ý
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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51-0291762
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(State or Other Jurisdiction of
Incorporation or Organization)
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(I.R.S. Employer
Identification No.)
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390 Interlocken Crescent
Broomfield, Colorado
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80021
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(Address of Principal Executive Offices)
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(Zip Code)
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Large accelerated filer
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ý
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Accelerated filer
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¨
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Non-accelerated filer
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¨
(Do not check if a smaller reporting company)
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Smaller reporting company
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¨
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Emerging growth company
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¨
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PART I
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FINANCIAL INFORMATION
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Page
|
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Item 1.
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Financial Statements (unaudited).
|
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Item 2.
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Item 3.
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Item 4.
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||
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PART II
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OTHER INFORMATION
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|
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Item 1.
|
||
Item 1A.
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Item 2.
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Item 3.
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Item 4.
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Item 5.
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||
Item 6.
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April 30, 2017
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July 31, 2016
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April 30, 2016
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||||||
Assets
|
|
|
|
|
|
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||||||
Current assets:
|
|
|
|
|
|
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||||||
Cash and cash equivalents
|
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$
|
195,818
|
|
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$
|
67,897
|
|
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$
|
68,565
|
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Restricted cash
|
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8,648
|
|
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6,046
|
|
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5,934
|
|
|||
Trade receivables, net
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174,433
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|
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147,113
|
|
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145,483
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|||
Inventories, net
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77,332
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74,589
|
|
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68,882
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|||
Other current assets
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42,488
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27,220
|
|
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57,455
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|||
Total current assets
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498,719
|
|
|
322,865
|
|
|
346,319
|
|
|||
Property, plant and equipment, net (Note 6)
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1,647,004
|
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1,363,814
|
|
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1,370,374
|
|
|||
Real estate held for sale and investment
|
|
108,217
|
|
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111,088
|
|
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116,874
|
|
|||
Goodwill, net (Note 6)
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1,430,008
|
|
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509,037
|
|
|
509,083
|
|
|||
Intangible assets, net
|
|
280,516
|
|
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140,007
|
|
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141,222
|
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|||
Other assets
|
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44,403
|
|
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35,207
|
|
|
35,303
|
|
|||
Total assets
|
|
$
|
4,008,867
|
|
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$
|
2,482,018
|
|
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$
|
2,519,175
|
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Liabilities and Stockholders’ Equity
|
|
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||||||
Current liabilities:
|
|
|
|
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|
||||||
Accounts payable and accrued liabilities (Note 6)
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$
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403,285
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|
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$
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397,488
|
|
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$
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338,089
|
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Income taxes payable
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48,702
|
|
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95,639
|
|
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20,059
|
|
|||
Long-term debt due within one year (Note 4)
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38,386
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|
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13,354
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|
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13,349
|
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|||
Total current liabilities
|
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490,373
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506,481
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|
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371,497
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|
|||
Long-term debt (Note 4)
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1,168,210
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686,909
|
|
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613,704
|
|
|||
Other long-term liabilities (Note 6)
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|
280,203
|
|
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270,168
|
|
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249,298
|
|
|||
Deferred income taxes
|
|
281,813
|
|
|
129,994
|
|
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305,134
|
|
|||
Total liabilities
|
|
2,220,599
|
|
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1,593,552
|
|
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1,539,633
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|
|||
Commitments and contingencies (Note 8)
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|
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|
||||||
Stockholders’ equity:
|
|
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|
||||||
Preferred stock, $0.01 par value, 25,000,000 shares authorized, no shares issued and outstanding
|
|
—
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—
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—
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|||
Common stock, $0.01 par value, 100,000,000 shares authorized, 45,443,310, 41,614,432 and 41,595,420 shares issued, respectively
|
|
454
|
|
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416
|
|
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416
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|
|||
Exchangeable shares, $0.01 par value, 70,149, zero and zero shares issued and outstanding, respectively (Note 5)
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1
|
|
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—
|
|
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—
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|
|||
Additional paid-in capital
|
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1,217,820
|
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635,986
|
|
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632,148
|
|
|||
Accumulated other comprehensive loss
|
|
(44,677
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)
|
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(1,550
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)
|
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(1,167
|
)
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|||
Retained earnings
|
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650,331
|
|
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486,667
|
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581,245
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|
|||
Treasury stock, at cost, 5,436,294, 5,434,977, and 5,434,977 shares, respectively (Note 10)
|
|
(247,189
|
)
|
|
(246,979
|
)
|
|
(246,979
|
)
|
|||
Total Vail Resorts, Inc. stockholders’ equity
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1,576,740
|
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874,540
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|
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965,663
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|
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Noncontrolling interests
|
|
211,528
|
|
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13,926
|
|
|
13,879
|
|
|||
Total stockholders’ equity
|
|
1,788,268
|
|
|
888,466
|
|
|
979,542
|
|
|||
Total liabilities and stockholders’ equity
|
|
$
|
4,008,867
|
|
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$
|
2,482,018
|
|
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$
|
2,519,175
|
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Three Months Ended April 30,
|
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Nine Months Ended April 30,
|
||||||||||||
|
2017
|
|
2016
|
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2017
|
|
2016
|
||||||||
Net revenue:
|
|
|
|
|
|
|
|
||||||||
Mountain
|
$
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721,160
|
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$
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572,805
|
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$
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1,486,026
|
|
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$
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1,206,610
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Lodging
|
68,601
|
|
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72,933
|
|
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201,887
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|
200,026
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|
||||
Real estate
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4,870
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1,734
|
|
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10,181
|
|
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14,766
|
|
||||
Total net revenue
|
794,631
|
|
|
647,472
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1,698,094
|
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1,421,402
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|
||||
Segment operating expense (exclusive of depreciation and amortization shown separately below):
|
|
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|
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|
||||||||
Mountain
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340,390
|
|
|
281,968
|
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|
863,882
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|
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729,382
|
|
||||
Lodging
|
57,897
|
|
|
57,422
|
|
|
181,660
|
|
|
176,170
|
|
||||
Real estate
|
9,818
|
|
|
3,085
|
|
|
17,144
|
|
|
17,043
|
|
||||
Total segment operating expense
|
408,105
|
|
|
342,475
|
|
|
1,062,686
|
|
|
922,595
|
|
||||
Other operating (expense) income:
|
|
|
|
|
|
|
|
||||||||
Depreciation and amortization
|
(50,029
|
)
|
|
(41,472
|
)
|
|
(140,236
|
)
|
|
(120,713
|
)
|
||||
Gain on sale of real property
|
—
|
|
|
19
|
|
|
6,466
|
|
|
1,810
|
|
||||
Change in estimated fair value of contingent consideration (Note 7)
|
(14,500
|
)
|
|
—
|
|
|
(15,100
|
)
|
|
—
|
|
||||
Loss on disposal of fixed assets and other, net
|
(1,924
|
)
|
|
(164
|
)
|
|
(4,705
|
)
|
|
(3,149
|
)
|
||||
Income from operations
|
320,073
|
|
|
263,380
|
|
|
481,833
|
|
|
376,755
|
|
||||
Mountain equity investment income, net
|
521
|
|
|
211
|
|
|
1,510
|
|
|
992
|
|
||||
Investment income and other, net
|
210
|
|
|
150
|
|
|
5,881
|
|
|
509
|
|
||||
Interest expense and other, net
|
(23,313
|
)
|
|
(10,400
|
)
|
|
(44,325
|
)
|
|
(31,905
|
)
|
||||
Income before provision for income taxes
|
297,491
|
|
|
253,341
|
|
|
444,899
|
|
|
346,351
|
|
||||
Provision for income taxes
|
(100,635
|
)
|
|
(95,804
|
)
|
|
(151,933
|
)
|
|
(131,613
|
)
|
||||
Net income
|
196,856
|
|
|
157,537
|
|
|
292,966
|
|
|
214,738
|
|
||||
Net (income) loss attributable to noncontrolling interests
|
(15,749
|
)
|
|
95
|
|
|
(25,267
|
)
|
|
289
|
|
||||
Net income attributable to Vail Resorts, Inc.
|
$
|
181,107
|
|
|
$
|
157,632
|
|
|
$
|
267,699
|
|
|
$
|
215,027
|
|
Per share amounts (Note 3):
|
|
|
|
|
|
|
|
||||||||
Basic net income per share attributable to Vail Resorts, Inc.
|
$
|
4.52
|
|
|
$
|
4.35
|
|
|
$
|
6.87
|
|
|
$
|
5.92
|
|
Diluted net income per share attributable to Vail Resorts, Inc.
|
$
|
4.40
|
|
|
$
|
4.23
|
|
|
$
|
6.68
|
|
|
$
|
5.76
|
|
Cash dividends declared per share
|
$
|
1.053
|
|
|
$
|
0.81
|
|
|
$
|
2.673
|
|
|
$
|
2.055
|
|
|
|
Three Months Ended April 30,
|
|
Nine Months Ended April 30,
|
||||||||||||
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Net income
|
|
$
|
196,856
|
|
|
$
|
157,537
|
|
|
$
|
292,966
|
|
|
$
|
214,738
|
|
Foreign currency translation adjustments, net of tax
|
|
(48,690
|
)
|
|
6,540
|
|
|
(47,452
|
)
|
|
3,746
|
|
||||
Comprehensive income
|
|
148,166
|
|
|
164,077
|
|
|
245,514
|
|
|
218,484
|
|
||||
Comprehensive (income) loss attributable to noncontrolling interests
|
|
(10,822
|
)
|
|
95
|
|
|
(20,942
|
)
|
|
289
|
|
||||
Comprehensive income attributable to Vail Resorts, Inc.
|
|
$
|
137,344
|
|
|
$
|
164,172
|
|
|
$
|
224,572
|
|
|
$
|
218,773
|
|
|
Common Stock
|
Additional Paid in Capital
|
Accumulated Other Comprehensive Loss
|
Retained Earnings
|
Treasury Stock
|
Total Vail Resorts, Inc. Stockholders’ Equity
|
Noncontrolling Interests
|
Total Stockholders’ Equity
|
|||||||||||||||||||
|
Vail Resorts
|
Exchangeable
|
|
|
|
|
|
|
|
||||||||||||||||||
Balance, July 31, 2015
|
$
|
415
|
|
$
|
—
|
|
$
|
623,510
|
|
$
|
(4,913
|
)
|
$
|
440,748
|
|
$
|
(193,192
|
)
|
$
|
866,568
|
|
$
|
14,018
|
|
$
|
880,586
|
|
Comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Net income (loss)
|
—
|
|
—
|
|
—
|
|
—
|
|
215,027
|
|
—
|
|
215,027
|
|
(289
|
)
|
214,738
|
|
|||||||||
Foreign currency translation adjustments, net of tax
|
—
|
|
—
|
|
—
|
|
3,746
|
|
—
|
|
—
|
|
3,746
|
|
—
|
|
3,746
|
|
|||||||||
Total comprehensive income (loss)
|
|
|
|
|
|
|
218,773
|
|
(289
|
)
|
218,484
|
|
|||||||||||||||
Stock-based compensation expense
|
—
|
|
—
|
|
12,665
|
|
—
|
|
—
|
|
—
|
|
12,665
|
|
—
|
|
12,665
|
|
|||||||||
Issuance of shares under share award plans, net of shares withheld for taxes
|
1
|
|
—
|
|
(8,521
|
)
|
—
|
|
—
|
|
—
|
|
(8,520
|
)
|
—
|
|
(8,520
|
)
|
|||||||||
Tax benefit from share award plans
|
—
|
|
—
|
|
4,494
|
|
—
|
|
—
|
|
—
|
|
4,494
|
|
—
|
|
4,494
|
|
|||||||||
Repurchase of common stock (Note 10)
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(53,787
|
)
|
(53,787
|
)
|
—
|
|
(53,787
|
)
|
|||||||||
Dividends (Note 3)
|
—
|
|
—
|
|
—
|
|
—
|
|
(74,530
|
)
|
—
|
|
(74,530
|
)
|
—
|
|
(74,530
|
)
|
|||||||||
Contributions from noncontrolling interests, net
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
150
|
|
150
|
|
|||||||||
Balance, April 30, 2016
|
$
|
416
|
|
$
|
—
|
|
$
|
632,148
|
|
$
|
(1,167
|
)
|
$
|
581,245
|
|
$
|
(246,979
|
)
|
$
|
965,663
|
|
$
|
13,879
|
|
$
|
979,542
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Balance, July 31, 2016
|
$
|
416
|
|
$
|
—
|
|
$
|
635,986
|
|
$
|
(1,550
|
)
|
$
|
486,667
|
|
$
|
(246,979
|
)
|
$
|
874,540
|
|
$
|
13,926
|
|
$
|
888,466
|
|
Comprehensive income:
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Net income
|
—
|
|
—
|
|
—
|
|
—
|
|
267,699
|
|
—
|
|
267,699
|
|
25,267
|
|
292,966
|
|
|||||||||
Foreign currency translation adjustments, net of tax
|
—
|
|
—
|
|
—
|
|
(43,127
|
)
|
—
|
|
—
|
|
(43,127
|
)
|
(4,325
|
)
|
(47,452
|
)
|
|||||||||
Total comprehensive income
|
|
|
|
|
|
|
224,572
|
|
20,942
|
|
245,514
|
|
|||||||||||||||
Stock-based compensation expense
|
—
|
|
—
|
|
13,588
|
|
—
|
|
—
|
|
—
|
|
13,588
|
|
—
|
|
13,588
|
|
|||||||||
Shares issued for acquisition (Note 5)
|
33
|
|
4
|
|
574,608
|
|
—
|
|
—
|
|
—
|
|
574,645
|
|
—
|
|
574,645
|
|
|||||||||
Exchangeable share transfers
|
3
|
|
(3
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|||||||||
Issuance of shares under share award plans, net of shares withheld for taxes
|
2
|
|
—
|
|
(15,886
|
)
|
—
|
|
—
|
|
—
|
|
(15,884
|
)
|
—
|
|
(15,884
|
)
|
|||||||||
Tax benefit from share award plans
|
—
|
|
—
|
|
9,524
|
|
—
|
|
—
|
|
—
|
|
9,524
|
|
—
|
|
9,524
|
|
|||||||||
Repurchase of common stock (Note 10)
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(210
|
)
|
(210
|
)
|
—
|
|
(210
|
)
|
|||||||||
Dividends (Note 3)
|
—
|
|
—
|
|
—
|
|
—
|
|
(104,035
|
)
|
—
|
|
(104,035
|
)
|
—
|
|
(104,035
|
)
|
|||||||||
Acquisition of noncontrolling interest (Note 5)
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
182,579
|
|
182,579
|
|
|||||||||
Distributions to noncontrolling interests, net
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(5,919
|
)
|
(5,919
|
)
|
|||||||||
Balance, April 30, 2017
|
$
|
454
|
|
$
|
1
|
|
$
|
1,217,820
|
|
$
|
(44,677
|
)
|
$
|
650,331
|
|
$
|
(247,189
|
)
|
$
|
1,576,740
|
|
$
|
211,528
|
|
$
|
1,788,268
|
|
|
|
Nine Months Ended April 30,
|
||||||
|
|
2017
|
|
2016
|
||||
Cash flows from operating activities:
|
|
|
|
|
||||
Net income
|
|
$
|
292,966
|
|
|
$
|
214,738
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
||||
Depreciation and amortization
|
|
140,236
|
|
|
120,713
|
|
||
Cost of real estate sales
|
|
8,017
|
|
|
10,508
|
|
||
Stock-based compensation expense
|
|
13,588
|
|
|
12,665
|
|
||
Deferred income taxes, net
|
|
151,933
|
|
|
131,741
|
|
||
Change in fair value of contingent consideration
|
|
15,100
|
|
|
—
|
|
||
Gain on sale of real property
|
|
(6,466
|
)
|
|
(1,810
|
)
|
||
Other non-cash income, net
|
|
(3,741
|
)
|
|
(1,037
|
)
|
||
Changes in assets and liabilities:
|
|
|
|
|
||||
Restricted cash
|
|
3,557
|
|
|
7,078
|
|
||
Trade receivables, net
|
|
(26,375
|
)
|
|
(27,973
|
)
|
||
Inventories, net
|
|
13,648
|
|
|
4,857
|
|
||
Accounts payable and accrued liabilities
|
|
(66,999
|
)
|
|
(4,641
|
)
|
||
Income taxes payable
|
|
(56,128
|
)
|
|
(19,083
|
)
|
||
Other assets and liabilities, net
|
|
(1,023
|
)
|
|
7,671
|
|
||
Net cash provided by operating activities
|
|
478,313
|
|
|
455,427
|
|
||
Cash flows from investing activities:
|
|
|
|
|
||||
Capital expenditures
|
|
(111,836
|
)
|
|
(88,307
|
)
|
||
Acquisition of businesses, net of cash acquired
|
|
(512,348
|
)
|
|
(20,245
|
)
|
||
Cash received from the sale of real property
|
|
7,692
|
|
|
3,722
|
|
||
Other investing activities, net
|
|
6,543
|
|
|
(2,842
|
)
|
||
Net cash used in investing activities
|
|
(609,949
|
)
|
|
(107,672
|
)
|
||
Cash flows from financing activities:
|
|
|
|
|
||||
Proceeds from borrowings under Vail Holdings Credit Agreement term loan
|
|
509,375
|
|
|
—
|
|
||
Proceeds from borrowings under Vail Holdings Credit Agreement revolver
|
|
110,000
|
|
|
135,000
|
|
||
Proceeds from borrowings under Whistler Credit Agreement revolver
|
|
2,229
|
|
|
—
|
|
||
Repayments of borrowings under Vail Holdings Credit Agreement term loan
|
|
(18,750
|
)
|
|
(6,250
|
)
|
||
Repayments of borrowings under Vail Holdings Credit Agreement revolver
|
|
(185,000
|
)
|
|
(320,000
|
)
|
||
Repayments of borrowings under Whistler Credit Agreement revolver
|
|
(53,889
|
)
|
|
—
|
|
||
Dividends paid
|
|
(104,035
|
)
|
|
(74,530
|
)
|
||
Repurchases of common stock
|
|
(210
|
)
|
|
(53,787
|
)
|
||
Other financing activities, net
|
|
917
|
|
|
4,499
|
|
||
Net cash provided by (used in) financing activities
|
|
260,637
|
|
|
(315,068
|
)
|
||
Effect of exchange rate changes on cash and cash equivalents
|
|
(1,080
|
)
|
|
419
|
|
||
Net increase in cash and cash equivalents
|
|
127,921
|
|
|
33,106
|
|
||
Cash and cash equivalents:
|
|
|
|
|
||||
Beginning of period
|
|
67,897
|
|
|
35,459
|
|
||
End of period
|
|
$
|
195,818
|
|
|
$
|
68,565
|
|
|
|
|
|
|
||||
Non-cash investing activities:
|
|
|
|
|
||||
Accrued capital expenditures
|
|
$
|
9,127
|
|
|
$
|
5,801
|
|
1.
|
Organization and Business
|
Mountain Resorts:
|
|
Location:
|
|
1.
|
Vail Mountain
|
|
Colorado
|
2.
|
Breckenridge
|
|
Colorado
|
3.
|
Keystone
|
|
Colorado
|
4.
|
Beaver Creek
|
|
Colorado
|
5.
|
Park City Mountain Resort (“Park City”)
|
|
Utah
|
6.
|
Heavenly
|
|
Lake Tahoe area of Nevada and California
|
7.
|
Northstar
|
|
Lake Tahoe area of California
|
8.
|
Kirkwood
|
|
Lake Tahoe area of California
|
9.
|
Perisher Ski Resort (“Perisher”)
|
|
New South Wales, Australia
|
10.
|
Whistler Blackcomb Resort (“Whistler Blackcomb”)
|
|
British Columbia, Canada
|
Urban Ski Areas (“Urban”):
|
|
Location:
|
|
1.
|
Wilmot Mountain (“Wilmot”)
|
|
Wisconsin
|
2.
|
Afton Alps
|
|
Minnesota
|
3.
|
Mount Brighton
|
|
Michigan
|
2.
|
Summary of Significant Accounting Policies
|
3.
|
Net Income per Share
|
|
|
Three Months Ended April 30,
|
||||||||||||||
|
|
2017
|
|
2016
|
||||||||||||
|
|
Basic
|
|
Diluted
|
|
Basic
|
|
Diluted
|
||||||||
Net income per share:
|
|
|
|
|
|
|
|
|
||||||||
Net income attributable to Vail Resorts
|
|
$
|
181,107
|
|
|
$
|
181,107
|
|
|
$
|
157,632
|
|
|
$
|
157,632
|
|
Weighted-average Vail Resorts shares outstanding
|
|
39,996
|
|
|
39,996
|
|
|
36,217
|
|
|
36,217
|
|
||||
Weighted-average Exchangeco shares outstanding
|
|
72
|
|
|
72
|
|
|
—
|
|
|
—
|
|
||||
Total Weighted-average shares outstanding
|
|
40,068
|
|
|
40,068
|
|
|
36,217
|
|
|
36,217
|
|
||||
Effect of dilutive securities
|
|
—
|
|
|
1,113
|
|
|
—
|
|
|
1,051
|
|
||||
Total shares
|
|
40,068
|
|
|
41,181
|
|
|
36,217
|
|
|
37,268
|
|
||||
Net income per share attributable to Vail Resorts
|
|
$
|
4.52
|
|
|
$
|
4.40
|
|
|
$
|
4.35
|
|
|
$
|
4.23
|
|
|
|
Nine Months Ended April 30,
|
||||||||||||||
|
|
2017
|
|
2016
|
||||||||||||
|
|
Basic
|
|
Diluted
|
|
Basic
|
|
Diluted
|
||||||||
Net income per share:
|
|
|
|
|
|
|
|
|
||||||||
Net income attributable to Vail Resorts
|
|
$
|
267,699
|
|
|
$
|
267,699
|
|
|
$
|
215,027
|
|
|
$
|
215,027
|
|
Weighted-average Vail Resorts shares outstanding
|
|
38,871
|
|
|
38,871
|
|
|
36,312
|
|
|
36,312
|
|
||||
Weighted-average Exchangeco shares outstanding
|
|
101
|
|
|
101
|
|
|
—
|
|
|
—
|
|
||||
Total Weighted-average shares outstanding
|
|
38,972
|
|
|
38,972
|
|
|
36,312
|
|
|
36,312
|
|
||||
Effect of dilutive securities
|
|
—
|
|
|
1,097
|
|
|
—
|
|
|
1,016
|
|
||||
Total shares
|
|
38,972
|
|
|
40,069
|
|
|
36,312
|
|
|
37,328
|
|
||||
Net income per share attributable to Vail Resorts
|
|
$
|
6.87
|
|
|
$
|
6.68
|
|
|
$
|
5.92
|
|
|
$
|
5.76
|
|
4.
|
Long-Term Debt
|
|
|
Maturity
|
|
April 30, 2017
|
|
July 31, 2016
|
|
April 30, 2016
|
||||||
Vail Holdings Credit Agreement term loan (a)
|
|
2021
|
|
$
|
731,250
|
|
|
$
|
240,625
|
|
|
$
|
243,750
|
|
Vail Holdings Credit Agreement revolver (a)
|
|
2021
|
|
—
|
|
|
75,000
|
|
|
—
|
|
|||
Whistler Credit Agreement revolver (b)
|
|
2021
|
|
89,379
|
|
|
—
|
|
|
—
|
|
|||
Employee housing bonds
|
|
2027-2039
|
|
52,575
|
|
|
52,575
|
|
|
52,575
|
|
|||
Canyons obligation
|
|
2063
|
|
327,364
|
|
|
323,099
|
|
|
321,688
|
|
|||
Other
|
|
2017-2028
|
|
10,316
|
|
|
11,021
|
|
|
11,165
|
|
|||
Total debt
|
|
|
|
1,210,884
|
|
|
702,320
|
|
|
629,178
|
|
|||
Less: Unamortized debt issuance costs (c)
|
|
|
|
4,288
|
|
|
2,057
|
|
|
2,125
|
|
|||
Less: Current maturities (d)
|
|
|
|
38,386
|
|
|
13,354
|
|
|
13,349
|
|
|||
Long-term debt
|
|
|
|
$
|
1,168,210
|
|
|
$
|
686,909
|
|
|
$
|
613,704
|
|
(a)
|
On
October 14, 2016
, in order to finance the cash portion of the consideration and payment of associated fees and expenses of the Whistler Blackcomb acquisition (see Note 5, Acquisitions), the Company’s wholly owned subsidiary, Vail Holdings, Inc., entered into the Second Amendment to the Seventh Amended and Restated Credit Agreement, dated as of May 1, 2015 (the “Vail Holdings Credit Agreement”), with Bank of America, N.A., as administrative agent, and other lenders named therein, through which these lenders provided an additional
$509.4 million
in incremental term loans and agreed, on behalf of all lenders, to extend the maturity date for the outstanding term loans and revolver facility under the Vail Holdings Credit Agreement to
October 14, 2021
(the “Amendment”). The Vail Holdings Credit Agreement consists of a
$400.0 million
revolving credit facility and a
$750.0 million
term loan facility. The other material terms of the Vail Holdings Credit Agreement, including those disclosed in the Company’s Annual Report on Form 10-K filed on September 26, 2016, were not altered by the Amendment. Borrowings under the Vail Holdings Credit Agreement, including the term loan facility, bear interest at approximately
2.2%
, as of April 30, 2017, and interest payments are due monthly. Additionally,
the term loan facility is subject to quarterly principal payments of approximately $9.4 million, which began on January 31, 2017. Final payment of the remaining principle outstanding plus accrued and unpaid interest is due upon maturity in October 2021.
|
(b)
|
The WB Partnerships (as defined in Note 5, Acquisitions) are party to a credit agreement, dated as of
November 12, 2013
(as amended, the “Whistler Credit Agreement”), by and among Whistler Mountain Resort Limited Partnership (“Whistler LP”), Blackcomb Skiing Enterprises Limited Partnership (“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 which matures on
November 12, 2021
. 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 April 30, 2017, 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
April 30, 2017
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
2.67%
). The Whistler Credit Agreement also includes a quarterly unused commitment fee based on the Consolidated Total Leverage Ratio, which as of
April 30, 2017
is equal to
0.3937%
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. In addition, the Whistler Credit Agreement includes the restrictive financial covenants (leverage ratios and interest coverage ratios) customary for facilities of this type. In connection with the Whistler Blackcomb transaction, the WB Partnerships obtained an amendment to the Whistler Credit Agreement to waive the change of control provision that otherwise would have required repayment in full of the facility as a result of the closing of the Whistler Blackcomb acquisition and to extend the maturity to
November 12, 2021
.
|
(c)
|
The Company adopted ASU 2015-03 and ASU 2015-15 as of July 31, 2016 which alters the presentation of debt issuance costs. As a result, approximately
$2.1 million
of debt issuance costs have been reclassified to Long-term debt as of April 30, 2016.
|
(d)
|
Current maturities represent principal payments due in the next 12 months.
|
|
Total
|
||
2017 (May 2017 through July 2017)
|
$
|
9,525
|
|
2018
|
38,397
|
|
|
2019
|
38,455
|
|
|
2020
|
38,516
|
|
|
2021
|
38,580
|
|
|
Thereafter
|
1,047,411
|
|
|
Total debt
|
$
|
1,210,884
|
|
5.
|
Acquisitions
|
(in thousands, except exchange ratio and share price amounts)
|
|
Acquisition Date Estimated Fair Value
|
||
Total Whistler Blackcomb shares acquired
|
|
38,500
|
|
|
Exchange ratio as of October 14, 2016
|
|
0.097294
|
|
|
Total Vail Resorts shares issued to Whistler Blackcomb shareholders
|
|
3,746
|
|
|
Vail Resorts closing share price on October 14, 2016
|
|
$
|
153.41
|
|
Total value of Vail Resorts shares issued
|
|
$
|
574,645
|
|
Total cash consideration paid at C$17.50 ($13.31 on October 17, 2016) per Whistler Blackcomb share
|
|
512,558
|
|
|
Total purchase consideration to Whistler Blackcomb shareholders
|
|
1,087,203
|
|
|
Estimated fair value of previously held investment in Whistler Blackcomb
|
|
4,308
|
|
|
Estimated fair value of Nippon Cable’s 25% interest in Whistler Blackcomb
|
|
182,579
|
|
|
Total estimated purchase consideration
|
|
$
|
1,274,090
|
|
|
|
|
||
Allocation of total estimated purchase consideration:
|
|
|
||
Estimated fair values of assets acquired:
|
|
|
||
Current assets
|
|
$
|
37,567
|
|
Property, plant and equipment
|
|
332,609
|
|
|
Real estate held for sale and investment
|
|
8,216
|
|
|
Goodwill
|
|
956,876
|
|
|
Identifiable intangibles
|
|
152,035
|
|
|
Deferred income taxes, net
|
|
8,138
|
|
|
Other assets
|
|
1,907
|
|
|
Current liabilities
|
|
(75,175
|
)
|
|
Assumed long-term debt
|
|
(144,922
|
)
|
|
Other long-term liabilities
|
|
(3,161
|
)
|
|
Net assets acquired
|
|
$
|
1,274,090
|
|
|
Estimated Fair Value
|
|
Weighted Average Amortization Period
|
||
|
($ in thousands)
|
|
(in years)
(1)
|
||
Trademarks and trade names
|
$
|
139,977
|
|
|
n/a
|
Season pass holder relationships
|
7,950
|
|
|
5
|
|
Property management contracts
|
4,108
|
|
|
n/a
|
|
Total acquired identifiable intangible assets
|
$
|
152,035
|
|
|
|
|
|
Three Months Ended
April 30, 2016
|
|||
Pro forma net revenue
|
|
$
|
752,462
|
|
|
Pro forma net income attributable to Vail Resorts, Inc.
|
|
$
|
184,064
|
|
|
Pro forma basic net income per share attributable to Vail Resorts, Inc.
|
|
$
|
4.61
|
|
|
Pro forma diluted net income per share attributable to Vail Resorts, Inc.
|
|
$
|
4.49
|
|
|
|
Nine Months Ended April 30,
|
||||||
|
|
2017
|
|
2016
|
||||
Pro forma net revenue
|
|
$
|
1,720,758
|
|
|
$
|
1,631,813
|
|
Pro forma net income attributable to Vail Resorts, Inc.
|
|
$
|
270,418
|
|
|
$
|
248,187
|
|
Pro forma basic net income per share attributable to Vail Resorts, Inc.
|
|
$
|
6.76
|
|
|
$
|
6.20
|
|
Pro forma diluted net income per share attributable to Vail Resorts, Inc.
|
|
$
|
6.58
|
|
|
$
|
6.04
|
|
6.
|
Supplementary Balance Sheet Information
|
|
|
April 30, 2017
|
|
July 31, 2016
|
|
April 30, 2016
|
||||||
Land and land improvements
|
|
$
|
531,058
|
|
|
$
|
440,300
|
|
|
$
|
439,815
|
|
Buildings and building improvements
|
|
1,170,700
|
|
|
1,025,515
|
|
|
1,028,408
|
|
|||
Machinery and equipment
|
|
967,157
|
|
|
866,008
|
|
|
878,730
|
|
|||
Furniture and fixtures
|
|
275,235
|
|
|
284,959
|
|
|
305,159
|
|
|||
Software
|
|
105,352
|
|
|
103,754
|
|
|
112,551
|
|
|||
Vehicles
|
|
61,415
|
|
|
58,159
|
|
|
62,166
|
|
|||
Construction in progress
|
|
34,029
|
|
|
39,396
|
|
|
28,019
|
|
|||
Gross property, plant and equipment
|
|
3,144,946
|
|
|
2,818,091
|
|
|
2,854,848
|
|
|||
Accumulated depreciation
|
|
(1,497,942
|
)
|
|
(1,454,277
|
)
|
|
(1,484,474
|
)
|
|||
Property, plant and equipment, net
|
|
$
|
1,647,004
|
|
|
$
|
1,363,814
|
|
|
$
|
1,370,374
|
|
|
|
April 30, 2017
|
|
July 31, 2016
|
|
April 30, 2016
|
||||||
Trade payables
|
|
$
|
51,305
|
|
|
$
|
72,658
|
|
|
$
|
47,144
|
|
Deferred revenue
|
|
206,534
|
|
|
182,506
|
|
|
164,927
|
|
|||
Accrued salaries, wages and deferred compensation
|
|
36,162
|
|
|
43,086
|
|
|
34,403
|
|
|||
Accrued benefits
|
|
36,401
|
|
|
29,175
|
|
|
29,625
|
|
|||
Deposits
|
|
22,117
|
|
|
23,307
|
|
|
21,641
|
|
|||
Other liabilities
|
|
50,766
|
|
|
46,756
|
|
|
40,349
|
|
|||
Total accounts payable and accrued liabilities
|
|
$
|
403,285
|
|
|
$
|
397,488
|
|
|
$
|
338,089
|
|
|
|
April 30, 2017
|
|
July 31, 2016
|
|
April 30, 2016
|
||||||
Private club deferred initiation fee revenue
|
|
$
|
120,260
|
|
|
$
|
121,750
|
|
|
$
|
123,341
|
|
Unfavorable lease obligation, net
|
|
25,254
|
|
|
27,322
|
|
|
28,005
|
|
|||
Other long-term liabilities
|
|
134,689
|
|
|
121,096
|
|
|
97,952
|
|
|||
Total other long-term liabilities
|
|
$
|
280,203
|
|
|
$
|
270,168
|
|
|
$
|
249,298
|
|
|
|
Mountain
|
|
Lodging
|
|
Goodwill, net
|
||||||
Balance at July 31, 2016
|
|
$
|
441,138
|
|
|
$
|
67,899
|
|
|
$
|
509,037
|
|
Whistler Blackcomb acquisition
|
|
956,876
|
|
|
—
|
|
|
956,876
|
|
|||
Effects of changes in foreign currency exchange rates
|
|
(35,905
|
)
|
|
—
|
|
|
(35,905
|
)
|
|||
Balance at April 30, 2017
|
|
$
|
1,362,109
|
|
|
$
|
67,899
|
|
|
$
|
1,430,008
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
Estimated Fair Value Measurement as of April 30, 2017
|
||||||||||||||
Description
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
Assets:
|
|
|
|
|
|
|
|
|
||||||||
Money Market
|
|
$
|
3,005
|
|
|
$
|
3,005
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Commercial Paper
|
|
$
|
2,401
|
|
|
$
|
—
|
|
|
$
|
2,401
|
|
|
$
|
—
|
|
Certificates of Deposit
|
|
$
|
2,404
|
|
|
$
|
—
|
|
|
$
|
2,404
|
|
|
$
|
—
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
||||||||
Contingent Consideration
|
|
$
|
26,200
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
26,200
|
|
Interest Rate Swap
|
|
$
|
1,181
|
|
|
$
|
—
|
|
|
$
|
1,181
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
Estimated Fair Value Measurement as of July 31, 2016
|
||||||||||||||
Description
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
Assets:
|
|
|
|
|
|
|
|
|
||||||||
Commercial Paper
|
|
$
|
2,401
|
|
|
$
|
—
|
|
|
$
|
2,401
|
|
|
$
|
—
|
|
Certificates of Deposit
|
|
$
|
2,403
|
|
|
$
|
—
|
|
|
$
|
2,403
|
|
|
$
|
—
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
||||||||
Contingent Consideration
|
|
$
|
11,100
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
11,100
|
|
|
|
|
||||||||||||||
|
|
Estimated Fair Value Measurement as of April 30, 2016
|
||||||||||||||
Description
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
Assets:
|
|
|
|
|
|
|
|
|
||||||||
Commercial Paper
|
|
$
|
2,401
|
|
|
$
|
—
|
|
|
$
|
2,401
|
|
|
$
|
—
|
|
Certificates of Deposit
|
|
$
|
2,402
|
|
|
$
|
—
|
|
|
$
|
2,402
|
|
|
$
|
—
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
||||||||
Contingent Consideration
|
|
$
|
6,900
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
6,900
|
|
|
|
|
|
|
||||
Balance as of July 31, 2016 and 2015, respectively
|
|
$
|
11,100
|
|
|
$
|
6,900
|
|
Change in estimated fair value
|
|
15,100
|
|
|
—
|
|
||
Balance as of April 30, 2017 and 2016, respectively
|
|
$
|
26,200
|
|
|
$
|
6,900
|
|
|
Three Months Ended April 30,
|
|
Nine Months Ended April 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Net revenue:
|
|
|
|
|
|
|
|
||||||||
Lift
|
$
|
419,647
|
|
|
$
|
334,789
|
|
|
$
|
799,324
|
|
|
$
|
642,627
|
|
Ski school
|
91,704
|
|
|
74,279
|
|
|
173,674
|
|
|
139,703
|
|
||||
Dining
|
65,618
|
|
|
51,000
|
|
|
133,352
|
|
|
108,093
|
|
||||
Retail/rental
|
102,104
|
|
|
79,384
|
|
|
261,816
|
|
|
214,748
|
|
||||
Other
|
42,087
|
|
|
33,353
|
|
|
117,860
|
|
|
101,439
|
|
||||
Total Mountain net revenue
|
$
|
721,160
|
|
|
$
|
572,805
|
|
|
$
|
1,486,026
|
|
|
$
|
1,206,610
|
|
Lodging
|
68,601
|
|
|
72,933
|
|
|
201,887
|
|
|
200,026
|
|
||||
Total Resort net revenue
|
789,761
|
|
|
645,738
|
|
|
1,687,913
|
|
|
1,406,636
|
|
||||
Real estate
|
4,870
|
|
|
1,734
|
|
|
10,181
|
|
|
14,766
|
|
||||
Total net revenue
|
$
|
794,631
|
|
|
$
|
647,472
|
|
|
$
|
1,698,094
|
|
|
$
|
1,421,402
|
|
Operating expense:
|
|
|
|
|
|
|
|
||||||||
Mountain
|
340,390
|
|
|
281,968
|
|
|
863,882
|
|
|
729,382
|
|
||||
Lodging
|
57,897
|
|
|
57,422
|
|
|
181,660
|
|
|
176,170
|
|
||||
Total Resort operating expense
|
398,287
|
|
|
339,390
|
|
|
1,045,542
|
|
|
905,552
|
|
||||
Real estate
|
9,818
|
|
|
3,085
|
|
|
17,144
|
|
|
17,043
|
|
||||
Total segment operating expense
|
$
|
408,105
|
|
|
$
|
342,475
|
|
|
$
|
1,062,686
|
|
|
$
|
922,595
|
|
|
|
|
|
|
|
|
|
||||||||
Gain on sale of real property
|
$
|
—
|
|
|
$
|
19
|
|
|
$
|
6,466
|
|
|
$
|
1,810
|
|
Mountain equity investment income, net
|
$
|
521
|
|
|
$
|
211
|
|
|
$
|
1,510
|
|
|
$
|
992
|
|
Reported EBITDA:
|
|
|
|
|
|
|
|
||||||||
Mountain
|
$
|
381,291
|
|
|
$
|
291,048
|
|
|
$
|
623,654
|
|
|
$
|
478,220
|
|
Lodging
|
10,704
|
|
|
15,511
|
|
|
20,227
|
|
|
23,856
|
|
||||
Resort
|
391,995
|
|
|
306,559
|
|
|
643,881
|
|
|
502,076
|
|
||||
Real estate
|
(4,948
|
)
|
|
(1,332
|
)
|
|
(497
|
)
|
|
(467
|
)
|
||||
Total Reported EBITDA
|
$
|
387,047
|
|
|
$
|
305,227
|
|
|
$
|
643,384
|
|
|
$
|
501,609
|
|
|
|
|
|
|
|
|
|
||||||||
Real estate held for sale and investment
|
$
|
108,217
|
|
|
$
|
116,874
|
|
|
$
|
108,217
|
|
|
$
|
116,874
|
|
|
|
|
|
|
|
|
|
||||||||
Reconciliation to net income attributable to Vail Resorts, Inc.:
|
|
|
|
|
|
|
|
||||||||
Total Reported EBITDA
|
$
|
387,047
|
|
|
$
|
305,227
|
|
|
$
|
643,384
|
|
|
$
|
501,609
|
|
Depreciation and amortization
|
(50,029
|
)
|
|
(41,472
|
)
|
|
(140,236
|
)
|
|
(120,713
|
)
|
||||
Change in estimated fair value of contingent consideration
|
(14,500
|
)
|
|
—
|
|
|
(15,100
|
)
|
|
—
|
|
||||
Loss on disposal of fixed assets and other, net
|
(1,924
|
)
|
|
(164
|
)
|
|
(4,705
|
)
|
|
(3,149
|
)
|
||||
Investment income and other, net
|
210
|
|
|
150
|
|
|
5,881
|
|
|
509
|
|
||||
Interest expense and other, net
|
(23,313
|
)
|
|
(10,400
|
)
|
|
(44,325
|
)
|
|
(31,905
|
)
|
||||
Income before provision for income taxes
|
297,491
|
|
|
253,341
|
|
|
444,899
|
|
|
346,351
|
|
||||
Provision for income taxes
|
(100,635
|
)
|
|
(95,804
|
)
|
|
(151,933
|
)
|
|
(131,613
|
)
|
||||
Net income
|
196,856
|
|
|
157,537
|
|
|
292,966
|
|
|
214,738
|
|
||||
Net (income) loss attributable to noncontrolling interests
|
(15,749
|
)
|
|
95
|
|
|
(25,267
|
)
|
|
289
|
|
||||
Net income attributable to Vail Resorts, Inc.
|
$
|
181,107
|
|
|
$
|
157,632
|
|
|
$
|
267,699
|
|
|
$
|
215,027
|
|
Mountain Resorts:
|
|
Location:
|
|
1.
|
Vail Mountain
|
|
Colorado
|
2.
|
Breckenridge
|
|
Colorado
|
3.
|
Keystone
|
|
Colorado
|
4.
|
Beaver Creek
|
|
Colorado
|
5.
|
Park City Mountain Resort (“Park City”)
|
|
Utah
|
6.
|
Heavenly
|
|
Lake Tahoe area of Nevada and California
|
7.
|
Northstar
|
|
Lake Tahoe area of California
|
8.
|
Kirkwood
|
|
Lake Tahoe area of California
|
9.
|
Perisher Ski Resort (“Perisher”)
|
|
New South Wales, Australia
|
10.
|
Whistler Blackcomb Resort (“Whistler Blackcomb”)
|
|
British Columbia, Canada
|
Urban Ski Areas (“Urban”):
|
|
Location:
|
|
1.
|
Wilmot Mountain (“Wilmot”)
|
|
Wisconsin
|
2.
|
Afton Alps
|
|
Minnesota
|
3.
|
Mount Brighton
|
|
Michigan
|
•
|
The timing and amount of snowfall can have an impact on Mountain and Lodging revenue particularly in regards to skier visits and the duration and frequency of guest visitation. To help mitigate this impact, we sell a variety of pass products prior to the beginning of the ski season resulting in a more stabilized stream of lift revenue. Additionally, our pass products provide a compelling value proposition to our guests, which in turn creates a guest commitment predominately prior to the start of the ski season. In March 2017, we began our early season pass sales program for the 2017/2018 North American ski season. Through May 30, 2017, our early North American pass sales for the upcoming 2017/2018 North American ski season increased approximately 10% in units and increased approximately 16% in sales dollars, compared to the prior year period ended May 31, 2016, including Whistler Blackcomb pass sales at comparable exchange rates in both periods. However, we cannot predict if this favorable trend will continue through the Fall 2017 North American pass sales campaign or the overall impact that pass sales will have on lift revenue for the 2017/2018 North American ski season.
|
•
|
On October 17, 2016, the Company, through its wholly-owned Canadian subsidiary (“Exchangeco”), acquired all of the outstanding common shares of Whistler Blackcomb, for an aggregate purchase consideration paid to Whistler Blackcomb shareholders of approximately $1.09 billion, consisting of (i) approximately C$673.8 million in cash (or C$17.50 per Whistler Blackcomb share), (ii) 3,327,719 shares of our common stock, and (iii) 418,095 shares of Exchangeco (the “Exchangeco Shares”). The cash purchase consideration portion was funded through borrowing from an incremental term loan under our Seventh Amended and Restated Credit Agreement (the “Vail Holdings Credit Agreement”). Whistler Blackcomb, through a 75% ownership interest in Whistler Mountain Resort Limited Partnership and a 75% ownership interest in Blackcomb Skiing Enterprises Limited Partnership, collectively (the “WB Partnerships”), operates a four season mountain resort that features two adjacent and integrated mountains, Whistler Mountain and Blackcomb Mountain. The remaining 25% ownership interest in each of the WB Partnerships is held by Nippon Cable, an unrelated party to Vail Resorts. We expect that Whistler Blackcomb will significantly contribute to our results of operations; however, we cannot predict whether we will realize all of the expected synergies from the combination of the operations of Whistler Blackcomb nor can we predict all the resources required to integrate Whistler Blackcomb operations and the ultimate impact Whistler Blackcomb will have on our future results of operations.
|
•
|
Key U.S. economic indicators have remained steady in 2017, including strong consumer confidence and declines in the unemployment rate. However, the growth in the U.S. economy may be impacted by economic challenges in the U.S. or declining or slowing growth in economies outside of the U.S., accompanied by devaluation of currencies and lower commodity prices. Given these economic uncertainties, we cannot predict what the impact will be on overall travel and leisure spending or more specifically, on our guest visitation, guest spending or other related trends for the upcoming 2017/2018 North American ski season.
|
•
|
On June 7, 2017, we acquired Stowe Mountain Resort (“Stowe”) in Stowe, Vermont, from Mt. Mansfield Company, Inc., a wholly-owned subsidiary of American International Group, Inc., for a cash purchase price of approximately $41.0 million, subject to certain adjustments as provided in the purchase agreement. We acquired all of the assets related to the mountain operations of the resort, including base area skier services (food and beverage, retail and rental, lift ticket offices and ski and snowboard school facilities). We expect that Stowe will positively contribute to our results of operations; however, we cannot predict whether we will realize all of the synergies expected from the operations of Stowe and the ultimate impact Stowe will have on our future results of operations.
|
•
|
As of April 30, 2017, we had $327.0 million available under the revolver component of our Vail Holdings Credit Agreement (which represents the total commitment of $400.0 million less certain letters of credit outstanding of $73.0 million). Additionally, in October 2016 we amended our Vail Holdings Credit Agreement to provide for an incremental term loan of $509.4 million, for a total term loan amount outstanding of $750.0 million, to fund the cash portion of the Whistler Blackcomb acquisition. Also, we assumed in the Whistler Blackcomb acquisition a credit facility which supports the
|
•
|
Real Estate Reported EBITDA is highly dependent on, among other things, the timing of closings on condominium units available for sale and the sale of land parcels to third-party developers, which determines when revenue and associated cost of sales and gain (loss) on the sale of real property are recognized. As of April 30, 2017, we had one remaining unit available at The Ritz-Carlton Residences, Vail which was sold in May 2017 and, as a result, we no longer have condominium units available for sale.
|
|
|
Three Months Ended April 30,
|
|
Nine Months Ended April 30,
|
||||||||||||
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Mountain Reported EBITDA
|
|
$
|
381,291
|
|
|
$
|
291,048
|
|
|
$
|
623,654
|
|
|
$
|
478,220
|
|
Lodging Reported EBITDA
|
|
10,704
|
|
|
15,511
|
|
|
20,227
|
|
|
23,856
|
|
||||
Resort Reported EBITDA
|
|
$
|
391,995
|
|
|
$
|
306,559
|
|
|
$
|
643,881
|
|
|
$
|
502,076
|
|
Real Estate Reported EBITDA
|
|
$
|
(4,948
|
)
|
|
$
|
(1,332
|
)
|
|
$
|
(497
|
)
|
|
$
|
(467
|
)
|
Income before provision for income taxes
|
|
$
|
297,491
|
|
|
$
|
253,341
|
|
|
$
|
444,899
|
|
|
$
|
346,351
|
|
Net income attributable to Vail Resorts, Inc.
|
|
$
|
181,107
|
|
|
$
|
157,632
|
|
|
$
|
267,699
|
|
|
$
|
215,027
|
|
|
|
Three Months Ended April 30,
|
|
Percentage
Increase
(Decrease)
|
|||||||
|
|
2017
|
|
2016
|
|
||||||
Net Mountain revenue:
|
|
|
|
|
|
|
|||||
Lift
|
|
$
|
419,647
|
|
|
$
|
334,789
|
|
|
25.3
|
%
|
Ski school
|
|
91,704
|
|
|
74,279
|
|
|
23.5
|
%
|
||
Dining
|
|
65,618
|
|
|
51,000
|
|
|
28.7
|
%
|
||
Retail/rental
|
|
102,104
|
|
|
79,384
|
|
|
28.6
|
%
|
||
Other
|
|
42,087
|
|
|
33,353
|
|
|
26.2
|
%
|
||
Total Mountain net revenue
|
|
$
|
721,160
|
|
|
$
|
572,805
|
|
|
25.9
|
%
|
Mountain operating expense:
|
|
|
|
|
|
|
|||||
Labor and labor-related benefits
|
|
139,811
|
|
|
115,932
|
|
|
20.6
|
%
|
||
Retail cost of sales
|
|
34,875
|
|
|
26,123
|
|
|
33.5
|
%
|
||
Resort related fees
|
|
41,910
|
|
|
36,129
|
|
|
16.0
|
%
|
||
General and administrative
|
|
53,988
|
|
|
47,416
|
|
|
13.9
|
%
|
||
Other
|
|
69,806
|
|
|
56,368
|
|
|
23.8
|
%
|
||
Total Mountain operating expense
|
|
340,390
|
|
|
281,968
|
|
|
20.7
|
%
|
||
Mountain equity investment income, net
|
|
521
|
|
|
211
|
|
|
146.9
|
%
|
||
Mountain Reported EBITDA
|
|
$
|
381,291
|
|
|
$
|
291,048
|
|
|
31.0
|
%
|
|
|
|
|
|
|
|
|||||
Total skier visits
|
|
5,907
|
|
|
4,689
|
|
|
26.0
|
%
|
||
ETP
|
|
$
|
71.04
|
|
|
$
|
71.40
|
|
|
(0.5
|
)%
|
|
|
Nine Months Ended April 30,
|
|
Percentage
Increase
(Decrease)
|
|||||||
|
|
2017
|
|
2016
|
|
||||||
Net Mountain revenue:
|
|
|
|
|
|
|
|||||
Lift
|
|
$
|
799,324
|
|
|
$
|
642,627
|
|
|
24.4
|
%
|
Ski school
|
|
173,674
|
|
|
139,703
|
|
|
24.3
|
%
|
||
Dining
|
|
133,352
|
|
|
108,093
|
|
|
23.4
|
%
|
||
Retail/rental
|
|
261,816
|
|
|
214,748
|
|
|
21.9
|
%
|
||
Other
|
|
117,860
|
|
|
101,439
|
|
|
16.2
|
%
|
||
Total Mountain net revenue
|
|
$
|
1,486,026
|
|
|
$
|
1,206,610
|
|
|
23.2
|
%
|
Mountain operating expense:
|
|
|
|
|
|
|
|||||
Labor and labor-related benefits
|
|
334,024
|
|
|
283,353
|
|
|
17.9
|
%
|
||
Retail cost of sales
|
|
98,263
|
|
|
80,864
|
|
|
21.5
|
%
|
||
Resort related fees
|
|
78,976
|
|
|
66,473
|
|
|
18.8
|
%
|
||
General and administrative
|
|
156,442
|
|
|
135,216
|
|
|
15.7
|
%
|
||
Other
|
|
196,177
|
|
|
163,476
|
|
|
20.0
|
%
|
||
Total Mountain operating expense
|
|
863,882
|
|
|
729,382
|
|
|
18.4
|
%
|
||
Mountain equity investment income, net
|
|
1,510
|
|
|
992
|
|
|
52.2
|
%
|
||
Mountain Reported EBITDA
|
|
$
|
623,654
|
|
|
$
|
478,220
|
|
|
30.4
|
%
|
|
|
|
|
|
|
|
|||||
Total skier visits
|
|
11,635
|
|
|
9,705
|
|
|
19.9
|
%
|
||
ETP
|
|
$
|
68.70
|
|
|
$
|
66.22
|
|
|
3.7
|
%
|
|
|
Three Months Ended April 30,
|
|
Percentage
Increase
(Decrease)
|
|||||||
|
|
2017
|
|
2016
|
|
||||||
Lodging net revenue:
|
|
|
|
|
|
|
|||||
Owned hotel rooms
|
|
$
|
12,494
|
|
|
$
|
13,813
|
|
|
(9.5
|
)%
|
Managed condominium rooms
|
|
23,907
|
|
|
23,110
|
|
|
3.4
|
%
|
||
Dining
|
|
9,324
|
|
|
10,167
|
|
|
(8.3
|
)%
|
||
Transportation
|
|
8,611
|
|
|
8,827
|
|
|
(2.4
|
)%
|
||
Other
|
|
10,820
|
|
|
13,634
|
|
|
(20.6
|
)%
|
||
|
|
65,156
|
|
|
69,551
|
|
|
(6.3
|
)%
|
||
Payroll cost reimbursements
|
|
3,445
|
|
|
3,382
|
|
|
1.9
|
%
|
||
Total Lodging net revenue
|
|
68,601
|
|
|
72,933
|
|
|
(5.9
|
)%
|
||
Lodging operating expense:
|
|
|
|
|
|
|
|||||
Labor and labor-related benefits
|
|
27,204
|
|
|
26,808
|
|
|
1.5
|
%
|
||
General and administrative
|
|
9,848
|
|
|
9,657
|
|
|
2.0
|
%
|
||
Other
|
|
17,400
|
|
|
17,575
|
|
|
(1.0
|
)%
|
||
|
|
54,452
|
|
|
54,040
|
|
|
0.8
|
%
|
||
Reimbursed payroll costs
|
|
3,445
|
|
|
3,382
|
|
|
1.9
|
%
|
||
Total Lodging operating expense
|
|
57,897
|
|
|
57,422
|
|
|
0.8
|
%
|
||
Lodging Reported EBITDA
|
|
$
|
10,704
|
|
|
$
|
15,511
|
|
|
(31.0
|
)%
|
|
|
|
|
|
|
|
|||||
Owned hotel statistics:
|
|
|
|
|
|
|
|||||
ADR
|
|
$
|
294.75
|
|
|
$
|
263.40
|
|
|
11.9
|
%
|
RevPAR
|
|
$
|
200.94
|
|
|
$
|
188.86
|
|
|
6.4
|
%
|
Managed condominium statistics:
|
|
|
|
|
|
|
|||||
ADR
|
|
$
|
428.83
|
|
|
$
|
407.96
|
|
|
5.1
|
%
|
RevPAR
|
|
$
|
183.08
|
|
|
$
|
185.19
|
|
|
(1.1
|
)%
|
Owned hotel and managed condominium statistics (combined):
|
|
|
|
|
|
|
|||||
ADR
|
|
$
|
389.94
|
|
|
$
|
359.55
|
|
|
8.5
|
%
|
RevPAR
|
|
$
|
186.72
|
|
|
$
|
186.10
|
|
|
0.3
|
%
|
|
|
Nine Months Ended April 30,
|
|
Percentage
Increase
(Decrease)
|
|||||||
|
|
2017
|
|
2016
|
|
||||||
Lodging net revenue:
|
|
|
|
|
|
|
|||||
Owned hotel rooms
|
|
$
|
42,559
|
|
|
$
|
43,164
|
|
|
(1.4
|
)%
|
Managed condominium rooms
|
|
55,417
|
|
|
52,420
|
|
|
5.7
|
%
|
||
Dining
|
|
33,384
|
|
|
34,049
|
|
|
(2.0
|
)%
|
||
Transportation
|
|
19,428
|
|
|
19,440
|
|
|
(0.1
|
)%
|
||
Golf
|
|
8,921
|
|
|
8,722
|
|
|
2.3
|
%
|
||
Other
|
|
31,806
|
|
|
33,009
|
|
|
(3.6
|
)%
|
||
|
|
191,515
|
|
|
190,804
|
|
|
0.4
|
%
|
||
Payroll cost reimbursements
|
|
10,372
|
|
|
9,222
|
|
|
12.5
|
%
|
||
Total Lodging net revenue
|
|
201,887
|
|
|
200,026
|
|
|
0.9
|
%
|
||
Lodging operating expense:
|
|
|
|
|
|
|
|||||
Labor and labor-related benefits
|
|
84,515
|
|
|
82,529
|
|
|
2.4
|
%
|
||
General and administrative
|
|
29,360
|
|
|
27,036
|
|
|
8.6
|
%
|
||
Other
|
|
57,413
|
|
|
57,383
|
|
|
0.1
|
%
|
||
|
|
171,288
|
|
|
166,948
|
|
|
2.6
|
%
|
||
Reimbursed payroll costs
|
|
10,372
|
|
|
9,222
|
|
|
12.5
|
%
|
||
Total Lodging operating expense
|
|
181,660
|
|
|
176,170
|
|
|
3.1
|
%
|
||
Lodging Reported EBITDA
|
|
$
|
20,227
|
|
|
$
|
23,856
|
|
|
(15.2
|
)%
|
|
|
|
|
|
|
|
|||||
Owned hotel statistics:
|
|
|
|
|
|
|
|||||
ADR
|
|
$
|
254.29
|
|
|
$
|
232.50
|
|
|
9.4
|
%
|
RevPAR
|
|
$
|
168.45
|
|
|
$
|
156.09
|
|
|
7.9
|
%
|
Managed condominium statistics:
|
|
|
|
|
|
|
|||||
ADR
|
|
$
|
382.35
|
|
|
$
|
353.54
|
|
|
8.1
|
%
|
RevPAR
|
|
$
|
134.38
|
|
|
$
|
128.79
|
|
|
4.3
|
%
|
Owned hotel and managed condominium statistics (combined):
|
|
|
|
|
|
|
|||||
ADR
|
|
$
|
332.33
|
|
|
$
|
303.40
|
|
|
9.5
|
%
|
RevPAR
|
|
$
|
143.03
|
|
|
$
|
136.37
|
|
|
4.9
|
%
|
|
|
Three Months Ended
April 30, |
|
Percentage
Increase
(Decrease)
|
|||||||
|
|
2017
|
|
2016
|
|
||||||
Total Real Estate net revenue
|
|
4,870
|
|
|
1,734
|
|
|
180.9
|
%
|
||
Real Estate operating expense:
|
|
|
|
|
|
|
|||||
Cost of sales (including sales commission)
|
|
4,281
|
|
|
1,161
|
|
|
268.7
|
%
|
||
Other
|
|
5,537
|
|
|
1,924
|
|
|
187.8
|
%
|
||
Total Real Estate operating expense
|
|
9,818
|
|
|
3,085
|
|
|
218.2
|
%
|
||
Gain on sale of real property
|
|
—
|
|
|
19
|
|
|
(100.0
|
)%
|
||
Real Estate Reported EBITDA
|
|
$
|
(4,948
|
)
|
|
$
|
(1,332
|
)
|
|
(271.5
|
)%
|
|
Three Months Ended April 30,
|
|
Nine Months Ended April 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Mountain Reported EBITDA
|
$
|
381,291
|
|
|
$
|
291,048
|
|
|
$
|
623,654
|
|
|
$
|
478,220
|
|
Lodging Reported EBITDA
|
10,704
|
|
|
15,511
|
|
|
20,227
|
|
|
23,856
|
|
||||
Resort Reported EBITDA
|
391,995
|
|
|
306,559
|
|
|
643,881
|
|
|
502,076
|
|
||||
Real Estate Reported EBITDA
|
(4,948
|
)
|
|
(1,332
|
)
|
|
(497
|
)
|
|
(467
|
)
|
||||
Total Reported EBITDA
|
387,047
|
|
|
305,227
|
|
|
643,384
|
|
|
501,609
|
|
||||
Depreciation and amortization
|
(50,029
|
)
|
|
(41,472
|
)
|
|
(140,236
|
)
|
|
(120,713
|
)
|
||||
Loss on disposal of fixed assets and other, net
|
(1,924
|
)
|
|
(164
|
)
|
|
(4,705
|
)
|
|
(3,149
|
)
|
||||
Change in estimated fair value of contingent consideration
|
(14,500
|
)
|
|
—
|
|
|
(15,100
|
)
|
|
—
|
|
||||
Investment income and other, net
|
210
|
|
|
150
|
|
|
5,881
|
|
|
509
|
|
||||
Interest expense and other, net
|
(23,313
|
)
|
|
(10,400
|
)
|
|
(44,325
|
)
|
|
(31,905
|
)
|
||||
Income before provision for income taxes
|
297,491
|
|
|
253,341
|
|
|
444,899
|
|
|
346,351
|
|
||||
Provision for income taxes
|
(100,635
|
)
|
|
(95,804
|
)
|
|
(151,933
|
)
|
|
(131,613
|
)
|
||||
Net income
|
196,856
|
|
|
157,537
|
|
|
292,966
|
|
|
214,738
|
|
||||
Net (income) loss attributable to noncontrolling interests
|
(15,749
|
)
|
|
95
|
|
|
(25,267
|
)
|
|
289
|
|
||||
Net income attributable to Vail Resorts, Inc.
|
$
|
181,107
|
|
|
$
|
157,632
|
|
|
$
|
267,699
|
|
|
$
|
215,027
|
|
|
|
April 30,
|
||||||
|
|
2017
|
|
2016
|
||||
Long-term debt
|
|
$
|
1,168,210
|
|
|
$
|
613,704
|
|
Long-term debt due within one year
|
|
38,386
|
|
|
13,349
|
|
||
Total debt
|
|
1,206,596
|
|
|
627,053
|
|
||
Less: cash and cash equivalents
|
|
195,818
|
|
|
68,565
|
|
||
Net Debt
|
|
$
|
1,010,778
|
|
|
$
|
558,488
|
|
•
|
prolonged weakness in general economic conditions, including adverse effects on the overall travel and leisure related industries;
|
•
|
unfavorable weather conditions or natural disasters;
|
•
|
willingness of our guests to travel due to terrorism, the uncertainty of military conflicts or outbreaks of contagious diseases, and the cost and availability of travel options and changing consumer preferences;
|
•
|
the seasonality of our business combined with adverse events that occur during our peak operating periods;
|
•
|
competition in our mountain and lodging businesses;
|
•
|
high fixed cost structure of our business;
|
•
|
our ability to fund resort capital expenditures;
|
•
|
our reliance on government permits or approvals for our use of public land or to make operational and capital improvements;
|
•
|
risks related to a disruption in our water supply that would impact our snowmaking capabilities;
|
•
|
risks related to federal, state, local and foreign government laws, rules and regulations;
|
•
|
risks related to our reliance on information technology, including our failure to maintain the integrity of our customer or employee data;
|
•
|
adverse consequences of current or future legal claims;
|
•
|
a deterioration in the quality or reputation of our brands, including our ability to protect our intellectual property and the risk of accidents at our mountain resorts;
|
•
|
our ability to hire and retain a sufficient seasonal workforce;
|
•
|
risks related to our workforce, including increased labor costs;
|
•
|
loss of key personnel;
|
•
|
our ability to successfully integrate acquired businesses, or that acquired businesses may fail to perform in accordance with expectations, including Whistler Blackcomb, Stowe or future acquisitions;
|
•
|
our ability to realize anticipated financial benefits from Park City;
|
•
|
our ability to satisfy the requirements of Section 404 of the Sarbanes-Oxley Act of 2002, with respect to acquired businesses;
|
•
|
risks associated with international operations;
|
•
|
fluctuations in foreign currency exchange rates, particularly the Canadian dollar and Australian dollar;
|
•
|
changes in accounting estimates and judgments, accounting principles, policies or guidelines; and
|
•
|
a materially adverse change in our financial condition.
|
|
Nine Months Ended April 30,
|
||||||
|
2017
|
|
2016
|
||||
Foreign currency translation adjustments, net of tax
|
$
|
(47,452
|
)
|
|
$
|
3,746
|
|
Exhibit
Number
|
Description
|
|
|
10.1
|
Whistler Mountain Master Development Agreement, dated as of February 23, 2017, between Her Majesty the Queen in Right of the Province of British Columbia and Whistler Mountain Resort Limited Partnership (Incorporated by reference to Exhibit 10.1 on Form 8-K of Vail Resorts, Inc. filed on February 27, 2017) (File No. 001-09614).
|
|
|
10.2
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Blackcomb Mountain Master Development Agreement, dated as of February 23, 2017, between Her Majesty the Queen in Right of the Province of British Columbia and Blackcomb Skiing Enterprises Limited Partnership (Incorporated by reference to Exhibit 10.2 on Form 8-K of Vail Resorts, Inc. filed on February 27, 2017) (File No. 001-09614).
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10.3
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Third Amendment to Seventh Amended and Restated Credit Agreement, dated as of April 7, 2017, by and among Vail Holdings, Inc., Bank of America, N.A., as Administrative Agent, and the Lenders named therein.
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31.1
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Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
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31.2
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Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
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32
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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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101
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The following information from the Company’s Quarterly Report on Form 10-Q for the three and nine months ended April 30, 2017 formatted in eXtensible Business Reporting Language: (i) Unaudited Consolidated Condensed Balance Sheets as of April 30, 2017, July 31, 2016, and April 30, 2016; (ii) Unaudited Consolidated Condensed Statements of Operations for the three and nine months ended April 30, 2017 and 2016; (iii) Unaudited Consolidated Condensed Statements of Comprehensive Income for the three and nine months ended April 30, 2017 and 2016; (iv) Unaudited Consolidated Condensed Statements of Stockholders’ Equity for the nine months ended April 30, 2017 and 2016; (v) Unaudited Consolidated Condensed Statements of Cash Flows for the nine months ended April 30, 2017 and 2016; and (vi) Notes to the Consolidated Condensed Financial Statements.
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Vail Resorts, Inc.
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Date: June 8, 2017
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By:
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/s/ Michael Z. Barkin
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Michael Z. Barkin
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Executive Vice President and Chief Financial Officer
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(Principal Financial Officer)
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Date: June 8, 2017
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By:
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/s/ Ryan H. Siurek
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Ryan H. Siurek
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Vice President, Controller and
Chief Accounting Officer
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(Principal Accounting Officer)
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(xiv)
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If Distribution #1 is a dividend, does any Default or Potential Default exist under the Credit Agreement or would any Default or Potential Default arise after giving effect to Distribution #1?
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Yes/No
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(If No, then VRI may pay dividends in an amount not to exceed greater of (a) $55,000,000, or (b) an amount equal to twenty percent (20%) of Adjusted EBITDA for the trailing twelve month period ended on the last day of the most-recently ended fiscal quarter)
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(A) Are the dividends paid during the Subject Period under
Section 10.9(d)(iii)
of the Credit Agreement greater than the greater of (a) $55,000,000, or (b) an amount equal to twenty percent (20%) of Adjusted EBITDA for the trailing twelve month period ended on the last day of the most-recently ended fiscal quarter?
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Yes/No
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By:
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/s/ Ryan H. Siurek
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1.
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I have reviewed this quarterly report on Form 10-Q of Vail Resorts, Inc.;
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2.
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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;
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3.
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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;
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4.
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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:
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a)
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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;
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b)
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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;
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c)
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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
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d)
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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
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5.
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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):
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a)
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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
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b)
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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.
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Date: June 8, 2017
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/s/ ROBERT A. KATZ
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Robert A. Katz
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Chief Executive Officer
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1.
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I have reviewed this quarterly report on Form 10-Q of Vail Resorts, Inc.;
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2.
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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;
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3.
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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;
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4.
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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:
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|
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a)
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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;
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b)
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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;
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c)
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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
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d)
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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
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5.
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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):
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a)
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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
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b)
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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.
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Date: June 8, 2017
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/s/ MICHAEL Z. BARKIN
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Michael Z. Barkin
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Executive Vice President and Chief Financial Officer
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Date: June 8, 2017
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/s/ ROBERT A. KATZ
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Robert A. Katz
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Chief Executive Officer
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Date: June 8, 2017
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/s/ MICHAEL Z. BARKIN
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Michael Z. Barkin
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Executive Vice President and Chief Financial Officer
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