VAIL RESORTS: DISCUSSION AND ANALYSIS BY THE DEPARTMENT OF FINANCIAL POSITION AND OPERATING RESULTS. (form 10-K)

The following Management's Discussion and Analysis of Financial Condition and
Results of Operations ("MD&A") should be read in conjunction with the
Consolidated Financial Statements and notes related thereto included in this
Form 10-K. To the extent that the following MD&A contains statements which are
not of a historical nature, such statements are forward-looking statements which
involve risks and uncertainties. These risks include, but are not limited to,
those discussed in Item 1A. "Risk Factors" in this Form 10-K. The following
discussion and analysis should be read in conjunction with the Forward-Looking
Statements section and Item 1A. "Risk Factors" each included in this Form 10-K.

The MD&A includes discussion of financial performance within each of our three
segments. We have chosen to specifically include segment Reported EBITDA
(defined as segment net revenue less segment operating expense, plus or minus
segment equity investment income or loss and for the Real Estate segment, plus
gain or loss on sale of real property) in the following discussion because we
consider this measurement to be a significant indication of our financial
performance. We utilize segment Reported EBITDA in evaluating our performance
and in allocating resources to our segments. Net Debt (defined as long-term
debt, net plus long-term debt due within one year less cash and cash
equivalents) is included in the following discussion because we consider this
measurement to be a significant indication of our available capital resources.
We also believe that Net Debt is an important measurement as it is an indicator
of our ability to obtain additional capital resources for our future cash needs.
Resort Reported EBITDA (defined as the combination of segment Reported EBITDA of
our Mountain and Lodging segments), Total Reported EBITDA (which is Resort
Reported EBITDA plus segment Reported EBITDA from our Real Estate segment) and
Net Debt are not measures of financial performance or liquidity defined under
accounting principles generally accepted in the United States ("GAAP"). Refer to
the end of the Results of Operations section for a reconciliation of net income
attributable to Vail Resorts, Inc. to Total Reported EBITDA and long-term debt,
net to Net Debt.

Items excluded from Reported EBITDA and Net Debt are significant components in
understanding and assessing financial performance or liquidity. Reported EBITDA
and Net Debt should not be considered in isolation or as an alternative to, or
substitute for, net income, net change in cash and cash equivalents or other
financial statement data presented in the Consolidated Financial Statements as
indicators of financial performance or liquidity. Because Resort Reported
EBITDA, Total Reported EBITDA and Net Debt are not measurements determined in
accordance with GAAP and are thus susceptible to varying calculations, Resort
Reported EBITDA, Total Reported EBITDA and Net Debt, as presented herein, may
not be comparable to other similarly titled measures of other companies. In
addition, our segment Reported EBITDA (i.e. Mountain, Lodging and Real Estate),
the measure of segment profit or loss required to be disclosed in accordance
with GAAP, may not be comparable to other similarly titled measures of other
companies.
Overview
Our operations are grouped into three integrated and interdependent segments:
Mountain, Lodging and Real Estate. We refer to "Resort" as the combination of
the Mountain and Lodging segments. The Mountain, Lodging and Real Estate
segments represented approximately 89%, 11% and 0%, respectively, of our net
revenue for Fiscal 2021.


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Mountain Segment
In the Mountain segment, the Company operates the following 37 destination
mountain resorts and regional ski areas:
[[Image Removed: mtn-20210731_g2.jpg]]

*Denotes a destination mountain resort, which generally receives a meaningful
portion of skier visits from long-distance travelers, as opposed to our regional
ski areas, which tend to generate skier visits predominantly from their
respective local markets.

Additionally, we operate ancillary services, including ski school, dining and
retail/rental operations, and for our Australian ski areas, including lodging
and transportation operations. Mountain segment revenue is seasonal, with the
majority of revenue earned from our North American destination mountain resorts
and regional ski areas (collectively, our "Resorts") occurring in our second and
third fiscal quarters and the majority of revenue earned from our Australian ski
areas occurring in our first and fourth fiscal quarters. Our North American
Resorts are typically open for business from mid-November through mid-April,
which is the peak operating season for the Mountain segment, and our Australian
ski areas are typically open for business from June to early October. Our single
largest source of Mountain segment revenue is the sale of lift tickets
(including pass products), which represented approximately 64%, 53% and 53% of
Mountain segment net revenue for Fiscal 2021, the fiscal year ended July 31,
2020 ("Fiscal 2020") and the fiscal year ended July 31, 2019 ("Fiscal 2019"),
respectively.

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Lift revenue is driven by volume and pricing. Pricing is impacted by both
absolute pricing, as well as the demographic mix of guests, which impacts the
price points at which various products are purchased. The demographic mix of
guests that visit our North American mountain resorts is divided into two
primary categories: (1) out-of-state and international ("Destination") guests
and (2) in-state and local ("Local") guests. For the 2020/2021 North American
ski season, Destination guests comprised approximately 52% of our North American
destination mountain resort skier visits (excluding complimentary access), while
Local guests comprised approximately 48%, which compares to approximately 58%
and 42%, respectively, for the 2019/2020 North American ski season and
approximately 57% and 43%, respectively, for the 2018/2019 North American ski
season. Skier visitation at our regional ski areas is largely comprised of Local
guests. Destination guests generally purchase our higher-priced lift tickets
(including pass products) and utilize more ancillary services such as ski
school, dining and retail/rental, as well as lodging at or around our mountain
resorts. The impacts of COVID-19, including travel restrictions, had a
disproportionately adverse impact on Destination visitation, particularly
international guests, as demand for long-distance travel was lower than normal
throughout the 2020/2021 North American ski season. Additionally, Destination
guest visitation is less likely to be impacted by changes in the weather during
the current ski season, but may be more impacted by adverse economic conditions,
the global geopolitical climate or weather conditions in the immediately
preceding ski season. Local guests tend to be more value-oriented and weather
sensitive.

We offer a variety of pass products for all of our Resorts marketed towards both
Destination and Local guests. Our pass product offerings range from providing
access to one or a combination of our Resorts for a certain number of days to
our Epic Pass, which allows pass holders unlimited and unrestricted access to
all of our Resorts. The Epic Day Pass is a customizable one to seven day pass
product purchased in advance of the season, for those skiers and riders who
expect to ski a certain number of days during the season, and which is available
in two tiers of resort access offerings. For the 2021/2022 North American ski
season, we reduced prices of our entire portfolio of pass products by 20%. Our
pass program provides a compelling value proposition to our guests, which in
turn assists us in developing a loyal base of customers who commit to ski at our
Resorts generally in advance of the ski season and typically ski more days each
season at our Resorts than those guests who do not buy pass products.
Additionally, we have entered into strategic long-term season pass alliance
agreements with third-party mountain resorts including Telluride Ski Resort in
Colorado, Sun Valley Resort in Idaho, Snowbasin Resort in Utah, Hakuba Valley
and Rusutsu Resort in Japan, Resorts of the Canadian Rockies in Canada, Les 3
Vallées in France, 4 Vallées in Switzerland, Skirama Dolomiti in Italy and Ski
Arlberg in Austria, which further increases the value proposition of our pass
products. As such, our pass program drives strong customer loyalty, mitigates
exposure to more weather sensitive guests, generates additional ancillary
spending and provides cash flow in advance of winter season operations. In
addition, our pass program attracts new guests to our Resorts. All of our pass
products, including the Epic Pass and Epic Day Pass, are predominately sold
prior to the start of the ski season. Pass product revenue, although primarily
collected prior to the ski season, is recognized in the Consolidated Statements
of Operations throughout the ski season primarily based on historical visitation
(excluding visitation data for Fiscal 2020, which we do not believe is
indicative of future visitation due to the early resort closures associated with
COVID-19 in March 2020).

Lift revenue consists of pass product lift revenue ("pass revenue") and non-pass
product lift revenue ("non-pass revenue"). Approximately 61%, 51% and 47% of
total lift revenue was derived from pass revenue for Fiscal 2021, Fiscal 2020
and Fiscal 2019, respectively (including the impact of the deferral of pass
product revenue from Fiscal 2020 to Fiscal 2021 as a result of the Credit Offer,
as defined below). Additionally, lift revenue for Fiscal 2021 was impacted by
the Company only allowing pass product holders to access the Resorts during the
early portion of the 2020/2021 North American ski season, as well as the Company
utilizing a reservation system, which limited capacity for both pass product
holders and non-pass lift tickets.

The cost structure of our mountain resort operations has a significant fixed
component with variable expenses including, but not limited to, land use permit
or lease fees, credit card fees, retail/rental cost of sales and labor, ski
school labor and expenses associated with dining operations. As such, profit
margins can fluctuate greatly based on the level of revenues associated with
visitation.
Lodging Segment
Operations within the Lodging segment include (i) ownership/management of a
group of luxury hotels through the RockResorts brand proximate to our Colorado
and Utah mountain resorts; (ii) ownership/management of non-RockResorts branded
hotels and condominiums proximate to our North American Resorts; (iii) National
Park Service ("NPS") concessionaire properties including Grand Teton Lodge
Company ("GTLC"); (iv) a Colorado resort ground transportation company; and (v)
mountain resort golf courses.

The performance of our lodging properties (including managed condominium units
and our Colorado resort ground transportation company) proximate to our mountain
resorts is closely aligned with the performance of the Mountain segment and
generally experiences similar seasonal trends, particularly with respect to
visitation by Destination guests. Revenues from
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such properties represented approximately 64%, 73% and 70% of Lodging segment
net revenue (excluding Lodging segment revenue associated with reimbursement of
payroll costs) for Fiscal 2021, Fiscal 2020 and Fiscal 2019, respectively.
Management primarily focuses on Lodging net revenue excluding payroll cost
reimbursements and Lodging operating expense excluding reimbursed payroll costs
(which are not measures of financial performance under GAAP) as the
reimbursements are made based upon the costs incurred with no added margin; as
such, the revenue and corresponding expense have no effect on our Lodging
Reported EBITDA, which we use to evaluate Lodging segment performance. Revenue
of the Lodging segment during our first and fourth fiscal quarters is generated
primarily by the operations of our NPS concessionaire properties (as their
operating season generally occurs from June to the end of September); mountain
resort golf operations and seasonally lower volume from our other owned and
managed properties and businesses.

Real Estate Segment
The principal activities of our Real Estate segment include the sale of land
parcels to third-party developers and planning for future real estate
development projects, including zoning and acquisition of applicable permits. We
continue undertaking preliminary planning and design work on future projects and
are pursuing opportunities with third-party developers rather than undertaking
our own significant vertical development projects. Additionally, real estate
development projects by third-party developers most often result in the creation
of certain resort assets that provide additional benefit to the Mountain
segment. We believe that, due to our low carrying cost of real estate land
investments, we are well situated to promote future projects by third-party
developers while limiting our financial risk. Our revenue from the Real Estate
segment and associated expense can fluctuate significantly based upon the timing
of closings and the type of real estate being sold, causing volatility in the
Real Estate segment's operating results from period to period.
Recent Trends, Risks and Uncertainties
We have identified the following significant factors (as well as uncertainties
associated with such factors) that could impact our future financial
performance:

•COVID-19 has led to travel restrictions and other adverse economic impacts
including reduced consumer confidence, an increase in unemployment rates and
volatility in global and local economies. Our operations continue to be
negatively impacted by COVID-19 and associated government mandated restrictions,
including capacity limitations, travel restrictions, and mask and social
distancing requirements. Additionally, we may impose our own COVID-19 related
restrictions in addition to what is required by state and local governments in
the interest of safety for our guests, employees and resort communities.
Although we are uncertain as to the ultimate severity and duration of the
COVID-19 pandemic as well as the related global or other travel restrictions and
other adverse impacts, we have seen a significant negative change in performance
and our future performance could also be negatively impacted. In addition, the
North American economy may be impacted by economic challenges in North America
or declining or slowing growth in economies outside of North America,
accompanied by devaluation of currencies, rising inflation, trade tariffs and
lower commodity prices. We cannot predict the ultimate impact that the global
economic uncertainty as a result of COVID-19 will have on overall travel and
leisure spending or more specifically, on our guest visitation, guest spending
or other related trends for the upcoming 2021/2022 North American ski season.

•In the prior year, we announced the early closure of the 2019/2020 North
American ski season for our Resorts, lodging properties and retail stores
beginning on March 15, 2020. These actions (the "Resort Closures") had a
significant adverse impact on our results of operations for the year ended July
31, 2020. Additionally, on April 27, 2020, we announced that we would offer
credits to customers who had purchased 2019/2020 North American pass products
and who purchased 2020/2021 North American pass products on or before September
17, 2020 (the "Credit Offer"). The Credit Offer discounts ranged from a minimum
of 20% to a maximum of 80% for season pass holders, depending on the number of
days the pass holder used their pass product during the 2019/2020 season and a
credit, with no minimum, but up to 80% for multi-day pass products, such as the
Epic Day Pass, based on total unused days. As a result of the Credit Offer to
2019/2020 pass product holders, we delayed the recognition of approximately
$120.9 million of season pass deferred revenue, as well as approximately $2.9
million of related deferred costs, that would have been recognized in Fiscal
2020 and which was instead primarily recognized in the second and third quarters
of Fiscal 2021.

•The ongoing impacts of the COVID-19 pandemic resulted in reduced visitation and
decreased spending for the 2020/2021 North American ski season compared to the
prior year through March 14, 2021, the equivalent date that we closed our
Resorts early for the 2019/2020 North American ski season due to the outbreak of
COVID-19. These declines were primarily driven by reduced demand for Destination
visitation at our western resorts and COVID-19 related capacity limitations,
which were further impacted by snowfall levels that were well below average at
our Colorado, Utah and Tahoe resorts from the early season throughout the
holiday season. Visitation and spending was also particularly
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impacted in regions where heightened COVID-19 restrictions were in place,
including Whistler Blackcomb, Tahoe and Vermont. However, results continued to
improve as the season progressed, primarily as a result of stronger Destination
visitation at our Colorado and Utah resorts, including improved lift ticket
purchases. Whistler Blackcomb's results were disproportionately impacted as
compared to our broader Mountain segment as a result of the Canadian travel
restrictions and border closures, and were further impacted by the early closure
of Whistler Blackcomb on March 30, 2021 following a provincial health order
issued by the government of British Columbia due to an increase in COVID-19
cases in the region. Our Fiscal 2021 first quarter results were negatively
impacted by Mount Hotham and Falls Creek, which opened for the 2020 Australian
ski season on July 6, 2020, but we decided to close them four days later due to
a "stay at home" order put in place by the Victorian government and specifically
for the Melbourne metropolitan area, which represents the majority of visitors
for Mount Hotham and Falls Creek, as a result of a reemergence of COVID-19 in
the region. Additionally, our Australian ski areas were also impacted by "stay
at home" orders and periodic resort closures during the 2021 ski season, which
had a negative impact on our Fiscal 2021 fourth quarter results. The ongoing
impacts of COVID-19 also resulted in reduced occupancy at our lodging properties
during the 2019/2020 North American ski season following our early closure in
March 2020, as well as during the 2020/2021 North American ski season. We closed
our GTLC facilities including Jackson Lake Lodge and Jenny Lake Lodge during the
summer of 2020, implemented restrictions on guided activities and in-restaurant
dining, and temporarily closed many other facilities, which negatively impacted
results for the first quarter of Fiscal 2021. These actions, trends, and the
COVID-19 pandemic in general, had a significant adverse impact on our results of
operations for the Fiscal 2020 and Fiscal 2021, and may continue to have a
material, negative impact on our resorts and lodging properties for the fiscal
year ending July 31, 2022 ("Fiscal 2022").

•The timing and amount of snowfall can have an impact on Mountain and Lodging
revenue, particularly with regard to skier visits and the duration and frequency
of guest visitation. To help mitigate this impact, we sell a variety of pass
products prior to the beginning of the ski season which results in a more
stabilized stream of lift revenue. In March 2021, we began our pass product
sales program for the 2021/2022 North American ski season, which included a 20%
reduction in price for all pass products. Pass product sales through September
17, 2021 for the upcoming 2021/2022 North American ski season increased
approximately 42% in units and approximately 17% in sales dollars as compared to
the period in the prior year through September 18, 2020, without deducting for
the value of any redeemed credits provided to certain North American pass
product holders in the prior period. To provide a comparison to the season pass
results released on June 7, 2021, pass product sales through September 17, 2021
increased approximately 67% in units and approximately 45% in sales dollars as
compared to the period through September 20, 2019, with pass product sales
adjusted to include Peak Resorts pass sales in both periods. Pass product sales
are adjusted to eliminate the impact of foreign currency by applying an exchange
rate of $0.79 between the Canadian dollar and U.S. dollar in all periods for
Whistler Blackcomb. We cannot predict if this favorable trend will continue
through the fall 2021 North American pass sales campaign or the overall impact
that pass sales will have on lift revenue for the 2021/2022 North American ski
season.

•Prior to the 2020/2021 North American ski season, we introduced Epic Coverage,
which is included with the purchase of all pass products for no additional
charge. Epic Coverage provides refunds in the event of certain resort closures
and certain qualifying travel restrictions (e.g. for COVID-19), giving pass
product holders a refund for any portion of the season that is lost due to
qualifying circumstances. Additionally, Epic Coverage provides a refund for
qualifying personal circumstances that were historically covered by our pass
insurance program, including for eligible injuries, job losses and many other
personal events. The estimated amount of refunds reduces the amount of pass
product revenue recognized. We believe our estimate of refund amounts are
reasonable; however, actual results could vary materially from such estimates,
and we could be required to refund significantly higher amounts than estimated.

Additionally, for the 2020/2021 North American ski season, we introduced Epic
Mountain Rewards, a program which provides pass product holders a discount of
20% off on-mountain food and beverage, lodging, group ski school lessons,
equipment rentals and more at our North American owned and operated Resorts.
Epic Mountain Rewards constitutes an option to our guests to purchase additional
products and services from us at a discount and as a result, we allocate a
portion of the pass product transaction price to these other lines of business.

•As of July 31, 2021, we had $1,244.0 million of cash and cash equivalents as
well as $417.7 million available under the revolver component of our Eighth
Amended and Restated Credit Agreement, dated as of August 15, 2018 and as
amended most recently on December 18, 2020 (the "Vail Holdings Credit
Agreement"), which represents the total commitment of $500.0 million less
certain letters of credit outstanding of $82.3 million. Additionally, we have a
credit facility which supports the liquidity needs of Whistler Blackcomb (the
"Whistler Credit Agreement"). As of July 31, 2021, we had C$243.1 million
($194.9 million) available under the revolver component of the Whistler Credit
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Agreement (which represents the total commitment of C$300.0 million ($240.5
million) less outstanding borrowings of C$56.0 million ($44.9 million) and a
letter of credit outstanding of C$0.9 million ($0.7 million)).
On December 18, 2020, we entered into the Fourth Amendment to our Vail Holdings
Credit Agreement (the "Fourth Amendment"). Pursuant to the Fourth Amendment,
among other terms, we are exempt from complying with the Vail Holdings Credit
Agreement's leverage ratio, senior secured leverage ratio, and interest coverage
ratio financial maintenance covenants for each of the fiscal quarters ending
through January 31, 2022 (unless we make a one-time irrevocable election to
terminate such exemption prior to such date) (such period, the "Financial
Covenants Temporary Waiver Period"), after which we will again be required to
comply with such covenants starting with the fiscal quarter ending April 30,
2022 (or such earlier fiscal quarter as elected by us). During the Financial
Covenants Temporary Waiver Period, we are subject to other restrictions which
will limit our ability to make future acquisitions, investments, distributions
to stockholders, share repurchases or incur additional debt. Additionally, on
December 18, 2020, we completed an offering of $575.0 million in aggregate
principal amount of 0.0% convertible senior notes due 2026 (the "0.0%
Convertible Notes") in a private placement conducted pursuant to Rule 144A under
the Securities Act of 1933, as amended (the "Securities Act"). The 0.0%
Convertible Notes are senior, unsecured obligations that do not bear regular
interest, and the principal amount of the 0.00% Convertible Notes does not
accrete. The notes will mature on January 1, 2026, unless earlier repurchased,
redeemed or converted. See Liquidity and Capital Resources for additional
information.
We believe that our existing cash and cash equivalents, availability under our
credit agreements and the expected positive cash flow from operating activities
of our Mountain and Lodging segments less resort capital expenditures will
continue to provide us with sufficient liquidity to fund our operations.


Results of Operations
Summary
Shown below is a summary of operating results for Fiscal 2021, Fiscal 2020 and
Fiscal 2019 (in thousands):
                                                           Year ended July 31,
                                                   2021           2020           2019

Net income attributable to Vail Resorts, Inc. $ 127,850 $ 98,833

   $ 301,163
Income before provision for income taxes        $ 125,183      $ 116,433      $ 398,965
Mountain Reported EBITDA                        $ 550,389      $ 500,080      $ 678,594
Lodging Reported EBITDA                            (5,733)         3,269         28,100
Resort Reported EBITDA                          $ 544,656      $ 503,349      $ 706,694
Real Estate Reported EBITDA                     $  (4,582)     $  (4,128)     $  (4,317)



A discussion of segment results, including reconciliations of net income
attributable to Vail Resorts, Inc. to Total Reported EBITDA, and other items can
be found below. The consolidated results of operations, including any
consolidated financial metrics pertaining thereto, include the operations of
Peak Resorts (acquired September 24, 2019), Falls Creek and Hotham (acquired
April 4, 2019), Triple Peaks (acquired September 27, 2018) and Stevens Pass
(acquired August 15, 2018), prospectively from their respective dates of
acquisition.

The Resort Closures had a significant adverse impact on our results of
operations for Fiscal 2020. Additionally, COVID-19 continued to have an adverse
impact on our results of operations for Fiscal 2021, as further described below
in our segment results of operations.

The sections titled "Fiscal 2021 compared to Fiscal 2020" and "Fiscal 2020
compared to Fiscal 2019" in each of the Mountain and Lodging segment discussions
below provide comparisons of financial and operating performance for Fiscal 2021
to Fiscal 2020 and Fiscal 2020 to Fiscal 2019, respectively, unless otherwise
noted.
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Mountain Segment
Mountain segment operating results for Fiscal 2021, Fiscal 2020 and Fiscal 2019
are presented by category as follows (in thousands, except ETP):
                                                                                                                            Percentage
                                                          Year ended July 31,                                          Increase/(Decrease)
                                             2021                2020                 2019                     2021/2020                      2020/2019
Mountain net revenue:
Lift                                    $ 1,076,578          $  913,091          $ 1,033,234                               17.9  %                  (11.6) %
Ski school                                  144,227             189,131              215,060                              (23.7) %                  (12.1) %
Dining                                       90,329             160,763              181,837                              (43.8) %                  (11.6) %
Retail/rental                               227,993             270,299              320,267                              (15.7) %                  (15.6) %
Other                                       150,751             177,159              205,803                              (14.9) %                  (13.9) %
Total Mountain net revenue                1,689,878           1,710,443            1,956,201                               (1.2) %                  (12.6) %

Mountain operating expense:
Labor and labor-related benefits            452,352             473,365              507,811                               (4.4) %                   (6.8) %
Retail cost of sales                         76,565              96,497              121,442                              (20.7) %                  (20.5) %
Resort related fees                          69,768              75,044               96,240                               (7.0) %                  (22.0) %
General and administrative                  253,279             239,412              233,159                                5.8  %                    2.7  %
Other                                       294,223             327,735              320,915                              (10.2) %                    2.1  %
Total Mountain operating expense          1,146,187           1,212,053            1,279,567                               (5.4) %                   (5.3) %
Mountain equity investment income, net        6,698               1,690                1,960                              296.3  %                  (13.8) %
Mountain Reported EBITDA                $   550,389          $  500,080          $   678,594                               10.1  %                  (26.3) %
Total skier visits                           14,852              13,483               14,998                               10.2  %                  (10.1) %
ETP                                     $     72.49          $    67.72          $     68.89                                7.0  %                   (1.7) %


The EBITDA presented by Mountain includes $ 20.3 million, $ 17.4 million and $ 16.5 million
stock-based compensation expense for fiscal years 2021, 2020 and 2019 respectively.

Fiscal 2021 compared to Fiscal 2020
Mountain Reported EBITDA increased $50.3 million, or 10.1%, primarily due to the
impact of the prior year Resort Closures, including the deferral of
$120.9 million of pass product revenue from Fiscal 2020 to Fiscal 2021 as a
result of the Credit Offer to 2019/2020 North American pass product holders, as
well as cost discipline efforts in the current year associated with lower levels
of operations. These increases were partially offset by limitations and
restrictions on our North American winter operations and closures, limitations
and restrictions at Perisher, Falls Creek and Hotham during both the 2020 and
2021 Australian ski seasons. Additionally, Whistler Blackcomb's performance was
negatively impacted in the current year due to the continued closure of the
Canadian border to international guests and was further impacted by the resort
closing earlier than expected on March 30, 2021 following a provincial health
order issued by the government of British Columbia. Mountain segment results
also include $1.0 million and $13.6 million of acquisition and integration
related expenses for Fiscal 2021 and Fiscal 2020, respectively, which are
recorded within Mountain other operating expense. Additionally, operating
results from Whistler Blackcomb, which are translated from Canadian dollars to
U.S. dollars, were favorably affected by increases in the Canadian dollar
exchange rate relative to the U.S. dollar as compared to the prior year,
resulting in an increase in Mountain Reported EBITDA of approximately
$2 million, which the Company calculated by applying current period foreign
exchange rates to the prior period results.

Lift revenue increased $163.5 million, or 17.9%, primarily due to the Company
operating for the full U.S. ski season in the current year as compared to the
shortened operating season in the prior year as a result of the Resort Closures,
including the deferral impact of the Credit Offer from Fiscal 2020 to Fiscal
2021, partially offset by limitations and restrictions on our North American
winter operations in the current year due to the ongoing impacts of COVID-19,
which resulted in a decrease in non-pass visitation. Pass product revenue
increased 40.6%, primarily as a result of strong North American pass sales
growth for the 2020/2021 ski season, including the deferral impact of the Credit
Offer which was recognized primarily during Fiscal 2021. Non-pass revenue
decreased 5.7% due to reduced non-pass visitation to our Resorts, which were
adversely impacted by COVID-19 related capacity limitations and snowfall levels
that were well below average at our Colorado, Utah and Tahoe
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resorts through the holiday season, partially offset by an increase in non-pass
ETP of 10.1% in the current year. Visitation was particularly impacted in
regions where heightened COVID-19 related restrictions were in place, including
Whistler Blackcomb, Tahoe and Vermont. Additionally, Whistler Blackcomb's
results were disproportionately impacted as compared to our broader Mountain
segment performance in the current year due to the continued closure of the
Canadian border to international guests, and was further impacted by the resort
closing earlier than expected on March 30, 2021 following a provincial health
order issued by the government of British Columbia.

Ski school revenue, dining revenue and retail/rental revenue each decreased in
Fiscal 2021 compared to Fiscal 2020 primarily due to the limitations and
restrictions on our North American operations during Fiscal 2021 as a result of
the impacts of COVID-19 on our business.

Other revenue mainly consists of summer visitation and mountain activities
revenue, employee housing revenue, guest services revenue, commercial leasing
revenue, marketing and internet advertising revenue, private club revenue (which
includes both club dues and amortization of initiation fees), municipal services
revenue and other recreation activity revenue. Other revenue is also comprised
of Australian ski area lodging and transportation revenue. For Fiscal 2021,
other revenue decreased $26.4 million, or 14.9%, primarily due to decreased
mountain activities and mountain services revenue as a result of limitations and
restrictions on our business in Fiscal 2021 due to COVID-19, as well as a
reduction in ski pass insurance revenue as a result of the replacement of our
previous ski pass insurance program with Epic Coverage for the 2020/2021 North
American ski season, which is free to all pass product holders.

Operating expense decreased $65.9 million, or 5.4%, which was primarily
attributable to cost discipline efforts in the current year associated with
lower levels of operations and limitations, restrictions and closures of Resort
operations resulting from COVID-19. Additionally, operating expense includes
$1.0 million and $13.6 million of acquisition and integration related expenses
for Fiscal 2021 and Fiscal 2020, respectively.

Labor and labor-related benefits decreased 4.4%, primarily due to cost
discipline efforts in the current year associated with limitations, restrictions
and closures of our Resort operations as a result of COVID-19, as well as
incremental tax credits of approximately $10.3 million primarily associated with
COVID-19 related legislation passed in Canada, partially offset by an increase
in variable compensation. Retail cost of sales decreased 20.7% compared to a
decrease in retail sales of 23.5%, reflecting a higher mix of aged retail
products sold at reduced margins. Resort related fees decreased 7.0% primarily
due to decreases in revenue on which those fees are based. General and
administrative expense increased 5.8%, primarily due to a $13.2 million charge
recorded during the fourth quarter of Fiscal 2021 for a contingent obligation
with respect to employment-related litigation, as well as an increase in
variable compensation accruals, partially offset by incremental tax credits of
approximately $2.7 million primarily associated with COVID-19 related
legislation passed in Canada and Australia. Other expense decreased 10.2%
primarily due to decreases in variable operating expenses associated with
reduced revenues, as well as a decrease in acquisition and integration related
expenses of $12.6 million.

Mountain equity investment income, net primarily includes our share of income
from the operations of a real estate brokerage joint venture. Mountain equity
investment income from the real estate brokerage company increased $5.0 million
(296.3%) for Fiscal 2021 compared to Fiscal 2020 due to a significant increase
in both the number of real estate sales and the average price of those sales.

Fiscal 2020 compared to Fiscal 2019
Mountain Reported EBITDA decreased $178.5 million, or 26.3%, primarily due to
the impact of the deferral of $120.9 million of pass product revenue during
Fiscal 2020 as a result of the Credit Offer to 2019/2020 North American pass
product holders from the Resort Closures and the overall impacts of the COVID-19
pandemic, which resulted in significantly reduced visitation and operations at
our Resorts and retail stores for the 2019/2020 North American ski season, the
2020 Australian ski season and our 2020 North American summer operations. These
decreases were partially offset by the incremental operations of Peak Resorts,
Falls Creek and Hotham. Mountain segment results include $13.6 million and
$16.4 million of acquisition and integration related expenses for Fiscal 2020
and Fiscal 2019, respectively, which are recorded within Mountain other
operating expense.

Lift revenue decreased $120.1 million, or 11.6%, primarily due to a 3.4%
decrease in pass product revenue and an 18.8% decrease in non-pass revenue. Pass
product revenue decreased primarily as a result of the deferral of approximately
$120.9 million of pass product revenue associated with the Credit Offer to
2019/2020 North American pass product holders, which would have been recognized
during Fiscal 2020 and which was instead recognized primarily in the second and
third quarters of Fiscal 2021, partially offset by a combination of an increase
in pricing and units sold and increased pass sales to Destination guests, as
well as the introduction of the Epic Day Pass. Non-pass revenue decreased
primarily due to significantly
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reduced skier visitation as a result of the Resort Closures, partially offset by
an increase in non-pass ETP (excluding Peak Resorts, Falls Creek and Hotham) of
6.2% and incremental revenue from Peak Resorts, Falls Creek and Hotham of
approximately $61.4 million. Total non-pass ETP, including the impact of Peak
Resorts, Falls Creek and Hotham decreased 7.3%.

Ski school revenue, dining revenue and retail/rental revenue in Fiscal 2020 all
decreased compared to Fiscal 2019 due to the Resort Closures. These decreases
were partially offset by incremental revenue from our acquisitions of Peak
Resorts, Falls Creek and Hotham of $18.0 million of ski school revenue, $23.8
million of dining revenue and $26.8 million of retail/rental revenue.

Other revenue mainly consists of summer visitation and mountain activities
revenue, employee housing revenue, guest services revenue, commercial leasing
revenue, marketing and internet advertising revenue, private club revenue (which
includes both club dues and amortization of initiation fees), municipal services
revenue and other recreation activity revenue. Other revenue is also comprised
of Australian ski area lodging and transportation revenue. For Fiscal 2020,
other revenue decreased as a result of the Resort Closures, partially offset by
incremental revenue from Peak Resorts of approximately $12.6 million.

Resort Closures and the associated actions taken by the Company to reduce costs
resulted in a decrease in our operating expense of $67.5 million, or 5.3%, which
includes incremental operating expenses from Peak Resorts, Falls Creek and
Hotham of approximately $121.4 million, as well as $13.6 million and $16.4
million of acquisition and integration related expenses for Fiscal 2020 and
Fiscal 2019, respectively.

Labor and labor-related benefits decreased 6.8%, which primarily resulted from
cost actions associated with the Resort Closures, including decreased staffing,
employee furloughs, salary reductions and reduced variable compensation
accruals, as well as tax credits of approximately $12.0 million associated with
COVID-19 related legislation passed in the U.S., Canada and Australia, partially
offset by incremental expenses from Peak Resorts, Falls Creek and Hotham of
approximately $50.7 million. Retail cost of sales decreased 20.5% compared to a
decrease in retail sales of 20.1%. Resort related fees decreased 22.0% primarily
due to decreases in revenue on which those fees are based, partially offset by
incremental expenses from Peak Resorts of approximately $4.3 million. General
and administrative expense increased 2.7% primarily due to incremental expenses
from Peak Resorts, Falls Creek and Hotham of approximately $18.9 million,
partially offset by a decrease in allocated corporate overhead costs, a decrease
in variable compensation accruals primarily as a result of the Resort Closures
and tax credits of approximately $3.3 million associated with COVID-19 related
legislation passed in the U.S., Canada and Australia. Other expense increased
2.1% primarily due to incremental operating expenses from Peak Resorts, Falls
Creek and Hotham of approximately $42.2 million, partially offset by decreases
in variable operating expenses associated with the Resort Closures, as well as a
decrease in acquisition and integration related expenses.

Mountain’s net equity investment income primarily includes our share of income from the operations of a real estate brokerage joint venture.

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Lodging Segment
Lodging segment operating results for Fiscal 2021, Fiscal 2020 and Fiscal 2019
are presented by category as follows (in thousands, except ADR and RevPAR):
                                                                                                                                                

Percentage

                                                                               Year ended July 31,                                          Increase/(Decrease)
                                                                  2021                2020                2019                     2021/2020                      2020/2019
Lodging net revenue:
Owned hotel rooms                                             $   47,509          $   44,992          $   64,826                                5.6  %                   (30.6) %
Managed condominium rooms                                         72,217              76,480              86,236                               (5.6) %                   (11.3) %
Dining                                                            19,068              38,252              53,730                              (50.2) %                   (28.8) %
Transportation                                                     9,271              15,796              21,275                              (41.3) %                   (25.8) %
Golf                                                              20,437              17,412              19,648                               17.4  %                   (11.4) %
Other                                                             43,007              44,933              54,617                               (4.3) %                   (17.7) %

Net revenue from accommodation (excluding reimbursements of social charges) 211,509

         237,865             300,332                              (11.1) %                   (20.8) %
Payroll cost reimbursements                                        6,553              10,549              14,330                              (37.9) %                   (26.4) %
Total Lodging net revenue                                        218,062             248,414             314,662                              (12.2) %                   (21.1) %
Lodging operating expense:
Labor and labor-related benefits                                 101,582             114,279             135,940                              (11.1) %                   (15.9) %
General and administrative                                        43,714              39,283              41,256                               11.3  %                    (4.8) %
Other                                                             71,946              81,034              95,036                              (11.2) %                   (14.7) %
Lodging operating expense (excluding reimbursed payroll
costs)                                                           217,242             234,596             272,232                               (7.4) %                   (13.8) %
Reimbursed payroll costs                                           6,553              10,549              14,330                              (37.9) %                   (26.4) %
Total Lodging operating expense                                  223,795             245,145             286,562                               (8.7) %                   (14.5) %
Lodging Reported EBITDA                                       $   (5,733)         $    3,269          $   28,100                             (275.4) %                   (88.4) %


Owned hotel statistics (1)
ADR                             $  264.83          $  266.43          $  256.50                 (0.6) %               3.9  %
RevPar                          $  122.45          $  122.34          $  175.45                  0.1  %             (30.3) %
Managed condominium statistics
(1)
ADR                             $  349.08          $  328.98          $  324.34                  6.1  %               1.4  %
RevPar                          $   77.74          $   83.10          $  107.67                 (6.5) %             (22.8) %
Owned hotel and managed
condominium statistics
(combined) (1)
ADR                             $  322.15          $  310.76          $  300.47                  3.7  %               3.4  %
RevPar                          $   85.99          $   90.37          $  121.81                 (4.8) %             (25.8) %


(1) RevPAR for Fiscal 2021 and Fiscal 2020 declined from Fiscal 2019 primarily
due to limitations and restrictions on our North American operations resulting
from COVID-19, as well as the impact of the Resort Closures.
Lodging Reported EBITDA includes $3.8 million, $3.4 million and $3.2 million of
stock-based compensation expense for Fiscal 2021, Fiscal 2020 and Fiscal 2019,
respectively.
Fiscal 2021 compared to Fiscal 2020
Lodging Reported EBITDA for Fiscal 2021 decreased $9.0 million, or 275.4%,
primarily as a result of limitations and restrictions on our North American
operations in the current year as a result of the impacts of COVID-19, which
resulted in reduced occupancy and capacity-related restrictions at our lodging
properties compared to the prior year.
Revenue from managed condominium rooms, dining, transportation, and other
revenue each decreased primarily as a result of the impacts of COVID-19. These
decreases were partially offset by increases in revenue from golf, primarily due
to strong
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summer demand in FY2021 and owned hotel rooms, primarily due to increased GTLC revenue and partially offset by declines in our other accommodation properties due to the impacts of COVID-19 .

Operating expense (excluding reimbursed payroll costs) decreased 7.4%. Labor and
labor related benefits decreased 11.1% primarily due to decreased staffing
associated with COVID-19. General and administrative expense increased 11.3% due
to an increase in allocated corporate overhead costs across all functions,
including variable compensation accruals, primarily as a result of lower costs
in the prior year associated with the Resort Closures. Other expense decreased
11.2% related to lower variable expenses associated with reduced revenue as a
result of COVID-19.

Revenue from payroll cost reimbursement and the corresponding reimbursed payroll
costs relate to payroll costs at managed hotel properties where we are the
employer and all payroll costs are reimbursed by the owners of the properties
under contractual arrangements. Since the reimbursements are made based upon the
costs incurred with no added margin, the revenue and corresponding expense have
no effect on our Lodging Reported EBITDA.
Fiscal 2020 compared to Fiscal 2019
Lodging Reported EBITDA for Fiscal 2020 decreased $24.8 million, or 88.4%,
primarily due to the impacts of the COVID-19 pandemic and the associated Resort
Closures.
Primarily as a result of the Resort Closures, revenue from owned hotel rooms,
managed condominium rooms, dining, transportation, golf and other revenue each
decreased. The decreases resulting from the Resort Closures were partially
offset by $13.7 million of incremental revenue from Peak Resorts and Triple
Peaks.

Operating expense (excluding reimbursed payroll costs) decreased 13.8%. Labor
and labor related benefits decreased 15.9% primarily due to cost actions
associated with the Resort Closures, including decreased staffing, employee
furloughs, salary reductions and reduced variable compensation accruals, as well
as tax credits of approximately $2.2 million associated with recent COVID-19
related legislation passed in the U.S., Canada and Australia, partially offset
by $6.4 million of incremental expenses from Peak Resorts and Triple Peaks.
General and administrative expense decreased 4.8% due to lower allocated
corporate overhead costs primarily associated with a reduction in variable
compensation accruals, as well as tax credits of approximately $0.5 million
associated with recent COVID-19 related legislation passed in the U.S., Canada
and Australia. Other expenses decreased 14.7% primarily related to lower
variable expenses associated with the impact of the Resort Closures, partially
offset by $4.7 million of incremental expenses from Peak Resorts and Triple
Peaks.

Revenue from payroll cost reimbursement and the corresponding reimbursed payroll
costs relate to payroll costs at managed hotel properties where we are the
employer and all payroll costs are reimbursed by the owners of the properties
under contractual arrangements. Since the reimbursements are made based upon the
costs incurred with no added margin, the revenue and corresponding expense have
no effect on our Lodging Reported EBITDA.
Real Estate Segment

Our Real Estate net revenue is primarily determined by the timing of closings
and the mix of real estate sold in any given period. Different types of projects
have different revenue and profit margins; therefore, as the real estate
inventory mix changes, it can greatly impact Real Estate segment net revenue,
operating expense, gain on sale of real property and Real Estate Reported
EBITDA.

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The operating results of the Real Estate segment for fiscal years 2021, 2020 and 2019 are presented by category as follows (in thousands):

                                                                                                                     Percentage
                                                     Year ended July 31,                                         Increase/(Decrease)
                                          2021               2020               2019                    2021/2020                      2020/2019

Total Real Estate net revenue $ 1,770 $ 4,847 $ 712

                              (63.5) %                   580.8  %
Real Estate operating expense:
Cost of sales (including sales
commissions)                              1,294              3,932                 13                              (67.1) %                30,146.2  %
Other                                     5,382              5,250              5,596                                2.5  %                    (6.2) %
Total Real Estate operating expense       6,676              9,182              5,609                              (27.3) %                    63.7  %
Gain on sale of real property               324                207                580                               56.5  %                   (64.3) %
Real Estate Reported EBITDA           $  (4,582)         $  (4,128)         $  (4,317)                             (11.0) %                     4.4  %



Fiscal 2021
We did not close on any significant real estate transactions during Fiscal 2021.
Other operating expense of $5.4 million was primarily comprised of general and
administrative costs, such as labor and labor-related benefits, professional
services and allocated corporate overhead costs.

Fiscal 2020
During Fiscal 2020, we closed on the sale of a development land parcel for $4.1
million which was recorded within Real Estate net revenue, with a corresponding
cost of sale (including sales commission) of $3.9 million.
Other operating expense of $5.3 million was primarily comprised of general and
administrative costs, such as labor and labor-related benefits, professional
services and allocated corporate overhead costs.

Fiscal 2019
We closed on two land sales during the third quarter of Fiscal 2019 with third
party developers at Keystone (One River Run site) and Breckenridge (East Peak 8
site) for proceeds of approximately $16.0 million, including $4.8 million
associated with the sale of density for the Breckenridge property. The land
parcel sales were accounted for as financing arrangements as a result of the
Company's continuing involvement with the underlying assets that were sold,
including but not limited to, the obligation to repurchase finished commercial
space from the development projects upon completion. As a result, the estimated
gain of $3.6 million associated with the East Peak 8 site and the estimated loss
of $3.2 million associated with the One River Run site will be deferred until
the Company no longer maintains continuing involvement. Additionally, the
Company's future obligation to repurchase finished commercial space in the two
completed projects, as well as other related capital spending, will result in
total estimated capital expenditures of up to approximately $9.5 million in
future fiscal years.

Other operating expense of $5.6 million was primarily comprised of general and
administrative costs, such as labor and labor-related benefits, professional
services and allocated corporate overhead costs. Real Estate Reported EBITDA
also included a gain on sale of real property of $0.6 million for the sale of
land parcels.
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Other Items
In addition to segment operating results, the following items contributed to our
overall financial position and results of operations (in thousands).
                                                       Year ended July 31,                                   Percentage Increase/(Decrease)
                                          2021                2020                2019                     2021/2020                     2020/2019

Depreciation and amortization (252,585) $ (249,572) $

   $ (218,117)                              1.2  %                   14.4  %
Asset impairments                     $        -          $  (28,372)         $        -                            (100.0) %                        nm
Change in fair value of contingent
consideration                         $  (14,402)         $    2,964          $   (5,367)                           (585.9) %                  155.2  %

Interest expense, net                 $ (151,399)         $ (106,721)         $  (79,496)                             41.9  %                   34.2  %
Foreign currency gain (loss) on
intercompany loans                    $    8,282          $   (3,230)         $   (2,854)                            356.4  %                  (13.2) %

Provision for income taxes            $     (726)         $   (7,378)         $  (75,472)                            (90.2) %                  (90.2) %
Effective tax rate                          (0.6) %             (6.3) %            (18.9) %                         (5.7 pts)                (12.6 pts)


Depreciation and amortization. Depreciation and amortization expense for Fiscal
2021 and Fiscal 2020 increased over Fiscal 2019 primarily due to assets acquired
in the Peak Resorts acquisition (incremental impact of $24.3 million in Fiscal
2020 relative to Fiscal 2019), as well as discretionary capital projects
completed at our resorts in each fiscal year.
Asset impairments. We recorded an asset impairment of approximately $28.4
million during Fiscal 2020 as a result of the effects of COVID-19 on our
Colorado resort ground transportation company, with corresponding reductions to
goodwill, net of $25.7 million and intangible assets, net and property, plant
and equipment, net of $2.7 million. See Notes to the Consolidated Financial
Statements for additional information.

Change in fair value of contingent consideration. We recorded a loss of
$14.4 million during Fiscal 2021 primarily related to improved performance
compared to estimated results for Park City in Fiscal 2021, resulting in an
increase in the expected payment for the year, as well as accretion resulting
from the passage of time. We recorded a gain of $3.0 million during Fiscal 2020
primarily related to a decrease in the estimated Contingent Consideration
payments for Fiscal 2020 and Fiscal 2021 as a result of a decrease in expected
results due to the anticipated impacts of COVID-19. We recorded a loss
of $5.4 million during Fiscal 2019 primarily related to the estimated Contingent
Consideration payment for Fiscal 2019. The estimated fair value of contingent
consideration is based on assumptions for EBITDA of Park City in future periods,
as calculated under the lease on which participating payments are determined,
and was $29.6 million and $17.8 million as of July 31, 2021 and 2020,
respectively.
Interest expense, net. Interest expense, net for Fiscal 2021 increased compared
to Fiscal 2020 primarily due to borrowings under our 6.25% unsecured bond
offering, which was completed on May 4, 2020 (the "6.25% Notes") and generated
approximately $28.3 million of incremental interest expense in Fiscal 2021, and
$12.5 million of non-cash interest expense associated with amortization of the
debt discount for the 0.0% Convertible Notes, which were issued in December
2020. Interest expense, net for Fiscal 2020 increased compared to Fiscal 2019
primarily due to debt obligations assumed in the Peak Resorts acquisition;
borrowings under our 6.25% unsecured bond offering which was completed on May 4,
2020; incremental term loan borrowings under the Vail Holdings Credit Agreement
of $335.6 million, which were used to fund the Peak Resorts acquisition in
September 2019; and incremental borrowings under the revolver components of our
Vail Holdings Credit Agreement and Whistler Credit Agreement, which were almost
entirely drawn on during Fiscal 2020 as a precautionary measure in order to
increase our cash position and financial flexibility in light of the financial
market conditions resulting from the COVID-19 pandemic and were subsequently
paid down, partially offset by a decrease in variable interest rates.
Foreign currency gain (loss) on intercompany loans. Foreign currency gain (loss)
on intercompany loans for Fiscal 2021 increased as compared to Fiscal 2020 and
decreased for Fiscal 2020 as compared to Fiscal 2019 as a result of the Canadian
dollar fluctuating relative to the U.S. dollar, and was associated with an
intercompany loan from Vail Holdings, Inc. to Whistler Blackcomb in the original
amount of $210.0 million that was funded, effective as of November 1, 2016, in
connection with the acquisition of Whistler Blackcomb. This intercompany loan,
which had an outstanding balance of approximately $97.2 million as of July 31,
2021, requires foreign currency remeasurement to Canadian dollars, the
functional currency for Whistler Blackcomb. As a result, foreign currency
fluctuations associated with the loan are recorded within our results of
operations.
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Provision for income taxes. The effective tax rate was (0.6)%, (6.3)% and
(18.9)% in Fiscal 2021, Fiscal 2020 and Fiscal 2019, respectively. The decrease
in the effective tax rate provision during Fiscal 2021 compared to Fiscal 2020
was primarily driven by an increase in excess tax benefits from employee share
awards that were exercised (stock appreciation rights) and that vested
(restricted stock awards). The decrease in the effective tax rate during Fiscal
2020 compared to Fiscal 2019 was primarily due to lower full year pre-tax net
income, as well as a one-time, provisional $3.8 million benefit related to the
net operating loss carryback provision of the Coronavirus Aid, Relief, and
Economic Security Act, partially offset by a decrease in excess tax benefits
from employee share awards that were exercised (stock appreciation rights) and
that vested (restricted stock awards).
Reconciliation of Segment Earnings
The following table reconciles net income attributable to Vail Resorts, Inc. to
Total Reported EBITDA for Fiscal 2021, Fiscal 2020 and Fiscal 2019 (in
thousands):
                                                                          Year ended July 31,
                                                             2021                2020                2019
Net income attributable to Vail Resorts, Inc.            $  127,850          $   98,833          $  301,163
Net (loss) income attributable to noncontrolling
interests                                                    (3,393)             10,222              22,330
Net income                                                  124,457             109,055             323,493
Provision for income taxes                                      726               7,378              75,472
Income before provision for income taxes                    125,183             116,433             398,965
Depreciation and amortization                               252,585             249,572             218,117
Asset impairments                                                 -              28,372                   -

Loss (gain) on disposal of fixed assets and others, net 5,373

        (838)                664
Change in fair value of contingent consideration             14,402              (2,964)              5,367
Investment income and other, net                               (586)             (1,305)             (3,086)
Foreign currency (gain) loss on intercompany loans           (8,282)              3,230               2,854
Interest expense, net                                       151,399             106,721              79,496
Total Reported EBITDA                                    $  540,074         

$ 499,221 $ 702,377

Mountain Reported EBITDA                                 $  550,389          $  500,080          $  678,594
Lodging Reported EBITDA                                      (5,733)              3,269              28,100
Resort Reported EBITDA                                      544,656             503,349             706,694
Real Estate Reported EBITDA                                  (4,582)             (4,128)             (4,317)
Total Reported EBITDA                                    $  540,074          $  499,221          $  702,377

The following table reconciles net long-term debt to net debt (defined as net long-term debt plus long-term debt within one year less cash and cash equivalents) (in thousands):

                                                      Year ended July 31,
                                                     2021             2020
            Long-term debt, net                  $ 2,736,175      $ 2,387,122
            Long-term debt due within one year       114,117           63,677
            Total debt                             2,850,292        2,450,799
            Less: cash and cash equivalents        1,243,962          390,980
            Net Debt                             $ 1,606,330      $ 2,059,819



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Liquidity and Capital Resources
Changes in significant sources and uses of cash for Fiscal 2021, Fiscal 2020 and
Fiscal 2019 are presented by categories as follows (in thousands):
                                                                 Year ended 

July 31,

                                                        2021            2020            2019

Net cash flow generated by operating activities $ 525,250 $ 394,950 $ 634,231
Net cash used in investing activities

              $   (103,329)   $   (492,739)   $   (596,034)
Net cash provided by (used in) financing
activities                                         $    434,662    $    

376 233 $ (99,558)


Historically, we have lower cash available at the end of each first and fourth
fiscal quarter-end as compared to our second and third fiscal quarter-ends,
primarily due to the seasonality of our Mountain segment operations, although
our available cash balances as of July 31, 2021 and 2020 were higher than our
historical July 31 balance as a result of the various debt offerings we
completed in Fiscal 2021 and Fiscal 2020, and our suspension of dividend
payments.
Fiscal 2021 compared to Fiscal 2020
We generated $525.3 million of cash from operating activities during Fiscal
2021, an increase of $130.3 million when compared to $395.0 million of cash
generated during Fiscal 2020. The increase in operating cash flows was primarily
a result of (i) an increase in accounts payable and accrued liabilities
(excluding accounts payable and accrued liabilities assumed through
acquisitions) primarily due to an increase in accrued trade payables, salaries
and wages in the current year due to a return to more normal operations, as
compared to significantly lower accruals in the prior year due to the Resort
Closures; (ii) an increase in pass product sales and collections as compared to
the prior year, primarily as a result of the impacts of COVID-19, including the
extended pass product sales deadline in the prior year and the impact of the
Credit Offer; and (iii) a decrease in inventories (excluding inventories assumed
through acquisitions) as of July 31, 2021 as compared to the beginning of the
fiscal year relative to an increase in the prior year period. These increases
were partially offset by an increase in cash interest payments of $37.3 million
in Fiscal 2021 as compared to the prior year, primarily due to incremental cash
interest payments on the 6.25% Notes issued in May 2020, for which the first
interest payments were made during Fiscal 2021.
Cash used in investing activities for Fiscal 2021 decreased by $389.4 million,
primarily due to cash payments of $327.6 million, net of cash acquired, related
to the acquisition of Peak Resorts during Fiscal 2020. Additionally, capital
expenditures decreased by $57.2 million primarily as a result of the deferral of
a significant amount of discretionary capital projects related to the Company's
decision during the outbreak of COVID-19 to prioritize near-term liquidity.
Cash provided by financing activities increased by $58.4 million during Fiscal
2021 compared to Fiscal 2020, primarily due to (i) proceeds of $575.0 million
from the issuance of our 0.0% Convertible Notes during the Fiscal 2021; (ii) a
decrease in dividends paid of $212.7 million; (iii) a decrease in net payments
of $208.0 million under the revolver component of our Vail Holdings Credit
Agreement; and (iv) a decrease in repurchases of common stock of $46.4 million.
These increases were partially offset by (i) proceeds of $600.0 million related
to the issuance of our 6.25% Notes during Fiscal 2020; (ii) proceeds of $335.6
million from incremental borrowings under the term loan portion of our Vail
Holdings Credit Agreement during Fiscal 2020, which were used to fund the Peak
Resorts acquisition; (iii) an increase in net payments under the revolver
component of our Whistler Credit Agreement of $23.5 million; and (iv) an
increase in employee taxes paid for equity award exercises of $19.6 million.
Fiscal 2020 compared to Fiscal 2019
We generated $395.0 million of cash from operating activities during Fiscal
2020, a decrease of $239.3 million when compared to $634.2 million of cash
generated during Fiscal 2019. The decrease in operating cash flows was primarily
a result of decreased Mountain and Lodging segment operating results in Fiscal
2020, primarily due to the Resort Closures; a decrease in accounts payable and
accrued liabilities due to declines associated with the Resort Closures
(excluding accounts payable and accrued liabilities assumed through
acquisitions) and an increase in cash interest payments of approximately $17.5
million primarily associated with debt assumed in the Peak Resorts acquisition
and incremental term loan and revolver borrowings under our Vail Holdings Credit
Agreement. These decreases were partially offset by increased North American
pass product sales and receivable collections for the 2019/2020 North American
ski season as compared to the prior year and a decrease in estimated tax
payments of $23.1 million. Additionally we generated approximately $4.4 million
of proceeds from real estate development land parcel sales in Fiscal 2020
compared to $0.1 million in proceeds from real estate development project
closings that occurred in the prior year.
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Cash used in investing activities for Fiscal 2020 decreased by $103.3 million,
primarily due to cash payments of $327.6 million, net of cash acquired, related
to the acquisition of Peak Resorts during Fiscal 2020, as compared to cash
payments of $419.0 million, net of cash acquired, related to the acquisitions of
Triple Peaks, Stevens Pass, Falls Creek and Hotham during Fiscal 2019.
Additionally, capital expenditures decreased by $19.7 million primarily as a
result of actions associated with the deferral of discretionary capital projects
related to the Company's decision to prioritize near-term liquidity.
Cash provided by financing activities increased by $475.8 million during Fiscal
2020 compared to Fiscal 2019, primarily due to (i) the $600.0 million issuance
of the 6.25% Notes in Fiscal 2020; (ii) an increase in proceeds from incremental
borrowings under the term loan portion of our Vail Holdings Credit Agreement
from $265.5 million during Fiscal 2019, which were used to fund the Triple Peaks
and Stevens Pass acquisitions, to $335.6 million during Fiscal 2020, which were
used to fund the Peak Resorts acquisition; (iii) an increase in net borrowings
under the revolver component of our Whistler Credit Agreement of $24.1 million,
primarily relating to funds which were drawn as a precautionary measure in order
to increase our cash position and financial flexibility in light of the
financial market conditions resulting from the COVID-19 pandemic; (iv) a
decrease in repurchases of common stock of $38.6 million; and (v) a decrease in
dividend payments of $47.8 million associated with the Company's decision to
prioritize near-term liquidity. These increases in cash provided by financing
activities were partially offset by (i) an increase in net payments on
borrowings under the revolver component of our Vail Holdings Credit Agreement of
$286.0 million; (ii) an increase in financing cost payments of $8.8 million,
primarily associated with the issuance of the 6.25% Notes; and (iii) a payment
for contingent consideration with regard to our lease for Park City.
Significant Sources of Cash
We had $1,244.0 million of cash and cash equivalents as of July 31, 2021,
compared to $391.0 million as of July 31, 2020. Although we cannot predict the
future impact associated with the COVID-19 pandemic on our business, we
currently anticipate that our Mountain and Lodging segment operating results
will continue to provide a significant source of future operating cash flows
(primarily generated in our second and third fiscal quarters).
In addition to our $1,244.0 million of cash and cash equivalents at July 31,
2021, we had $417.7 million available under the revolver component of our Vail
Holdings Credit Agreement as of July 31, 2021 (which represents the total
commitment of $500.0 million less certain letters of credit outstanding of $82.3
million). Also, to further support the liquidity needs of Whistler Blackcomb, we
had C$243.1 million ($194.9 million) available under the revolver component of
our Whistler Credit Agreement (which represents the total commitment of C$300.0
million ($240.5 million) less outstanding borrowings of C$56.0 million ($44.9
million) and a letter of credit outstanding of C$0.9 million ($0.7 million)). We
expect that our liquidity needs in the near term will be met by continued use of
our existing cash and cash equivalents, operating cash flows and borrowings
under both the Vail Holdings Credit Agreement and Whistler Credit Agreement, if
needed. The Vail Holdings Credit Agreement and the Whistler Credit Agreement
provide adequate flexibility and are priced favorably with any new borrowings
currently priced at LIBOR plus 2.5% and Bankers Acceptance Rate plus 2.0%,
respectively.
Significant Uses of Cash
Capital Expenditures
We have historically invested significant amounts of cash in capital
expenditures for our resort operations, and we expect to continue to do so,
subject to operating performance particularly as it relates to discretionary
projects. In addition, we may incur capital expenditures for retained ownership
interests associated with third-party real estate development projects.
Currently planned capital expenditures primarily include investments that will
allow us to maintain our high-quality standards, as well as certain incremental
discretionary improvements at our Resorts, throughout our owned hotels and in
technology that can impact the full network. We evaluate additional
discretionary capital improvements based on an expected level of return on
investment.

We currently anticipate we will spend approximately $115 million to $120 million
on resort capital expenditures during calendar year 2021, excluding one-time
items associated with integrations of $5 million and $12 million of reimbursable
investments, as well as real estate related capital. Including these one-time
items, we expect that our total capital plan will be approximately $135 million
to $140 million. Included in these estimated capital expenditures are
approximately $75 million to $80 million of maintenance capital expenditures,
which are necessary to maintain appearance and level of service appropriate to
our resort operations. Discretionary expenditures expected for calendar year
2021 include, among other projects, several investments which were previously
deferred from calendar year 2020 as a result of COVID-19, including the 250-acre
lift-served terrain expansion in the McCoy Park area of Beaver Creek; a new
four-person high speed lift to serve Peak 7 at Breckenridge; replacing the Peru
lift at Keystone with a six-person high speed chairlift; replacing the Peachtree
lift at Crested Butte with a new three-person fixed-grip lift; and an upgrade of
the four-person Quantum lift at Okemo with a six-person high speed chairlift,
relocating the existing four-person Quantum lift to replace the Green Ridge
three-person fixed-grip chairlift. We will also continue to invest in
company-wide technology enhancements to support our data driven approach, guest
experience
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and corporate infrastructure which improve our scalability and efficiency as we
work to optimize our processes, business analytics and cost discipline across
the network, as well as upgrades to the infrastructure of our guest contact
centers. We currently plan to utilize cash on hand, borrowings available under
our credit agreements and/or cash flow generated from future operations to
provide the cash necessary to complete our capital plans.

Approximately $48 million was spent for capital expenditures in calendar year
2021 as of July 31, 2021, leaving approximately $87 million to $92 million to
spend in the remainder of calendar year 2021.
Debt
As of July 31, 2021, principal payments on the majority of our long-term debt
($2.7 billion of the total $2.9 billion debt outstanding as of July 31, 2021)
are not due until fiscal year 2025 and beyond. As of July 31, 2021 and 2020,
total long-term debt, net (including long-term debt due within one year) was
$2,850.3 million and $2,450.8 million, respectively. Net Debt (defined as
long-term debt, net plus long-term debt due within one year less cash and cash
equivalents) decreased from $2,059.8 million as of July 31, 2020 to $1,606.3
million as of July 31, 2021, primarily as a result of cash provided by operating
activities, as discussed above. See Notes to the Consolidated Financial
Statements for additional information.
On December 18, 2020, we entered into the Fourth Amendment to the Vail Holdings
Credit Agreement. Pursuant to the Fourth Amendment, among other terms, we are
exempt from complying with the Vail Holdings Credit Agreement's maximum leverage
ratio, maximum senior secured leverage ratio and minimum interest coverage ratio
financial maintenance covenants for each of the fiscal quarters ending through
January 31, 2022 (unless we make a one-time irrevocable election to terminate
such exemption period prior to such date), after which we will again be required
to comply with such covenants starting with the fiscal quarter ending April 30,
2022 (or such earlier fiscal quarter as elected by us). After the expiration of
the Financial Covenants Temporary Waiver Period:
•the maximum ratio permitted under the maximum leverage ratio financial
maintenance covenant shall be 6.25 to 1.00;
•the maximum ratio permitted under the senior secured leverage ratio financial
maintenance covenant shall be 4.00 to 1.00; and
•the minimum ratio permitted under the minimum interest coverage ratio financial
maintenance covenant will be 2.00 to 1.00.

We are also prohibited from the following activities during the Financial
Covenants Temporary Waiver Period (unless approval is obtained by a majority of
the lenders under the Vail Holdings Credit Agreement):
•paying any dividends or making share repurchases, unless (x) no default or
potential default exists under the Vail Holdings Credit Agreement and (y) we
have liquidity (as defined below) of at least $300.0 million, and the aggregate
amount of dividends paid and share repurchases made by the Company during the
Financial Covenants Temporary Waiver Period may not exceed $38.2 million in any
fiscal quarter;
•incurring indebtedness secured by the collateral under the Vail Holdings Credit
Agreement in an amount in excess of $1.75 billion; and
•making certain non-ordinary course investments in similar businesses, joint
ventures and unrestricted subsidiaries unless the Company has liquidity (as
defined below) of at least $300.0 million.

The Fourth Amendment also removed certain restrictions under the Financial
Covenants Temporary Waiver Period, including (i) removing the restriction on
acquisitions so long as we have liquidity (as defined below) of at least $300.0
million and (ii) removing the $200.0 million annual limit on capital
expenditures.

We are required to comply with a monthly minimum liquidity test (liquidity is
defined as unrestricted cash and temporary cash investments of VRI and its
restricted subsidiaries and available commitments under the Vail Holdings Credit
Agreement revolver) of not less than $150.0 million, during the period that
began July 31, 2020 and ending on the date we deliver a compliance certificate
for the Company and its subsidiaries' first fiscal quarter following the end of
the Financial Covenants Temporary Waiver Period.

During the Financial Covenants Temporary Waiver Period, borrowings under the
Vail Holdings Credit Agreement, including the term loan facility, bear interest
annually at LIBOR plus 2.50% and, for amounts in excess of $400.0 million, LIBOR
is subject to a floor of 0.25% (which has decreased from the floor of 0.75% that
was in effect prior to the Fourth Amendment).

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On December 18, 2020, we completed our offering of $575.0 million in aggregate
principal amount of 0.0% Convertible Notes due 2026 in a private placement
conducted pursuant to Rule 144A of the Securities Act. The 0.0% Convertible
Notes were issued under an Indenture dated December 18, 2020 (the "Indenture")
between us and U.S. Bank National Association, as Trustee. The 0.0% Convertible
Notes do not bear regular interest and the principal amount does not accrete.
The 0.0% Convertible Notes mature on January 1, 2026, unless earlier
repurchased, redeemed or converted.

The 0.0% Convertible Notes are our general senior unsecured obligations. The
0.0% Convertible Notes rank senior in right of payment to any future debt that
is expressly subordinated, equal in right of payment with our existing and
future liabilities that are not so subordinated, and are subordinated to all of
our existing and future secured debt to the extent of the value of the assets
securing such debt. The 0.0% Convertible Notes will also be structurally
subordinated to all of the existing and future liabilities and obligations of
our subsidiaries, including such subsidiaries' guarantees of the 6.25% Notes.

The initial conversion rate was 2.4560 shares per $1,000 principal amount of
notes (the "Conversion Rate"), which represents an initial conversion price of
approximately $407.17 per share (the "Conversion Price"), and is subject to
adjustment upon the occurrence of certain specified events as described in the
Indenture. The principal amount of the 0.0% Convertible Notes is required to be
settled in cash. We will settle conversions by paying cash, delivering shares of
our common stock, or a combination of the two, at our option.

Holders may convert their notes, at their option, only under the following
circumstances:
•during any calendar quarter commencing after the calendar quarter ending on
March 31, 2021 if the last reported sale price per share of our common stock
exceeds 130% of the Conversion Price for each of at least 20 trading days
(whether or not consecutive) during the 30 consecutive trading days ending on,
and including, the last trading day of the immediately preceding calendar
quarter;
•during the five consecutive business days immediately after any 10 consecutive
trading day period (such 10 consecutive trading day period, the "Measurement
Period") in which the trading price per $1,000 principal amount of notes for
each trading day of the Measurement Period was less than 98% of the product of
the last reported sale price per share of our common stock on such trading day
and the Conversion Rate on such trading day;
•upon the occurrence of certain corporate events or distributions on our common
stock, as described in the Indenture;
•if we call the 0.0% Convertible Notes for redemption; or
•at any time from, and including, July 1, 2025 until the close of business on
the scheduled trading day immediately before the maturity date.

The 0.0% Convertible Notes will be redeemable, in whole or in part, at our
option at any time, and from time to time, on or after January 1, 2024 and on or
before the 25th scheduled trading day immediately before the maturity date, at a
cash redemption price equal to the principal amount of the notes to be redeemed,
plus accrued and unpaid special and additional interest, if any, to, but
excluding, the redemption date, but only if the last reported sale price per
share of our common stock exceeds 130% of the Conversion Price for a specified
period of time. If we elect to redeem less than all of the 0.0% Convertible
Notes, at least $50.0 million aggregate principal amount of notes must be
outstanding and not subject to redemption as of the relevant redemption notice
date. Calling any 0.0% Convertible Notes for redemption will constitute a
make-whole fundamental change with respect to such notes, in which case the
Conversion Rate applicable to the conversion of such notes will be increased in
certain circumstances if such notes are converted after they are called for
redemption.

In addition, upon the occurrence of a fundamental change (as defined in the
Indenture), holders of the 0.0% Convertible Notes may require us to repurchase
all or a portion of their notes at a cash repurchase price equal to the
principal amount of the notes to be repurchased, plus any accrued and unpaid
special and additional interest, if any, to, but excluding, the applicable
repurchase date. If certain fundamental changes referred to as make-whole
fundamental changes (as defined in the Indenture) occur, the Conversion Rate for
the 0.0% Convertible Notes may be increased for a specified period of time.

The Indenture includes customary events of default, including failure to make
payment, failure to comply with the obligations set forth in the Indenture,
certain defaults on certain other indebtedness, and certain events of
bankruptcy, insolvency or reorganization. We may elect, at our option, that the
sole remedy for an event of default relating to certain failures by the Company
to comply with certain reporting covenants in the Indenture will consist
exclusively of the right of the holders of the 0.0% Convertible Notes to receive
additional interest on the notes for up to 360 days following such failure.
As of July 31, 2021, the Vail Holdings Credit Agreement provides for (i) a
revolving loan facility in an aggregate principal amount of $500.0 million and
(ii) a term loan facility of $1.1 billion. We expect that our liquidity needs in
the near term will be
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met by continued use of our existing cash and cash equivalents, operating cash
flows and borrowings under the Vail Holdings Credit Agreement and the Whistler
Credit Agreement, if needed.
Our debt service requirements can be impacted by changing interest rates as we
had approximately $0.8 billion of net variable-rate debt outstanding as of
July 31, 2021, after consideration of $400.0 million in interest rate swaps
which convert variable-rate debt to fixed-rate debt. A 100-basis point change in
LIBOR would cause our annual interest payments on our net variable-rate debt to
change by approximately $8.4 million. Additionally, the annual payments
associated with the financing of the Canyons transaction increase by the greater
of CPI less 1%, or 2%. The fluctuation in our debt service requirements, in
addition to interest rate and inflation changes, may be impacted by future
borrowings under our credit agreements or other alternative financing
arrangements we may enter into. Our long term liquidity needs depend upon
operating results that impact the borrowing capacity under our credit
agreements, which can be mitigated by adjustments to capital expenditures, the
flexibility of investment activities and the ability to obtain favorable future
financing. We can respond to liquidity impacts of changes in the business and
economic environment, including the COVID-19 pandemic, by managing our capital
expenditures, variable operating expenses, the timing of new real estate
development activity and the payment of cash dividends on our common stock.
Share Repurchase Program
Our share repurchase program is conducted under authorizations made from time to
time by our Board of Directors. On March 6, 2006, our Board of Directors
initially authorized the repurchase of up to 3,000,000 shares of Vail Resorts
common stock ("Vail Shares") and later authorized additional repurchases of up
to 3,000,000 additional Vail Shares (July 16, 2008) and 1,500,000 Vail Shares
(December 4, 2015), for a total authorization to repurchase shares of up to
7,500,000 Vail Shares. During Fiscal 2021, we did not repurchase any Vail
Shares. Since the inception of this stock repurchase program through July 31,
2021, we have repurchased 6,161,141 Vail Shares at a cost of approximately
$404.4 million. As of July 31, 2021, 1,338,859 Vail Shares remained available to
repurchase under the existing repurchase authorization. Pursuant to the Third
Amendment and as discussed above, we are prohibited from repurchasing shares of
common stock during the Financial Covenants Temporary Waiver Period unless (x)
no default or potential default exists under the Vail Holdings Credit Agreement
and (y) the Company has liquidity (as defined above) of at least $300.0 million,
and the aggregate amount of dividends paid and share repurchases made by the
Company during the Financial Covenants Temporary Waiver Period may not exceed
$38.2 million in any fiscal quarter. Vail Shares purchased pursuant to the
repurchase program will be held as treasury shares and may be used for the
issuance of shares under the Company's share award plan. Repurchases under the
program may be made from time to time at prevailing prices as permitted by
applicable laws, and subject to market conditions and other factors. The timing,
as well as the number of Vail Shares that may be repurchased under the program,
will depend on several factors, including our future financial performance, our
available cash resources and competing uses for cash that may arise in the
future, the restrictions in our Vail Holdings Credit Agreement, prevailing
prices of Vail Shares and the number of Vail Shares that become available for
sale at prices that we believe are attractive. The share repurchase program has
no expiration date.
Dividend Payments
We announced on April 1, 2020 that we would be suspending the declaration of our
quarterly dividend in response to the COVID-19 pandemic. Additionally, pursuant
to the Fourth Amendment, we are prohibited from paying any dividends during the
Financial Covenants Temporary Waiver Period unless (x) no default or potential
default exists under the Vail Holdings Credit Agreement and (y) the Company has
liquidity (as defined above) of at least $300.0 million, and the aggregate
amount of dividends paid and share repurchases made by the Company during the
Financial Covenants Temporary Waiver Period may not exceed $38.2 million in any
fiscal quarter. During Fiscal 2021, we did not pay cash dividends. On September
22, 2021, our Board of Directors approved a cash dividend of $0.88 per share
payable on October 22, 2021 to stockholders of record as of October 5, 2021.
Additionally, a Canadian dollar equivalent dividend on the Exchangeco Shares
will be payable on October 22, 2021 to the shareholders of record as of October
5, 2021. We expect to fund the dividend with available cash on hand and will do
so pursuant to the restrictions under the Financial Covenants Temporary Waiver
Period. The amount, if any, of dividends to be paid in the future will depend on
our available cash on hand, anticipated cash needs, overall financial condition,
restrictions contained in our Vail Holdings Credit Agreement, future prospects
for earnings and cash flows, as well as other factors considered relevant by our
Board of Directors.
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Covenants and Limitations
We must abide by certain restrictive financial covenants under our credit
agreements. The most restrictive of those covenants include the following: for
the Vail Holdings Credit Agreement, Net Funded Debt to Adjusted EBITDA ratio,
Secured Net Funded Debt to Adjusted EBITDA ratio and the Interest Coverage ratio
(each as defined in the Vail Holdings Credit Agreement); for the Whistler Credit
Agreement, Consolidated Total Leverage Ratio and Consolidated Interest Coverage
Ratio (each as defined in the Whistler Credit Agreement); and for the EPR
Secured Notes, Maximum Leverage Ratio and Consolidated Fixed Charge Ratio (each
as defined in the EPR Agreements). In addition, our financing arrangements limit
our ability to make certain restricted payments, pay dividends on or redeem or
repurchase stock, make certain investments, make certain affiliate transfers and
may limit our ability to enter into certain mergers, consolidations or sales of
assets and incur certain indebtedness. Our borrowing availability under the Vail
Holdings Credit Agreement is primarily determined by the Net Funded Debt to
Adjusted EBITDA ratio, which is based on our segment operating performance, as
defined in the Vail Holdings Credit Agreement. Our borrowing availability under
the Whistler Credit Agreement is primarily determined based on the commitment
size of the credit facility and our compliance with the terms of the Whistler
Credit Agreement.

Pursuant to the Fourth Amendment and as discussed above in further detail, we
are exempt from complying with the restrictive financial covenants of the Vail
Holdings Credit Agreement during the Financial Covenants Temporary Waiver
Period, but are required to comply with a monthly minimum liquidity test during
such period (as discussed above).
We were in compliance with all restrictive financial covenants in our debt
instruments as of July 31, 2021. We expect that we will continue to meet all
applicable financial maintenance covenants in effect in our credit agreements
throughout the year ending July 31, 2022; however, there can be no assurance
that we will continue to meet such financial covenants. If such covenants are
not met, we would be required to seek a waiver or amendment from the banks
participating in our credit agreements. There can be no assurance that such
waiver or amendment would be granted, which could have a material adverse impact
on our liquidity.
Contractual Obligations
As part of our ongoing operations, we enter into arrangements that obligate us
to make future payments under contracts such as debt agreements, lease
agreements and construction agreements in conjunction with our resort capital
expenditures. Debt obligations, which totaled $2.9 billion as of July 31, 2021,
are recognized as liabilities in our Consolidated Balance Sheet. Obligations
under construction contracts and other purchase commitments are not recognized
as liabilities in our Consolidated Balance Sheet until services and/or goods are
received which is in accordance with GAAP. A summary of our contractual
obligations as of July 31, 2021 is presented below (in thousands):
                                                                            

Payments due per period

                                                               Fiscal              2-3                 4-5               More than
Contractual Obligations                    Total                2022              years               years               5 years
Long-Term Debt (Outstanding Principal)
(1)                                    $ 2,948,514          $ 121,345       

$ 127,538 $ 2,174,189 $ 525,442
Fixed rate interest (1)

                    350,352             56,388            112,873               57,790              123,301
Canyons Obligation (2)                   1,543,186             30,093             62,003               64,508            1,386,582
Operating Leases and Service Contracts
(3)                                        321,653             68,273             79,521               64,796              109,063
Purchase Obligations and Other (4)         538,284            434,269             80,903                   12               23,100

Total contractual cash obligations $ 5,701,989 $ 710,368

$ 462,838 $ 2,361,295 $ 2,167,488


(1)  The fixed-rate interest payments (including payments that are required
under interest rate swaps that we have entered into) as well as long-term debt
payments, included in the table above, assume that all debt outstanding as of
July 31, 2020 will be held to maturity. Interest payments associated with
variable-rate debt have not been included in the table. Assuming that our
approximately $0.8 billion of variable-rate long-term debt as of July 31, 2021
is held to maturity and utilizing interest rates in effect at July 31, 2021, our
annual interest payments (including commitment fees and letter of credit fees)
on variable rate long-term debt as of July 31, 2021 is anticipated to be
approximately $23.6 million for Fiscal 2022, approximately $21.9 million for
fiscal year 2023 and approximately $10.4 million for at least each of the next
three years subsequent to fiscal year 2023. The future annual interest
obligations noted herein are estimated only in relation to debt outstanding as
of July 31, 2021 and do not reflect interest obligations on potential future
debt.
Included in Long-Term Debt (Outstanding Principal) are $11.7 million of proceeds
resulting from real estate transactions accounted for as a financing
arrangements. Fiscal 2022 payments shown above include approximately $6.2
million of proceeds, which are expected to be recognized on the Company's
Statement of Operations during Fiscal 2022 as a result of
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the anticipated resolution of continuing involvement, with no associated cash
outflow (see Notes to Consolidated Financial Statements for additional
information).
(2)  Reflects interest expense payments associated with the remaining lease term
of the Canyons obligation, initially 50 years, assuming a 2% per annum (floor)
increase in payments. Any potential increases to the annual fixed payment above
the 2% floor due to inflation linked index of CPI less 1% have been excluded.
(3)  The payments under noncancelable operating leases included in the table
above reflect the applicable minimum lease payments and exclude any potential
contingent rent payments.
(4)  Purchase obligations and other primarily include amounts which are
classified as trade payables ($98.3 million), accrued payroll and benefits
($101.7 million), accrued fees and assessments ($21.2 million), contingent
consideration liability ($29.6 million), and accrued taxes (including taxes for
uncertain tax positions) ($123.6 million) on our Consolidated Balance Sheet as
of July 31, 2021; and, other commitments for goods and services not yet
received, including construction contracts and minimum commitments under season
pass alliance agreements, not included on our Consolidated Balance Sheet as of
July 31, 2021 in accordance with GAAP.
Off Balance Sheet Arrangements
We do not have off balance sheet transactions that are expected to have a
material effect on our financial condition, revenue, expenses, results of
operations, liquidity, capital expenditures or capital resources.
Critical Accounting Policies
The preparation of Consolidated Financial Statements in conformity with GAAP
requires us to select appropriate accounting policies and to make judgments and
estimates affecting the application of those accounting policies. In applying
our accounting policies, different business conditions or the use of different
assumptions may result in materially different amounts reported in the
Consolidated Financial Statements.
We have identified the most critical accounting policies which were determined
by considering accounting policies that involve the most complex or subjective
decisions or assessments. We also have other policies considered key accounting
policies; however, these policies do not meet the definition of critical
accounting policies because they do not generally require us to make estimates
or judgments that are complex or subjective. We have reviewed these critical
accounting policies and related disclosures with our Audit Committee of the
Board of Directors.
Goodwill and Intangible Assets
Description
The carrying value of goodwill and indefinite-lived intangible assets are
evaluated for possible impairment on an annual basis or between annual tests if
an event occurs or circumstances change that would more likely than not reduce
the estimated fair value of a reporting unit or indefinite-lived intangible
asset below its carrying value. Other intangible assets are evaluated for
impairment only when there is evidence that events or changes in circumstances
indicate that the carrying amount of these assets may not be recoverable.
Judgments and Uncertainties
Application of the goodwill and indefinite-lived intangible asset impairment
test requires judgment, including the identification of reporting units,
assignment of assets and liabilities to reporting units, assignment of goodwill
to reporting units and determination of the estimated fair value of reporting
units and indefinite-lived intangible assets. We perform a qualitative analysis
to determine whether it is more likely than not that the fair value of a
reporting unit or indefinite-lived intangible asset exceeds the carrying amount.
If it is determined, based on qualitative factors, that the fair value of the
reporting unit or indefinite-lived intangible asset may be more likely than not
less than carrying amount, or if significant changes to macro-economic factors
related to the reporting unit or intangible asset have occurred that could
materially impact fair value since the previous quantitative analysis was
performed, a quantitative impairment test would be required, in which we would
determine the estimated fair value of our reporting units using a discounted
cash flow analysis and determine the estimated fair value of indefinite-lived
intangible assets primarily using the income approach based upon estimated
future revenue streams. These analyses require significant judgments, including
estimation of future cash flows, which is dependent on internal forecasts,
available industry/market data (to the extent available), estimation of the
long-term rate of growth for our business including expectations and assumptions
regarding the impact of general economic conditions on our business, estimation
of the useful life over which cash flows will occur (including terminal
multiples), determination of the respective weighted average cost of
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capital and market participant assumptions. Changes in these estimates and
assumptions could materially affect the determination of estimated fair value
and impairment for each reporting unit or indefinite-lived intangible asset.
Effect if Actual Results Differ From Assumptions
Goodwill and indefinite-lived intangible assets are tested for impairment at
least annually as of May 1. Our testing for goodwill and indefinite-lived
intangible asset impairment consists of a comparison of the estimated fair value
of those assets with their net carrying values. If the net carrying value of the
assets exceed their estimated fair value, an impairment will be recognized for
indefinite-lived intangible assets, including goodwill, in an amount equal to
that excess; otherwise, no impairment loss is recognized. During Fiscal 2021, we
performed quantitative analyses of our reporting units and indefinite-lived
intangible assets and determined that the estimated fair value of all material
reporting units and indefinite-lived intangible assets significantly exceeded
their respective carrying values.
Fair value determinations require considerable judgment and are sensitive to
changes in underlying assumptions and factors. As a result, there can be no
assurance that the estimates and assumptions made for purposes of the annual
goodwill impairment test will prove to be an accurate prediction of the future.
Examples of events or circumstances that could reasonably be expected to
negatively affect the underlying key assumptions and ultimately impact the
estimated fair value of our reporting units may include such items as:
(1) prolonged adverse weather conditions resulting in a sustained decline in
guest visitation; (2) a prolonged weakness in the general economic conditions in
which guest visitation and spending is adversely impacted (particularly with
regard to the ongoing COVID-19 pandemic); and (3) volatility in the equity and
debt markets which could result in a higher discount rate.
While historical performance and current expectations have generally resulted in
estimated fair values of our reporting units in excess of carrying values, if
our assumptions are not realized, it is possible that an impairment charge may
need to be recorded in the future. However, it is not possible at this time to
determine if an impairment charge would result or if such a charge would be
material. As of July 31, 2021, we had $1,781.0 million of goodwill and $256.6
million of indefinite-lived intangible assets recorded on our Consolidated
Balance Sheet. There can be no assurance that the estimates and assumptions made
for purposes of the annual goodwill and indefinite-lived intangible asset
impairment tests will prove to be an accurate prediction of the future.
Tax Contingencies
Description
We must make certain estimates and judgments in determining income tax expense
for financial statement purposes. These estimates and judgments occur in the
calculation of tax credits and deductions and in the calculation of certain tax
assets and liabilities, which arise from differences in the timing of
recognition of revenue and expense for tax and financial statement purposes, as
well as the interest and penalties relating to uncertain tax positions. The
calculation of our tax liabilities involves dealing with uncertainties in the
application of complex tax regulations. We recognize liabilities for uncertain
tax positions based on a two-step process. The first step is to evaluate the tax
position for recognition by determining if the weight of available evidence
indicates that it is more likely than not that the position will be sustained on
audit, including resolution of related appeals or litigation processes, if any.
The second step requires us to estimate and measure the largest tax benefit that
is cumulatively greater than 50% likely of being realized upon ultimate
settlement. It is inherently difficult and subjective to estimate such amounts,
as this requires us to determine the probability of various possible outcomes.
This evaluation is based on factors including, but not limited to, changes in
facts or circumstances, changes in tax law, interpretation of tax law,
effectively settled issues under audit and new audit activity. A significant
amount of time may pass before a particular matter, for which we may have
established a reserve, is audited and fully resolved.
Judgments and Uncertainties
The estimates of our tax contingencies reserve contain uncertainty because
management must use judgment to estimate the potential exposure associated with
our various filing positions.
Effect if Actual Results Differ From Assumptions
We believe the estimates and judgments discussed herein are reasonable and we
have adequate reserves for our tax contingencies for uncertain tax positions.
Our reserves for uncertain tax positions, including any income tax related
interest and penalties ($74.8 million as of July 31, 2021), relate to the
treatment of the Canyons lease payments obligation as payments of debt
obligations and that the tax basis in Canyons goodwill is deductible. Actual
results could differ and we may be exposed to increases or decreases in those
reserves and tax provisions that could be material.
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An unfavorable tax settlement could require the use of cash and could possibly
result in increased tax expense and effective tax rate and/or adjustments to our
deferred tax assets and deferred tax liabilities in the year of resolution. A
favorable tax settlement could possibly result in a reduction in our tax
expense, effective tax rate, income taxes payable, other long-term liabilities
and/or adjustments to our deferred tax assets and deferred tax liabilities in
the year of settlement or in future years.
Depreciable Lives of Assets
Description
Mountain and lodging operational assets, furniture and fixtures, computer
equipment, software, vehicles and leasehold improvements are primarily
depreciated using the straight-line method over the estimated useful life of the
asset. Assets may become obsolete or require replacement before the end of their
useful life in which the remaining book value would be written-off or we could
incur costs to remove or dispose of assets no longer in use.
Judgments and Uncertainties
The estimates of our useful lives of the assets contain uncertainty because
management must use judgment to estimate the useful life of the asset.
Effect if Actual Results Differ From Assumptions
Although we believe the estimates and judgments discussed herein are reasonable,
actual results could differ, and we may be exposed to increased expense related
to depreciable assets disposed of, removed or taken out of service prior to its
originally estimated useful life, which may be material. A 10% decrease in the
estimated useful lives of depreciable assets would have increased depreciation
expense by approximately $24.0 million for Fiscal 2021.
Business Combinations
Description
A component of our growth strategy has been to acquire and integrate businesses
that complement our existing operations. We account for business combinations in
accordance with the guidance for business combinations and related literature.
Accordingly, we allocate the purchase price of acquired businesses to the
identifiable tangible and intangible assets acquired and liabilities assumed
based upon their estimated fair values at the date of acquisition. The
difference between the purchase price and the estimated fair value of the net
assets acquired or the excess of the aggregate estimated fair values of assets
acquired and liabilities assumed is recorded as goodwill. In determining the
estimated fair values of assets acquired and liabilities assumed in a business
combination, we use various recognized valuation methods including present value
modeling and referenced market values (where available). Valuations are
performed by management or independent valuation specialists under management's
supervision, where appropriate.
Judgments and Uncertainties
Accounting for business combinations requires our management to make significant
estimates and assumptions, especially at the acquisition date, including our
estimates for intangible assets, contractual obligations assumed and contingent
consideration, where applicable. Although we believe the assumptions and
estimates we have made in the past have been reasonable and appropriate, they
are based in part on historical experience and information obtained from the
management of the acquired companies and are inherently uncertain. Examples of
critical estimates in valuing certain of the intangible assets we have acquired
include but are not limited to determination of weighted average cost of
capital, market participant assumptions, royalty rates, terminal multiples and
estimates of future cash flows to be generated by the acquired assets. In
addition to the estimates and assumptions applied to valuing intangible assets
acquired, the determination of the estimated fair value of contingent
consideration, including estimating the likelihood and timing of achieving the
relevant thresholds for contingent consideration payments, requires the use of
subjective judgments. We estimate the fair value of the Park City contingent
consideration payments using an option pricing valuation model which
incorporates, among other factors, projected achievement of specified financial
performance measures, discounts rates and volatility for the respective
business.
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Effect if Actual Results Differ From Assumptions
We believe that the estimated fair values assigned to the assets acquired and
liabilities assumed are based on reasonable assumptions that a marketplace
participant would use. While we use our best estimates and assumptions to
accurately value assets acquired and liabilities assumed at the acquisition
date, our estimates are inherently uncertain and subject to refinement. As a
result, during the measurement period, which may be up to one year from the
acquisition date, we may record adjustments to the assets acquired and
liabilities assumed with the corresponding offset to goodwill. Upon the
conclusion of the measurement period or final determination of the estimated
fair values of assets acquired or liabilities assumed, whichever comes first,
any subsequent adjustments would be recorded in our Consolidated Statements of
Operations.
We recognize the fair value of contingent consideration at the date of
acquisition as part of the consideration transferred to acquire a business. The
liability associated with contingent consideration is remeasured to fair value
at each reporting period subsequent to the date of acquisition taking into
consideration changes in financial projections and long-term growth rates, among
other factors, that may impact the timing and amount of contingent consideration
payments until the term of the agreement has expired or the contingency is
resolved. Increases in the fair value of contingent consideration are recorded
as losses in our Consolidated Statements of Operations, while decreases in fair
value are recorded as gains.
New Accounting Standards
Refer to the Summary of Significant Accounting Policies within the Notes to
Consolidated Financial Statements for a discussion of new accounting standards.
Seasonality and Quarterly Results
Our mountain and lodging operations are seasonal in nature. In particular,
revenue and profits for our North America mountain and most of our lodging
operations are substantially lower and historically result in losses from late
spring to late fall. Conversely, peak operating seasons for our NPS
concessionaire properties, our mountain resort golf courses and our Australian
resorts' ski season generally occur during the North American summer months
while the North American winter months result in operating losses. Revenue and
profits generated by NPS concessionaire properties summer operations, golf
operations and Australian resorts' ski operations are not sufficient to fully
offset our off-season losses from our North American mountain and other lodging
operations. During Fiscal 2021, approximately 82% of total combined Mountain and
Lodging segment net revenue (excluding Lodging segment revenue associated with
reimbursement of payroll costs) was earned during the second and third fiscal
quarters. Therefore, the operating results for any three-month period are not
necessarily indicative of the results that may be achieved for any subsequent
quarter or for a full year (see Notes to Consolidated Financial Statements).

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