Net Income Per Common Share

12 Months Ended

Jul. 31, 2023

Earnings Per Share Reconciliation [Abstract]

Net Income Per Common Share

Net Income per Common Share

Earnings per Share

Basic earnings per share (“EPS”) excludes dilution and is computed by dividing net income attributable to Vail Resorts stockholders by the weighted-average shares outstanding during the period. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised, resulting in the issuance of shares of common stock that would then share in the earnings of Vail Resorts.

In connection with the Company’s acquisition of Whistler Blackcomb in October 2016, the Company issued consideration in the form of shares of Vail Resorts common stock (the “Vail Shares”), redeemable preferred shares of the Company’s wholly-owned Canadian subsidiary Whistler Blackcomb Holdings Inc. (“Exchangeco”) or cash (or a combination thereof). Whistler Blackcomb shareholders elected to receive 3,327,719 Vail Shares and 418,095 shares of Exchangeco (the “Exchangeco Shares”). The Exchangeco Shares could be redeemed for Vail Shares at any time until October 2023 or until the Company elected to convert any remaining Exchangeco Shares to Vail Shares, which the Company had the ability to do once total Exchangeco Shares outstanding fell below 20,904 shares (or 5% of the total Exchangeco Shares originally issued). In July 2022, the number of outstanding Exchangeco Shares fell below such threshold and on August 25, 2022, the Company elected to redeem all outstanding Exchangeco Shares, effective September 26, 2022. As of July 31, 2023, all Exchangeco Shares have been exchanged for Vail Shares. Both Vail Shares and Exchangeco Shares have a par value of $0.01 per share, and Exchangeco Shares, while they were outstanding, were substantially the economic equivalent of the Vail Shares. The Company’s calculation of weighted-average shares outstanding includes the Exchangeco Shares.

Presented below is basic and diluted EPS for the years ended July 31, 2023, 2022 and 2021 (in thousands, except per share amounts):

	Year Ended July 31,
	2023				2022				2021
	Basic		Diluted		Basic		Diluted		Basic		Diluted
Net income per share:
Net income attributable to Vail Resorts	$	268,148	$	268,148	$	347,923	$	347,923	$	127,850	$	127,850
Weighted-average Vail Shares outstanding	39,654		39,654		40,433		40,433		40,266		40,266
Weighted-average Exchangeco shares outstanding	—		—		32		32		35		35
Total Weighted-average shares outstanding	39,654		39,654		40,465		40,465		40,301		40,301
Effect of dilutive securities	—		106		—		222		—		527
Total shares	39,654		39,760		40,465		40,687		40,301		40,828
Net income per share attributable to Vail Resorts, Inc.	$	6.76	$	6.74	$	8.60	$	8.55	$	3.17	$	3.13

The Company computes the effect of dilutive securities using the treasury stock method and average market prices during the period. The number of shares issuable upon the exercise of share-based awards that were excluded from the calculation of diluted EPS because the effect of their inclusion would have been anti-dilutive totaled approximately 22,000, 6,000 and 2,000 for the years ended July 31, 2023, 2022 and 2021, respectively.

In December 2020, the Company completed an offering of $575.0 million in aggregate principal amount of 0.0% Convertible Notes (as defined in Note 6, Long-Term Debt). The Company is required to settle the principal amount of the 0.0% Convertible Notes in cash and has the option to settle the conversion spread in cash or shares. The Company uses the if-converted method to calculate the impact of convertible instruments on diluted EPS when the instruments may be settled in cash or shares. If the conversion value of the 0.0% Convertible Notes exceeds their conversion price, then the Company will calculate its diluted EPS as if all the notes were converted into common stock at the beginning of the period. However, if reflecting the 0.0% Convertible Notes in diluted EPS in this manner is anti-dilutive, or if the conversion value of the notes does not exceed their conversion price for a reporting period, then the shares underlying the notes will not be reflected in the Company’s calculation of diluted EPS. For the years ended July 31, 2023, 2022 and 2021, the price of Vail Shares did not exceed the conversion price and therefore there was no impact to diluted EPS during those periods.

Dividends

During the years ended July 31, 2023 and 2022, the Company paid cash dividends of $7.94 per share and $5.58 per share, respectively ($314.4 million and $225.8 million, respectively, including cash dividends paid to Exchangeco shareholders). The Company did not pay cash dividends during the year ended July 31, 2021. On September 27, 2023, the Company’s Board of Directors approved a cash dividend of $2.06 per share payable on October 26, 2023 to stockholders of record as of October 10, 2023.