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.
+Added: While we believe that our estimates and judgments are reasonable and while historical performance and current expectations have generally resulted in estimated fair values of our reporting units and indefinite-lived assets that are 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.
However, it is not possible at this time to determine if an impairment charge would result or if such a charge would be material.
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Effect if Actual Results Differ From Assumptions
−Removed: We believe the estimates and judgments discussed herein are reasonable and we have adequate reserves for our tax contingencies for uncertain tax positions.
+Added: We believe the estimates and judgments we have made related to tax contingencies are reasonable and we have adequate reserves for uncertain tax positions.
Our reserves for uncertain tax positions, including any income tax related interest and penalties, are $56.8 million as of July 31, 2023.
−Removed: This reserve relates to the treatment of the Canyons lease payments obligation as payments of debt obligations and that the tax basis in Canyons goodwill is deductible.
+Added: This reserve solely relates to the treatment of the Canyons lease payments obligation 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.
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Accordingly, we allocate the purchase price of acquired businesses to the identifiable tangible and intangible assets acquired and liabilities assumed based upon their estimated fair values at the date of acquisition.
−Removed: The difference between the purchase price and the estimated fair value of the net assets acquired or the excess of the aggregate estimated fair values of assets acquired and liabilities assumed is recorded as goodwill.
+Added: The difference between the purchase price and the estimated fair value of assets acquired and liabilities assumed is recorded as goodwill.
In determining the estimated fair values of assets acquired and liabilities assumed in a business combination, we use various recognized valuation methods including present value modeling and referenced market values (where available).
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determination of weighted average cost of capital, market participant assumptions, royalty rates, terminal multiples and estimates of future cash flows to be generated by the acquired assets.
−Removed: In addition to the estimates and assumptions applied to valuing intangible assets acquired, the determination of the estimated fair value of contingent consideration, including estimating the likelihood and timing of achieving the relevant thresholds for contingent consideration payments, requires the use of subjective judgments.
−Removed: We estimate the fair value of the Park City contingent consideration payments using an option pricing valuation model which incorporates, among other factors, projected achievement of specified financial performance measures, discounts rates and volatility for the respective business.
+Added: In addition to the estimates and assumptions applied to valuing intangible assets acquired, the determination of the estimated fair value of
+Added: contingent consideration, including estimating the likelihood and timing of achieving the relevant thresholds for contingent consideration payments, requires the use of subjective judgments.
+Added: We estimate the fair value of the Park City contingent consideration payments using an option pricing valuation model which incorporates, among other factors, projected achievement of specified financial performance measures, discount rates and volatility for the respective business.
Effect if Actual Results Differ From Assumptions
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While we use our best estimates and assumptions to accurately value assets acquired and liabilities assumed at the acquisition date, our estimates are inherently uncertain and subject to refinement.
−Removed: As a result, during the measurement period, which may be up to one year from the acquisition date, we may record adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill.
−Removed: Upon the conclusion of the measurement period or final determination of the estimated fair values of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments would be recorded in our Consolidated Statements of Operations.
−Removed: We recognize the fair value of contingent consideration at the date of acquisition as part of the consideration transferred to acquire a business.
+Added: As a result, during the measurement period, which may be up to one year from the acquisition date, we may record adjustments, which could be significant, to the assets acquired and liabilities assumed with the corresponding offset to goodwill.
+Added: Upon the conclusion of the measurement period or final determination of the estimated fair values of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments would be recorded on our Consolidated Statements of Operations.
+Added: We recognize the fair value of contingent consideration, if any, at the date of acquisition as part of the consideration transferred to acquire a business.
The liability associated with contingent consideration is remeasured to fair value at each reporting period subsequent to the date of acquisition taking into consideration changes in financial projections and long-term growth rates, among other factors, that may impact the timing and amount of contingent consideration payments until the term of the agreement has expired or the contingency is resolved.
−Removed: Increases in the fair value of contingent consideration are recorded as losses in our Consolidated Statements of Operations, while decreases in fair value are recorded as gains.
+Added: Increases in the fair value of contingent consideration are recorded as losses on our Consolidated Statements of Operations, while decreases in fair value are recorded as gains.
New Accounting Standards
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Seasonality and Quarterly Results
−Removed: Our mountain and lodging operations are seasonal in nature, with a typical peak operating season in North America generally beginning in mid-December and running through mid-April.
−Removed: 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.
−Removed: Conversely, peak operating seasons for our NPS concessioner 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.
−Removed: Revenue and profits generated by NPS concessioner 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.
+Added: Our mountain and lodging operations are seasonal in nature, with a typical peak operating season in North America and Europe generally beginning in mid-December and running through mid-April.
+Added: In particular, revenue and profits for our North American and European mountain and most of our lodging operations are substantially lower and historically result in losses from late spring to late fall.
+Added: Conversely, peak operating seasons for our NPS concessioner properties, our mountain resort golf courses and our Australian resorts’ ski season generally occur during the North American summer months, and these operations typically incur operating losses during the North American and European winter months.
+Added: Revenue and profits generated by NPS concessioner properties’ summer operations, golf operations and Australian resorts’ ski operations are not sufficient to fully offset our off-season losses from our North American and European mountain and other lodging operations.
During Fiscal 2023, approximately 81% 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.
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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.