Vail Resorts(MTN) - 2023 Q2 - Quarterly Report

PART I FINANCIAL INFORMATION Item 1. Financial Statements (unaudited) Presents Vail Resorts' unaudited financial statements, covering balance sheets, operations, cash flows, and notes for periods ended January 31, 2023, and 2022 Consolidated Condensed Balance Sheets Summarizes the company's financial position, detailing assets, liabilities, and equity as of January 31, 2023, and 2022 Consolidated Condensed Balance Sheet Highlights (in thousands) | Balance Sheet Item | Jan 31, 2023 | Jan 31, 2022 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $1,295,252 | $1,407,019 | | Total current assets | $1,760,131 | $1,767,427 | | Property, plant and equipment, net | $2,421,395 | $2,190,332 | | Goodwill, net | $1,723,019 | $1,764,106 | | Total assets | $6,564,962 | $6,369,742 | | Liabilities & Equity | | | | Total current liabilities | $1,287,936 | $1,155,036 | | Long-term debt, net | $2,789,827 | $2,695,589 | | Total liabilities | $4,787,611 | $4,576,058 | | Total stockholders' equity | $1,777,351 | $1,793,684 | Consolidated Condensed Statements of Operations Details the company's operating results, including revenue, income from operations, net income, and diluted EPS for specified periods Key Operating Results (in thousands, except per share amounts) | Metric | Three Months Ended Jan 31, 2023 | Three Months Ended Jan 31, 2022 | Six Months Ended Jan 31, 2023 | Six Months Ended Jan 31, 2022 | | :--- | :--- | :--- | :--- | :--- | | Total net revenue | $1,101,718 | $906,535 | $1,381,165 | $1,082,111 | | Income from operations | $328,033 | $325,140 | $164,672 | $159,467 | | Net income attributable to Vail Resorts, Inc. | $208,679 | $223,391 | $71,708 | $84,059 | | Diluted net income per share | $5.16 | $5.47 | $1.77 | $2.06 | Consolidated Condensed Statements of Cash Flows Presents the company's cash flow activities for the six months ended January 31, 2023 and 2022 Cash Flow Summary for Six Months Ended January 31 (in thousands) | Cash Flow Activity | 2023 | 2022 | | :--- | :--- | :--- | | Net cash provided by operating activities | $605,493 | $611,329 | | Net cash used in investing activities | $(206,025) | $(225,532) | | Net cash used in financing activities | $(201,377) | $(220,693) | | Net increase in cash, cash equivalents and restricted cash | $193,248 | $164,088 | Notes to Consolidated Condensed Financial Statements Provides detailed explanations of accounting policies, segment information, debt structure, and recent acquisitions - The company operates 41 destination mountain resorts and regional ski areas under its Mountain segment, which is its primary business[27] - On August 1, 2022, the company adopted ASU 2020-06, reclassifying the equity component of its 0.0% Convertible Notes to long-term debt and eliminating future non-cash interest expense related to the debt discount[38][39] - On August 3, 2022, the company acquired a 55% controlling interest in Andermatt-Sedrun Sport AG for a total consideration of $155.4 million[59] - On March 7, 2023, the Board of Directors approved an increase in the share repurchase program by an additional 2,500,000 shares, bringing the total available for repurchase to 3,534,292 shares[86] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) Management discusses financial results, highlighting EBITDA growth, liquidity, capital plans, and operational challenges Results of Operations Analyzes segment-wise financial performance, detailing changes in Mountain, Lodging, and Real Estate Reported EBITDA Total Reported EBITDA Reconciliation (in thousands) | Metric | Three Months Ended Jan 31, 2023 | Three Months Ended Jan 31, 2022 | | :--- | :--- | :--- | | Net income attributable to Vail Resorts, Inc. | $208,679 | $223,391 | | Total Reported EBITDA | $396,944 | $397,461 | | Mountain Reported EBITDA | $398,851 | $388,493 | | Lodging Reported EBITDA | $(4,053) | $9,368 | | Real Estate Reported EBITDA | $2,146 | $(400) | - Pass revenue for Q2 FY2023 increased 16.8% YoY, partly due to a $40 million timing difference from varied resort opening dates compared to the prior year[95][105] - Operations at Eastern U.S. resorts were negatively impacted by abnormal weather, while western U.S. resorts were affected by airline and weather disruptions in Tahoe during the peak holiday period[100] Liquidity and Capital Resources Details the company's liquidity position, cash and credit availability, capital expenditure plans, and dividend policy - As of January 31, 2023, the company had $1.3 billion of cash and cash equivalents[152] - Total available liquidity under the Vail Holdings and Whistler credit agreements was approximately $414.6 million and $211.7 million, respectively[153] - The calendar year 2023 capital expenditure plan is expected to be approximately $206 million to $211 million, including maintenance and growth projects[155] - The Board of Directors approved a cash dividend of $2.06 per share on March 7, 2023, an increase from previous payouts[161] Item 3. Quantitative and Qualitative Disclosures About Market Risk Discusses the company's exposure to market risks, primarily interest rate fluctuations and foreign currency exchange rate risk - A 100-basis point change in interest rates would impact annual interest payments by approximately $7.1 million[172] - The company is exposed to foreign currency risk from the Canadian dollar, Australian dollar, and Swiss franc, which affects the translation of financial statements[173] Item 4. Controls and Procedures Management concluded that disclosure controls and procedures were effective, with no material changes to internal control over financial reporting - The CEO and CFO concluded that disclosure controls and procedures are effective to provide reasonable assurance that required information is recorded and reported in a timely manner[177] - No changes occurred during the quarter that materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[179] PART II OTHER INFORMATION Item 1. Legal Proceedings The company is involved in various lawsuits not expected to materially impact its financial position, results, or cash flows - The company is a party to various lawsuits arising in the ordinary course of business, which are not expected to have a material adverse impact[180] Item 1A. Risk Factors No material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K were reported - No material changes to risk factors were reported since the last Form 10-K filing[181] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds Reports no unregistered sales of equity securities or use of proceeds during the period - None[182] Item 6. Exhibits Lists exhibits filed with the report, including CEO and CFO certifications and XBRL data files - Exhibits filed include certifications by the CEO and CFO as required by the Sarbanes-Oxley Act and XBRL data files[186]