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 inthe United States ("GAAP"). Refer to the end of the Results of Operations section for a reconciliation of net income attributable toVail Resorts, Inc. to Total Reported EBITDA and Resort Reported EBITDA, and long-term debt, net to Net Debt. Items excluded from Resort Reported EBITDA, Total Reported EBITDA and Net Debt are significant components in understanding and assessing financial performance or liquidity. Resort Reported EBITDA, Total 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 88%, 12% and 0%, respectively, of our net revenue for Fiscal 2022. 41
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Mountain Segment
In the Mountain segment, the Company operates the following 41 destination mountain resorts and regional ski areas:
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*Denotes a destination mountain resort, which generally receives a meaningful portion of skier visits from long-distance travelers, as opposed to our regional ski areas, which tend to generate skier visits predominantly from their respective local markets. Additionally, we operate ancillary services, primarily including ski school, dining and retail/rental operations, and for our Australian ski areas, including lodging and transportation operations. Mountain segment revenue is seasonal, with the majority of revenue earned from our North American ski operations occurring in our second and third fiscal quarters and the majority of revenue earned from our Australian ski operations occurring in our first and fourth fiscal quarters. Our North American destination mountain resorts and regional ski areas (collectively, "Resorts") typically experience their peak operating season for the Mountain segment from mid-December through mid-April, and our Australian ski areas typically experience their peak operating season from June to early October. Our largest source of Mountain segment revenue comes from the sale of lift tickets (including pass products), which represented approximately 59%, 63% and 53% of Mountain segment net revenue for Fiscal 2022, the fiscal year endedJuly 31, 2021 ("Fiscal 2021") and the fiscal year endedJuly 31, 2020 ("Fiscal 2020"), respectively. 42 -------------------------------------------------------------------------------- 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 ourNorth American Resorts is divided into two primary categories: (i) out-of-state and international ("Destination") guests and (ii) in-state and local ("Local") guests. For the 2021/2022 North American ski season, Destination guests comprised approximately 58% of our North American destination mountain resort skier visits (excluding complimentary access), while Local guests comprised approximately 42% of our North American destination mountain resort skier visits (excluding complimentary access), which compares to 52% and 48%, respectively, for the 2020/2021 North American ski season and approximately 58% and 42%, respectively, for the 2019/2020 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. Additionally, Destination guest visitation is less likely to be impacted by changes in the weather during the current season, but may be more impacted by adverse economic conditions, the global geopolitical climate or weather conditions in the immediately preceding ski season. Local guests tend to be more value-oriented and weather sensitive. We offer a variety of pass products for all of our Resorts, marketed toward 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 ourEpic 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 three tiers of resort access offerings. Our pass products provide a compelling value proposition to our guests, which in turn assists us in developing a loyal base of customers who commit to ski at our Resorts in advance of the ski season and typically ski more days each season at our Resorts than those guests who do not buy pass products. Additionally, we enter into strategic long-term pass alliance agreements with third-party mountain resorts, which further increase the value proposition of our pass products. For the 2022/2023 ski season, our pass alliances includeTelluride Ski Resort inColorado ,Hakuba Valley andRusutsu Resort inJapan , Resorts of the Canadian Rockies inCanada , Les 3 Vallées inFrance ,Verbier 4 Vallées inSwitzerland , Skirama Dolomiti inItaly and Ski Arlberg inAustria . 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 theEpic Pass andEpic 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 on a straight-line basis using skiable days (see Notes to the Consolidated Financial Statements for additional information). Lift revenue consists of pass product lift revenue ("pass revenue") and non-pass lift product revenue ("non-pass revenue"). Approximately 61%, 61% and 51% of total lift revenue was derived from pass revenue for Fiscal 2022, Fiscal 2021 and Fiscal 2020, respectively (including the impact of the deferral of pass product revenue from Fiscal 2020 to Fiscal 2021 as a result of credits offered to 2019/2020 North American pass product holders who purchased 2020/2021 pass products). Additionally, lift revenue for Fiscal 2021 was impacted by restrictions which only allowed pass product holders to access our Resorts during the early portion of the 2020/2021 North American ski season, as well as our use of a reservation system, which limited capacity for both pass product holders and non-pass lift tickets. 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.
Lodging Segment
Operations within the Lodging segment include: (i) ownership/management of a group of luxury hotels through the RockResorts brand proximate to ourColorado andUtah mountain resorts; (ii) ownership/management of non-RockResorts branded hotels and condominiums proximate to ourNorth American Resorts ; (iii)National Park Service ("NPS") concessioner properties, including theGrand Teton Lodge Company ("GTLC"); (iv) aColorado resort ground transportation company; and (v) mountain resort golf courses. 43 -------------------------------------------------------------------------------- The performance of our lodging properties (including managed condominium units) proximate to our Resorts, and ourColorado resort ground transportation company, are closely aligned with the performance of the Mountain segment and generally experience similar seasonal trends, particularly with respect to visitation by Destination guests. Revenues from such properties represented approximately 73%, 67% and 75% of Lodging segment net revenue (excluding Lodging segment revenue associated with the reimbursement of payroll costs) for Fiscal 2022, Fiscal 2021 and Fiscal 2020, 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 and as such, the revenue and corresponding expense do not affect 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 concessioner properties (as their peak operating season generally occurs from mid-May through 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 important factors (as well as risks and uncertainties associated with such factors) that could impact our future financial performance or condition:
•COVID-19 has led to travel restrictions and other adverse economic impacts in global and local economies. Our operations for Fiscal 2022 continued to be negatively impacted by COVID-19 and associated government-mandated restrictions, including capacity limitations, vaccination requirements and mask and social distancing requirements. Additionally, we may impose our own COVID-19 related restrictions in addition to what is required by state and local governments in the interest of the safety of our guests, employees and resort communities. The ongoing impacts of COVID-19 and associated regional shutdowns resulted in periodic closures of our Australian ski areas during their 2021 ski seasons. Although conditions have improved relative to the prior year, we are uncertain as to the ultimate severity and duration of the COVID-19 pandemic as well as the related global or other travel restrictions and other adverse impacts. We have experienced a 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 inNorth America or declining or slowing growth in economies outside ofNorth America , accompanied by devaluation of currencies, rising inflation, trade tariffs and fluctuating commodity prices. While we anticipate improvements as compared to Fiscal 2022 and Fiscal 2021, we cannot predict the ultimate impact that the global economic uncertainty as a result of COVID-19 will have on overall travel and leisure spending or more specifically, on our guest visitation, guest spending or other related trends for the upcoming 2022/2023 North American ski season. •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. Additionally, our pass products provide a compelling value proposition to our guests, which in turn create a guest commitment predominately prior to the start of the ski season. InMarch 2022 , we began our pass product sales program for the 2022/2023 North American ski season. Pass product sales throughSeptember 23, 2022 for the upcoming 2022/2023 North American ski season increased approximately 6% in units and approximately 7% in sales dollars as compared to the prior year throughSeptember 24, 2021 . Pass product sales are adjusted to include pass product sales for theSeven Springs Resorts in both periods and to eliminate the impact of foreign currency by applying an exchange rate of$0.76 between the Canadian dollar andU.S. dollar to both periods forWhistler Blackcomb pass product sales. We cannot predict if this favorable trend will continue through the remainder of the 2022 North American pass product sales campaign or the overall impact that pass product sales will have on lift revenue for the 2022/2023 North American ski season. 44 -------------------------------------------------------------------------------- •The 2021/2022 North American ski season got off to a slow start with challenging early season conditions which persisted through the holiday period, but results were strong from January through the remainder of the season. We had particularly strong Destination visitation this year, which was further supported by lift ticket sales at ourColorado andUtah resorts that exceeded our expectations through the spring. Our results atWhistler Blackcomb were also stronger than expected after the holiday period due to the easing of travel restrictions inCanada in late February. Additionally, after the holiday period, performance at our easternU.S. ski areas was in-line with our expectations while our Tahoe resorts were impacted by challenging spring conditions, resulting in performance below our expectations. Throughout the season, our ancillary businesses continued to be capacity constrained by staffing and, in the case of dining, by operational restrictions associated with COVID-19. During the fourth quarter of Fiscal 2022, our Australian resorts experienced record visitation, driven by strong demand following two years of COVID-19 related disruptions, continued momentum in advance commitment pass product sales following the addition of Hotham andFalls Creek inApril 2019 , and favorable early season conditions that continued throughout the quarter. We cannot predict the impact that COVID-19 limitations and restrictions, future weather conditions or continued staffing challenges may have on our skier visitation and results of operations for the year endingJuly 31, 2023 ("Fiscal 2023") and beyond. •As ofJuly 31, 2022 , we had$1,107.4 million of cash and cash equivalents as well as$417.4 million available under the revolver component of our Eighth Amended and Restated Credit Agreement, dated as ofAugust 15, 2018 and as amended most recently onDecember 18, 2020 (the "Vail Holdings Credit Agreement"), which represents the total commitment of$500.0 million less certain letters of credit outstanding of$82.6 million . Additionally, we have a credit facility which supports the liquidity needs ofWhistler Blackcomb (the "Whistler Credit Agreement"). As ofJuly 31, 2022 , we hadC$281.6 million ($220.0 million ) available under the revolver component of the Whistler Credit Agreement which represents the total commitment ofC$300.0 million ($234.3 million ) less outstanding borrowings ofC$15.0 million ($11.7 million ) and letters of credit outstanding ofC$3.4 million ($2.6 million ). We believe that our existing cash and cash equivalents, availability under our credit agreements and the expected positive cash flow from operating activities of our Mountain and Lodging segments less resort capital expenditures will continue to provide us with sufficient liquidity to fund our operations. •OnDecember 31, 2021 , through a wholly-owned subsidiary, we acquiredSeven Springs Mountain Resort ,Hidden Valley Resort andLaurel Mountain Ski Area inPennsylvania (collectively, the "SevenSprings Resorts ") fromSeven Springs Mountain Resort, Inc. and its affiliates for a purchase price of approximately$116.5 million , after adjustments for certain agreed-upon terms, which we funded with cash on hand. The acquisition included the mountain operations of theSeven Springs Resorts , including base area skier services (food and beverage, retail and rental, lift ticket offices and ski and snowboard school facilities), as well as hotel, conference center and other related operations. We cannot predict the ultimate impact the acquisition of theSeven Springs Resorts will have on our future results from operations. •OnAugust 3, 2022 , through a wholly-owned subsidiary, we acquired a 55% controlling interest inAndermatt-Sedrun Sport AG ("Andermatt-Sedrun") fromAndermatt Swiss Alps AG ("ASA"). Andermatt-Sedrun controls and operates all of Andermatt-Sedrun's mountain and ski-related assets, including lifts, most of the restaurants and a ski school operation at the ski area. We investedCHF 149.3 million ($155.7 million ), comprised of aCHF 110.0 million ($114.4 million ) investment into Andermatt-Sedrun for use in capital investments to enhance the guest experience on the mountain andCHF 39.3 million ($41.3 million ) paid to ASA. The proceeds paid to ASA will be fully reinvested into the real estate developments in the base area. ASA retains a 40% ownership stake, with a group of existing shareholders comprising the remaining 5% ownership. We will provide unlimited and unrestricted access to Andermatt-Sedrun on theEpic Pass for the 2022/2023 ski season, as well as provide access on other pass products. We cannot predict the ultimate impact the acquisition of Andermatt-Sedrun will have on our future results from operations. 45 --------------------------------------------------------------------------------
Results of Operations Summary Shown below is a summary of operating results for Fiscal 2022, Fiscal 2021 and Fiscal 2020 (in thousands): Year ended July 31, 2022 2021 (1) 2020 (1) Net income attributable to Vail Resorts, Inc.$ 347,923 $ 127,850 $ 98,833 Income before provision for income taxes$ 457,161 $ 125,183 $ 116,433 Mountain Reported EBITDA$ 811,167 $ 552,753 $ 503,440 Lodging Reported EBITDA 25,747 (8,097) (91) Resort Reported EBITDA$ 836,914 $ 544,656 $ 503,349 Real Estate Reported EBITDA$ (3,927) $ (4,582) $ (4,128) (1) Segment results for Fiscal 2021 and Fiscal 2020 have been retrospectively adjusted to reflect current period presentation. See Notes to the Consolidated Financial Statements for additional information. A discussion of segment results, including reconciliations of net income attributable toVail 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 theSeven Springs Resorts (acquiredDecember 31, 2021 ) prospectively from the date of acquisition.
COVID-19 in general had an adverse impact on our results of operations for Fiscal 2022, Fiscal 2021 and Fiscal 2020 as further described below in our segment results of operations.
The sections titled "Fiscal 2022 compared to Fiscal 2021" and "Fiscal 2021 compared to Fiscal 2020" in each of the Mountain and Lodging segment discussions below provide comparisons of financial and operating performance for Fiscal 2022 to Fiscal 2021 and Fiscal 2021 to Fiscal 2020, respectively, unless otherwise noted. 46 --------------------------------------------------------------------------------
Mountain Segment
Mountain segment operating results for Fiscal 2022, Fiscal 2021 and Fiscal 2020 are presented by category as follows (in thousands, except ETP):
Percentage Year ended July 31, Increase/(Decrease) 2022 2021 (1) 2020 (1) 2022/2021 2021/2020 Mountain net revenue: Lift$ 1,310,213 $ 1,076,578 $ 913,091 21.7 % 17.9 % Ski school 223,645 144,227 189,131 55.1 % (23.7) % Dining 163,705 92,186 167,551 77.6 % (45.0) % Retail/rental 311,768 227,993 270,299 36.7 % (15.7) % Other 203,783 161,814 186,548 25.9 % (13.3) %Total Mountain net revenue 2,213,114 1,702,798 1,726,620 30.0 % (1.4) % Mountain operating expense: Labor and labor-related benefits 561,266 458,029 479,993 22.5 % (4.6) % Retail cost of sales 99,024 77,217 97,052 28.2 % (20.4) % Resort related fees 93,177 69,983 75,246 33.1 % (7.0) % General and administrative 292,412 253,279 239,412 15.5 % 5.8 % Other 358,648 298,235 333,167 20.3 % (10.5) %Total Mountain operating expense 1,404,527 1,156,743 1,224,870 21.4 % (5.6) % Mountain equity investment income, net 2,580 6,698 1,690 (61.5) % 296.3 % Mountain Reported EBITDA$ 811,167 $ 552,753 $ 503,440 46.8 % 9.8 % Total skier visits 17,298 14,852 13,483 16.5 % 10.2 % ETP$ 75.74 $ 72.49 $ 67.72 4.5 % 7.0 % (1) Segment results for Fiscal 2021 and Fiscal 2020 have been retrospectively adjusted to reflect current period presentation. See Notes to the Consolidated Financial Statements for additional information.
Mountain Reported EBITDA includes
Fiscal 2022 compared to Fiscal 2021
Mountain Reported EBITDA increased$258.4 million , or 46.8%, primarily due to strong North American pass product sales growth for the 2021/2022 North American ski season and fewer COVID-19 related limitations and restrictions on our North American operations compared to the prior year. Visitation across ourNorth American Resorts increased relative to prior year levels, but was partially offset by the negative impact of delayed Resort openings due to challenging early season conditions. Additionally, our Australian resorts had strong visitation during the fourth quarter of Fiscal 2022, compared to being negatively impacted by limitations and restrictions during the 2021 Australian ski season. These increases were partially offset by an increase in variable expenses associated with the increase in revenue and visitation, and an increase in general and administrative expenses primarily due to cost discipline efforts in the prior year associated with lower levels of operations. Mountain segment results for Fiscal 2022 also include acquisition and integration related expenses, including expenses associated with the acquisitions of theSeven Springs Resorts and Andermatt-Sedrun, of$7.7 million , compared to$1.0 million of acquisition and integration related expenses for Fiscal 2021. Lift revenue increased$233.6 million , or 21.7%, primarily due to an increase in pass revenue and an increase in non-pass lift ticket purchases. Pass revenue increased 21.5%, which was primarily driven by increased pass product sales for the 2021/2022 North American ski season compared to the 2020/2021 North American ski season, which were favorably impacted by increased pass product sales to new pass holders and Destination guests. Non-pass revenue increased 22.0% primarily due to an increase in visitation, which was significantly impacted by COVID-19 related capacity limitations in the prior year, as well as an increase in non-pass ETP of 8.2%. The increase in non-pass lift revenue was partially offset by delayedNorth American Resort openings as a result of challenging early season conditions, which negatively impacted visitation. 47 -------------------------------------------------------------------------------- Ski school revenue increased$79.4 million , or 55.1%; dining revenue increased$71.5 million , or 77.6%; and retail/rental revenue increased$83.8 million , or 36.7%. Each increased primarily due to fewer COVID-19 related limitations and restrictions on our North American winter operations as compared to the prior year, as well as an increase in demand over the prior year. Other revenue mainly consists of summer visitation and other mountain activities revenue, employee housing revenue, guest services revenue, commercial leasing revenue, marketing revenue, private club revenue (which includes both club dues and amortization of initiation fees), municipal services revenue and other recreation activity revenue. Other revenue also includes Australian ski area lodging and transportation revenue. Other revenue increased$42.0 million , or 25.9%, primarily as a result of increased visitation and fewer COVID-19 related limitations and restrictions on our North American operations as compared to the prior year. Operating expense increased$247.8 million , or 21.4%, which was primarily attributable to increased variable expenses associated with increases in revenue, and the impact of cost discipline efforts in the prior year associated with lower levels of operations, including limitations, restrictions and closures resulting from COVID-19. Additionally, operating expense for Fiscal 2022 includes acquisition and integration related expenses, including expenses associated with the acquisitions of theSeven Springs Resorts and Andermatt-Sedrun, of$7.7 million , compared to$1.0 million of acquisition and integration related expense for Fiscal 2021. Labor and labor-related benefits increased 22.5%, primarily due to increased staffing associated with an increase in visitation and the impact of COVID-19 related cost actions in the prior year, including salary reductions, as well as a decrease of$16.5 million in tax credits from COVID-19 related legislation inCanada . Retail cost of sales increased 28.2%, compared to an increase in retail sales of 36.3%, reflecting increased margins on a higher mix of newer, higher-margin retail products. Resort related fees increased 33.1%, primarily due to increases in revenue on which those fees are based. General and administrative expense increased 15.5%, primarily due to an increase in corporate overhead costs due to cost reduction measures in the prior year to offset the impacts of COVID-19, as well as a decrease of$5.2 million in tax credits associated with COVID-19 related legislation inCanada andAustralia . Other expense increased 20.3%, primarily due to increases in variable operating expenses associated with increased revenues and visitation, as well as an increase in acquisition and integration related expenses of$6.7 million . Mountain equity investment income, net primarily includes our share of income from the operations of a real estate brokerage company. Mountain equity investment income from the real estate brokerage company decreased$4.1 million , or 61.5%, for Fiscal 2022 compared to Fiscal 2021 primarily due to a lower number of real estate sales.
Fiscal 2021 compared to Fiscal 2020
Mountain Reported EBITDA increased$49.3 million , or 9.8%, primarily due to the impact of the Fiscal 2020 Resort Closures, including the deferral of$120.9 million of pass product revenue from Fiscal 2020 to Fiscal 2021 as a result of the Credit Offer to 2019/2020 North American pass product holders, as well as cost discipline efforts in Fiscal 2021 associated with lower levels of operations. 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 Fiscal 2021 due to the continued closure of the Canadian border to international guests and was further impacted by the resort closing earlier than expected onMarch 30, 2021 following a provincial health order issued by the government ofBritish 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 fromWhistler Blackcomb , which are translated from Canadian dollars toU.S. dollars, were favorably affected by increases in the Canadian dollar exchange rate relative to theU.S. dollar for Fiscal 2021 as compared to Fiscal 2020, resulting in a decrease in Mountain Reported EBITDA of approximately$2.0 million , which the Company calculated by applying current period foreign exchange rates to the prior period results. Lift revenue increased$163.5 million , or 17.9%, primarily due to the Company operating for the fullU.S. ski season in Fiscal 2021 as compared to the shortened operating season in Fiscal 2020 as a result of the Resort Closures, including the deferral impact of the Credit Offer from Fiscal 2020 to Fiscal 2021, partially offset by limitations and restrictions on our North American winter operations in Fiscal 2021 due to the ongoing impacts of COVID-19, which resulted in a decrease in non-pass visitation. 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 ourColorado ,Utah and Tahoe 48 -------------------------------------------------------------------------------- resorts through the holiday season, partially offset by an increase in non-pass ETP of 10.1%. Visitation was particularly impacted in regions where heightened COVID-19 related restrictions were in place, includingWhistler Blackcomb , Tahoe andVermont . Additionally,Whistler Blackcomb's results were disproportionately impacted as compared to our broader Mountain segment performance in Fiscal 2021 due to the continued closure of the Canadian border to international guests, and was further impacted by the resort closing earlier than expected onMarch 30, 2021 following a provincial health order issued by the government ofBritish 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$24.7 million , or 13.3%, primarily due to decreased mountain activities and mountain services revenue as a result of limitations and restrictions on our business in Fiscal 2021 due to COVID-19, as well as a reduction in ski pass insurance revenue as a result of the replacement of our previous ski pass insurance program with Epic Coverage for the 2020/2021 North American ski season, which is free to all pass product holders. Operating expense decreased$68.1 million , or 5.6%, which was primarily attributable to cost discipline efforts in Fiscal 2021 associated with lower levels of operations and limitations, restrictions and closures of Resort operations resulting from COVID-19. 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 4.6%%, primarily due to cost discipline efforts in Fiscal 2021 associated with limitations, restrictions and closures of our Resort operations as a result of COVID-19, as well as incremental tax credits of approximately$10.3 million primarily associated with COVID-19 related legislation passed inCanada , partially offset by an increase in variable compensation. Retail cost of sales decreased 20.4% compared to a decrease in retail sales of 23.5%, reflecting a higher mix of aged retail products sold at reduced margins. 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 inCanada andAustralia . Other expense decreased 10.5% primarily due to decreases in variable operating expenses associated with reduced revenues, as well as a decrease in acquisition and integration related expenses of$12.6 million . 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$5.0 million (296.3%) for Fiscal 2021 compared to Fiscal 2020 due to a significant increase in both the number of real estate sales and the average price of those sales. 49 --------------------------------------------------------------------------------
Lodging Segment
Lodging segment operating results for Fiscal 2022, Fiscal 2021 and Fiscal 2020 are presented by category as follows (in thousands, except average daily rate ("ADR") and revenue per available room ("RevPAR")): Percentage Year ended July 31, Increase/(Decrease) 2022 2021 (1) 2020 (1) 2022/2021 2021/2020 Lodging net revenue: Owned hotel rooms$ 80,579 $ 47,509 $ 44,992 69.6 % 5.6 % Managed condominium rooms 97,704 72,217 76,480 35.3 % (5.6) % Dining 48,569 17,211 31,464 182.2 % (45.3) % Transportation 16,021 9,271 15,796 72.8 % (41.3) % Golf 10,975 9,373 8,023 17.1 % 16.8 % Other 46,500 43,008 44,933 8.1 % (4.3) %
Lodging net revenue (excluding payroll cost reimbursements) 300,348
198,589 221,688 51.2 % (10.4) % Payroll cost reimbursements 11,742 6,553 10,549 79.2 % (37.9) % Total Lodging net revenue 312,090 205,142 232,237 52.1 % (11.7) % Lodging operating expense: Labor and labor-related benefits 128,884 95,899 107,651 34.4 % (10.9) % General and administrative 55,081 43,714 39,283 26.0 % 11.3 % Other 90,636 67,073 74,845 35.1 % (10.4) % Lodging operating expense (excluding reimbursed payroll costs) 274,601 206,686 221,779 32.9 % (6.8) % Reimbursed payroll costs 11,742 6,553 10,549 79.2 % (37.9) % Total Lodging operating expense 286,343 213,239 232,328 34.3 % (8.2) % Lodging Reported EBITDA$ 25,747 $ (8,097) $ (91) 418.0 % (8,797.8) % Owned hotel statistics ADR$ 309.78 $ 264.83 $ 266.43 17.0 % (0.6) % RevPar$ 170.84 $ 122.45 $ 122.34 39.5 % 0.1 % Managed condominium statistics ADR$ 410.13 $ 349.08 $ 328.98 17.5 % 6.1 % RevPar$ 122.15 $ 77.74 $ 83.10 57.1 % (6.5) % Owned hotel and managed condominium statistics (combined) ADR$ 373.89 $ 322.15 $ 310.76 16.1 % 3.7 % RevPar$ 133.53 $ 85.99 $ 90.37 55.3 % (4.8) % (1) Segment results for Fiscal 2021 and Fiscal 2020 have been retrospectively adjusted to reflect current period presentation. See Notes to the Consolidated Financial Statements for additional information. Lodging Reported EBITDA includes$3.7 million ,$3.8 million and$3.4 million of stock-based compensation expense for Fiscal 2022, Fiscal 2021 and Fiscal 2020, respectively.
Fiscal 2022 compared to Fiscal 2021
Lodging Reported EBITDA increased$33.8 million , or 418.0%, primarily as a result of fewer COVID-19 capacity-related restrictions and limitations on our North American operations compared to the prior year, which resulted in increased occupancy at our lodging properties as compared to the prior year, as well as an increase in ADR of 16.1% driven by increased pricing at our owned hotels and managed condominiums due to an increase in demand particularly for group visitation. Additionally we benefited from the incremental operations of theSeven Springs Resorts (acquired inDecember 2021 ) which generated$5.8 million of EBITDA in the current year. These increases were partially offset by increased general and administrative expenses primarily due to COVID-19 related cost management in the prior year. 50 -------------------------------------------------------------------------------- Revenue from owned hotel rooms, managed condominium rooms, dining, transportation, golf and other revenue each increased primarily as a result of fewer COVID-19 related limitations and restrictions as compared to the prior year, as well as an increase in demand over the prior year and incremental revenue from theSeven Springs Resorts of$18.7 million . Operating expense (excluding reimbursed payroll costs) increased 32.9%, including incremental operating expenses from theSeven Springs Resorts of$12.9 million . Labor and labor related benefits increased 34.4%, primarily due to increased staffing associated with improved North American operations in the current year as a result of fewer COVID-19 related limitations and restrictions and increased demand, as well as the impact of salary reductions in the prior year. General and administrative expense increased 26.0% primarily due to an increase in allocated corporate overhead costs for nearly all functions, which were impacted in the prior year by COVID-19 related cost management. Other expense increased 35.1%, primarily related to higher variable expenses associated with increased revenue. 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 2021 compared to Fiscal 2020
Lodging Reported EBITDA for Fiscal 2021 decreased$8.0 million or 8797.8%, primarily as a result of limitations and restrictions on our North American operations in Fiscal 2021 as a result of the impacts of COVID-19, which resulted in reduced occupancy and capacity-related restrictions at our lodging properties compared to Fiscal 2020. 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 summer demand in Fiscal 2021, and owned hotel rooms, primarily as a result of increased revenue from GTLC and partially offset by decreases at our other lodging properties as a result of the impacts of COVID-19. Operating expense (excluding reimbursed payroll costs) decreased 6.8%. Labor and labor related benefits decreased 10.9% 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 10.4% 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.
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. 51 --------------------------------------------------------------------------------
Real Estate segment operating results for Fiscal 2022, Fiscal 2021 and Fiscal 2020 are presented by category as follows (in thousands):
Percentage Year ended July 31, Increase/(Decrease) 2022 2021 2020 2022/2021 2021/2020
(60.0) % (63.5) % Real Estate operating expense: Cost of sales (including sales commissions) 251 1,294 3,932 (80.6) % (67.1) % Other 5,660 5,382 5,250 5.2 % 2.5 %Total Real Estate operating expense 5,911 6,676 9,182 (11.5) % (27.3) % Gain on sale of real property 1,276 324 207 293.8 % 56.5 % Real Estate Reported EBITDA$ (3,927) $ (4,582) $ (4,128) 14.3 % (11.0) % Fiscal 2022 We did not close on any significant real estate transactions during Fiscal 2022. Other operating expense of$5.7 million was primarily comprised of general and administrative costs, such as labor and labor-related benefits, professional services and allocated corporate overhead costs.
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. 52 --------------------------------------------------------------------------------
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) 2022 2021 2020 2022/2021 2021/2020 Asset impairments $ - $ -$ (28,372) nm (100.0) % Change in estimated fair value of contingent consideration$ (20,280) $ (14,402) $ 2,964 (40.8) % (585.9) % Gain (loss) on disposal of fixed assets and other, net$ 43,992 $ (5,373) $ 838 918.8 % (741.2) % Interest expense, net$ (148,183) $ (151,399) $ (106,721) 2.1 % (41.9) % Foreign currency (loss) gain on intercompany loans$ (2,682) $ 8,282 $ (3,230) (132.4) % 356.4 % Provision for income taxes$ (88,824) $ (726) $ (7,378) (12,134.7) % 90.2 % Effective tax rate (19.4) % (0.6) % (6.3) % 18.8 pts (5.7 pts) Net (income) loss attributable to noncontrolling interest$ (20,414) $ 3,393 $ (10,222) (701.7) % 133.2 % 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 ourColorado 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 estimated fair value of contingent consideration. We recorded losses of$20.3 million and$14.4 million during Fiscal 2022 and Fiscal 2021, respectively, primarily related to an increase in the estimated contingent consideration payment for each respective year, as well as accretion resulting from the passage of time. We recorded a gain of$3.0 million during Fiscal 2020 primarily related to a decrease in the estimated Contingent Consideration payments for Fiscal 2020 and Fiscal 2021 as a result of a decrease in expected results due to the anticipated impacts of COVID-19 at that time. The estimated fair value of contingent consideration is based on assumptions for EBITDA ofPark City in future periods, as calculated under the lease on which participating payments are determined, and was$42.4 million and$29.6 million as ofJuly 31, 2022 and 2021, respectively. Gain (loss) on disposal of fixed assets and other, net. Gain on disposal of fixed assets and other, net for Fiscal 2022 included (i)$32.2 million from the sale of theDoubleTree atBreckenridge hotel; (ii)$10.3 million in proceeds from the NPS related to partial payments for a leasehold surrender interest at GTLC associated with assets that have been fully depreciated by the Company (payments were made at the request of the NPS); and (iii)$7.9 million from the sale of an administrative building inAvon, CO. These gains were partially offset by losses on other annual disposals of fixed assets. 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 onMay 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 inDecember 2020 . Foreign currency (loss) gain on intercompany loans. Foreign currency (loss) gain on intercompany loans for Fiscal 2022 decreased as compared to Fiscal 2021 and increased for Fiscal 2021 as compared to Fiscal 2020, both as a result of the Canadian dollar fluctuating relative to theU.S. dollar, and was associated with an intercompany loan fromVail Holdings, Inc. toWhistler Blackcomb in the original amount of$210.0 million that was funded, effective as ofNovember 1, 2016 , in connection with the acquisition ofWhistler Blackcomb . This intercompany loan, which had an outstanding balance of approximately$97.2 million as ofJuly 31, 2022 , requires foreign currency remeasurement to Canadian dollars, the functional currency forWhistler Blackcomb . As a result, foreign currency fluctuations associated with the loan are recorded within our results of operations. 53 -------------------------------------------------------------------------------- Provision for income taxes. The effective tax rate was 19.4%, 0.6% and 6.3% in Fiscal 2022, Fiscal 2021 and Fiscal 2020, respectively. The increase in the effective tax rate during Fiscal 2022 compared to Fiscal 2021 was primarily due to an increase in full fiscal year pre-tax book income, which lessens the tax rate impact from favorable permanent items and favorable discrete items, as well as a shift in income to higher tax rate jurisdictions. The decrease in the effective tax rate provision during Fiscal 2021 compared to Fiscal 2020 was primarily driven by an increase in excess tax benefits from employee share awards that were exercised (stock appreciation rights) and that vested (restricted stock awards). Net (income) loss attributable to noncontrolling interest. Net (income) loss attributable to noncontrolling interest is primarily associated with the income or loss attributable to the minority shareholder ofWhistler Blackcomb , and accordingly, fluctuations are primarily associated with changes in income or loss fromWhistler Blackcomb operations.
Reconciliation of Non-GAAP Measures
The following table reconciles net income attributable toVail Resorts, Inc. to Total Reported EBITDA for Fiscal 2022, Fiscal 2021 and Fiscal 2020 (in thousands): Year ended July 31, 2022 2021 (1) 2020 (1) Net income attributable to Vail Resorts, Inc.$ 347,923 $ 127,850 $ 98,833 Net income (loss) attributable to noncontrolling interests 20,414 (3,393) 10,222 Net income 368,337 124,457 109,055 Provision for income taxes 88,824 726 7,378 Income before provision for income taxes 457,161 125,183 116,433 Depreciation and amortization 252,391 252,585 249,572 Asset impairments - - 28,372
(Gain) loss on disposal of fixed assets and other, net (43,992)
5,373 (838) Change in estimated fair value of contingent consideration 20,280 14,402 (2,964) Investment income and other, net (3,718) (586) (1,305) Foreign currency loss (gain) on intercompany loans 2,682 (8,282) 3,230 Interest expense, net 148,183 151,399 106,721 Total Reported EBITDA$ 832,987 $ 540,074 $ 499,221 Mountain Reported EBITDA$ 811,167 $ 552,753 $ 503,440 Lodging Reported EBITDA 25,747 (8,097) (91) Resort Reported EBITDA 836,914 544,656 503,349 Real Estate Reported EBITDA (3,927) (4,582) (4,128) Total Reported EBITDA$ 832,987
(1) Segment results for Fiscal 2021 and Fiscal 2020 have been retrospectively adjusted to reflect current period presentation. See Notes to the Consolidated Financial Statements for additional information. The following table reconciles long-term debt, net to Net Debt (defined as long-term debt, net plus long-term debt due within one year less cash and cash equivalents) (in thousands): Year ended July 31, 2022 2021 Long-term debt, net$ 2,670,300 $ 2,736,175 Long-term debt due within one year 63,749 114,117 Total debt 2,734,049 2,850,292 Less: cash and cash equivalents 1,107,427 1,243,962 Net Debt$ 1,626,622 $ 1,606,330 54
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Liquidity and Capital Resources
Changes in significant sources and uses of cash for Fiscal 2022, Fiscal 2021 and Fiscal 2020 are presented by categories as follows (in thousands):
Year ended
2022 2021 2020
Net cash provided by operating activities
$ (347,917) $ (103,329) $ (492,739) Net cash (used in) provided by financing activities$ (493,136) $
434,662
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 ofJuly 31, 2022 and 2021 were higher than our historicalJuly 31 balance primarily as a result of the debt offerings we completed in Fiscal 2021 and Fiscal 2020.
Fiscal 2022 compared to Fiscal 2021
We generated$710.5 million of cash from operating activities during Fiscal 2022, an increase of$185.2 million when compared to$525.3 million of cash generated during Fiscal 2021. The increase in operating cash flows was primarily a result of increased Mountain and Lodging segment operating results during Fiscal 2022 compared to the prior year, including an increase in pass product sales and associated accounts receivable collections, net of refunds, during Fiscal 2022 compared to the prior year, which was impacted by the credits offered to 2019/2020 North American pass product holders who purchased 2020/2021 pass products. These increases were partially offset by (i) a decrease in cash flows from accounts payable and accrued liabilities, primarily associated with the lower level of operations as of the beginning of Fiscal 2021 resulting from COVID-19 and (ii) an increase in inventory purchases during Fiscal 2022 compared to the prior year. Cash used in investing activities for Fiscal 2022 increased by$244.6 million primarily due to (i) cash payments of$116.3 million , net of cash acquired of$0.2 million , related to the acquisition of theSeven Springs Resorts during Fiscal 2022; (ii) a cash deposit of$114.4 million made inJuly 2022 related to the acquisition of Andermatt-Sedrun, which closed onAugust 3, 2022 ; and (iii) an increase in capital expenditures of$77.7 million as a result of the deferral of discretionary capital projects in the prior year related to our decision to prioritize near-term liquidity due to the effects of COVID-19. These increases were partially offset by proceeds of$40.5 million from the sale of theDoubleTree atBreckenridge during Fiscal 2022, as well as proceeds of$10.3 million from the NPS related to partial payments for leasehold surrender interest at GTLC associated with assets that have been fully depreciated and the sale of an administrative building inAvon, CO for$11.3 million . Cash (used in) provided by financing activities decreased by$927.8 million during Fiscal 2022 compared to Fiscal 2021, primarily due to (i) prior year proceeds of$575.0 million from the issuance of our 0.0% Convertible Notes during Fiscal 2021; (ii) an increase in dividends paid of$225.8 million ; (iii) an increase in repurchases of common stock of$75.0 million ; (iv) a$51.5 million repayment of debt associated with the maturity of theEB-5 Development Notes (as defined in Notes to Consolidated Financial Statements); and (v) an increase in net payments under the revolver component of ourWhistler Credit Agreement of$14.8 million . These increases were partially offset by a decrease in financing costs primarily associated with the issuance of the 0.0% Convertible Notes in the prior year. 55 --------------------------------------------------------------------------------
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 Fiscal 2021 due to a return to more normal operations, as compared to significantly lower accruals in the prior year due to the early closure of the 2019/2020 North American ski season for our Resorts, lodging properties and retail stores beginning onMarch 15, 2020 ; (ii) an increase in pass product sales and collections as compared to Fiscal 2020, primarily as a result of the impacts of COVID-19, including the extended pass product sales deadline in the prior year and the impact of credits offered to 2019/2020 North American pass product holders who purchased 2020/2021 pass products; and (iii) a decrease in inventories (excluding inventories assumed through acquisitions) as ofJuly 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 inMay 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 ofPeak 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 our 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 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 in cash provided by financing activities were partially offset by (i) proceeds of$600.0 million related to the issuance of our 6.25% Notes during Fiscal 2020; (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 thePeak 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 .
Significant Sources of Cash
We had$1,107.4 million of cash and cash equivalents as ofJuly 31, 2022 , compared to$1,244.0 million as ofJuly 31, 2021 . Although we cannot predict the future impact associated with the COVID-19 pandemic or other economic factors on our business, we currently anticipate that our Mountain and Lodging segment operating results will continue to provide a significant source of future operating cash flows. In addition to our$1,107.4 million of cash and cash equivalents atJuly 31, 2022 , we had$417.4 million available under the revolver component of our Vail Holdings Credit Agreement as ofJuly 31, 2022 (which represents the total commitment of$500.0 million less certain letters of credit outstanding of$82.6 million ). Also, to further support the liquidity needs ofWhistler Blackcomb , we hadC$281.6 million ($220.0 million ) available under the revolver component of our Whistler Credit Agreement (which represents the total commitment ofC$300.0 million ($234.3 million ) less outstanding borrowings ofC$15.0 million ($11.6 million ) and letters of credit outstanding ofC$3.4 million ($2.6 million)). We expect that our liquidity needs in the near term will be met by continued use of our existing cash and cash equivalents, operating cash flows and borrowings under both the Vail Holdings Credit Agreement and Whistler Credit Agreement, if needed. OnAugust 31, 2022 , we entered into an amendment of the Vail Holdings Credit Agreement, to extend the maturity date by two years toSeptember 2026 . Additionally, in connection with the amendment the reference rate changed from LIBOR to the secured overnight financing rate ("SOFR") given the anticipated sunset of LIBOR in June of 2023. SOFR is a broad measure of the cost of borrowing cash in the overnightU.S. Treasury repo market and is administered by theFederal Reserve Bank of New York . There were no other material changes in terms. The Vail Holdings Credit Agreement and the Whistler Credit Agreement provide adequate flexibility and are priced favorably with any new borrowings currently priced at SOFR, plus a spread of 0.1%, plus 1.25% for the Vail Holdings Credit Agreement, and Bankers Acceptance Rate plus 1.75% for the Whistler Credit Agreement. 56 --------------------------------------------------------------------------------
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$323 million to$333 million on resort capital expenditures during calendar year 2022. This plan includes the installation of 18 new or replacement lifts across 12 of our resorts, which will meaningfully increase lift capacity at those lift locations. The capital plan includes approximately$9 million for the addition of annual capital expenditures associated with the recently acquiredSeven Springs Resorts , approximately$4 million related to the addition of Andermatt-Sedrun and approximately$20 million of incremental spending to complete the one-time capital plans associated with thePeak Resorts and Triple Peaks acquisitions. Also included in these estimated capital expenditures are approximately$105 million to$115 million of maintenance capital expenditures, which are necessary to maintain appearance and level of service appropriate to our resort operations. 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$87 million was spent for capital expenditures in calendar year 2022 as ofJuly 31, 2022 , leaving approximately$236 million to$246 million to spend in the remainder of calendar year 2022.
Acquisitions
OnDecember 31, 2021 , we acquired the assets of theSeven Springs Resorts for a purchase price of approximately$116.5 million , after adjustments for certain agreed-upon terms, which was funded with cash on hand. OnAugust 3, 2022 , we acquired a majority stake inAndermatt-Sedrun Sport AG , for a purchase price ofCHF 149.3 million ($155.7 million ), which was funded with cash on hand. During Fiscal 2022, we made a cash deposit ofCHF 110.0 million ($114.4 million ) to escrow as a required prepayment in connection with the acquisition, and the remainingCHF 39.3 million ($41.3 million ) was paid subsequent toJuly 31, 2022 . As ofAugust 3, 2022 , the value of the total consideration paid to the seller was$155.4 million .
Debt
As ofJuly 31, 2022 , principal payments on the majority of our long-term debt ($2.7 billion of the total$2.8 billion debt outstanding as ofJuly 31, 2022 ) are not due until fiscal year 2025 and beyond. As ofJuly 31, 2022 and 2021, total long-term debt, net (including long-term debt due within one year) was$2.7 billion and$2.9 billion , respectively. Net Debt (defined as long-term debt, net plus long-term debt due within one year less cash and cash equivalents) was$1.6 billion as of bothJuly 31, 2022 and 2021. As ofJuly 31, 2022 , 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 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$0.7 billion of net variable-rate debt outstanding as ofJuly 31, 2022 , 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 (or its successor, SOFR) would cause our annual interest payments on our net variable-rate debt to change by approximately$7.4 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, 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. 57 --------------------------------------------------------------------------------
Material Cash Requirements
As part of our ongoing operations, we enter into arrangements that obligate us to make future payments under contracts such as debt agreements and construction agreements in conjunction with our resort capital expenditures. Debt obligations, which totaled$2.8 billion as ofJuly 31, 2022 , are recognized as liabilities in our Consolidated Balance Sheet. Obligations under construction contracts and other purchase commitments are not recognized as liabilities in our Consolidated Balance Sheet until services and/or goods are received which is in accordance with GAAP. A summary of our material cash requirements as ofJuly 31, 2022 (excluding obligations presented elsewhere, including Notes to Consolidated Financial Statements) is presented below (in thousands): Payments Due by Period Fiscal 2-3 4-5 More than Total 2023 years years 5 years Long-term debt (1)$ 3,164,858 152,598 1,748,777 630,925 632,558 Service contracts$ 26,507 24,800 1,288 419 - Purchase obligations and other (2)$ 698,358 597,847 77,411 - 23,100
Total contractual cash obligations
(1) Long-term debt includes principal payments, fixed-rate interest payments (including payments that are required under interest rate swaps) and estimated variable interest payments utilizing interest rates in effect atJuly 31, 2022 , and assumes all debt outstanding as ofJuly 31, 2022 will be held to maturity. The future annual interest obligations noted herein are estimated only in relation to debt outstanding as ofJuly 31, 2022 , and do not reflect interest obligations on potential future debt or refinancing (including the impact of the Fifth Amendment, which we entered into inAugust 2022 and which extended the maturity date of our Vail Holdings Credit Agreement by two years toSeptember 2026 (see Notes to Consolidated Financial Statements for additional information)). Long-term debt also includes$12.8 million of proceeds resulting from real estate transactions accounted for as a financing arrangements. Fiscal 2023 payments shown above include approximately$6.2 million of proceeds, which are expected to be recognized on the Company's Statement of Operations during Fiscal 2023 as a result of the anticipated resolution of continuing involvement, with no associated cash outflow (see Notes to Consolidated Financial Statements for additional information). (2) Purchase obligations and other primarily includes amounts which are classified as trade payables ($149.8 million ), accrued payroll and benefits ($109.8 million ), accrued fees and assessments ($25.7 million ), contingent consideration liability ($42.4 million ) and accrued taxes (including taxes for uncertain tax positions) ($87.5 million ) on our Consolidated Balance Sheet as ofJuly 31, 2022 . These amounts also include other commitments for goods and services not yet received, including construction contracts and minimum commitments under season pass alliance agreements, which are not included on our Consolidated Balance Sheet as ofJuly 31, 2022 in accordance with GAAP. Purchase obligations and other does not include any amounts associated with the acquisition of Andermatt-Sedrun, which was acquired onAugust 3, 2022 .
Share Repurchase Program
Our share repurchase program is conducted under authorizations made from time to time by our Board of Directors. OnMarch 6, 2006 , our Board of Directors initially authorized the repurchase of up to 3,000,000 shares ofVail Shares and later authorized additional repurchases of up to 3,000,000 additionalVail Shares (July 16, 2008 ) and 1,500,000Vail Shares (December 4, 2015 ), for a total authorization to repurchase shares of up to 7,500,000Vail Shares . During Fiscal 2022, we repurchased 304,567 shares of common stock at an average price of$246.27 for a total cost of$75.0 million . Since the inception of this stock repurchase program throughJuly 31, 2022 , we have repurchased 6,465,708Vail Shares at a cost of approximately$479.4 million . As ofJuly 31, 2022 , 1,034,292Vail Shares remained available to repurchase under the existing repurchase authorization.Vail Shares purchased pursuant to the repurchase program will be held as treasury shares and may be used for the issuance of shares under our 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 ofVail 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 ofVail Shares and the number ofVail Shares that become available for sale at prices that we believe are attractive. The share repurchase program has no expiration date. 58 --------------------------------------------------------------------------------
Dividend Payments
During Fiscal 2022, we paid cash dividends of$5.58 per share ($225.8 million , including cash dividends paid to Exchangeco shareholders). We did not pay cash dividends during Fiscal 2021. OnSeptember 22, 2022 , our Board of Directors approved a cash dividend of$1.91 per share payable onOctober 24, 2022 to stockholders of record as ofOctober 5, 2022 . We expect to fund the dividend with available cash on hand. 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.
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. We were in compliance with all restrictive financial covenants in our debt instruments as ofJuly 31, 2022 . We expect that we will continue to meet all applicable financial maintenance covenants in effect in our credit agreements throughout the year endingJuly 31, 2023 ; 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.
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.
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. 59 --------------------------------------------------------------------------------
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 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 ofMay 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 2022, we primarily performed qualitative analyses of our reporting units and indefinite-lived intangible assets and determined that the estimated fair value of all material reporting units and indefinite-lived intangible assets significantly exceeded their respective carrying values. 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 COVID-19 or other potential future pandemics); 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 ofJuly 31, 2022 , we had$1,754.9 million of goodwill and$254.2 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. 60 --------------------------------------------------------------------------------
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, are$68.8 million as ofJuly 31, 2022 . This reserve relates to the treatment of the Canyons lease payments obligation as payments of debt obligations and that the tax basis in Canyons goodwill is deductible. Actual results could differ and we may be exposed to increases or decreases in those reserves and tax provisions that could be material. 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 2022. 61 --------------------------------------------------------------------------------
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 thePark 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.
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.
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Seasonality and Quarterly Results
Our mountain and lodging operations are seasonal in nature, with a typical peak operating season inNorth America generally beginning in mid-December and running through mid-April. In particular, revenue and profits for ourNorth 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 concessioner properties, our mountain resort golf courses and our Australian resorts' ski season generally occur during the North American summer months while the North American winter months result in operating losses. Revenue and profits generated by NPS concessioner properties' summer operations, golf operations and Australian resorts' ski operations are not sufficient to fully offset our off-season losses from our North American mountain and other lodging operations. During Fiscal 2022, approximately 83% 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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