What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2023-09-28 compared with 2022-09-28 · 268 added, 308 removed, 1081 unchanged (35% of the section changed)

20 unchanged sentences

Based on this assessment, management concluded that, as of July 31, 2023, the Company’s internal control over financial reporting was effective.

Management’s evaluation and conclusion on the effectiveness of internal control over financial reporting as of July 31, 2022 excluded certain elements of internal controls of Seven Springs Mountain Resort, Hidden Valley Resort and Laurel Mountain Ski Area (collectively, the “Seven Springs Resorts,” acquired December 31, 2021) due to the timing of this acquisition.

Those elements of the acquired resorts’ internal controls over financial reporting that have been excluded represent less than 1% of total consolidated assets and approximately 2% of total consolidated net revenues of the Company as of and for the year ended July 31, 2022.

Management’s evaluation and conclusion on the effectiveness of internal control over financial reporting as of July 31, 2023 excluded certain elements of internal controls of Andermatt-Sedrun Sport AG (“Andermatt-Sedrun”, acquired August 3, 2022) due to the timing of this acquisition.

Those elements of the acquired resort’s internal controls over financial reporting that have been excluded represent approximately 2% of total consolidated assets and approximately 1% of total consolidated net revenues of the Company as of and for the year ended July 31, 2023.

The Company’s independent registered public accounting firm, PricewaterhouseCoopers LLP, has issued an attestation report on the effectiveness of the Company’s internal control over financial reporting as of July 31, 2023, as stated in the Report of Independent Registered Public Accounting Firm on the following page.

9 unchanged sentences

Basis for Opinions

The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting.

The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in Management’s Annual Report on Internal Control over Financial Reporting appearing under Item 9A.

Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company's internal control over financial reporting based on our audits.

9 unchanged sentences

We believe that our audits provide a reasonable basis for our opinions.

As described in Management’s Report on Internal Control over Financial Reporting, management has excluded certain elements of the internal control over financial reporting of Seven Springs Mountain Resort, Hidden Valley Resort and Laurel Mountain Ski Area (collectively, the “Seven Springs Resorts”) from its assessment of the Company’s internal control over financial reporting as of July 31, 2022 because it was acquired by the Company in a purchase business combination during 2022.

Subsequent to the acquisition, certain elements of the Seven Springs Resorts’ internal control over financial reporting and related processes were integrated into the Company’s existing systems and internal control over financial reporting.

Those controls that were not integrated have been excluded from management’s assessment of the effectiveness of internal control over financial reporting as of July 31, 2022.

We have also excluded these elements of the internal control over financial reporting of the Seven Springs Resorts from our audit of the Company’s internal control over financial reporting.

The excluded elements represent controls over less than 1% of consolidated assets and approximately 2% of the consolidated net revenues.

As described in Management’s Report on Internal Control over Financial Reporting, management has excluded Andermatt-Sedrun Sport AG from its assessment of internal control over financial reporting as of July 31, 2023 because it was acquired by the Company in a purchase business combination during the year ended July 31, 2023.

We have also excluded Andermatt-Sedrun Sport AG from our audit of internal control over financial reporting.

Andermatt-Sedrun Sport AG is a subsidiary whose total assets and total revenues excluded from management’s assessment and our audit of internal control over financial reporting represent 2% and 1%, respectively, of the related consolidated financial statement amounts as of and for the year ended July 31, 2023.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally

accepted accounting principles.

A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

(ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company;

(ii) provide reasonable assurance that transactions are recorded as necessary to permit

preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company;

and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

7 unchanged sentences

The Company remeasures the Contingent Consideration to fair value at each reporting date until the contingency is resolved.

The estimated fair value of Contingent Consideration includes the future period resort operations of Park City in the calculation of EBITDA on which participating contingent payments are made, which is determined on the basis of estimated subsequent year performance, escalated by an assumed long-term growth factor and discounted to net present value.

The estimated fair value of Contingent Consideration includes the future period resort operations of Park City in the calculation of EBITDA on which participating contingent payments are made, which is determined on the basis of estimated subsequent year performance, escalated by an assumed annual growth factor and discounted to net present value.

Fair value is estimated using an option pricing valuation model.

As described by management, key assumptions in determining the fair value under this model included future period Park City EBITDA, discount rate and volatility.

As described by management, significant assumptions in determining the fair value under this model included future period Park City EBITDA, discount rate and volatility.

The principal considerations for our determination that performing procedures relating to the fair value measurement of the Contingent Consideration is a critical audit matter are (i) the significant judgment by management when developing the fair value measurement, which in turn led to a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating audit evidence related to management’s significant assumptions for the future period Park City EBITDA, discount rate, and volatility;

17 unchanged sentences

Restricted cash 10,118 18,680

Accounts receivable, net of allowances of $ 6,356 and $ 7,621 , respectively

383,425 345,408

Inventories, net of reserves of $ 2,687 and $ 2,601 , respectively

Trade receivables, net of allowances of $ 5,385 and $ 6,356 , respectively

381,067 383,425

Inventories, net of reserves 132,548 108,723

Other current assets 121,403 173,277

9 unchanged sentences

192,289 192,070

Deferred charges and other assets 51,405 37,106

Other assets 55,901 51,405

Total assets $ 5,947,754 $ 6,318,028

21 unchanged sentences

Additional paid-in capital 1,124,433 1,184,577

Accumulated other comprehensive income 10,923 27,799

Accumulated other comprehensive (loss) income ( 10,358 ) 10,923

Retained earnings 873,710 895,889

28 unchanged sentences

Gain on sale of real property 842 1,276 324

Asset impairments (Note 2)

— — ( 28,372 )

Change in estimated fair value of contingent consideration (Note 9)

( 49,836 ) ( 20,280 ) ( 14,402 )

Gain (loss) on disposal of fixed assets and other, net 43,992 ( 5,373 ) 838

(Loss) gain on disposal of fixed assets and other, net ( 9,070 ) 43,992 ( 5,373 )

Income from operations 505,097 601,728 261,016

44 unchanged sentences

Comprehensive income:

Net income — — — — 98,833 — 98,833 10,222 109,055

Net income (loss) — — — — 127,850 — 127,850 ( 3,393 ) 124,457

Foreign currency translation adjustments — — — 71,819 — — 71,819 28,200 100,019

1 unchanged sentence

Total comprehensive income 212,486 24,807 237,293

Equity component of 0.0% Convertible Notes, net (Note 6)

— — 80,066 — — — 80,066 — 80,066

Stock-based compensation expense (Note 14)

2 unchanged sentences

2 — ( 39,092 ) — — — ( 39,090 ) — ( 39,090 )

Exchangeable share transfers 1 ( 1 ) — — — — — — —

Repurchases of common stock (Note 13)

— — — — — ( 46,422 ) ( 46,422 ) — ( 46,422 )

Dividends (Note 5)

— — — — ( 212,732 ) — ( 212,732 ) — ( 212,732 )

Distributions to noncontrolling interests, net — — — — — — — ( 5,263 ) ( 5,263 )

1 unchanged sentence

Comprehensive income:

Net income (loss) — — — — 127,850 — 127,850 ( 3,393 ) 124,457

Net income — — — — 347,923 — 347,923 20,414 368,337

Foreign currency translation adjustments — — — ( 35,782 ) — — ( 35,782 ) ( 10,711 ) ( 46,493 )

1 unchanged sentence

Total comprehensive income 331,047 9,703 340,750

Equity component of 0.0% Convertible Notes, net (Note 6)

— — 80,066 — — — 80,066 — 80,066

Stock-based compensation expense (Note 14)

2 unchanged sentences

1 — ( 37,301 ) — — — ( 37,300 ) — ( 37,300 )

Repurchases of common stock (Note 13)

— — — — — ( 75,006 ) ( 75,006 ) — ( 75,006 )

Dividends (Note 5)

— — — — ( 225,786 ) — ( 225,786 ) — ( 225,786 )

Distributions to noncontrolling interests, net — — — — — — — ( 9,127 ) ( 9,127 )

5 unchanged sentences

Total comprehensive income 246,867 16,488 263,355

Cumulative effect of adoption of ASU 2020-06 (Notes 2 & 6)

— — ( 80,066 ) — 24,023 — ( 56,043 ) — ( 56,043 )

Stock-based compensation expense (Note 14)

6 unchanged sentences

— — — — ( 314,350 ) — ( 314,350 ) — ( 314,350 )

Estimated acquisition date fair value of noncontrolling interests (Note 7)

— — — — — — — 91,524 91,524

Distributions to noncontrolling interests, net — — — — — — — ( 11,344 ) ( 11,344 )

10 unchanged sentences

Depreciation and amortization 268,501 252,391 252,585

Asset impairments — — 28,372

Stock-based compensation expense 25,409 24,885 24,395

Deferred income taxes, net 24,065 ( 9,390 ) ( 16,136 )

(Gain) loss on disposal of fixed assets and other, net ( 43,992 ) 5,373 ( 838 )

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

Other non-cash expense (income), net 3,510 ( 7,231 ) ( 3,356 )

Other non-cash (income) expense, net ( 4,687 ) 3,510 ( 7,231 )

Changes in assets and liabilities, net of effects of acquisitions:

Accounts receivable, net ( 39,010 ) ( 237,188 ) 167,347

Trade receivables, net 4,248 ( 39,010 ) ( 237,188 )

Inventories, net ( 23,418 ) ( 28,048 ) 22,781

1 unchanged sentence

Deferred revenue 60,268 48,973 199,410

Income taxes payable - excess tax benefit from share award plans ( 17,042 ) ( 18,096 ) ( 8,236 )

Income taxes payable - other 98,349 29,946 ( 4,951 )

Income taxes payable ( 32,270 ) 81,307 11,850

Other assets and liabilities, net ( 19,053 ) ( 9,822 ) 11,573

3 unchanged sentences

Acquisition of businesses, net of cash acquired ( 38,567 ) ( 116,337 ) —

Deposit for future acquisition of business ( 114,414 ) — —

Deposit returned (paid) for acquisition of business 114,506 ( 114,414 ) —

Investments in short-term deposits ( 86,756 ) — —

Maturity of short-term deposits 37,978 — —

Cash received from disposal of fixed assets 5,674 66,264 9,705

2 unchanged sentences

Cash flows from financing activities:

Proceeds from borrowings under Vail Holdings Credit Agreement — — 892,625

Proceeds from borrowings under Whistler Credit Agreement — — 27,775

Proceeds from borrowings under 0.0% Convertible Notes — — 575,000

Proceeds from borrowings under 6.25% Notes — — 600,000

Repayments of borrowings under Vail Holdings Credit Agreement ( 62,500 ) ( 62,500 ) ( 62,500 )

7 unchanged sentences

Effect of exchange rate changes on cash, cash equivalents and restricted cash ( 3,702 ) ( 1,913 ) ( 95 )

Net (decrease) increase in cash and cash equivalents ( 132,467 ) 856,488 283,697

Net (decrease) increase in cash, cash equivalents and restricted cash ( 553,014 ) ( 132,467 ) 856,488

Cash, cash equivalents and restricted cash:

10 unchanged sentences

(“Vail Resorts”) is organized as a holding company and operates through various subsidiaries.

Vail Resorts and its subsidiaries (collectively, the “Company”) operate in three business segments:

Vail Resorts and its subsidiaries (collectively, the “Company”) operate in three reportable segments:

Mountain, Lodging and Real Estate.

The Company refers to “Resort” as the combination of the Mountain and Lodging segments.

In the Mountain segment, the Company operates the following 41 destination mountain resorts and regional ski areas as of September 28, 2022:

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 the Company’s regional ski areas, which tend to generate skier visits predominantly from their respective local markets.

4 unchanged sentences

The operations of the Company’s Australian ski areas are conducted pursuant to long-term leases and licenses on land owned by the governments of New South Wales and Victoria, Australia.

A portion of the operations of Andermatt-Sedrun are conducted on land owned by the Swiss Confederation, for which operations are conducted under leasehold agreements and pursuant to a personal easement on land owned by the municipality of Tujetsch.

Okemo, Mount Sunapee and Stowe operate on land leased from the respective states in which the resorts are located and on land owned by the Company.

1 unchanged sentence

other strategic lodging properties and a large number of condominiums located in proximity to the Company’s North American mountain resorts;

National Park Service (“NPS”) concessioner properties including the Grand Teton Lodge Company (“GTLC”), which operates destination resorts in Grand Teton National Park;

National Park Service (“NPS”) concessioner properties including the Grand Teton Lodge Company, which operates destination resorts in Grand Teton National Park;

a Colorado resort ground transportation company and mountain resort golf courses.

Vail Resorts Development Company (“VRDC”), a wholly-owned subsidiary, conducts the operations of the Company’s Real Estate segment, which owns, develops and sells real estate in and around the Company’s resort communities.

The Company’s mountain business and its lodging properties at or around the Company’s mountain resorts are seasonal in nature, and typically experience their peak operating seasons primarily from mid-December through mid-April in North America.

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

America and Europe.

The peak operating season at the Company’s Australian resorts, NPS concessioner properties and golf courses generally occurs from June to early October.

Acquisition of Andermatt-Sedrun Sport AG

On August 3, 2022, through a wholly-owned subsidiary, the Company acquired a 55 % controlling interest in Andermatt-Sedrun Sport AG (“Andermatt-Sedrun”) from Andermatt Swiss Alps AG (“ASA”).

Andermatt-Sedrun operates mountain and ski-related assets, including lifts, most of the restaurants and a ski school operation at the ski area.

Ski operations are conducted on land owned by ASA as freehold or leasehold properties, land owned by Usern Corporation, land owned by the municipality of Tujetsch and land owned by private property owners.

See Note 16, Subsequent Events, for additional information.

Summary of Significant Accounting Policies

22 unchanged sentences

Vehicles 3 - 10

Real Estate Held for Sale or Investment — The Company capitalizes as real estate held for sale or investment the original land acquisition cost, direct construction and development costs, property taxes, interest recorded on costs related to real estate under development and other related costs.

Real Estate Held for Sale or Investment — The Company capitalizes as real estate held for sale or investment the original land acquisition cost, direct construction and development costs, property taxes and interest paid related to real estate under development and other related costs.

Sales and marketing expenses are charged against income in the period incurred.

5 unchanged sentences

Goodwill and various indefinite-lived intangible assets, including certain trademarks, water rights and certain property management contracts, are not amortized but are subject to at least annual impairment testing.

The Company tests these non-amortizing assets annually (or more often, if necessary) for impairment as of May 1.

The Company tests these non-amortizing assets annually (or more often, if

necessary) for impairment as of May 1.

Amortizable intangible assets are amortized over the shorter of their contractual terms or estimated useful lives.

5 unchanged sentences

The Company determined that there were no impairments of goodwill or definite and indefinite-lived assets for the years ended July 31, 2023, 2022 and 2021.

As a result of COVID-19 and the impact it has had on the Company’s operations during the year ended July 31, 2020, the Company determined that the estimated fair value of its Colorado resort ground transportation company reporting unit within its Lodging segment no longer exceeded its carrying value.

As a result, the Company recognized an impairment of approximately $ 28.4 million related to its Colorado resort ground transportation company during the year ended July 31, 2020, which was recorded within asset impairments on the Company’s Consolidated Statement of Operations, with a corresponding reduction to goodwill, net of $ 25.7 million and to intangible assets, net and property, plant and equipment, net of $ 2.7 million.

The Company determined that there were no other impairments of goodwill or definite and indefinite-lived assets for the year ended July 31, 2020 .

Long-Lived Assets — The Company evaluates potential impairment of long-lived assets and long-lived assets to be disposed of whenever events or changes in circumstances indicate that the net carrying amount of an asset may not be fully recoverable.

If the sum of the expected cash flows, on an undiscounted basis, is less than the net carrying amount of the asset, an impairment loss is recognized in the amount by which the net carrying amount of the asset exceeds its estimated fair value.

If the sum of the expected cash flows, on an undiscounted basis, is less than the net carrying amount of the asset group, an impairment loss is recognized in the amount by which the net carrying amount of the asset group exceeds its estimated fair value.

The Company determined that there were no impairments of long-lived assets for the years ended July 31, 2023, 2022 and 2021.

As discussed above, the Company recorded an impairment to long-lived assets related to its Colorado resort ground transportation company during the year ended July 31, 2020.

The Company determined that there were no other impairments of long-lived assets for the year ended July 31, 2020.

Revenue Recognition — The Company’s significant accounting policies with regard to revenue recognition are discussed in Note 3, Revenues.

1 unchanged sentence

The Company utilizes the relative sales value method to determine cost of sales for condominium units sold within a project when specific identification of costs cannot be reasonably determined.

Foreign Currency Translation — The functional currency of the Company’s entities operating outside of the United States is the principal currency of the economic environment in which the entity primarily generates and expends cash, which is

generally the local currency.

The assets and liabilities of these foreign operations are translated at the exchange rate in effect as of the balance sheet dates.

8 unchanged sentences

Advertising Costs — Advertising costs are expensed at the time such advertising commences.

Advertising expense for the years ended July 31, 2022, 2021 and 2020 was $ 47.7 million, $ 38.6 million and $ 41.6 million, respectively, and was recorded within Mountain and Lodging operating expenses on the Company’s Consolidated Statement of Operations.

Advertising expense for the years ended July 31, 2023, 2022 and 2021 was $ 47.2 million, $ 47.7 million and $ 38.6 million, respectively, and was recorded within Mountain and Lodging operating expense on the Company’s Consolidated Statement of Operations.

Income Taxes — Income tax expense includes U.S.

2 unchanged sentences

Deferred tax assets and liabilities are recorded for the estimated future tax effects of temporary differences between the tax bases of assets and liabilities and amounts reported in the accompanying Consolidated Balance Sheets and for operating loss and tax credit carrybacks or carryforwards.

The change in deferred tax assets and liabilities for the period measures the deferred tax provision or benefit for the period.

The change in deferred tax assets and liabilities for the

period measures the deferred tax provision or benefit for the period.

Effects of changes in enacted tax laws on deferred tax assets and liabilities are reflected as adjustments to the tax provision or benefit in the period of enactment.

5 unchanged sentences

See Note 10, Income Taxes, for more information.

Fair Value of Financial Instruments — The recorded amounts for cash and cash equivalents, restricted cash, receivables, other current assets and accounts payable and accrued liabilities approximate fair value due to their short-term nature.

The fair value of amounts outstanding under the Company’s credit agreements and the Employee Housing Bonds (as defined in Note 6, Long-Term Debt) approximate book value due to the variable nature of the interest rate associated with the debt.

The estimated fair values of the 6.25% Notes and the 0.0% Convertible Notes (each as defined in Note 6, Long-Term Debt) are based on quoted market prices (a Level 2 input).

Fair Value of Financial Instruments — The estimated fair values of the 6.25% Notes and the 0.0% Convertible Notes (each as defined in Note 6, Long-Term Debt) are based on quoted market prices (a Level 2 input).

The estimated fair value of the EPR Secured Notes (as defined in Note 6, Long-Term Debt) has been estimated using an analysis based on current borrowing rates for debt with similar remaining maturities and ratings (a Level 2 input).

5 unchanged sentences

EPR Secured Notes $ 132,503 $ 174,854

The recorded amount of the Company’s NRP Loan (as defined in Note 6, Long-Term Debt), which was assumed by the Company during the year ended July 31, 2023, approximates fair value as the debt obligation was recorded at estimated fair value in conjunction with the preliminary purchase accounting for the Andermatt-Sedrun acquisition (see Note 7, Acquisitions) and there has been no significant change in underlying rates.

The recorded amounts for all current asset, current liability and other financial liability balances not included in the above table approximate fair value due to their short-term nature or variable nature of associated interest rates.

Stock-Based Compensation — Stock-based compensation expense is measured at the grant date based upon the estimated fair value of the award and is recognized as expense over the applicable vesting period of the award generally using the straight-line method (see Note 14, Stock Compensation Plan, for more information), less the amount of forfeited awards which are recorded as they occur.

The following table shows total net stock-based compensation expense for the years ended July 31, 2022, 2021 and 2020 included in the accompanying Consolidated Statements of Operations (in thousands):

The following table shows total net stock-based compensation expense for the years ended July 31, 2023, 2022 and 2021 included on the accompanying Consolidated Statements of Operations (in thousands):

Year Ended July 31,

7 unchanged sentences

Concentration of Credit Risk — The Company’s financial instruments that are exposed to concentrations of credit risk consist primarily of cash and cash equivalents and restricted cash.

The Company places its cash and temporary cash investments in low risk accounts with high-quality credit institutions.

The Company places its cash and temporary cash investments in accounts with high-quality credit institutions.

The Company does not enter into financial instruments for trading or speculative purposes.

Concentration of credit risk with respect to accounts and notes receivables is limited due to the wide variety of customers and markets in which the Company transacts business, as well as their dispersion across many geographical areas.

Concentration of credit risk with respect to accounts and notes receivables is limited due to the wide variety of customers and markets in which the Company conducts business, as well as their dispersion across many geographical areas.

The Company performs ongoing credit evaluations of its customers and generally does not require collateral, but does require advance deposits on certain transactions.

Accounting for Hedging Instruments — From time to time, the Company enters into interest rate swaps to hedge the variability in cash flows associated with variable-rate borrowings by converting the floating interest rate to a fixed interest rate (the “Interest Rate Swaps”).

As of July 31, 2022, the Company hedged the future cash flows associated with $ 400.0 million of the principal amount outstanding of its Vail Holdings Credit Agreement (as defined in Note 6, Long-Term Debt), which were designated as cash flow hedges.

As of July 31, 2023, the Company hedged the future cash flows associated with $ 400.0 million of the principal amount outstanding of its Vail Holdings Credit Agreement (as defined in Note 6, Long-Term Debt), which were

designated as cash flow hedges.

The accounting for changes in fair value of hedging instruments depends on the effectiveness of the hedge.

In order to qualify for hedge accounting, the underlying hedged item must expose the Company to risks associated with market fluctuations and the financial instrument used must reduce the Company’s exposure to market fluctuation throughout the hedge period.

Changes in estimated fair value of the Interest Rate Swaps are recorded within change in estimated fair value of hedging instruments, net of tax, on the Company’s Consolidated Statements of Comprehensive Income, and such change was recorded as a gain (loss) of $ 18.9 million, $ 12.8 million and ($ 22.5 ) million during the years ended July 31, 2022, 2021 and 2020, respectively.

Changes in estimated fair value of the Interest Rate Swaps are recorded within change in estimated fair value of hedging instruments, net of tax, on the Company’s Consolidated Statements of Comprehensive Income, and such change was recorded as a gain of $ 3.7 million, $ 18.9 million and $ 12.8 million during the years ended July 31, 2023, 2022 and 2021, respectively.

Amounts are reclassified into interest expense, net from other comprehensive income during the period in which the hedged item affects earnings.

During the years ended July 31, 2022 and 2021, $ 4.3 million and $ 5.4 million, respectively, was reclassified into interest expense, net from other comprehensive income.

As of July 31, 2022, the estimated fair value of the Interest Rate Swaps was an asset of approximately $ 12.3 million and was recorded within deferred charges and other assets on the Company’s Consolidated Balance Sheet, and the impact of the underlying cash flows associated with the Interest Rate Swaps are recorded within interest expense, net on the Company’s Consolidated Statements of Operations.

During the years ended July 31, 2023, 2022 and 2021, gains (losses) of $ 11.0 million, $( 4.3 ) million and $( 5.4 ) million, respectively, were reclassified into interest expense, net from other comprehensive income.

See Note 9, Fair Value Measurements, for more information.

15 unchanged sentences

Recently Issued Accounting Standards

Standards Being Evaluated

In March 2020, the Financial Accounting Standards Board (“FASB”) issued ASU 2020-04, “Reference Rate Reform (Topic 848):

Adopted Standards

In March 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2020-04, “Reference Rate Reform (Topic 848):

Facilitation of the Effects of Reference Rate Reform on Financial Reporting.” The ASU provides optional transition guidance, for a limited time, to companies that have contracts, hedging relationships or other transactions that reference the London Inter-bank Offered Rate (“LIBOR”) or another reference rate which is expected to be discontinued because of reference rate reform.

The amendments provide optional expedients and exceptions for applying GAAP to contracts, hedging relationships and other transactions if certain criteria are met.

The amendments in this update are effective as of March 12, 2020 through December 31, 2022.

The amendments of ASU 2020-04 were effective as of March 12, 2020.

In December 2022, the FASB issued ASU 2022-06, “Reference Rate Reform (Topic 848):

Deferral of the Sunset Date of Topic 848,” which extended the effective date of the provisions of ASU 2020-04 to December 31, 2024.

The amendments in this update may be applied as of any date from the beginning of an interim period that includes or is subsequent to March 12, 2020, or prospectively from a date within an interim period that includes or is subsequent to March 12, 2020, up to the date that the financial statements are available to be issued.

All other amendments should be applied on a prospective basis.

The Company will complete its assessment of the effect that the adoption of this standard will have on its Consolidated Financial Statements in the first quarter of the fiscal year ending July 31, 2023, but does not expect it will have a material effect.

In August 2020, the FASB issued ASU 2020-06, “Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity” which simplifies the guidance in Accounting Standards Codifications (“ASC”) 470-20, “Debt – Debt with Conversion and Other Options” by reducing the number of accounting separation models for convertible instruments, amending the guidance in ASC 815-40, “Derivatives and Hedging – Contracts in Entity’s Own Equity” for certain contracts in an entity’s own equity that are currently accounted for as derivatives, and requiring entities to use the if-converted method for all convertible instruments in the diluted earnings per share (“EPS”) calculation.

This standard will be effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years (the Company’s first quarter of the fiscal year ending July 31, 2023).

The Company is party to various interest rate swap agreements that hedge the variable interest rate component of underlying cash flows of $400.0 million in principal amount of its Vail Holdings Credit Agreement (as defined in Note 6, Long-Term Debt), which are designated as cash flow hedges.

During the year ended July 31, 2023, the Company entered into an amendment to its Vail Holdings Credit Agreement (the “Fifth Amendment”) to modify the calculation of interest under the Vail Holdings Credit Agreement from being calculated based on LIBOR to being calculated based on the Secured Overnight Financing Rate (“SOFR”).

See Note 6, Long-Term Debt, for additional information.

Subsequent to the Fifth Amendment, the interest rate swaps were also amended to transition from a hedge of LIBOR-based cash flows to a hedge of SOFR-based cash flows.

The Company elected certain optional expedients provided by Topic 848, which allowed the Company to not apply certain modification accounting requirements or reassess the previous accounting designation of the interest rate swap agreements as cash flow hedges.

In August 2020, the FASB issued ASU 2020-06, “Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity” which simplifies the accounting related to certain convertible debt instruments.

The guidance removes certain rules which required separation of the embedded conversion features from the host contract for convertible instruments.

The updated guidance requires bifurcation only if the convertible debt feature qualifies as a derivative under ASC 815, “Derivatives and Hedging”, or for convertible debt issued at a substantial premium.

The guidance also amends the guidance in ASC 815-40, “Derivatives and Hedging – Contracts in Entity’s Own Equity” for certain contracts in an entity’s own equity that are currently accounted for as derivatives.

This standard is effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years (the Company’s first quarter of the fiscal year ended July 31, 2023).

This standard allows for a modified retrospective or fully retrospective method of transition.

The Company will adopt ASU 2020-06 on August 1, 2022 using the modified retrospective method, and therefore financial information for periods before August 1, 2022 will remain unchanged.

As a result of the adoption of ASU 2020-06, the Company will reclassify the equity component of its 0.0% Convertible Notes (as defined in Note 6, Long-Term Debt) to long-term debt, net, and it will no longer record non-cash interest expense related to the amortization of the debt discount.

The Company adopted ASU 2020-06 on August 1, 2022 using the modified retrospective method, and therefore prior period financial information has not been retrospectively adjusted and continues to be reported under the accounting standards in effect for those periods.

Upon adoption of the standard, the Company reclassified the previously bifurcated equity component of its 0.0% Convertible Notes (as defined in Note 6, Long-Term Debt) to long-term debt, net, as the convertible option on the 0.0% Convertible Notes does not qualify as a derivative under ASC 815 nor were the 0.0% Convertible Notes issued at a substantial premium.

This reclassification was partially offset by an increase to retained earnings to reverse the previously recognized non-cash interest expense, net of tax that had been recorded as a result of amortization of the previously recorded debt discount.

The adoption of this new guidance eliminates the recognition of non-cash interest expense in future periods due to the elimination of the debt discount.

The impact of adoption of ASU 2020-06 on the Company’s Consolidated Balance Sheet as of the adoption date was as follows (in thousands):

As of August 1, 2022

Balance Sheet Balances without the Adoption of ASU 2020-06 Adjustments Balances with the adoption of ASU 2020-06

Long-term debt, net $ 2,670,300 $ 74,822 $ 2,745,122

Deferred income taxes, net $ 268,464 $ ( 18,779 ) $ 249,685

Stockholders’ equity

Additional paid-in capital $ 1,184,577 $ ( 80,066 ) $ 1,104,511

Retained earnings $ 895,889 $ 24,023 $ 919,912

ASU 2020-06 also prohibits the use of the treasury stock method for convertible instruments for the purposes of calculating diluted earnings per share (“EPS”) and instead requires application of the if-converted method.

Under the if-converted method, diluted EPS will generally be calculated assuming that all of the convertible debt instruments were converted solely into shares of common stock at the beginning of the reporting period unless the result would be anti-dilutive.

Pursuant to the terms of the 0.0% Convertible Notes, the principal amount of the 0.0% Convertible Notes is required to be paid in cash and only the premium due upon conversion, if any, is permitted to be settled in shares, cash or a combination of shares and cash.

Consequently, for the Company the if-converted method would produce a similar result as the treasury stock method, which was utilized for the calculation of diluted EPS prior to the adoption of ASU 2020-06 for the 0.0% Convertible Notes.

Revenue Recognition

7 unchanged sentences

The Company also includes other sources of revenue, primarily related to commercial leasing and employee housing leasing arrangements, within other mountain revenue.

Revenue is recognized over time as performance obligations are satisfied as control of the good or service (e.g.

Revenue is recognized over time as performance obligations are satisfied as control of the good or service

access to ski areas, provision of ski school services, etc.) is transferred to the customer, except for the Company’s retail sales and dining operations revenues which are recognized at a point in time when performance obligations are satisfied by transferring control of the underlying goods to the customer.

26 unchanged sentences

For contracts with an expected term in excess of one year, the Company has considered the provisions of Topic 606 in determining whether contracts contain a financing component.

The Company presents revenues in the accompanying Consolidated Statements of Operations, net of taxes, when collected from its customers that are remitted or payable to government taxing authorities, except when products are inclusive of taxes where applicable.

Taxes collected from customers and remitted to governmental authorities are generally excluded from revenue on the accompanying Consolidated Statements of Operations.

Disaggregation of Revenues

22 unchanged sentences

Total net revenue $ 2,889,364 $ 2,525,912 $ 1,909,710

(1) Segment results for the years ended July 31, 2021 and 2020 have been retrospectively adjusted to reflect current period presentation.

See Note 12, Segment and Geographic Area Information, for additional information.

Arrangements with Multiple Performance Obligations

7 unchanged sentences

Due to the seasonality of the Company’s operations, its largest deferred revenue balances occur during the North American pass product selling window, which generally begins in the third quarter of its fiscal year.

Deferred revenue balances of a short-term nature were $ 511.3 million and $ 456.5 million as of July 31, 2022 and 2021, respectively, and the increase was primarily due to an increase in pass product sales for the 2022/2023 North American ski season as compared to the prior year from the beginning of the selling season through each respective fiscal year-end.

Deferred revenue balances of a long-term nature, comprised primarily of long-term private club initiation fee revenue, were $ 117.2 million and $ 121.0 million as of July 31, 2022 and 2021, respectively.

Deferred revenue balances of a short-term nature were $ 572.6 million and $ 511.3 million as of July 31, 2023 and 2022, respectively.

For the year ended July 31, 2023, the Company recognized approximately $ 486.5 million of net revenue that was included in the deferred revenue balance as of July 31, 2022.

Deferred revenue balances of a long-term nature, comprised primarily of long-term private club initiation fee revenue, were $ 109.7 million and $ 117.2 million as of July 31, 2023 and 2022, respectively.

As of July 31, 2023, the weighted average remaining period over which revenue for unsatisfied performance obligations on long-term private club contracts will be recognized was approximately 15 years.

1 unchanged sentence

Trade receivable balances were $ 381.1 million and $ 383.4 million as of July 31, 2023 and 2022, respectively.

Payments from customers are based on

billing terms established in the contracts with customers, which vary by the type of customer, the location and the products or services offered.

Payments from customers are based on billing terms established in the contracts with customers, which vary by the type of customer, the location and the products or

services offered.

The term between invoicing and when payment is due is not significant.

6 unchanged sentences

As of July 31, 2023, $ 5.1 million of costs to obtain contracts with customers were recorded within other current assets on the Company’s Consolidated Balance Sheet.

Deferred credit card fees and sales commissions are amortized commensurate with the recognition of ski pass product revenue.

The Company recorded amortization of $ 22.1 million, $ 17.8 million and $ 11.0 million for these costs during the years ended July 31, 2022, 2021 and 2020, respectively, which were recorded within Mountain and Lodging operating expenses on the Consolidated Statement of Operations.

Utilizing the practical expedient provided for under Topic 606, the Company has elected to expense credit card fees and sales commissions related to non-season ski pass products and services as incurred, as the amortization period is generally one year or less for the time between customer purchase and utilization.

These fees are recorded within Mountain and Lodging operating expenses on the Company’s Consolidated Statements of Operations.

Deferred credit card fees and sales commissions are amortized commensurate with the recognition of pass product revenue.

The Company recorded amortization of $ 25.2 million, $ 22.1 million and $ 17.8 million for these costs during the years ended July 31, 2023, 2022 and 2021, respectively, which were recorded within Mountain and Lodging operating expense on the accompanying Consolidated Statement of Operations.

Utilizing the practical expedient provided for under Topic 606, the Company has elected to expense credit card fees and sales commissions related to non-pass products and services as incurred, as the amortization period is generally one year or less for the time between customer purchase and utilization.

These fees are recorded within Mountain and Lodging operating expense on the Company’s Consolidated Statements of Operations.

The Company’s operating leases consist primarily of commercial and retail space, office space, employee residential units, vehicles and other equipment.

7 unchanged sentences

or (iii) lease payments adjusted for changes in an index or market value.

These variable lease payments are typically recognized when the underlying event occurs and are included in operating expenses in the Company’s Consolidated Statements of Operations in the same line item as the expense arising from the respective fixed lease payments.

These variable lease payments are typically recognized when the underlying event occurs and are included in operating expenses on the Company’s Consolidated Statements of Operations in the same line item as the expense arising from the respective fixed lease payments.

The Company’s lease agreements may also include non-lease components, such as common area maintenance and insurance, which are accounted for separately.

18 unchanged sentences

Variable lease expense $ 3,204 $ 2,309 $ 1,660

(1) Short-term lease expense is attributable to leases with terms of 12 months or less which are not included within the Consolidated Balance Sheets.

(1) Short-term lease expense is attributable to leases with terms of 12 months or less which are not included within the Company’s Consolidated Balance Sheets.

The following table presents the supplemental cash flow information associated with the Company’s leasing activities for the years ended July 31, 2023, 2022 and 2021 (in thousands):

4 unchanged sentences

Operating cash outflows for lease- and non-lease components of finance leases $ 54,788 $ 37,573 $ 31,429

Financing cash outflows for non-lease components of finance leases $ — $ — $ 5,387

Non-cash supplemental information:

Operating ROU assets obtained in exchange for operating lease obligations $ 30,342 $ 23,190 $ 12,615

Weighted-average remaining lease terms and discount rates are as follows:

Finance ROU assets obtained in exchange for finance lease obligations $ 39,114 $ — $ —

Weighted-average remaining lease terms and discount rates as of July 31, 2023 and 2022 are as follows:

July 31, 2023 July 31, 2022

16 unchanged sentences

Total lease liabilities $ 205,230 $ 402,058

The current portion of operating lease liabilities of approximately $ 34.2 million and $ 34.7 million as of July 31, 2022 and 2021, respectively, are recorded within accounts payables and accrued liabilities in the accompanying Consolidated Balance Sheets.

The current portion of operating lease liabilities of approximately $ 36.9 million and $ 34.2 million as of July 31, 2023 and 2022, respectively, is recorded within accounts payables and accrued liabilities in the accompanying Consolidated Balance Sheets.

Finance lease liabilities are recorded within long-term debt, net in the accompanying Consolidated Balance Sheets.

The Canyons finance lease obligation represents the only material finance lease entered into by the Company and was $ 357.6 million and $ 351.8 million as of July 31, 2022 and 2021, respectively, which represents the estimated annual fixed lease payments for the remaining initial 50 year term of the lease assuming annual increases at the floor of 2% and discounted using an interest rate of 10%.

As of July 31, 2022 and 2021, respectively, the Company has recorded $ 99.0 million and $ 108.0 million of finance lease ROU assets in connection with the Canyons lease, net of $ 84.6 million and $ 75.5 million of accumulated amortization, which is included within property, plant and equipment, net in the Company’s Consolidated Balance Sheets.

The Canyons finance lease obligation was $ 363.4 million and $ 357.6 million as of July 31, 2023 and 2022, respectively, which represents the estimated annual fixed lease payments for the remaining initial 50 year term of the lease assuming annual increases at the floor of 2% and discounted using an interest rate of 10%.

As of July 31, 2023 and 2022, respectively, the Company has recorded $ 90.2 million and $ 99.0 million of net finance lease ROU assets in connection with the Canyons lease, net of $ 93.4 million and $ 84.6 million of accumulated amortization, which is included within property, plant and equipment, net in the Company’s Consolidated Balance Sheets.

During the year ended July 31, 2023, the Company entered into new finance lease agreements for employee housing units at Whistler Blackcomb, for which the finance lease obligation was $ 29.5 million as of July 31, 2023, which represents the minimum lease payments for the remaining initial 20 year term of the lease, net of amounts representing interest, discounted using an interest rate of 6.95%.

As of July 31, 2023, the Company has recorded $ 27.5 million of net finance lease ROU assets in connection with these leases, net of $ 1.1 million of accumulated amortization, which is included within property, plant and equipment, net in the Company’s Consolidated Balance Sheet.

Net Income per Common Share

5 unchanged sentences

Whistler Blackcomb shareholders elected to receive 3,327,719 Vail Shares and 418,095 shares of Exchangeco (the “Exchangeco Shares”).

The Exchangeco Shares could be redeemed for Vail Shares at any time until October 2023 or until the Company elects to convert any remaining Exchangeco Shares to Vail Shares, which the Company has the ability to do once total Exchangeco Shares outstanding fall below 20,904 shares (or 5% of the total Exchangeco Shares originally issued).

The Exchangeco Shares could be redeemed for Vail Shares at any time until October 2023 or until the Company elected to convert any remaining Exchangeco Shares to Vail Shares, which the Company had the ability to do once total Exchangeco Shares outstanding fell below 20,904 shares (or 5% of the total Exchangeco Shares originally issued).

In July 2022, the number of outstanding Exchangeco Shares fell below such threshold and on August 25, 2022, the Company elected to redeem all outstanding Exchangeco Shares, effective September 26, 2022.

As of September 28, 2022, all Exchangeco Shares have been exchanged for Vail Shares.

As of July 31, 2023, all Exchangeco Shares have been exchanged for Vail Shares.

Both Vail Shares and Exchangeco Shares have a par value of $ 0.01 per share, and Exchangeco Shares, while they were outstanding, were substantially the economic equivalent of the Vail Shares.

6 unchanged sentences

Net income attributable to Vail Resorts $ 268,148 $ 268,148 $ 347,923 $ 347,923 $ 127,850 $ 127,850

Weighted-average shares outstanding 40,433 40,433 40,266 40,266 40,227 40,227

Weighted-average Vail Shares outstanding 39,654 39,654 40,433 40,433 40,266 40,266

Weighted-average Exchangeco shares outstanding — — 32 32 35 35

5 unchanged sentences

The Company computes the effect of dilutive securities using the treasury stock method and average market prices during the period.

The number of shares issuable on the exercise of share based awards that were excluded from the calculation of diluted net income per share because the effect of their inclusion would have been anti-dilutive totaled approximately 6,000 , 2,000 and 2,000 for the years ended July 31, 2022, 2021 and 2020, respectively.

On December 18, 2020, the Company completed an offering of $ 575.0 million in aggregate principal amount of 0.0 % Convertible Notes (as defined in Note 6, Long-Term Debt).

The number of shares issuable upon the exercise of share-based awards that were excluded from the calculation of diluted EPS because the effect of their inclusion would have been anti-dilutive totaled approximately 22,000 , 6,000 and 2,000 for the years ended July 31, 2023, 2022 and 2021, respectively.

In December 2020, the Company completed an offering of $ 575.0 million in aggregate principal amount of 0.0 % Convertible Notes (as defined in Note 6, Long-Term Debt).

The Company is required to settle the principal amount of the 0.0 % Convertible Notes in cash and has the option to settle the conversion spread in cash or shares.

The Company uses the treasury method to calculate diluted EPS, and if the conversion value of the 0.0 % Convertible Notes exceeds their conversion price, then the Company will calculate its diluted EPS as if all the notes were converted and the Company issued shares of its common stock to settle the excess value over the conversion price.

However, if reflecting the 0.0 % Convertible Notes in diluted EPS in this manner is anti-dilutive, or if the conversion value of the notes does not exceed their initial conversion amount for a reporting period, then the shares underlying the notes will not be reflected in the Company’s calculation of diluted EPS.

For the years ended July 31, 2022 and 2021, the average price of Vail Shares did not exceed the conversion price and therefore there was no impact to diluted EPS during those periods.

During the years ended July 31, 2022 and 2020, the Company paid cash dividends of $ 5.58 per share and $ 5.28 per share, respectively ($ 225.8 million and $ 212.7 million in the aggregate, respectively, including cash dividends paid to Exchangeco

shareholders).

The Company uses the if-converted method to calculate the impact of convertible instruments on diluted EPS when the instruments may be settled in cash or shares.

If the conversion value of the 0.0 % Convertible Notes exceeds their conversion price, then the Company will calculate its diluted EPS as if all the notes were converted into common stock at the beginning of the period.

However, if reflecting the 0.0 % Convertible Notes in diluted EPS in this manner is anti-dilutive, or if the conversion value of the notes does not exceed their conversion price for a reporting period, then the shares underlying the notes will not be reflected in the Company’s calculation of diluted EPS.

For the years ended July 31, 2023, 2022 and 2021, the price of Vail Shares did not exceed the conversion price and therefore there was no impact to diluted EPS during those periods.

During the years ended July 31, 2023 and 2022, the Company paid cash dividends of $ 7.94 per share and $ 5.58 per share, respectively ($ 314.4 million and $ 225.8 million, respectively, including cash dividends paid to Exchangeco shareholders).

The Company did not pay cash dividends during the year ended July 31, 2021.

15 unchanged sentences

114,162 114,162

EB-5 Development Notes (f)

Employee housing bonds (f)

52,575 52,575

Employee housing bonds (g)

Canyons obligation (g)

2063 363,386 357,607

Canyons obligation (h)

2036 40,399 —

Whistler Blackcomb employee housing leases (i)

2042 29,491 —

Total debt 2,807,046 2,948,514

Unamortized premiums, discounts and debt issuance costs (j)

35,011 17,860

Current maturities (k)

Total debt 2,825,649 2,807,046

Unamortized premiums, discounts and debt issuance costs (k)

Current maturities (l)

69,160 63,749

Long-term debt, net $ 2,750,675 $ 2,670,300

(a) On December 18, 2020, Vail Holdings, Inc.

(“VHI”), which is a wholly-owned subsidiary of the Company, along with other certain subsidiaries of the Company, as guarantors, Bank of America, N.A., as administrative agent, and certain lenders entered into a Fourth Amendment to the Vail Holdings Credit Agreement (the “Fourth Amendment”).

Pursuant to the Fourth Amendment, among other terms, VHI was exempted from complying with certain financial maintenance covenants for fiscal quarters ending through January 31, 2022 (unless VHI made a one-time irrevocable election to terminate such exemption period prior to such date) (such period, the “Financial Covenants Temporary Waiver Period”), and the Company was prohibited from undertaking certain activities during such period.

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

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

On August 31, 2022, the Company entered into an additional amendment to the Vail Holdings Credit Agreement (the “Fifth Amendment”), which extended the maturity date to September 23, 2026.

Additionally, the Fifth Amendment contains customary LIBOR replacement language, including, but not limited to, the use of rates based on the secured overnight financing rate (“SOFR”).

(a) On August 31, 2022, Vail Holdings, Inc.

(“VHI”), which is a wholly-owned subsidiary of the Company, along with other certain subsidiaries of the Company, as guarantors, Bank of America, N.A., as administrative agent, and certain lenders entered into the Fifth Amendment (the “Fifth Amendment”) to the Eighth Amended and Restated Credit Agreement (the “Vail Holdings Credit Agreement”), which extended the maturity date to September 23, 2026.

Additionally, the Fifth Amendment contains customary LIBOR replacement language, including, but not limited to, the use of rates based on SOFR.

SOFR is a broad measure of the cost of borrowing cash in the overnight U.S.

3 unchanged sentences

As of July 31, 2023, the Vail Holdings Credit Agreement consists of a $ 500.0 million revolving credit facility and a $ 1.0 billion outstanding term loan facility.

The term loan facility is subject to quarterly amortization of principal of approximately $ 15.6 million (which began in January 2020), in equal installments, for a total of 5% of principal payable in each year and the final payment of all amounts outstanding, plus accrued and unpaid interest due upon maturity.

The term loan facility is subject to quarterly amortization of principal of approximately $ 15.6 million, in equal installments, for a total of 5% of principal payable in each year and the final payment of all amounts outstanding, plus accrued and unpaid interest due in upon maturity.

The proceeds of the loans made under the Vail Holdings Credit Agreement may be used to fund the Company’s working capital needs, capital expenditures, acquisitions, investments and other general corporate purposes, including the issuance of letters of credit.

Borrowings under the Vail Holdings Credit Agreement, including the term loan facility, bear interest annually at LIBOR plus 1.25 % as of July 31, 2022 ( 3.62 % as of July 31, 2022).

Borrowings under the Vail Holdings Credit Agreement, including the term loan facility, bear interest annually at SOFR plus a spread of 1.60 % as of July 31, 2023 ( 6.92 % as of July 31, 2023).

Interest rate margins may fluctuate based upon the ratio of the Company’s Net Funded Debt to Adjusted EBITDA on a trailing four-quarter basis.

The Vail Holdings Credit Agreement also includes a quarterly unused commitment fee, which is equal to a percentage determined by the Net Funded Debt to Adjusted EBITDA ratio, as each such term is defined in the Vail Holdings Credit Agreement, multiplied by the daily amount by which the Vail Holdings Credit Agreement commitment exceeds the total of outstanding loans and outstanding letters of credit ( 0.30 % as of July 31, 2023).

The Company is party to various interest rate swap agreements which hedge the LIBOR-based variable interest rate component of underlying cash flows of $ 400.0 million in principal amount of its Vail Holdings Credit Agreement for the remaining term of the agreement at an effective rate of 1.46 %.

Subsequent to July 31, 2022 and in association with the Fifth Amendment, the interest rate swaps were also amended to transition from a hedge of LIBOR to a hedge of SOFR.

The Company is party to various interest rate swap agreements which hedge the cash flows associated with the SOFR-based variable interest rate component of $ 400.0 million in principal amount of its Vail Holdings Credit Agreement until September 23, 2024, at an effective rate of 1.38 %.

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

2 unchanged sentences

The 6.25% Notes are redeemable, in whole or in part, at any time on or after May 15, 2022 at the redemption prices specified in an indenture dated as of May 4, 2020 (the “6.25% Indenture”) plus accrued and unpaid interest.

The 6.25% Notes are senior unsecured obligations of the Company, are guaranteed by certain of the Company’s domestic subsidiaries, and rank equally in right of payment with existing and future senior indebtedness of the Company and the guarantors (as defined in the 6.25% Indenture).

The 6.25% Notes are senior unsecured obligations of the Company, are guaranteed by certain of the Company’s domestic subsidiaries, and rank equally in right of

payment with existing and future senior indebtedness of the Company and the guarantors (as defined in the 6.25% Indenture).

The 6.25% Indenture requires that, upon the occurrence of a Change of Control (as defined in the 6.25% Indenture), the Company shall offer to purchase all of the outstanding 6.25% Notes at a purchase price in cash equal to 101% of the outstanding principal amount of the 6.25% Notes, plus accrued and unpaid interest.

13 unchanged sentences

The 0.0% Convertible Notes will also be structurally subordinated to all of the existing and future liabilities and obligations of the Company’s subsidiaries, including such subsidiaries’ guarantees of the 6.25% Notes.

The initial conversion rate was 2.4560 shares per $1,000 principal amount of notes, which represents an initial conversion price of approximately $ 407.17 per share, and is subject to adjustment upon the occurrence of certain specified events as

described in the Convertible Indenture, including the payment of cash dividends.

As of July 31, 2023, the conversion rate of the 0.0% Convertible Notes, adjusted for cash dividends paid since the issuance date, was 2.5972 shares per $1,000 principal amount of notes (the “Conversion Rate”), which represents a conversion price of $ 385.03 per share (the “Conversion Price”).

14 unchanged sentences

The Company may elect, at its option, that the sole remedy for an event of default relating to certain failures by the Company to comply with certain reporting covenants in the Convertible Indenture will consist exclusively of the right of the holders of the 0.0% Convertible Notes to receive additional interest on the notes for up to 360 days following such failure.

The Company separately accounts for the liability and equity components of the 0.0% Convertible Notes.

Prior to the adoption of ASU 2020-06 on August 1, 2022, the Company separately accounted for the liability and equity components of the 0.0% Convertible Notes.

The liability component at issuance was recognized at estimated fair value based on the fair value of a similar debt instrument that does not have an embedded convertible feature, and was determined to be $ 465.3 million and was recorded within long-term debt, net on the Company’s Consolidated Balance Sheet.

The excess of the principal amount of the 0.0% Convertible Notes over the initial fair value of the liability component represented a debt discount of $ 109.7 million and is being amortized to interest expense, net over the term.

The excess of the principal amount of the 0.0% Convertible Notes over the initial fair value of the liability component represented a debt discount of $ 109.7 million and was being amortized to interest expense, net over the term through July 31, 2022 (prior to the adoption of ASU 2020-06).

The balance of the unamortized debt discount was $ 76.7 million as of July 31, 2022.

1 unchanged sentence

Additionally, the Company recorded deferred tax liabilities of approximately $ 27.5 million related to the equity component of the 0.0% Convertible Notes on the date of issuance, which decreased the recorded value of the equity component.

As of July 31, 2022, the equity component is recorded within additional paid-in capital on the Company’s Consolidated Balance Sheets and is not remeasured as long as it continues to meet the conditions

for equity classification.

The Company will adopt ASU 2020-06 on August 1, 2022 using the modified retrospective method.

As a result of the adoption of ASU 2020-06, the Company will reclassify the equity component of its 0.0% Convertible Notes to long-term debt, net, and it will no longer record non-cash interest expense related to the amortization of the debt discount (see Note 2, Summary of Significant Accounting Policies, for additional information).

Deferred financing costs related to the 0.0% Convertible Notes of approximately $ 14.9 million were allocated between the liability and equity components of the 0.0% Convertible Notes based on the proportion of the total proceeds allocated to the debt and equity components.

(d) Whistler Mountain Resort Limited Partnership (“Whistler LP”) and Blackcomb Skiing Enterprises Limited Partnership (“Blackcomb LP”), together the “WB Partnerships,” are party to a credit agreement, dated as of November 12, 2013 (as amended, the “Whistler Credit Agreement”), by and among Whistler LP, Blackcomb LP, certain subsidiaries of Whistler LP and Blackcomb LP party thereto as guarantors (the “Whistler Subsidiary Guarantors”), the financial institutions party thereto as lenders and The Toronto-Dominion Bank, as administrative agent.

The Whistler Credit Agreement consists of a C$ 300.0 million revolving credit facility, and during the year ended July 31, 2022, the Company entered into an amendment of the Whistler Credit Agreement which extended the maturity date of the revolving credit facility to December 15, 2026.

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

The WB Partnerships’ obligations under the Whistler Credit Agreement are guaranteed by the Whistler Subsidiary Guarantors and are collateralized by a pledge of the capital stock of the Whistler Subsidiary Guarantors and a pledge of substantially all of the assets of Whistler LP, Blackcomb LP and the Whistler Subsidiary Guarantors.

In addition, pursuant to the terms of the Whistler Credit Agreement, the WB Partnerships have the ability to increase the commitment amount by up to C$75.0 million, subject to lender approval.

Borrowings under the Whistler Credit Agreement are available in Canadian or U.S.

dollars and bear interest annually, subject to an applicable margin based on the WB Partnerships’ Consolidated Total Leverage Ratio (as defined in the Whistler Credit Agreement), with pricing as of July 31, 2022, in the case of borrowings (i) in Canadian dollars, at the WB Partnerships’ option, either (a) at the Canadian Prime Rate plus 0.75% per annum or (b) by way of the issuance of bankers’ acceptances plus 1.75% per annum;

and (ii) in U.S.

dollars, at the WB Partnerships option, either at (a) the U.S.

Base Rate plus 0.75% per annum or (b) Bankers Acceptance Rate plus 1.75% per annum .

As of July 31, 2022, all borrowings under the Whistler Credit Agreement were made in Canadian dollars and by way of the issuance of bankers’ acceptances plus 1.75% (approximately 4.70 % as of July 31, 2022).

As of July 31, 2022, the equity component was recorded within additional paid-in-capital on the Company’s Consolidated Balance Sheet.

The Company adopted ASU 2020-06 on August 1, 2022 using the modified retrospective method, and as a result, the Company reclassified the equity component of its 0.0% Convertible Notes to long-term debt, net, and no longer records non-cash interest expense related to the amortization of the debt discount effective as of the adoption date.

Refer to Note 2, Summary of Significant Accounting Policies, for further information on ASU 2020-06.

(d) Whistler Mountain Resort Limited Partnership (“Whistler LP”) and Blackcomb Skiing Enterprises Limited Partnership (“Blackcomb LP” and together with Whistler LP, the “WB Partnerships”) are party to a credit agreement consisting of a C$ 300.0 million credit facility which was originally dated as of November 12, 2013 , by and among Whistler LP, Blackcomb LP, certain subsidiaries of Whistler LP and Blackcomb LP party thereto as guarantors, the financial institutions party thereto as lenders and The Toronto-Dominion Bank, as administrative agent.

On April 14, 2023, the WB Partnerships along with other parties to the original agreement entered into the Second Amended and Restated Credit Agreement (as amended, the “Whistler Credit Agreement”).

The amended Whistler Credit Agreement (i) extended the maturity date of the revolving credit facility to April 14, 2028;

(ii) contained customary LIBOR replacement language for the use of rates based on SOFR with regard to borrowings under the facility made in U.S.

and (iii) contained customary forward-looking transition language for the Canadian Dollar Offered Rate (“CDOR”) with regard to borrowings under the facility made in Canadian dollars, including, but not limited to, the use of rates based on the Canadian Overnight Repo Rate Average, which is a measure of the cost of overnight general collateral funding using Government of Canada treasury bills and bonds as collateral for repurchase transactions, and for which such transition is expected to occur no later than June 2024.

No other significant terms of the agreement were amended.

As of July 31, 2023, there were no borrowings under the Whistler Credit Agreement.

The Whistler Credit Agreement also includes a quarterly unused commitment fee based on the Consolidated Total Leverage Ratio, which as of July 31, 2023 is equal to 0.39 % per annum.

The Whistler Credit Agreement provides for affirmative and negative covenants that restrict, among other things, the WB Partnerships’ ability to incur indebtedness and liens, dispose of assets, make capital expenditures, make distributions and make investments.

The Whistler Credit Agreement provides for affirmative and negative covenants that restrict, among other things, the WB Partnerships’ ability

to incur indebtedness and liens, dispose of assets, make capital expenditures, make distributions and make investments.

In addition, the Whistler Credit Agreement includes the restrictive financial covenants (leverage ratios and interest coverage ratios) customary for facilities of this type.

(e) On September 24, 2019, in conjunction with the acquisition of Peak Resorts (see Note 7, Acquisitions), the Company assumed various secured borrowings (the “EPR Secured Notes”) under the master credit and security agreements and other related agreements, as amended, (collectively, the “EPR Agreements”) with EPT Ski Properties, Inc.

(e) In September 2019, in conjunction with the acquisition of Peak Resorts, Inc.

(“Peak Resorts”), the Company assumed various secured borrowings (the “EPR Secured Notes”) under the master credit and security agreements and other related agreements, as amended, (collectively, the “EPR Agreements”) with EPT Ski Properties, Inc.

and its affiliates (“EPR”).

15 unchanged sentences

As of July 31, 2023, interest on this note accrued at a rate of 9.03 %.

The EPR Secured Notes are secured by all or substantially all of the assets of Peak Resorts and its subsidiaries, including mortgages on the Alpine Valley, Boston Mills, Brandywine, Jack Frost, Big Boulder, Mount Snow and Hunter Mountain

The EPR Secured Notes bear interest at specified interest rates, as discussed above, which are subject to increase each year by the lesser of (i) three times the percentage increase in the Consumer Price Index (“CPI”) or (ii) a capped index (the “Capped CPI Index”), which is 1.75 % for the Hunter Mountain Secured Note and 1.50 % for all other notes.

11 unchanged sentences

In addition, Peak Resorts is required to maintain a debt service reserve account which amounts are applied to fund interest payments and other amounts due and payable to EPR.

As of July 31, 2022, the Company had funded the EPR debt service reserve account in an amount equal to approximately $ 5.3 million, which was included in other current assets in the Consolidated Balance Sheet.

(f) Peak Resorts serves as the general partner for two limited partnerships, Carinthia Group 1, LP and Carinthia Group 2, LP (together, the “Carinthia Partnerships”), which were formed to raise funds through the Immigrant Investor Program administered by the U.S.

Citizenship and Immigration Services (“USCIS”), pursuant to the Immigration and Nationality Act (the “EB-5 Program”).

On December 27, 2016, Peak Resorts borrowed $ 52.0 million from the Carinthia Partnerships to fund two capital projects at Mount Snow.

The amounts were borrowed through two loan agreements, which provided $ 30.0 million and $ 22.0 million (together, the “EB-5 Development Notes”).

On December 27, 2021, Peak Resorts repaid all remaining principal owed to the Carinthia Partnerships.

(g) The Company has recorded the outstanding debt of four Employee Housing Entities (each an “Employee Housing Entity” and collectively the “Employee Housing Entities”):

As of July 31, 2023, the Company had funded the EPR debt service reserve account in an amount equal to approximately $ 5.4 million, which was included in other current assets in the Company’s Consolidated Balance Sheet.

(f) The Company has recorded the outstanding debt of four Employee Housing Entities (each an “Employee Housing Entity” and collectively the “Employee Housing Entities”):

Breckenridge Terrace, Tarnes, BC Housing and Tenderfoot.

The proceeds of the Employee Housing Bonds were used to develop apartment complexes designated primarily for use by the Company’s seasonal employees at its Colorado mountain resorts.

The Employee Housing Bonds are variable rate, interest-only instruments with interest rates tied to LIBOR plus 0% to 0.10% ( 2.35 % to 2.45 % as of July 31, 2022).

The proceeds of the Employee Housing Bonds were used to develop apartment complexes designated primarily for use by

the Company’s seasonal employees at its Colorado mountain resorts.

The Employee Housing Bonds are variable rate, interest-only instruments with interest rates tied to SOFR plus 0% to 0.20% ( 5.32 % to 5.52 % as of July 31, 2023).

Interest on the Employee Housing Bonds is paid monthly in arrears and the interest rate is adjusted weekly.

9 unchanged sentences

$ 37,780 $ 14,795 $ 52,575

(h) On May 24, 2013 , VR CPC Holdings, Inc.

(“VR CPC”), a wholly-owned subsidiary of the Company, entered into a transaction agreement with affiliate companies of Talisker Corporation (“Talisker”) pursuant to which the parties entered into a master lease agreement (the “Park City Lease”) and certain ancillary transaction documents on May 29, 2013 related to the former stand-alone Canyons Resort (“Canyons”), pursuant to which the Company assumed the resort operations of

(g) On May 24, 2013 , VR CPC Holdings, Inc.

The Park City Lease between VR CPC and Talisker has an initial term of 50 years with six 50-year renewal options .

2 unchanged sentences

The obligation at July 31, 2023 represents future lease payments for the remaining initial lease term of 50 years (including annual increases at the floor of 2%) discounted using an interest rate of 10 %, and includes accumulated accreted interest expense of approximately $ 58.1 million.

(i) During the year ended July 31, 2019, the Company completed two real estate sales transactions that were accounted for as financing arrangements as a result of the Company’s continuing involvement with the underlying assets that were sold, including but not limited to, the obligation to repurchase finished commercial space from the development projects upon completion.

(h) On August 3, 2022 in conjunction with the acquisition of Andermatt-Sedrun (see Note 7, Acquisitions), the Company assumed the New Regional Policy loan between Andermatt-Sedrun and the Canton of Uri and Canton of Graubünden dated June 24, 2016 (the “NRP Loan”), with an initial principal balance of CHF 40.0 million.

Amounts outstanding under the NRP Loan bear interest at 0.63% per annum until the maturity date, which is September 30, 2036, with semi-annual required payments of principal amortization and accrued interest.

In addition, the NRP Loan agreement includes restrictive covenants requiring certain minimum financial results (as defined in the agreement).

(i) During the year ended July 31, 2023, the Company entered into new finance lease agreements for employee housing units at Whistler Blackcomb.

The leases have a term of 20 years with no renewal options.

The obligation at July 31, 2023 represents future lease payments for the remaining initial lease term of 20 years (including annual increases at the floor of 3%) discounted using an interest rate of 6.95 %.

(j) During the year ended July 31, 2019, the Company completed two real estate sales transactions that were accounted for as financing arrangements as a result of the Company’s continuing involvement with the underlying assets that were sold, including but not limited to, the obligation to repurchase finished commercial space from the development projects upon completion.

The Company received approximately $ 12.8 million of proceeds for these sales transactions through the year ended July 31, 2023, which are reflected within long-term debt, net.

Other obligations also consist of a $ 2.9 million note outstanding to the Colorado Water Conservation Board, which matures on September 16, 2028 , and other financing arrangements.

Other obligations, including the Colorado Water Conservation Board note, bear interest at rates ranging from 5.1 % to 5.5 %.

(j) In connection with the issuance of the 0.0% Convertible Notes, the Company recorded a debt discount, which represents the excess of the principal amount of the 0.0% Convertible Notes over the fair value of the liability component, as discussed above.

(k) In connection with the issuance of the 0.0% Convertible Notes, the Company recorded a debt discount under previous accounting guidance, which represented the excess of the principal amount of the 0.0% Convertible Notes over the fair value of the liability component, as discussed above.

The Company adopted ASU 2020-06 on August 1, 2022 using the modified retrospective method, and as a result, the Company reclassified the equity component of its 0.0% Convertible Notes to long-term debt, net, and therefore no longer records non-cash interest expense related to the amortization of the debt discount.

In connection with the acquisition of Peak Resorts, the Company estimated the acquisition date fair values of the debt instruments assumed, including the EPR Secured Notes, and recorded any difference between such estimated fair values and the par value of debt instruments as unamortized premiums and discounts, which is amortized and recorded to interest expense, net on the Company’s Consolidated Statements of Operations over the respective term of the applicable debt instruments.

Additionally, certain costs incurred with regard to the issuance of debt instruments are capitalized and included as a reduction in the net carrying value of long-term debt, net of accumulated amortization, with the exception of costs incurred related to line-of-credit arrangements, which are included in deferred charges and other assets, net of accumulated amortization.

accumulated amortization.

Amortization of such deferred financing costs are recorded to interest expense, net on the Company’s Consolidated Statements of Operations over the respective term of the applicable debt instruments.

(k) Current maturities represent principal payments due in the next 12 months, and exclude approximately $ 6.2 million of proceeds resulting from a real estate transaction accounted for as a financing arrangement, as discussed above, which are expected to be recognized on the Company’s Statement of Operations during the year ending July 31, 2023 as a result of the anticipated resolution of continuing involvement, with no associated cash outflow.

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

Aggregate maturities for debt outstanding, including finance lease obligations, as of July 31, 2023 reflected by fiscal year are as follows (in thousands):

2024 $ 69,930

Thereafter 579,679

Total debt $ 2,825,649

(1) Includes approximately $ 6.2 million of proceeds resulting from a real estate transaction accounted for as a financing arrangement, as discussed above, which are expected to be recognized on the Company’s Statement of Operations during the year ending July 31, 2023 as a result of the anticipated resolution of continuing involvement, with no associated cash outflow.

(2) Subsequent to July 31, 2022, the Company entered into the Fifth Amendment to the Vail Holdings Credit Agreement, which extended the maturity date by two years and is now due in the fiscal year ending July 31, 2027.

See Note 16, Subsequent Events, for additional information.

The Company recorded interest expense of $ 148.2 million, $ 151.4 million and $ 106.7 million for the years ended July 31, 2022, 2021 and 2020, respectively, of which $ 5.9 million, $ 4.9 million and $ 1.9 million, respectively, was amortization of

deferred financing costs.

The Company recorded interest expense of $ 153.0 million, $ 148.2 million and $ 151.4 million for the years ended July 31, 2023, 2022 and 2021, respectively, of which $ 6.7 million, $ 5.9 million and $ 4.9 million, respectively, was amortization of deferred financing costs.

The Company was in compliance with all of its financial and operating covenants required to be maintained under its debt instruments for all periods presented.

In connection with the acquisition of Whistler Blackcomb, VHI funded a portion of the purchase price through an intercompany loan to Whistler Blackcomb of $ 210.0 million, which was effective as of November 1, 2016 and requires foreign currency remeasurement to Canadian dollars, the functional currency for Whistler Blackcomb.

In connection with the acquisition of Whistler Blackcomb, VHI funded a portion of the purchase price through an intercompany loan to Whistler Blackcomb, which was effective as of November 1, 2016 and requires foreign currency remeasurement to Canadian dollars, the functional currency for Whistler Blackcomb.

As a result, foreign currency fluctuations associated with the loan are recorded within the Company’s results of operations.

The Company recognized approximately $( 2.7 ) million, $ 8.3 million and $( 3.2 ) million of non-cash foreign currency (loss) gain on the intercompany loan to Whistler Blackcomb during the years ended July 31, 2022, 2021 and 2020, respectively, on the Consolidated Statements of Operations.

The Company recognized approximately $( 2.9 ) million, $( 2.7 ) million and $ 8.3 million of non-cash foreign currency (loss) gain on the intercompany loan to Whistler Blackcomb during the years ended July 31, 2023, 2022 and 2021, respectively, on its Consolidated Statements of Operations.

As of July 31, 2023, the remaining balance of the intercompany loan was $ 98.7 million.

Seven Springs Mountain Resort, Hidden Valley Resort & Laurel Mountain Ski Area

On December 31, 2021, the Company, through a wholly-owned subsidiary, acquired Seven Springs Mountain Resort, Hidden Valley Resort and Laurel Mountain Ski Area in Pennsylvania from Seven Springs Mountain Resort, Inc.

and its affiliates for a cash purchase price of approximately $ 116.5 million, after adjustments for certain agreed-upon terms, which the Company funded with cash on hand.

The acquisition included the mountain operations of the resorts, including base area skier services (food and beverage, retail and rental, lift ticket offices and ski and snowboard school facilities), as well as a hotel, conference center and other related operations.

Andermatt-Sedrun

On August 3, 2022, through a wholly-owned subsidiary, the Company acquired a 55 % controlling interest in Andermatt-Sedrun from Andermatt Swiss Alps AG (“ASA”).

The consideration paid consisted of an investment of $ 114.4 million (CHF 110.0 million) into Andermatt-Sedrun for use in capital investments to enhance the guest experience on mountain (which was prepaid to fund the acquisition and was recorded in other current assets on the Company’s Consolidated Balance Sheet as of July 31, 2022) and $ 41.3 million (CHF 39.3 million) paid to ASA (which was paid on August 3, 2022, commensurate with closing).

As of August 3, 2022 the total fair value of the consideration paid was $ 155.4 million (CHF 149.3 million).

Andermatt-Sedrun operates mountain and ski-related assets, including lifts, most of the restaurants and a ski school operation at the ski area.

ASA retained a 40% ownership stake, with a group of existing shareholders comprising the remaining 5% ownership stake.

ASA and the other noncontrolling economic interests contain certain protective rights pursuant to a shareholder agreement (the “Andermatt Agreement”) and no ability to participate in the day-to-day operations of Andermatt-Sedrun.

The Andermatt Agreement provides that no dividend distributions be made by Andermatt-Sedrun until the end of the fiscal year ending July 31, 2026, after which time there shall be annual distributions of 50% of the available cash (as defined in the Andermatt Agreement) for the most recently completed fiscal year.

In addition, the distribution rights are non-transferable and transfer of the noncontrolling interests are limited.

The following summarizes the purchase consideration and the preliminary purchase price allocation to estimated fair values of the identifiable assets acquired and liabilities assumed at the date the transaction was effective (in thousands):

Acquisition Date Estimated Fair Value

Total cash consideration paid by Vail Resorts, Inc.

Estimated fair value of noncontrolling interests 91,524

Total estimated purchase consideration $ 246,889

Allocation of total estimated purchase consideration:

Current assets $ 119,867

2 unchanged sentences

Identifiable intangible assets and other assets 7,476

Liabilities ( 15,172 )

Assumed long-term debt ( 44,130 )

Other liabilities ( 16,497 )

Net assets acquired $ 246,889

Identifiable intangible assets acquired in the transaction were primarily related to advanced lodging bookings and trade names.

Identifiable intangible assets acquired in the transaction were primarily related to a trade name.

The process of estimating the fair value of the property, plant, and equipment includes the use of certain estimates and assumptions related to replacement cost and physical condition at the time of acquisition.

The excess of the purchase price over the aggregate estimated fair values of the assets acquired and liabilities assumed was recorded as goodwill.

The goodwill recognized is attributable primarily to expected synergies, the assembled workforce of the resorts and other factors, and is not expected to be deductible for income tax purposes.

The Company recognized $ 2.8 million of acquisition related expenses associated with the transaction within Mountain and Lodging operating expense in its Consolidated Statement of Operations for the year ended July 31, 2022.

The operating results of the acquired resorts are reported within the Mountain and Lodging segments prospectively from the date of acquisition.

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

The goodwill recognized is attributable primarily to expected synergies, the assembled workforce of the resort and other factors, and is not expected to be deductible for income tax purposes.

The operating results of Andermatt-Sedrun are reported within the Mountain segment prospectively from the date of acquisition.

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

The Company believes that this information provides a reasonable basis for estimating the fair values of assets acquired and liabilities assumed;

2 unchanged sentences

The Company expects to finalize the valuation and complete the purchase consideration allocation no later than one year from the acquisition date.

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

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

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

Accordingly, the total purchase price, including the repayment of certain outstanding debt instruments and lease obligations, was approximately $ 334.7 million, for

which the Company borrowed approximately $ 335.6 million under the Vail Holdings Credit Agreement (see Note 6, Long-Term Debt) to fund the acquisition, repayment of debt instruments and lease obligations, and associated acquisition related expenses.

The acquired resorts include:

Mount Snow in Vermont;

Hunter Mountain in New York;

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

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

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

Hidden Valley and Snow Creek in Missouri;

and Paoli Peaks in Indiana.

The Company assumed the Special Use Permits from the U.S.

Forest Service for Attitash, Mount Snow and Wildcat Mountain, and assumed the land leases for Mad River and Paoli Peaks.

The acquisition included the mountain operations of the resorts, including base area skier services (food and beverage, retail and rental, lift ticket offices and ski school facilities), as well as lodging operations at certain resorts.

Seven Springs Mountain Resort, Hidden Valley Resort & Laurel Mountain Ski Area

and its affiliates for a cash purchase price of approximately $ 116.5 million, after adjustments for certain agreed-upon terms, which the Company funded with cash on hand.

The following summarizes the purchase consideration and the purchase price allocation to estimated fair values of the identifiable assets acquired and liabilities assumed at the date the transaction was effective (in thousands):

3 unchanged sentences

Goodwill 5,041

Identifiable intangible assets 19,221

Other assets 16,203

Assumed long-term debt ( 184,668 )

Other liabilities ( 99,275 )

Identifiable intangible assets and other assets 5,335

Liabilities ( 15,222 )

Net assets acquired $ 116,501

Identifiable intangible assets acquired in the transaction were primarily related to trade names and property management contracts, which had acquisition date estimated fair values of approximately $ 15.8 million and $ 3.1 million, respectively.

The process of estimating the fair value of the depreciable property, plant, and equipment includes the use of certain estimates and assumptions related to replacement cost.

Identifiable intangible assets acquired in the transaction were primarily related to advanced lodging bookings and trade names.

The excess of the purchase price over the aggregate estimated fair values of the assets acquired and liabilities assumed was recorded as goodwill.

The goodwill recognized is attributable primarily to expected synergies, the assembled workforce of the resorts and other factors, and is not expected to be deductible for income tax purposes.

The Company assumed various debt obligations of Peak Resorts, which were recorded at their respective estimated fair values as of the acquisition date (see Note 6, Long-Term Debt).

The Company incurred $ 3.1 million of acquisition related expenses associated with the transaction which were recorded within Mountain and Lodging operating expense in its Consolidated Statement of Operations for the year ended July 31, 2020.

The operating results of Peak Resorts are reported within the Mountain and Lodging segments prospectively from the date of acquisition.

Peak Resorts Pro Forma Financial Information

The following presents the unaudited pro forma consolidated financial information of the Company as if the acquisition of Peak Resorts was completed on August 1, 2018 (the beginning of the fiscal year preceding the fiscal year in which the acquisition occurred).

The following unaudited pro forma financial information includes adjustments for (i) depreciation on acquired property, plant and equipment;

(ii) amortization of intangible assets recorded at the date of the transaction;

(iii) transaction and business integration related costs;

and (iv) interest expense associated with financing the transaction.

This unaudited pro forma financial information is presented for informational purposes only and does not purport to be indicative of the results of future operations or the results that would have occurred had the transaction taken place on August 1, 2018 (in thousands, except per share amounts).

Year Ended July 31, 2020

Pro forma net revenue $ 1,970,363

Pro forma net income attributable to Vail Resorts, Inc.

Pro forma basic net income per share attributable to Vail Resorts, Inc.

Pro forma diluted net income per share attributable to Vail Resorts, Inc.

The Company recognized $ 2.8 million of acquisition related expenses associated with the transaction within Mountain and Lodging operating expense on its Consolidated Statement of Operations for the year ended July 31, 2022.

The operating results of the acquired resorts are reported within the Mountain and Lodging segments prospectively from the date of acquisition.

Supplementary Balance Sheet Information

47 unchanged sentences

Balance at July 31, 2021 $ 1,738,836 $ 42,211 $ 1,781,047

Acquisitions (including measurement period adjustments) 2,196 2,795 4,991

Effects of changes in foreign currency exchange rates

2 unchanged sentences

Acquisition (including measurement period adjustments) 3,368 — 3,368

Disposal of retail and rental stores (1)

( 5,975 ) — ( 5,975 )

Effects of changes in foreign currency exchange rates

1 unchanged sentence

Balance at July 31, 2023 $ 1,675,338 $ 45,006 $ 1,720,344

(1) During the year ended July 31, 2023, the Company completed a sale of five retail and rental stores in Telluride, Colorado (the “Disposal Group”) to an unrelated party for cash, which the Company determined constituted the sale of a business.

As of April 30, 2023, the Company allocated a proportionate share of the applicable reporting unit’s goodwill to the Disposal Group, and reduced the carrying value of the Disposal Group to its net realizable value.

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

31 unchanged sentences

The Company’s cash equivalents, other current assets and Interest Rate Swaps are measured utilizing quoted market prices or pricing models whereby all significant inputs are either observable or corroborated by observable market data.

The Company entered into the Interest Rate Swaps to hedge the LIBOR-based variable interest rate component of $ 400.0 million in principal amount of its Vail Holdings Credit Agreement.

Changes in the estimated fair value are recognized in change in estimated fair value of hedging instruments on the Company’s Consolidated Statements of Comprehensive Income.

The estimated fair value of the Interest Rate Swaps was included as an asset within deferred charges and other assets as of July 31, 2022, and as a liability within other long-term liabilities as of July 31, 2021, in the Company’s Consolidated Balance Sheets.

The estimated fair value of the Interest Rate Swaps was included as an asset within deferred charges and other assets as of July 31, 2023, and 2022 in the Company’s Consolidated Balance Sheets.

The changes in Contingent Consideration during the years ended July 31, 2023 and 2022 were as follows (in thousands):

5 unchanged sentences

Balance as of July 31, 2023 $ 73,300

The Park City Lease provides for participating contingent payments (the “Contingent Consideration”) to the landlord of 42% of the amount by which EBITDA for the Park City resort operations, as calculated under the Park City Lease, exceeds approximately $35 million, as established at the transaction date, with such threshold amount subsequently increased annually by an inflation linked index and a 10% adjustment for any capital improvements or investments made under the Park City Lease by the Company.

The estimated fair value of Contingent Consideration includes the future period resort operations of Park City in the calculation of EBITDA on which participating contingent payments are made, which is determined on the basis of estimated subsequent performance, escalated by an assumed long-term growth factor and discounted to net present value.

The Park City Lease provides for participating contingent payments (the “Contingent Consideration”) to the landlord of 42% of the amount by which EBITDA for the Park City resort operations, as calculated under the Park City Lease, exceeds approximately $35 million, as established upon the Company’s acquisition of the resort, with such threshold amount subsequently increased annually by an inflation linked index and a 10% adjustment for any capital improvements or investments made under the Park City Lease by the Company.

Contingent Consideration is classified as a liability, which is remeasured to fair value at each reporting date until the contingency is resolved.

The Company estimated the fair value of the Contingent Consideration payments using an option pricing valuation model.

Key assumptions included a discount rate of 11.1%, volatility of 17.0% and future period Park City EBITDA, which are unobservable inputs and thus are considered Level 3 inputs.

The Company evaluated the long-term growth assumptions related to future results at Park City as of July 31, 2022.

Operating results for the year ended July 31, 2022 were significantly higher than the historical trend for Park City, in part driven by dynamics caused by COVID-19.

There is inherent variability in the performance of the Company’s individual resorts, including Park City, and while results for the year ended July 31, 2022 were strong for the resort, the long-term historical average of results continues to support a more normalized growth rate in the valuation.

The Company will continue to monitor actual performance compared to its expectations and will update assumptions as appropriate.

The estimated fair value of Contingent Consideration includes future period resort operations of Park City in the calculation of EBITDA on which participating contingent payments are made, which is determined on the basis of estimated subsequent year performance, escalated by an assumed annual growth factor and discounted to net present value.

Other significant assumptions included a discount rate of 11.1%, and volatility of 17.0%, which together with future period Park City EBITDA, are all unobservable inputs and thus are considered Level 3 inputs.

During the year ended July 31, 2023, the Company made a payment to the landlord for Contingent Consideration of approximately $ 18.9 million which increased compared to the prior year, primarily due to improved Park City performance for the period ended July 31, 2022.

During the year ended July 31, 2023, the Company observed a continued trend of improved performance which led to a reassessment of the long-term EBITDA assumptions used to estimate the fair value of the liability.

As a result, the Company recorded an increase in the liability of approximately $ 49.8 million which was primarily related to an increase in the expected long-term EBITDA performance for Park City as well as the expected payment to be made in October 2023 for the resort’s performance for the year ending July 31, 2023.

The increased expectations for long-term EBITDA performance for Park City are based on an average of historical results observed for the resort, which include actual performance for the years ended July 31, 2023 and 2022.

Future period actual EBITDA performance for Park City may differ significantly from these estimates, which could have a material impact on the estimated fair value of the Contingent Consideration liability.

The estimated fair value of the Contingent Consideration liability is approximately $ 73.3 million, which is recorded in accounts payable and accrued liabilities and other long-term liabilities in the Company’s Consolidated Balance Sheet as of July 31, 2023.

The Company prepared a sensitivity analysis to evaluate the effect that changes on certain key assumptions would have on the estimated fair value of the Contingent Consideration.

A change in the discount rate of 100 basis points or a 5% change in estimated subsequent year performance would result in a change in the estimated fair value within the range of approximately $3.0 million to $6.1 million.

Contingent Consideration is classified as a liability and is remeasured to an estimated fair value at each reporting date until the contingency is resolved.

During the year ended July 31, 2022, the Company made a payment to the landlord for Contingent Consideration of approximately $ 7.5 million and recorded an increase in the estimated fair value of approximately $ 20.3 million which was primarily associated with the estimated Contingent Consideration payment for the fiscal year ended July 31, 2022.

These changes resulted in an estimated fair value of the Contingent Consideration of $ 42.4 million as of July 31, 2022, which is reflected in accounts payable and accrued liabilities and other long-term liabilities in the accompanying Consolidated Balance Sheet.

A change in the discount rate of 100 basis points or a 5% change in estimated subsequent year performance of the resort would result in a change in the estimated fair value within the range of approximately $10.1 million to $13.6 million.

The Company is subject to taxation in U.S.

federal, state and local jurisdictions and various non-U.S.

jurisdictions, including Australia and Canada.

jurisdictions, including Australia, Canada, the Netherlands and Switzerland.

The Company’s effective tax rate is impacted by the tax laws, regulations, practices and interpretations in the jurisdictions in which it operates and may fluctuate significantly from period to period depending on, among other things, the geographic mix of the Company’s profits and losses, changes in tax laws and regulations or their application and interpretation, the outcome of tax audits and changes in valuation allowances associated with the Company’s deferred tax assets.

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

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

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

tax code that impacted the Company’s accounting and reporting for income taxes during the years ended July 31, 2022, 2021 and 2020, and the Company expects these amendments will continue to impact its accounting and reporting for income taxes in the future.

The primary provisions of the CARES Act that the Company has been impacted by include:

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

Under the CARES Act, the Company was permitted to carry back its pre-existing NOLs to tax years prior to the enactment of the TCJA and obtain an incremental benefit of $ 3.8 million in the year ended July 31, 2020 related to the differential in federal tax rates between years that NOLs were generated and years that the NOLs were carried back to;

• treatment of certain qualified improvement property (“QIP”) as 15-year property and allowing such QIP placed in service after December 31, 2017 to be eligible for bonus depreciation;

• increases in the allowable business interest deduction from 30% of adjusted taxable income to 50% of adjusted taxable income for calendar year 2020.

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

As a result, during the year ended July 31, 2020, the Company recorded a benefit of approximately $ 9.6 million, which primarily offset Mountain and Lodging operating expense as a result of wages paid to employees who were not providing services.

Additionally, the Company deferred payment of the employer-paid portion of social security payroll taxes through the end of calendar year 2020 and remitted such amounts in equal installments during calendar years 2021 and 2022.

The Company also recognized benefits of approximately $ 7.0 million, $ 30.8 million and $ 8.5 million during the years ended July 31, 2022, 2021 and 2020, respectively, as a result of the recent Canada Emergency Wage Subsidy and Australian JobKeeper legislation for its Canadian and Australian employees, which primarily offset Mountain and Lodging operating expense.

and foreign components of income (loss) before provision for income taxes is as follows (in thousands):

and foreign components of income before provision for income taxes are as follows (in thousands):

Year Ended July 31,

47 unchanged sentences

Change in uncertain tax positions ( 1.5 ) % ( 1.2 ) % ( 3.5 ) %

Excess tax benefits related to stock-based compensation ( 3.6 ) % ( 14.3 ) % ( 7.1 ) %

Impacts of the Tax Act and other legislative changes — % — % ( 3.2 ) %

Stock-based compensation 0.7 % ( 3.6 ) % ( 14.3 ) %

Noncontrolling interests ( 1.0 ) % ( 1.2 ) % 0.8 %

Foreign rate differential 0.1 % ( 5.0 ) % ( 2.4 ) %

Foreign taxes 3.2 % 0.1 % ( 5.0 ) %

Taxes related to prior year filings ( 0.1 ) % 0.3 % ( 2.9 ) %

11 unchanged sentences

As of July 31, 2023, the Company’s unrecognized tax benefits associated with uncertain tax positions relate to the treatment of the Talisker lease payments as payments of debt obligations and that the tax basis in Canyons goodwill is deductible, and are included within other long-term liabilities in the accompanying Consolidated Balance Sheets.

As of July 31, 2023, the Company had recorded $ 51.7 million of uncertain tax positions as well as $ 5.1 million of accrued interest and penalties.

During the year ended July 31, 2023, the Company experienced a reduction in the uncertain tax positions due to the lapse of the statute of limitations of $ 22.3 million, which was partially offset with an increase to the uncertain tax position of $ 11.0 million.

Accrued interest and penalties associated with the statute of limitations lapse were approximately $5.8 million.

The Company also recognized a tax benefit of $ 0.7 million from a reduction in accrued interest and penalties during the year ended July 31, 2023.

The Company is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will change materially in the next twelve months.

1 unchanged sentence

The Company’s major tax jurisdictions in which it files income tax returns are the U.S.

federal jurisdiction, various state jurisdictions, Australia and Canada.

federal jurisdiction, various state jurisdictions, Australia, Canada and Switzerland.

The Company’s U.S.

federal income tax returns are subject to tax examinations for the tax years 2018 through the current period.

state, Australia and Canada income tax returns are generally subject to examination for the tax years 2018 through the current period.

federal and state income tax returns are generally subject to tax examinations for the tax years 2019 through the current period.

The Company’s Australian and Canadian income tax returns are generally subject to examination for the tax years 2018 through the current period, and Swiss income tax returns are generally subject to examination for the tax years 2017 through the current period.

Additionally, to the extent the Company has NOLs that have been carried back or are available for carryforward, the tax years to which the NOL was carried back or in which the NOL was generated may still be adjusted by the taxing authorities to the extent the NOLs are utilized.

The Company has NOL carryforwards totaling $ 63.4 million, primarily comprised of $ 10.6 million of federal and state NOLs as a result of the acquisition of Peak Resorts in September 2019 that will expire beginning July 31, 2034 and non-U.S.

NOLs of $ 3.6 million that will carry forward indefinitely.

NOLs of $ 52.8 million (for which a portion will begin expiring July 31, 2024, and a portion will carry forward indefinitely).

In connection with Peak Resorts’ initial public offering in November 2014, as well as the Company’s acquisition of Peak Resorts in September 2019, Peak Resorts had two ownership changes pursuant to the provisions of the Tax Reform Act of 1986.

1 unchanged sentence

however, management believes the full benefit of those carryforwards will be realized prior to their respective expiration dates.

As of July 31, 2022, the Company has recorded a valuation allowance on $ 3.6 million of the historical non-U.S.

As of July 31, 2023, the Company has recorded a valuation allowance of $ 4.4 million on the historical non-U.S.

NOL carryforwards, as the Company has determined that it is more likely than not that the associated NOL carryforwards will not be realized.

Additionally, the Company has foreign tax credit carryforwards of $ 4.2 million, which expire by the year ending July 31, 2028.

As of July 31, 2022, the Company has recorded a valuation

allowance of $ 4.2 million on foreign tax credit carryforwards, as the Company has determined that it is more likely than not that these foreign tax credit carryforwards will not be realized.

The Company may be required to record additional valuation allowances if, among other things, adverse economic conditions, including those caused by the COVID-19 pandemic, negatively impact the Company’s ability to realize its deferred tax assets.

The Company has foreign tax credit carryforwards of $ 4.2 million, which expire by the year ending July 31, 2028.

As of July 31, 2023, the Company has recorded a valuation allowance of $ 4.2 million on foreign tax credit carryforwards, as the Company has determined that it is more likely than not that these foreign tax credit carryforwards will not be realized.

Additionally, the Company has $ 1.0 million of foreign deferred tax assets, for which a valuation allowance of $ 1.0 million has been recorded.

The Company may be required to record additional valuation allowances if, among other things, adverse economic conditions negatively impact the Company’s ability to realize its deferred tax assets.

Evaluating and estimating the Company’s tax provision, current and deferred tax assets and liabilities and other tax accruals requires significant management judgment.

1 unchanged sentence

It is not practical at this time to determine the income tax liability related to any remaining undistributed earnings.

In response to the COVID-19 pandemic, the Canadian and Australian governments each enacted legislation to assist companies in maintaining liquidity and retaining employees.

As a result, the Company recognized benefits of approximately $ 7.0 million, and $ 30.8 million during the years ended July 31, 2022 and 2021, respectively, relating to the Canada Emergency Wage Subsidy and Australian JobKeeper legislation for its Canadian and Australian employees, which primarily offset Mountain and Lodging operating expense.

Commitments and Contingencies

Metropolitan Districts

The Company credit-enhances $ 6.3 million of bonds issued by Holland Creek Metropolitan District (“HCMD”) through a $ 6.4 million letter of credit issued under the Vail Holdings Credit Agreement.

HCMD’s bonds were issued and used to build infrastructure associated with the Company’s Red Sky Ranch residential development.

The Company has agreed to pay capital improvement fees to the Red Sky Ranch Metropolitan District (“RSRMD”) until RSRMD’s revenue streams from property taxes are sufficient to meet debt service requirements under HCMD’s bonds.

The Company recorded a liability of $ 1.8 million and $ 2.0 million, primarily within other long-term liabilities in the accompanying Consolidated Balance Sheets, as of July 31, 2022 and 2021, respectively, with respect to the estimated present value of future RSRMD capital improvement fees.

The Company estimates that it will make capital improvement fee payments under this arrangement through the year ending July 31, 2031 .

Guarantees/Indemnifications

As of July 31, 2022, the Company had various other letters of credit outstanding totaling $ 79.3 million, consisting of $ 53.4 million to support the Employee Housing Bonds and $ 25.9 million primarily for workers’ compensation, a wind energy purchase agreement and insurance-related deductibles.

As of July 31, 2023, the Company had various letters of credit outstanding totaling $ 83.0 million, consisting of $ 53.4 million to support the Employee Housing Bonds;

$ 6.4 million to support bonds issued by Holland Creek Metropolitan District;

and $ 23.2 million primarily for workers’ compensation, a wind energy purchase agreement and insurance-related deductibles.

The Company also had surety bonds of $ 9.5 million as of July 31, 2023, primarily to provide collateral for its U.S.

12 unchanged sentences

The operations of Northstar are conducted on land and with operating assets owned by affiliates of EPR Properties, a real-estate investment trust, primarily under operating leases which were assumed in the acquisition of Northstar by the Company.

The leases provide for the payment of a minimum annual base rent over the lease term which is recognized on a straight-line basis over the remaining lease term from the date of assumption.

In addition, the leases provide for the payment of percentage rent of certain gross revenues generated at the property over a revenue threshold which is incrementally adjusted annually.

5 unchanged sentences

The leases have terms that expire in fiscal 2041 for Falls Creek and fiscal 2058 for Hotham, and provide for the payment of rent with both a fixed and variable component.

The operations of Mad River Mountain is conducted on land under a lease granted by EPT Mad River, Inc., which initially commenced in 2005, which the Company assumed in its acquisition of Peak Resorts in September 2019.

The operations of Mad River Mountain are conducted on land under a lease granted by EPT Mad River, Inc., which initially commenced in 2005, which the Company assumed in its acquisition of Peak Resorts in September 2019.

The lease has a term that expires in the year ending July 31, 2035 , and provides for the payment of an initial minimum annual base rent, with annual CPI increases, and percentage rent of certain gross revenue generated at the property.

1 unchanged sentence

The agreement has a term that expires in the year ending July 31, 2052 , and provides for the payment of an initial minimum annual base rent, with bi-annual CPI increases, and additional rent based on skier visits.

The operations of Andermatt-Sedrun are conducted on (i) land owned by ASA as freehold or leasehold properties, including land owned by Usern Corporation, for which operations are conducted under a main framework concession agreement that expires in the year ending July 31, 2033 and provides for annual concession and administrative fee payments, and land owned by the Swiss Confederation, for which operations are conducted under leasehold agreements which expire in the years ending July 31, 2067 and 2068 ;

(ii) land owned by the municipality of Tujetsch, for which operations are conducted under various building rights and rights of way which expire in the year ending July 31, 2033 and provide for annual concession fee payments;

and (iii) land owned by private property owners.

The transportation and ski infrastructure operations of Andermatt-Sedrun also operate under various concessions from the Federal Office of Transport, which have terms expiring in the years ending July 31, 2026 through 2042 .

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

3 unchanged sentences

Leasehold improvement incentives are recorded as leasehold improvements and amortized over the shorter of their economic lives or the term of the lease.

For the years ended July 31, 2022, 2021 and 2020, the Company recorded lease expense (including Northstar, Perisher, Falls Creek & Hotham and Mad River Mountain), excluding executory costs, related to these agreements of $ 61.2 million, $ 58.7 million and $ 58.8 million, respectively, which is included in the accompanying Consolidated Statements of Operations.

For the years ended July 31, 2023, 2022 and 2021, the Company recorded lease expense (including for the lease obligations discussed above), excluding executory costs, related to these agreements of $ 71.3 million, $ 61.2 million and $ 58.7 million, respectively, which is included on the accompanying Consolidated Statements of Operations.

See Note 4, Leases, for additional information regarding the Company’s leasing arrangements.

8 unchanged sentences

The amounts related to these claims are included as a component of accrued benefits in accounts payable and accrued liabilities (see Note 8, Supplementary Balance Sheet Information).

During the year ended July 31, 2021, several named plaintiffs filed respective complaints against the Company on behalf of the same or similar purported classes of current and former employees of the Company.

The complaints generally allege violations of federal and state laws governing employee wage and hours practices, and seek damages in the form of unpaid wages, related penalties and other damages.

As a result, the Company had recorded an accrual of $ 13.2 million as of July 31, 2022 and 2021 on its Consolidated Balance Sheets.

The parties proposed a settlement agreement to resolve these complaints, which the court approved in August 2022.

The Company is also a party to various lawsuits arising in the ordinary course of business.

Management believes the Company has adequate insurance coverage and/or has accrued for all loss contingencies for asserted and unasserted matters deemed to be probable losses and reasonably estimable.

As of July 31, 2022 and 2021, the accruals for such loss contingencies (excluding the employment-related litigation) were not material individually or in the aggregate.

The Company is a party to various lawsuits arising in the ordinary course of business.

Management believes the Company has adequate insurance coverage and/or has accrued for all loss contingencies for asserted and unasserted matters deemed to be probable and reasonably estimable losses.

As of July 31, 2023 and 2022, the accruals for such loss contingencies were not material individually or in the aggregate.

Segment and Geographic Area Information

8 unchanged sentences

As such, these segments are managed separately.

On August 1, 2021, the Company revised its segment reporting to move certain dining and golf operations from the Lodging segment to the Mountain segment.

Segment reporting results for the prior years have been adjusted retrospectively to conform to the current period presentation.

The Company reports its segment results using Reported EBITDA (defined as segment net revenue less segment operating expenses, plus segment equity investment income or loss, and for the Real Estate segment, plus gain or loss on sale of real property).

41 unchanged sentences

Depreciation and amortization 268,501 252,391 252,585

Asset impairments — — 28,372

(Gain) loss on disposal of fixed assets and other, net (2)

Loss (gain) on disposal of fixed assets and other, net (1)

9,070 ( 43,992 ) 5,373

4 unchanged sentences

Total Reported EBITDA $ 833,109 $ 832,987 $ 540,074

(1) Segment results for the years ended July 31, 2021 and 2020 have been retrospectively adjusted to reflect current period presentation.

(1) During the year ended July 31, 2022, the Company recognized a gain of $ 32.2 million from the sale of a hotel property in Breckenridge.

12 unchanged sentences

Total property, plant and equipment, net $ 2,371,557 $ 2,118,052

(1) No individual international country (i.e.

except the U.S.) accounted for more than 10% of the Company’s revenue for the years ended July 31, 2022 and 2021.

The only individual international country to account for more than 10% of the Company’s revenue for the year ended July 31, 2020 was Canada.

Canada accounted for $ 223.3 million of revenue for the year ended July 31, 2020.

(1) The only individual international country (i.e.

except the U.S.) to account for more than 10% of the Company’s net revenue was Canada.

Canada accounted for $ 321.7 million of net revenue for the year ended July 31, 2023.

For the years ended July 31, 2022 and 2021 no individual international country accounted for more than 10% of the Company’s net revenue.

(2) The only individual international country to account for more than 10% of the Company’s property plant and equipment, net was Canada.

2 unchanged sentences

On March 9, 2006, the Company’s Board of Directors approved a share repurchase program, authorizing the Company to repurchase up to 3,000,000 Vail Shares.

On July 16, 2008, the Company’s Board of Directors increased the authorization by an additional 3,000,000 Vail Shares, and on December 4, 2015, the Company’s Board of Directors increased the authorization by an additional 1,500,000 Vail Shares for a total authorization to repurchase up to 7,500,000 Vail Shares.

During the years ended July 31, 2022 and 2020, the Company repurchased 304,567 and 256,418 Vail Shares, respectively (at a total cost of $ 75.0 million and $ 46.4 million, respectively).

On July 16, 2008, December 4, 2015 and March 7, 2023, the Company’s Board of Directors increased the authorization by an additional 3,000,000 , 1,500,000 and 2,500,000 Vail Shares, respectively, for a total authorization to repurchase up to 10,000,000 Vail Shares.

During the years ended July 31, 2023 and 2022, the Company repurchased 2,182,594 and 304,567 Vail Shares, respectively (at a total cost of $ 500.0 million and $ 75.0 million, respectively, excluding accrued excise tax, as discussed further below).

The Company did not repurchase any Vail Shares during the year ended July 31, 2021.

2 unchanged sentences

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

On August 16, 2022 the U.S.

government enacted the Inflation Reduction Act of 2022, which imposed a 1.0% excise tax on share repurchases (net of estimated share issuances) made after December 31, 2022.

As a result, the Company accrued approximately $ 4.9 million of excise tax in connection with the share repurchases it completed during the year ended July 31, 2023, which was recorded as an adjustment to the cost basis of repurchased shares in treasury stock and accounts payable and accrued liabilities on the Company’s Consolidated Balance Sheet as of July 31, 2023.

Stock Compensation Plan

46 unchanged sentences

The Company had 120,000 , 160,000 and 96,000 SARs that vested during the years ended July 31, 2023, 2022 and 2021, respectively.

These awards had a total estimated fair value of $ 16.2 million, $ 0.1 million and $ 2.6 million at the date of vesting for the years ended July 31, 2022, 2021 and 2020, respectively.

These awards had total estimated fair values of $ 0.0 million (due to the exercise prices exceeding the market prices at the date of vesting), $ 16.2 million and $ 0.1 million at the date of vesting for the years ended July 31, 2023, 2022 and 2021, respectively.

A summary of the status of the Company’s nonvested SARs as of July 31, 2023 and changes during the year then ended is presented below (in thousands, except fair value amounts):

14 unchanged sentences

The Company granted 68,000 restricted share units during the year ended July 31, 2022 with a weighted-average grant-date estimated fair value of $ 336.57 .

The Company granted 83,000 restricted share units during the year ended July 31, 2020 with a weighted-average grant-date estimated fair value of $ 217.46 .

The Company granted 94,000 restricted share units during the

year ended July 31, 2021 with a weighted-average grant-date estimated fair value of $ 222.17 .

The Company had 63,000 , 68,000 and 66,000 restricted share units that vested during the years ended July 31, 2023, 2022 and 2021, respectively.

2 unchanged sentences

The tax benefit realized or expected to be realized from SARs exercised and restricted stock units vested was $ 2.5 million, $ 23.0 million and $ 24.0 million for the years ended July 31, 2023, 2022 and 2021, respectively.

The Company has a policy of using either authorized and unissued shares or treasury shares, including shares acquired by purchase in the open market, to satisfy equity award exercises.

The Company has a policy of using either authorized and unissued shares, including shares acquired by purchase in the open market, to satisfy equity award exercises.

Retirement and Profit Sharing Plans

6 unchanged sentences

(i) 12 months of employment with at least 1,000 service hours from the commencement date or (ii) if 1,000 hours within the first 12 months was not completed, then after the employee completed a cumulative 1,500 service hours.

In April 2020, the Company announced a temporary six month suspension of its 401(k) contribution matching as a result of the impacts of COVID-19 and resulting resort closures, which subsequently resumed in October 2020.

The Company’s matching contribution is entirely discretionary and may be reduced or eliminated at any time.

Total Retirement Plan expense recognized by the Company for the years ended July 31, 2023, 2022 and 2021 was $ 9.8 million, $ 8.5 million and $ 6.5 million, respectively.

Subsequent Events

On August 3, 2022, through a wholly-owned subsidiary, the Company acquired a 55% controlling interest in Andermatt-Sedrun from ASA.

Andermatt-Sedrun operates mountain and ski-related assets, including lifts, most of the restaurants and a ski school operation at the ski area.

The Company 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 (which was prepaid to fund the acquisition and is recorded in other current assets on the Company’s Consolidated Balance Sheet as of July 31, 2022) and CHF 39.3 million ($ 41.3 million) paid to ASA (which was paid on August 3, 2022, commensurate with closing).

ASA has retained a 40% ownership stake, with a group of existing shareholders comprising the remaining 5% ownership.

The acquisition was funded with cash on hand.

As of August 3, 2022, the value of the total consideration paid to the seller was $ 155.4 million.

Initial accounting for the acquisition is not yet complete, including the determination of the acquisition-date fair value of assets acquired and liabilities assumed, as the Company is currently in the process of completing the assessment of valuation inputs and assumptions.

On August 31, 2022, the Company entered into the Fifth Amendment of the Vail Holdings Credit Agreement, which extended the maturity date to September 23, 2026.

Additionally, the Fifth Amendment contains customary LIBOR replacement language, including, but not limited to, the use of rates based on SOFR.

The Fifth Amendment modified the calculation of interest under the Vail Holdings Credit Agreement from being calculated based on LIBOR to being calculated based on SOFR.

No other material terms of the Vail Holdings Credit Agreement were amended.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.

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

What changed 10-K

Item 8. Financial Statements and Supplementary Data