Net Income per Share

Earnings per Share

Basic earnings per share (“EPS”) is computed by dividing net income attributable to Vail Resorts stockholders by the total 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 participate 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. The Company computes the effect of dilutive securities using the treasury stock method and average market prices during the period.

Presented below is basic and diluted EPS for the three months ended January 31, 2017 and 2016 (in thousands, except per share amounts):



	Three Months Ended January 31,
	2017				2016
	Basic		Diluted		Basic		Diluted
Net income per share:
Net income attributable to Vail Resorts	$	149,179	$	149,179	$	116,982	$	116,982
Weighted-average Vail Resorts shares outstanding	39,888		39,888		36,246		36,246
Weighted-average Exchangeco shares outstanding	162		162		—		—
Total Weighted-average shares outstanding	40,050		40,050		36,246		36,246
Effect of dilutive securities	—		1,057		—		1,010
Total shares	40,050		41,107		36,246		37,256
Net income per share attributable to Vail Resorts	$	3.72	$	3.63	$	3.23	$	3.14

The number of shares issuable on the exercise of share based awards excluded from the calculation of diluted EPS because the effect of their inclusion would have been anti-dilutive totaled 2,000 and 19,000 for the three months ended January 31, 2017 and 2016, respectively.

Presented below is basic and diluted EPS for the six months ended January 31, 2017 and 2016 (in thousands, except per share amounts):



	Six Months Ended January 31,
	2017				2016
	Basic		Diluted		Basic		Diluted
Net income per share:
Net income attributable to Vail Resorts	$	86,592	$	86,592	$	57,395	$	57,395
Weighted-average Vail Resorts shares outstanding	38,327		38,327		36,359		36,359
Weighted-average Exchangeco shares outstanding	115		115		—		—
Total Weighted-average shares outstanding	38,442		38,442		36,359		36,359
Effect of dilutive securities	—		1,087		—		999
Total shares	38,442		39,529		36,359		37,358
Net income per share attributable to Vail Resorts	$	2.25	$	2.19	$	1.58	$	1.54

The number of shares issuable on the exercise of share based awards excluded from the calculation of diluted EPS because the effect of their inclusion would have been anti-dilutive totaled 1,000 and 10,000 for the six months ended January 31, 2017 and 2016, respectively.

Dividends

During the three and six months ended January 31, 2017, the Company paid cash dividends of $0.81 and $1.62 per share ($32.4 million and $61.8 million, respectively, in the aggregate). During the three and six months ended January 31, 2016, the Company paid cash dividends of $0.6225 and $1.245 per share ($22.6 million and $45.2 million, respectively, in the aggregate). On March 9, 2017, the Company’s Board of Directors declared a quarterly cash dividend of $1.053 per share, for Vail Shares, payable on April 13, 2017 to stockholders of record as of March 29, 2017. Additionally, a Canadian dollar equivalent dividend on the Exchangeco Shares will be payable on April 13, 2017 to the shareholders of record on March 29, 2017.