Net Income Per Common Share

12 Months Ended

Jul. 31, 2021

Earnings Per Share Reconciliation [Abstract]

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 7, 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, 2021, 2020 and 2019 (in thousands, except per share amounts):


	Year Ended July 31,
	2021				2020				2019
	Basic		Diluted		Basic		Diluted		Basic		Diluted
Net income per share:
Net income attributable to Vail Resorts	$	127,850	$	127,850	$	98,833	$	98,833	$	301,163	$	301,163
Weighted-average shares outstanding	40,266		40,266		40,227		40,227		40,292		40,292
Weighted-average Exchangeco shares outstanding	35		35		46		46		57		57
Total Weighted-average shares outstanding	40,301		40,301		40,273		40,273		40,349		40,349
Effect of dilutive securities	—		527		—		565		—		809
Total shares	40,301		40,828		40,273		40,838		40,349		41,158
Net income per share attributable to Vail Resorts, Inc.	$	3.17	$	3.13	$	2.45	$	2.42	$	7.46	$	7.32

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 2,000, 2,000 and 4,000 for the years ended July 31, 2021, 2020 and 2019, respectively.

On December 18, 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 treasury method to calculate diluted EPS, and if the conversion value of the 0.0% Convertible Notes exceeds their conversion price of $407.17 per share of common stock, then the Company will calculate its diluted EPS as if all the notes were converted and the Company issued shares of its common stock to settle the excess value over the conversion price. The par value of the 0.0% Convertible Notes is required to be settled in cash and therefore would not impact diluted EPS. 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 initial conversion amount for a reporting period, then the shares underlying the notes will not be reflected in the Company’s calculation of diluted EPS. For the year ended July 31, 2021, the average price of Vail Shares did not exceed the conversion price and therefore there was no impact to diluted EPS during those periods.

Dividends

The Company did not pay cash dividends during the year ended July 31, 2021. During the years ended July 31, 2020 and 2019, the Company paid cash dividends of $5.28 per share ($212.7 million in the aggregate) and $6.46 per share ($260.6 million in the aggregate), respectively. On September 22, 2021 the Company’s Board of Directors approved a cash dividend of $0.88 per share payable on October 22, 2021 to stockholders of record as of October 5, 2021. Additionally, a Canadian dollar equivalent dividend on the Exchangeco Shares will be payable on October 22, 2021 to the shareholders of record on October 5, 2021.