Vail Resorts Inc.

Overview Key strengths Key risks A broad and geographically diverse portfolio of mountain resorts across North America, Australia, and Europe. Exposure to consumer discretionary and travel spending, which can be volatile over an economic cycle. A growing Epic Pass base that provides revenue visibility and reduced EBITDA volatility during periods of economic weakness and years with lower-than-average snowfall. Unfavorable weather and below-average snowfall, especially in key geographies, can lead to significant declines in visitation, revenue, and profitability. High barriers to entry and limited supply growth given the cost to develop mountain resorts. High fixed-cost structure of mountain resort operations can result in significantly lower margins if revenues decline. While we expect Vail Resorts to maintain leverage of 2.0x-2.5x through fiscal

...Vail Resort Inc.'s financial policy and increased shareholder returns constrain rating upside despite leverage that is under our 3.25x upgrade threshold. While we expect Vail Resorts to maintain leverage of 2.0x-2.5x through fiscal 2024, which is below our 3.25x upgrade threshold, the stable outlook reflects the risk that the company pursues a more aggressive M&A strategy and increases shareholder returns through share repurchases that we haven't incorporated into our base case. Vail Resorts has historically grown via acquisitions of large, high-quality resorts in destination markets or via portfolio purchases that grow the Epic pass base in specific metropolitan areas. Additionally, uncertainty remains because we believe the company's revenue and EBITDA are relatively sensitive to snowfall. If winter 2023-2024 snow conditions are poorer than average, its leverage could be higher than our base-case forecast. We forecast Vail Resorts' S&P Global Ratings-adjusted leverage to be in the mid-2x...

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