Vail Resorts Inc 10-Q for FY2023 Q2

Vail Resorts Inc (MTN)

10-Q 2023-03-09 For: 2023-01-31

Added on April 09, 2026

About this 10-Q

Vail Resorts Inc filed this 10-Q on March 9, 2023, covering the quarter ended January 31, 2023 (FY2023 Q2).

Headline figures

Quarter ended January 31, 2023, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $1.1B; up 21.5% from $906.54M a year earlier
Net income: $208.68M; down 6.6% from net income of $223.39M a year earlier
Diluted EPS: $5.16; down 5.7% from $5.47 a year earlier

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

390 Interlocken Crescent
Broomfield,	Colorado	80021
(Address of Principal Executive Offices)		(Zip Code)


Title of each class	Trading Symbol	Name of each exchange on which registered
Common Stock, $0.01 par value	MTN	New York Stock Exchange



PART I	FINANCIAL INFORMATION	Page

Item 1.	Financial Statements (unaudited).
	Consolidated Condensed Balance Sheets as of January 31, 202 3 , July 31, 2022 and January 31, 20 2 2	2
	Consolidated Condensed Statements of Operations for the Three and Six Months Ended January 31, 202 3 and 20 2 2	3
	Consolidated Condensed Statements of Comprehensive Income for the Three and Six Months Ended January 31, 202 3 and 20 2 2	4
	Consolidated Condensed Statements of Stockholders’ Equity for the Three an d Six Months Ended January 31, 202 3 and 20 2 2	5
	Consolidated Condensed Statements of Cash Flows for the Six Months Ended January 31, 202 3 and 20 2 2	7
	Notes to Consolidated Condensed Financial Statements	8
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	23
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	42
Item 4.	Controls and Procedures	43

PART II	OTHER INFORMATION

Item 1.	Legal Proceedings	43
Item 1A.	Risk Factors	43
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	43
Item 3.	Defaults Upon Senior Securities	43
Item 4.	Mine Safety Disclosures	43
Item 5.	Other Information	43
Item 6.	Exhibits	44


	January 31, 2023		July 31, 2022		January 31, 2022
Assets
Current assets:
Cash and cash equivalents	$	1,295,252	$	1,107,427	$	1,407,019
Restricted cash	24,103		18,680		15,643
Trade receivables, net	160,393		383,425		167,088
Inventories, net	122,088		108,723		104,573
Other current assets	158,295		173,277		73,104
Total current assets	1,760,131		1,791,532		1,767,427
Property, plant and equipment, net (Note 7)	2,421,395		2,118,052		2,190,332
Real estate held for sale or investment	90,354		95,983		95,331
Goodwill, net (Note 7)	1,723,019		1,754,928		1,764,106
Intangible assets, net	310,666		314,058		318,078
Operating right-of-use assets	200,667		192,070		198,672
Other assets	58,730		51,405		35,796
Total assets	$	6,564,962	$	6,318,028	$	6,369,742
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable and accrued liabilities (Note 7)	$	1,144,795	$	942,830	$	1,067,137
Income taxes payable	73,559		104,275		24,153
Long-term debt due within one year (Note 5)	69,582		63,749		63,746
Total current liabilities	1,287,936		1,110,854		1,155,036
Long-term debt, net (Note 5)	2,789,827		2,670,300		2,695,589
Operating lease liabilities	184,298		174,567		188,797
Other long-term liabilities	237,478		246,359		254,209
Deferred income taxes, net	288,072		268,464		282,427
Total liabilities	4,787,611		4,470,544		4,576,058
Commitments and contingencies (Note 9)
Stockholders’ equity:
Preferred stock, $0.01 par value, 25,000 shares authorized, no shares issued and outstanding	—		—		—
Common stock, $0.01 par value, 100,000 shares authorized, 46,795, 46,744 and 46,713 shares issued, respectively	468		467		467
Exchangeable shares, $0.01 par value, 0, 3 and 33 shares issued and outstanding, respectively (Note 4)	—		—		—
Additional paid-in capital	1,112,519		1,184,577		1,172,595
Accumulated other comprehensive (loss) income	(8,565)		10,923		10,418
Retained earnings	837,573		895,889		786,473
Treasury stock, at cost, 6,466, 6,466 and 6,161 shares, respectively (Note 11)	(479,417)		(479,417)		(404,411)
Total Vail Resorts, Inc. stockholders’ equity	1,462,578		1,612,439		1,565,542
Noncontrolling interests	314,773		235,045		228,142
Total stockholders’ equity	1,777,351		1,847,484		1,793,684
Total liabilities and stockholders’ equity	$	6,564,962	$	6,318,028	$	6,369,742


	Three Months Ended January 31,				Six Months Ended January 31,
	2023		2022		2023		2022
Net revenue:
Mountain and Lodging services and other	$	901,837	$	770,300	$	1,112,223	$	892,160
Mountain and Lodging retail and dining	192,182		136,055		261,130		189,456
Resort net revenue	1,094,019		906,355		1,373,353		1,081,616
Real Estate	7,699		180		7,812		495
Total net revenue	1,101,718		906,535		1,381,165		1,082,111
Operating expense (exclusive of depreciation and amortization shown separately below):
Mountain and Lodging operating expense	507,216		364,336		749,502		548,061
Mountain and Lodging retail and dining cost of products sold	75,431		53,715		110,516		77,944
General and administrative	116,616		91,261		215,415		168,495
Resort operating expense	699,263		509,312		1,075,433		794,500
Real Estate operating expense	6,310		1,511		7,692		2,981
Total segment operating expense	705,573		510,823		1,083,125		797,481
Other operating (expense) income:
Depreciation and amortization	(65,989)		(62,070)		(130,603)		(123,559)
Gain on sale of real property	757		931		757		962
Change in estimated fair value of contingent consideration (Note 8)	(1,100)		(16,780)		(1,736)		(18,780)
(Loss) gain on disposal of fixed assets and other, net	(1,780)		7,347		(1,786)		16,214
Income from operations	328,033		325,140		164,672		159,467
Mountain equity investment income, net	42		818		388		2,332
Investment income and other, net	7,108		257		9,994		756
Foreign currency gain (loss) on intercompany loans (Note 5)	2,338		(2,870)		(3,797)		(2,039)
Interest expense, net	(38,370)		(37,366)		(73,672)		(76,911)
Income before (provision for) benefit from income taxes	299,151		285,979		97,585		83,605
(Provision for) benefit from income taxes	(79,032)		(52,049)		(21,026)		7,804
Net income	220,119		233,930		76,559		91,409
Net income attributable to noncontrolling interests	(11,440)		(10,539)		(4,851)		(7,350)
Net income attributable to Vail Resorts, Inc.	$	208,679	$	223,391	$	71,708	$	84,059
Per share amounts (Note 4):
Basic net income per share attributable to Vail Resorts, Inc.	$	5.17	$	5.51	$	1.78	$	2.08
Diluted net income per share attributable to Vail Resorts, Inc.	$	5.16	$	5.47	$	1.77	$	2.06
Cash dividends declared per share	$	1.91	$	0.88	$	3.82	$	1.76


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


(303)			404-1800
(Registrant’s telephone number, including area code)


	Common Stock				Additional Paid in Capital		Accumulated Other Comprehensive Income (Loss)		Retained Earnings		Treasury Stock		Total Vail Resorts, Inc. Stockholders’ Equity		Noncontrolling Interests		Total Stockholders’ Equity
	Vail Resorts		Exchangeable
Balance, October 31, 2021	$	466	$	—	$	1,192,901	$	44,689	$	598,796	$	(404,411)	$	1,432,441	$	233,989	$	1,666,430
Comprehensive income:
Net income	—		—		—		—		223,391		—		223,391		10,539		233,930
Foreign currency translation adjustments	—		—		—		(38,754)		—		—		(38,754)		(10,103)		(48,857)
Change in estimated fair value of hedging instruments, net of tax	—		—		—		4,483		—		—		4,483		—		4,483
Total comprehensive income													189,120		436		189,556
Stock-based compensation expense	—		—		6,479		—		—		—		6,479		—		6,479
Issuance of shares under share award plans, net of shares withheld for employee taxes	1		—		(26,785)		—		—		—		(26,784)		—		(26,784)

Dividends (Note 4)	—		—		—		—		(35,714)		—		(35,714)		—		(35,714)
Distributions to noncontrolling interests, net	—		—		—		—		—		—		—		(6,283)		(6,283)
Balance, January 31, 2022	$	467	$	—	$	1,172,595	$	10,418	$	786,473	$	(404,411)	$	1,565,542	$	228,142	$	1,793,684

Balance, October 31, 2022	$	468	$	—	$	1,106,813	$	(68,908)	$	705,923	$	(479,417)	$	1,264,879	$	286,839	$	1,551,718
Comprehensive income:
Net income	—		—		—		—		208,679		—		208,679		11,440		220,119
Foreign currency translation adjustments	—		—		—		63,130		—		—		63,130		19,338		82,468
Change in estimated fair value of hedging instruments, net of tax	—		—		—		(2,787)		—		—		(2,787)		—		(2,787)
Total comprehensive income													269,022		30,778		299,800
Stock-based compensation expense	—		—		6,844		—		—		—		6,844		—		6,844
Issuance of shares under share award plans, net of shares withheld for employee taxes	—		—		(1,138)		—		—		—		(1,138)		—		(1,138)

Dividends (Note 4)	—		—		—		—		(77,029)		—		(77,029)		—		(77,029)


Distributions to noncontrolling interests, net	—		—		—		—		—		—		—		(2,844)		(2,844)
Balance, January 31, 2023	$	468	$	—	$	1,112,519	$	(8,565)	$	837,573	$	(479,417)	$	1,462,578	$	314,773	$	1,777,351


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


	As of August 1, 2022
Balance Sheet	Balances without the Adoption of ASU 2020-06		Adjustments		Balances with the adoption of ASU 2020-06
Liabilities
Long term debt, net	$	2,670,300	$	74,822	$	2,745,122
Deferred income taxes, net	$	268,464	$	(18,779)	$	249,685
Stockholders’ equity
Additional paid-in capital	$	1,184,577	$	(80,066)	$	1,104,511
Retained earnings	$	895,889	$	24,023	$	919,912


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

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

NRP Loan (e)	2036	39,967		—		—
Employee housing bonds	2027-2039	52,575		52,575		52,575
Canyons obligation	2063	360,497		357,607		354,713
Whistler Blackcomb employee housing leases (f)	2042	29,346		—		—
Other	2023-2036	37,633		17,860		17,562
Total debt		2,867,330		2,807,046		2,844,630
Less: Unamortized premiums, discounts and debt issuance costs (b)		7,921		72,997		85,295
Less: Current maturities (g)		69,582		63,749		63,746
Long-term debt, net		$	2,789,827	$	2,670,300	$	2,695,589


	Total
2023 (February 2023 through July 2023)	$	41,163
2024	69,711
2025	669,136
2026	643,580
2027	856,182
Thereafter	587,558
Total debt	$	2,867,330


	Acquisition Date Estimated Fair Value
Total cash consideration paid by Vail Resorts, Inc.	$	155,365
Estimated fair value of noncontrolling interests	91,524
Total estimated purchase consideration	$	246,889

Allocation of total estimated purchase consideration:
Current assets	$	119,867
Property, plant and equipment	176,805
Goodwill	3,750
Identifiable intangible assets and other assets	7,476
Assumed long-term debt	(44,130)
Other liabilities	(16,879)
Net assets acquired	$	246,889


	Acquisition Date Estimated Fair Value
Current assets	$	2,932
Property, plant and equipment	118,415
Goodwill	5,041
Identifiable intangible assets and other assets	5,335
Liabilities	(15,222)
Net assets acquired	$	116,501


	Three Months Ended January 31,				Six Months Ended January 31,
	2023		2022		2023		2022
Mountain net revenue:
Lift	$	592,603	$	521,582	$	652,143	$	535,911
Ski School	123,451		92,072		132,378		93,545
Dining	85,828		54,049		105,270		66,569
Retail/Rental	159,932		126,831		200,276		155,207
Other	51,628		39,841		125,092		92,443
Total Mountain net revenue	$	1,013,442	$	834,375	$	1,215,159	$	943,675
Lodging net revenue:
Owned hotel rooms	$	13,479	$	13,584	$	37,044	$	35,067
Managed condominium rooms	31,336		33,125		44,195		46,209
Dining	13,184		8,375		30,013		18,650
Transportation	5,888		5,766		7,348		7,559
Golf	—		—		5,939		5,118
Other	11,700		9,269		24,988		21,736
	75,587		70,119		149,527		134,339
Payroll cost reimbursements	4,990		1,861		8,667		3,602
Total Lodging net revenue	$	80,577	$	71,980	$	158,194	$	137,941
Total Resort net revenue	$	1,094,019	$	906,355	$	1,373,353	$	1,081,616
Total Real Estate net revenue	7,699		180		7,812		495
Total net revenue	$	1,101,718	$	906,535	$	1,381,165	$	1,082,111


	January 31, 2023		July 31, 2022		January 31, 2022
Land and land improvements	$	793,271	$	763,432	$	767,433
Buildings and building improvements	1,635,700		1,545,571		1,564,845
Machinery and equipment	1,769,052		1,505,236		1,504,991
Furniture and fixtures	330,257		307,867		318,434
Software	141,595		138,058		126,742
Vehicles	85,329		81,927		82,710
Construction in progress	135,903		127,282		114,165
Gross property, plant and equipment	4,891,107		4,469,373		4,479,320
Accumulated depreciation	(2,469,712)		(2,351,321)		(2,288,988)
Property, plant and equipment, net	$	2,421,395	$	2,118,052	$	2,190,332


	January 31, 2023		July 31, 2022		January 31, 2022
Trade payables	$	179,221	$	151,263	$	137,895
Deferred revenue	619,511		511,306		611,477
Accrued salaries, wages and deferred compensation	66,275		64,570		59,008
Accrued benefits	54,129		45,202		46,894
Deposits	81,612		37,731		80,547
Operating lease liabilities	36,667		34,218		35,438
Other liabilities	107,380		98,540		95,878
Total accounts payable and accrued liabilities	$	1,144,795	$	942,830	$	1,067,137


	Estimated Fair Value Measurement as of January 31, 2023
Description	Total		Level 1		Level 2		Level 3
Assets:
Money Market	$	614,439	$	614,439	$	—	$	—
Commercial Paper	$	2,401	$	—	$	2,401	$	—
Certificates of Deposit	$	111,140	$	—	$	111,140	$	—
Interest Rate Swaps	$	19,270	$	—	$	19,270	$	—
Liabilities:
Contingent Consideration	$	25,200	$	—	$	—	$	25,200

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

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


	Mountain		Lodging		Goodwill, net
Balance at July 31, 2022	$	1,709,922	$	45,006	$	1,754,928
Acquisition (including measurement period adjustments)	3,800		—		3,800

Effects of changes in foreign currency exchange rates	(35,709)		—		(35,709)
Balance at January 31, 2023	$	1,678,013	$	45,006	$	1,723,019


Balance as of July 31, 2022 and 2021, respectively	$	42,400	$	29,600
Payments	(18,936)		(7,480)
Change in estimated fair value	1,736		18,780
Balance as of January 31, 2023 and 2022, respectively	$	25,200	$	40,900


	Three Months Ended January 31,				Percentage Increase (Decrease)
	2023		2022
Mountain net revenue:
Lift	$	592,603	$	521,582	13.6	%
Ski school	123,451		92,072		34.1	%
Dining	85,828		54,049		58.8	%
Retail/rental	159,932		126,831		26.1	%
Other	51,628		39,841		29.6	%
Total Mountain net revenue	1,013,442		834,375		21.5	%
Mountain operating expense:
Labor and labor-related benefits	277,537		178,692		55.3	%
Retail cost of sales	48,197		36,288		32.8	%
Resort related fees	43,550		36,885		18.1	%
General and administrative	97,365		77,525		25.6	%
Other	147,984		117,310		26.1	%
Total Mountain operating expense	614,633		446,700		37.6	%
Mountain equity investment income, net	42		818		(94.9)	%
Mountain Reported EBITDA	$	398,851	$	388,493	2.7	%

Total skier visits	8,308		7,360		12.9	%
ETP	$	71.33	$	70.87	0.6	%


	Three Months Ended January 31,						Increase (Decrease)		Six Months Ended January 31,						Increase (Decrease)
	2023			2022					2023			2022
Depreciation and amortization	$	(65,989)		$	(62,070)		6.3	%	$	(130,603)		$	(123,559)		5.7	%

Change in estimated fair value of contingent consideration	$	(1,100)		$	(16,780)		(93.4)	%	$	(1,736)		$	(18,780)		(90.8)	%
Foreign currency gain (loss) on intercompany loans	$	2,338		$	(2,870)		181.5	%	$	(3,797)		$	(2,039)		(86.2)	%
(Loss) gain on disposal of fixed assets and other, net	$	(1,780)		$	7,347		(124.2)	%	$	(1,786)		$	16,214		(111.0)	%
Investment income and other, net	$	7,108		$	257		2,665.8	%	$	9,994		$	756		1,222.0	%

(Provision for) benefit from income taxes	$	(79,032)		$	(52,049)		51.8	%	$	(21,026)		$	7,804		(369.4)	%
Effective tax rate	(26.4)		%	(18.2)		%	(8.2) pts		(21.5)		%	9.3		%	(30.8) pts


	January 31,
	2023		2022
Long-term debt, net	$	2,789,827	$	2,695,589
Long-term debt due within one year	69,582		63,746
Total debt	2,859,409		2,759,335
Less: cash and cash equivalents	1,295,252		1,407,019
Net Debt	$	1,564,157	$	1,352,316


Exhibit Number			Description



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

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

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

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


		Vail Resorts, Inc.

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

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


1.	I have reviewed this quarterly report on Form 10-Q of Vail Resorts, Inc.;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
	a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
	b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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;
	c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
	d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.	The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
	a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
	b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.


Date: March 9, 2023
			/s/ KIRSTEN A. LYNCH
			Kirsten A. Lynch
			Chief Executive Officer