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 (see Note 5, Acquisitions), the Company issued consideration in the form of shares of Vail Resorts common stock (the “Vail Shares”) and shares of the Company’s wholly-owned Canadian subsidiary (“Exchangeco”). Whistler Blackcomb shareholders elected to receive 3,327,719 Vail Shares and 418,095 shares of Exchangeco (the “Exchangeco Shares”). Both Vail Shares and Exchangeco Shares have a par value of $0.01 per share, and Exchangeco Shares, while outstanding, are substantially the economic equivalent of the Vail Shares and are exchangeable, at any time prior to the seventh anniversary of the closing of the acquisition, into 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, 2017, 2016 and 2015 (in thousands, except per share amounts):



	Year Ended July 31,
	2017				2016				2015
	Basic		Diluted		Basic		Diluted		Basic		Diluted
Net income per share:
Net income attributable to Vail Resorts	$	210,553	$	210,553	$	149,754	$	149,754	$	114,754	$	114,754
Weighted-average shares outstanding	39,158		39,158		36,276		36,276		36,342		36,342
Weighted-average Exchangeco shares outstanding	93		93		—		—		—		—
Total Weighted-average shares outstanding	39,251		39,251		36,276		36,276		36,342		36,342
Effect of dilutive securities	—		1,115		—		1,036		—		1,064
Total shares	39,251		40,366		36,276		37,312		36,342		37,406
Net income per share attributable to Vail Resorts	$	5.36	$	5.22	$	4.13	$	4.01	$	3.16	$	3.07

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 on the exercise of share based awards that were excluded from the calculation of diluted net income per share because the effect of their inclusion would have been anti-dilutive totaled approximately 9,000, 18,000 and 11,000 for the years ended July 31, 2017, 2016 and 2015, respectively.

Dividends

In fiscal 2011, the Company’s Board of Directors approved the commencement of a regular quarterly cash dividend on the Company’s common stock at an annual rate of $0.60 per share, subject to quarterly declaration. Since the initial commencement of a regular quarterly cash dividend, the Company’s Board of Directors has annually approved an increase to the cash dividend on the Company’s common stock and on March 9, 2017, the Company’s Board of Directors approved an increase of approximately 30% in the annual cash dividend to an annual rate of $4.212 per share, subject to quarterly declaration. For the year ended July 31, 2017, the Company paid cash dividends of $3.726 per share ($146.2 million in the aggregate). On September 27, 2017 the Company’s Board of Directors approved a quarterly cash dividend of $1.053 per share payable on October 27, 2017 to stockholders of record as of October 10, 2017. Additionally, a Canadian dollar equivalent dividend on the Exchangeco Shares will be payable on October 27, 2017 to the shareholders of record on October 10, 2017.