IDR Idaho Strategic Resources Inc

Intrawest reports fiscal 2005 second quarter results ALL DOLLAR AMOUNTS ARE IN U.S. CURRENCY VANCOUVER, Feb. 8 /PRNewswire-FirstCall/ -- Intrawest Corporation, one of the world's leading destination resort and adventure-travel companies, announced today the results for its fiscal 2005 second quarter ended December 31, 2004. Total revenue for the quarter was $436.2 million compared with $350.0 million for the same period last year. The year-over-year increase was mainly the result of the inclusion of revenue from Abercrombie & Kent (A&K), which Intrawest acquired in July 2004, and the sale of commercial properties at seven resorts to a partnership with CNL Income Properties. Total Company EBITDA (earnings before interest, income taxes, non- controlling interest, depreciation and amortization) was $57.3 million compared with $52.0 million in the same period last year. An increase in EBITDA from resort and travel operations and management services, due mainly to increased skier visits, strong results from A&K and growth in service fee business, was partially offset by reduced EBITDA from real estate due to fewer closings. Net income before the after-tax cost of expensing the call premium and unamortized costs on senior notes redeemed was $16.1 million or $0.34 per share compared with $10.6 million or $0.22 per share in the same period last year. Senior notes were redeemed in both years, resulting in $28.1 million of expenses in the second quarter of this year compared with $12.1 million in the second quarter of last year. After expensing the call premium and unamortized costs on senior notes redeemed in the quarter, Intrawest incurred a net loss of $8.0 million or $0.17 per share compared with net income of $0.2 million or $0.01 per share in the second quarter last year. "We benefited from A&K's strong results during the second quarter," said Joe Houssian, chairman, president and chief executive officer. "We continue to build on the adventure-travel business segment, completing the acquisition of the remaining 55% of Alpine Helicopters Ltd., owner of Canadian Mountain Holidays, in late December." MANAGEMENT'S DISCUSSION AND ANALYSIS The following management's discussion and analysis (MD&A) should be read in conjunction with the more detailed MD&A (which includes a discussion of business risks) contained in our June 30, 2004 annual report. Statements contained herein that are not historical facts are forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those expressed or implied by such forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, our ability to implement our business strategies, seasonality, weather conditions, competition, general economic conditions, currency fluctuations, world events and other risks detailed in our filings with the Canadian securities regulatory authorities and the U.S. Securities and Exchange Commission. Our financial statements are prepared in accordance with Canadian generally accepted accounting principles (GAAP). We use several non-GAAP measures to assess our financial performance, such as EBITDA and free cash flow. Such measures do not have a standardized meaning prescribed by GAAP and they may not be comparable to similarly titled measures presented by other companies. We have provided reconciliations between any non-GAAP measures mentioned in this MD&A and our GAAP financial statements. These non-GAAP measures are referred to in this disclosure document because we believe they are indicative measures of a company's performance and are generally used by investors to evaluate companies in the resort industry. Additional information relating to our company, including our annual information form, is on SEDAR at http://www.sedar.com/. The date of this interim MD&A is February 7, 2005. THREE MONTHS ENDED DECEMBER 31, 2004 (THE 2004 QUARTER) COMPARED WITH THREE MONTHS ENDED DECEMBER 31, 2003 (THE 2003 QUARTER) Total revenue for the 2004 quarter was $436.2 million compared with $350.0 million for the 2003 quarter. Total Company EBITDA increased 10% from $52.0 million to $57.3 million. Net income before the after-tax cost of expensing the call premium and unamortized costs on senior notes redeemed was $16.1 million or $0.34 per share in the 2004 quarter compared with $10.6 million or $0.22 per share in 2003 quarter. We redeemed senior notes in both quarters and expensed $28.1 million of call premium and other costs in the 2004 quarter and $12.1 million in the 2003 quarter. After expensing the call premium and unamortized costs on senior notes redeemed, we incurred a net loss of $8.0 million or $0.17 per share in the 2004 quarter compared with net income of $0.2 million or $0.01 per share in the 2003 quarter. REVIEW OF RESORT AND TRAVEL OPERATIONS Resort and travel operations revenue increased from $111.3 million in the 2003 quarter to $195.3 million in the 2004 quarter. On July 2, 2004, we acquired a 67% interest in Abercrombie & Kent (A&K), a worldwide luxury adventure-travel company, and we consolidated A&K's results from the acquisition date. A&K generated revenue of $67.7 million in the 2004 quarter, principally from sales of travel tours. On December 15, 2004, we also acquired the remaining 55% of Alpine Helicopters that we did not already own. Given the late timing of this acquisition and since any difference was not material, we continued to consolidate 45% of Alpine's revenue and expenses for the full 2004 quarter and we will make catch-up adjustments in our third quarter financial statements. Excluding A&K, resort and travel operations revenue increased 15% to $127.6 million. Revenue from the mountain resorts increased from $102.3 million to $116.9 million while revenue from the warm-weather resorts increased from $9.0 million to $10.7 million. The $14.6 million increase in mountain resort revenue was due mainly to a 7% increase in skier visits, with increases at all resorts except for Whistler Blackcomb, Stratton and Mountain Creek. Skier visits increased 5% at our eastern resorts and 8% at our western resorts. Although the season started slowly at most of our resorts in the 2004 quarter due to warm temperatures and lack of snow at both the resorts and in their primary markets, we experienced similar conditions last year, particularly in the East. The rise in the value of the Canadian dollar from an average rate of US$0.75 in the 2003 quarter to US$0.80 in the 2004 quarter increased reported mountain resort revenue by $3.5 million. Revenue per skier visit, adjusted for a constant Canadian dollar exchange rate, increased 3% in the 2004 quarter. Our eastern resorts saw a 1% decline in revenue per skier visit due mainly to an increase in lower yielding season pass visits at Blue Mountain. At our western resorts, revenue per skier visit increased 6% due to a relative shift in the mix of visitors from regional and day visitors to destination visitors, who typically purchase higher yielding tickets and spend more on non-ticket services. The $1.7 million or 19% increase in revenue from the warm-weather resorts in the 2004 quarter was primarily due to a 39% increase in occupied room nights at Sandestin, which drove higher retail, food and beverage, and golf revenue. The breakdown of resort and travel operations revenue by major business component was as follows: 2004 2003 (MILLIONS) QUARTER QUARTER INCREASE CHANGE(%) ------------------------------------------------------------------------- Mountain operations $53.7 $49.2 $4.5 9% Retail and rental shops 28.2 23.6 4.6 19% Food and beverage 17.9 15.6 2.3 15% Ski school 11.6 9.9 1.7 17% Golf 4.6 3.3 1.3 39% Travel tours 66.3 - 66.3 n/a Other 13.0 9.7 3.3 34% ------------------------------------------------------------- $195.3 $111.3 $84.0 75% ------------------------------------------------------------- ------------------------------------------------------------- Resort and travel operations expenses increased from $89.8 million in the 2003 quarter to $164.8 million in the 2004 quarter, of which $62.7 million was due to the inclusion of A&K in our results. Excluding A&K, resort and travel operations expenses were $102.1 million in the 2004 quarter. Mountain resort expenses increased by $10.3 million to $87.9 million due mainly to the increased skier visits at our resorts, increased general and administrative costs of the recently formed Leisure and Travel Group and the impact on reported expenses of the higher Canadian dollar. Expenses at the warm-weather resorts increased by $2.0 million to $14.2 million due mainly to higher business volumes at Sandestin. Resort and travel operations EBITDA increased from $21.4 million in the 2003 quarter to $30.5 million in the 2004 quarter. The acquisition of A&K added $5.0 million to EBITDA while the impact of increased skier visits and other factors increased it by a further $4.1 million. REVIEW OF MANAGEMENT SERVICES Management services revenue increased from $24.4 million in the 2003 quarter to $36.6 million in the 2004 quarter. Strong resale markets at Sandestin and Stratton and higher sales fees from third-party developers enabled Playground (our real estate sales business) to increase its sales fees by $6.7 million and development and sales services fees charged to Leisura increased by $3.0 million as we had more projects under management. The balance of the increase in management services revenue in the 2004 quarter was derived mainly from lodging and property management fees due to a 19% increase in occupied room nights across our resorts. Occupied room nights increased at all resorts except for Stratton and Snowshoe and the growth was particularly strong at Sandestin and Mammoth. Management services expenses increased from $20.9 million in the 2003 quarter to $29.4 million in the 2004 quarter due to the higher volume of activity. EBITDA from management services more than doubled from $3.5 million in the 2003 quarter to $7.2 million in the 2004 quarter, due mainly to significantly increased profit on Playground and Leisura fees. REVIEW OF REAL ESTATE OPERATIONS Revenue from real estate development was $201.0 million in the 2004 quarter compared with $213.7 million in the 2003 quarter. Revenue for the 2004 quarter included $109.2 million from the sale of commercial properties at seven of our resort villages to a partnership in which CNL Income Properties, Inc., a real estate investment trust, is an 80% partner and we are a 20% partner. We also sold one project to Leisura for $14.5 million in the 2004 quarter compared with four projects for $44.0 million in the 2003 quarter. Excluding the sale of commercial properties and sales to Leisura, revenue generated by Intrawest Placemaking (our resort development business) decreased, as expected, from $161.3 million to $68.4 million while revenue generated by Intrawest Resort Club (our vacation ownership business) increased from $8.4 million to $8.9 million. Intrawest Placemaking closed 179 units in the 2004 quarter compared with 341 units in the 2003 quarter. The timing of unit closings is tied to a significant degree to construction completion and only one project completed construction in the 2004 quarter, allowing the closing of 90 units whereas four projects completed construction in the 2003 quarter, allowing the closing of 238 units. The average price per closed unit was $382,000 in the 2004 quarter, down from $473,000 in the 2003 quarter mainly due to unit type and resort mix. Relatively more single-family lots (25% of units versus 6%) and relatively fewer townhomes (9% of units versus 20%) were closed in the 2004 quarter than the 2003 quarter. Single-family lots typically have much lower sales prices than townhomes. In addition, the average price per closed unit in the 2003 quarter was increased by closings at two high-end fractional Storied Places properties at Whistler and Snowmass. The profit contribution from real estate development decreased to $14.3 million in the 2004 quarter from $18.4 million in the 2003 quarter due mainly to the lower number of closings. The contribution in the 2004 quarter includes profit on land sales to Leisura and equity income from Leisura, which are recognized on a percentage-of-completion basis, as well as a loss of $1.2 million on the sale of commercial properties at two resorts. We sold the commercial properties at the other five resorts at an aggregate gain of $10.4 million, however GAAP requires that gains be deferred, due to the sale and leaseback and equity accounting rules, while losses are recognized immediately. REVIEW OF CORPORATE OPERATIONS Interest and other income increased from $0.7 million in the 2003 quarter to $1.2 million in the 2004 quarter due mainly to higher interest income, including interest on notes to Leisura for project sales. Interest expense was $11.8 million in the 2004 quarter, down from $12.3 million in the 2003 quarter due to lower average debt levels and lower interest rates. During the 2004 quarter we redeemed $359.9 million of 10.5% senior notes and issued $329.9 million of 7.50% and 6.875% senior notes, resulting in annual interest savings of approximately $12 million. A significant portion of these savings will be reflected in reduced interest capitalized to real estate properties, which will increase income when the real estate properties are sold. Similarly in the 2003 quarter we redeemed $200 million 9.75% senior notes and issued $350 million 7.50% senior notes (using the excess proceeds to pay down our senior credit facility). As noted earlier, we expensed $28.1 million and $12.1 million of call premium and other costs, respectively, in the 2004 and 2003 quarters in connection with these redemptions. Depreciation and amortization expense was $14.7 million in the 2004 quarter, up from $11.5 million in the 2003 quarter due mainly to the inclusion of $1.2 million of depreciation and amortization at A&K, $0.5 million to amortize costs related to a business that was sold by RezRez and depreciation of capital expenditures made during the past year. In addition, the higher Canadian dollar increased reported depreciation of Canadian assets by $0.4 million in the 2004 quarter. Corporate general and administrative (G&A) expenses increased slightly from $5.4 million in the 2003 quarter to $5.5 million in the 2004 quarter. Higher compensation costs (including the cost of expensing stock options), increased corporate governance expenses, the cost of complying with privacy legislation and the impact on reported G&A of the stronger Canadian dollar offset a decline in corporate G&A expenses resulting from the transfer of personnel to the newly formed Leisure and Travel Group and the inclusion of their G&A expenses in resort and travel operations expenses. Non-controlling interest was $2.2 million in the 2004 quarter, the same as the 2003 quarter as lower non-controlling interest at Whistler Blackcomb, related mainly to reduced real estate closings, was offset by the inclusion of non-controlling interest in A&K. SIX MONTHS ENDED DECEMBER 31, 2004 (THE 2004 PERIOD) COMPARED WITH SIX MONTHS ENDED DECEMBER 31, 2003 (THE 2003 PERIOD) Total revenue for the 2004 period was $642.7 million compared with $626.6 million for the 2003 period. Total Company EBITDA decreased from $77.5 million to $73.4 million as increased EBITDA, mainly from the acquisition of A&K, was offset by reduced EBITDA due to the timing of real estate closings. Net income before the after-tax cost of expensing the call premium and unamortized costs on senior notes redeemed was $9.4 million or $0.20 per share in the 2004 period compared with $11.6 million or $0.24 per share in the 2003 period. We redeemed senior notes in both periods and expensed $28.1 million in the 2004 period and $12.1 million in the 2003 period of call premium and other costs. After expensing the call premium and unamortized costs on senior notes redeemed, we incurred a net loss of $14.7 million or $0.31 per share in the 2004 period compared with net income of $1.2 million or $0.02 per share in the 2003 period. REVIEW OF RESORT AND TRAVEL OPERATIONS Resort and travel operations revenue increased from $165.6 million in the 2003 period to $324.6 million in the 2004 period. The acquisition of A&K in July 2004 increased resort and travel operations revenue by $138.2 million and the impact of the higher Canadian dollar increased reported revenue by a further $5.1 million. On a same-business, constant exchange rate basis, mountain resort revenue increased by $13.1 million due mainly to the 7% increase in skier visits described above and strong growth in summer revenue at many resorts, particularly Whistler Blackcomb, Tremblant and Mammoth. Revenue from the warm-weather resorts (on a constant exchange rate basis) increased by $2.6 million in the 2004 period due mainly to a 20% increase in occupied room nights at Sandestin, which drove higher golf, food and beverage, and activities revenue. EBITDA from resort and travel operations increased from $24.9 million in the 2003 period to $37.6 million in the 2004 period. The acquisition of A&K increased EBITDA by $13.3 million and other factors, particularly increased G&A expenses incurred as a result of the formation of the Leisure and Travel Group, reduced it by $0.6 million. A&K's business is strongest in the first half of our fiscal year and its EBITDA for this period is not indicative of EBITDA for the remaining two quarters. REVIEW OF MANAGEMENT SERVICES Management services revenue increased 47% from $48.8 million in the 2003 period to $71.7 million in the 2004 period. Sales fees earned by Playground from third-party developers increased by $11.9 million due to the accelerated timing of real estate closings on newly constructed projects and to strong resales activity, and development services fees charged to Leisura increased by $7.2 million as more projects were under management. The balance of the increase in management services revenue was mainly due to higher lodging and property management fees as a result of a 12% increase in occupied room nights across our resorts in the 2004 period. The growth in revenues increased EBITDA from management services from $6.1 million in the 2003 period to $12.9 million in the 2004 period. REVIEW OF REAL ESTATE OPERATIONS Revenue from real estate development was $240.6 million in the 2004 period compared with $407.0 million in the 2003 period. As discussed above, revenue for the 2004 period included $109.2 million from the sale of commercial properties to a partnership with a real estate investment trust. We also sold two projects to Leisura for $19.8 million in the 2004 period, down from eight projects for $92.8 million in the 2003 period. Excluding the sale of commercial properties and sales to Leisura, revenue generated by Intrawest Placemaking decreased from $293.4 million to $91.4 million while revenue generated by Intrawest Resort Club decreased from $20.8 million to $20.2 million. Intrawest Placemaking closed 221 units in the 2004 period compared with 658 units in the 2003 period, reflecting the timing of construction completions as well as the impact of selling projects to Leisura (and closings of units in these projects being excluded from the Placemaking closings). For the fiscal year we expect to close about 600 units, down from 1,334 units in fiscal 2004. The profit contribution from real estate development decreased from $32.9 million in the 2003 period to $19.8 million in the 2004 period mainly due to the lower number of closings and to the $1.2 million loss on sale of commercial properties as discussed above. REVIEW OF CORPORATE OPERATIONS Interest and other income was $3.2 million in the 2004 period, down from $5.1 million in the 2003 period mainly because we collected $2.4 million in the 2003 period for fuel spill remediation costs expended in prior years at Mammoth. Interest expense was $23.1 million in the 2004 period, up from $22.2 million in the 2003 period. Interest incurred was 12% lower in the 2004 period (due to lower average debt levels and lower interest rates), however 23% less interest was capitalized to real estate (partly due to the sale of projects to Leisura). In addition, we consolidated $0.8 million of interest in connection with the acquisition of A&K. Depreciation and amortization expense increased from $21.6 million in the 2003 period to $26.0 million in the 2004 period due mainly to the inclusion of $2.8 million of depreciation and amortization at A&K and depreciation of capital expenditures made during the past year. In addition, the higher Canadian dollar increased reported depreciation of Canadian assets by $0.7 million in the 2004 period. Corporate general and administrative expenses increased from $9.5 million in the 2003 period to $9.9 million in the 2004 period. Higher compensation costs (including $0.4 million to expense the cost of stock options further to our change in accounting policy) increased corporate governance and privacy compliance expenses and the impact on reported G&A of the stronger Canadian dollar offset a decline in corporate G&A expenses resulting from the transfer of personnel to the newly formed Leisure and Travel Group and the inclusion of their G&A expenses in resort and travel operations expenses. Non-controlling interest was $3.1 million in the 2004 period, up from $2.1 million in the 2003 period as lower non-controlling interest at Whistler Blackcomb, related mainly to reduced real estate closings, was offset by the inclusion of non-controlling interest in A&K. LIQUIDITY AND CAPITAL RESOURCES Our ability to generate free cash flow is important to our long-term success. Free cash flow is the amount of cash flow generated by our businesses that is available to be used to invest in new acquisition opportunities or to repay debt or potentially to buy back shares or make distributions to shareholders. We generated $57.1 million of free cash flow in the 2004 quarter that we primarily used to acquire the remaining 55% of shares of Alpine Helicopters that we did not already own, up from free cash flow of $49.1 million in the 2003 quarter that we used mainly to pay down debt. For the 2004 period we now have negative free cash flow of $33.9 million compared with positive free cash flow of $41.7 million in the 2003 period due mainly to the timing of real estate closings. The following table identifies the major sources and uses of cash in the 2004 and 2003 quarters and periods. This table should be read in conjunction with the Consolidated Statements of Cash Flows, which are more detailed as prescribed by GAAP. 2004 2003 2004 2003 (MILLIONS) Quarter Quarter Change Period Period Change ------------------------------------------------------------------------- Funds from operations $ 12.5 $ 17.6 $ (5.1) $ 18.7 $ 30.4 $(11.7) Net recovery of (investment in) real estate properties 36.1 73.4 (37.3) (6.4) 98.6 (105.0) Acquisitions, resort capex and other investments (80.1) (36.2) (43.9) (88.9) (47.7) (41.2) Net cash flow from long-term receivables and working capital 53.0 (5.8) 58.8 22.7 (25.4) 48.1 ------------------------------------------------------------------------- Net cash flow from operating and investing activities 21.5 49.0 (27.5) (53.9) 55.9 (109.8) Net financing inflows (outflows) 22.7 (28.2) 50.9 81.4 (72.7) 154.1 ------------------------------------------------------------------------- Increase (decrease) in cash $ 44.2 $ 20.8 $ 23.4 $ 27.5 $(16.8) $ 44.3 ------------------------------------------------------------------------- ------------------------------------------------------------------------- The negative swings in funds from operations and net real estate investment for the quarter and the year-to-date were mainly due to the lower number of real estate closings in 2004, as described above. The timing of project sales to Leisura also increased our recovery of real estate properties in 2003 more than 2004. Funds from operations were also reduced by the higher call premium costs to redeem senior notes in 2004. These negative swings in cash flow were partially offset by the sale of commercial properties in the 2004 quarter, which generated $64.2 million of cash (before making our 20% investment in the partnership that purchased the properties). In order to facilitate the closing of the U.S. tranche of the commercial sale, we provided bridge financing of $45 million, which the purchaser is obligated to refinance. Acquisitions, resort capital expenditures (capex) and other investments used $80.1 million cash in the 2004 quarter compared with $36.2 million in the 2003 quarter. The major uses were as follows: - We paid $41.6 million for the acquisition of 55% of the shares of Alpine Helicopters that we did not already own. Net of cash acquired in the acquisition, our investment was $36.7 million. We did not make any acquisitions in the 2003 quarter. - We spent $24.4 million on resort and travel capex in the 2004 quarter, up from $22.6 million in the 2003 quarter. We expect to spend a total of approximately $70 million to $80 million on resort and travel capex during fiscal 2005, somewhat higher than the $69.3 million spent in fiscal 2004, due mainly to capital projects of our recently acquired businesses and expenditures to standardize technology across resorts. - We spent $9.4 million in the 2004 quarter for our 20% interest in the partnership that purchased our commercial properties. We will account for this investment on an equity basis. - We incurred costs of $5.9 million in the 2004 quarter in connection with the issue of senior notes, down from $6.9 million in the 2003 quarter. These costs are amortized over the term of the notes. - We recovered $0.5 million of our investment in Leisura in the 2004 quarter, being our equity for the one project that was purchased by Leisura in the quarter, net of reimbursement of working capital loans. In the 2003 quarter we invested $24.5 million in connection with projects purchased by Leisura. For the 2004 period, expenditures on acquisitions, capex and other investments now total $87.7 million, up from $47.7 million in the 2003 period. In addition to the amounts described above, we spent $24.6 million and $25.8 million, respectively, on capex, investments in Leisura and other assets in the first three months of the 2004 and 2003 periods. These expenditures were partially offset by $15.7 million of cash acquired on the acquisition of 67% of A&K, net of our acquisition cost in the first three months of the 2004 period, and $14.2 million of proceeds from sales of non-core assets (including our investment in Compagnie des Alpes) in the first three months of the 2003 period. Long-term receivables and working capital provided $53.0 million of cash in the 2004 quarter compared with a use of $5.8 million of cash in the 2003 quarter. This represents the cash flow from changes in receivables, other assets, payables and deferred revenue. The shift was mainly due to a significant increase in deferred revenue from season pass sales, tour bookings at A&K, real estate deposits (particularly at Les Arcs) and the deferred gain on the sale of commercial properties. In total, our operating and investing activities provided $21.5 million of cash in the 2004 quarter, down from $49.0 million in the 2003 quarter. For the 2004 period, operating and investing activities have used $53.9 million of cash, which we funded primarily by drawing on our senior credit facility, compared with a cash inflow of $55.9 million in the 2003 period, which we applied primarily to pay down our senior credit facility. We have a number of revolving credit facilities to meet our capital needs. Our main source of liquidity, our senior credit facility, was renewed during the 2004 period for a term of three years and its capacity was increased to $425 million. At December 31, 2004, we had drawn $217.5 million under this facility and we had also issued letters of credit for $61.9 million, leaving $145.6 million available to cover future liquidity requirements. Several of our resorts also have lines of credit in the range of $5 million to $10 million each to fund seasonal cash requirements. Financing for real estate construction is generally provided by one-off project-specific loans. We believe that these credit facilities, combined with cash on hand and internally generated cash flow, are sufficient to finance all our normal operating needs. This is particularly the case at this time of year as we are entering the peak season at our mountain resorts in the third quarter and our real estate closings are disproportionately weighted towards the fourth quarter. In October 2004 we purchased $359.9 million or approximately 90% of our 10.5% senior notes due February 1, 2010. The funds used to make this payment were provided mainly by a new issue of $225 million 7.5% senior notes due October 15, 2013 and Cdn$ 125 million 6.875% senior notes due October 15, 2009. We redeemed the remaining $34.3 million 10.5% senior notes on February 1, 2005, drawing on our senior credit facility to do so. With the refinancing of our senior notes and renewal of our senior credit facility now completed, the major objectives we set at the beginning of the fiscal year with respect to our capital structure have been satisfied. Additional Information ---------------------- Total Company EBITDA -------------------- 2004 2003 2004 2003 (MILLIONS) Quarter Quarter Period Period ------------------------------------------------------------------------- Cash flow provided by operating activities $ 101.6 $ 85.2 $ 35.1 $ 103.6 Add (deduct): Changes in non-cash operating assets and liabilities (89.1) (67.6) (16.4) (73.2) Current income tax expense (0.9) 0.4 (1.9) 0.5 Interest expense 11.8 12.3 23.1 22.2 Interest in real estate costs 10.7 14.0 13.0 23.0 Call premium and unamortized costs on senior notes redeemed 28.1 12.1 28.1 12.1 ------------------------------------------------------------------------- 62.2 56.4 81.0 88.2 Interest and other income, net of non-cash items (4.9) (4.4) (7.6) (10.7) ------------------------------------------------------------------------- Total Company EBITDA $ 57.3 $ 52.0 $ 73.4 $ 77.5 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Resort and Travel Operations EBITDA ----------------------------------- 2004 2003 2004 2003 (MILLIONS) Quarter Quarter Period Period ------------------------------------------------------------------------- Resort and travel operations revenue $ 195.3 $ 111.3 $ 324.6 $ 165.6 Resort and travel operations expenses 164.8 89.9 287.0 140.7 ------------------------------------------------------------------------- Resort and travel operations EBITDA $ 30.5 $ 21.4 $ 37.6 $ 24.9 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Management Services EBITDA -------------------------- 2004 2003 2004 2003 (MILLIONS) Quarter Quarter Period Period ------------------------------------------------------------------------- Management services revenue $ 36.6 $ 24.4 $ 71.7 $ 48.8 Management services expenses 29.4 20.9 58.8 42.7 ------------------------------------------------------------------------- Management services EBITDA $ 7.2 $ 3.5 $ 12.9 $ 6.1 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Net Income Before Expenses to Redeem Senior Notes ------------------------------------------------- 2004 2003 2004 2003 (MILLIONS) Quarter Quarter Period Period ------------------------------------------------------------------------- Net income (loss) $ (8.0) $ 0.2 $ (14.7) $ 1.2 Call premium and unamortized costs of senior notes redeemed, net of income tax 24.1 10.4 24.1 10.4 ------------------------------------------------------------------------- Net income before expenses to redeem senior notes $ 16.1 $ 10.6 $ 9.4 $ 11.6 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Free Cash Flow -------------- 2004 2003 2004 2003 (MILLIONS) Quarter Quarter Period Period ------------------------------------------------------------------------- Cash flow provided by operating activities $ 100.3 $ 85.2 $ 33.8 $ 103.6 Expenditures on resort and travel operations assets (24.4) (22.6) (41.8) (38.0) Expenditures on other assets (19.3) (6.0) (24.5) (9.8) Investment in Leisura 0.5 (7.5) (1.4) (14.1) ------------------------------------------------------------------------- Free cash flow $ 57.1 $ 49.1 $ (33.9) $ 41.7 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Quarterly Financial Summary (in millions, except per share amounts) Q2-05 Q1-05 Q4-04 Q3-04 Q2-04 Q1-04 Q4-03 Q3-03 ------------------------------------------------------------------------- Total revenue $436.2 $206.5 $487.2 $437.9 $350.0 $276.6 $371.4 $404.9 Net income (loss) (8.0) (6.7) 2.6 56.2 0.2 0.9 (14.4) 56.8 PER COMMON SHARE: Net income (loss) Basic (0.17) (0.14) 0.05 1.18 0.01 0.02 (0.31) 1.20 Diluted (0.17) (0.14) 0.05 1.17 0.01 0.02 (0.30) 1.19 Outstanding Share Data As at February 7, 2005, we have issued and there are outstanding 48,015,826 common shares and stock options exercisable for 4,125,068 common shares. CONSOLIDATED BALANCE SHEETS (in thousands of United States dollars) DECEMBER 31, JUNE 30, 2004 2004 (UNAUDITED) (AUDITED) ------------------------------------------------------------------------- ASSETS CURRENT ASSETS: Cash and cash equivalents $ 137,310 $ 109,816 Amounts receivable 143,527 142,427 Other assets 226,048 94,105 Resort properties 377,526 412,343 Future income taxes 19,151 18,638 ------------------------------------------------------------------------- 903,562 777,329 Resort and travel operations 1,066,384 940,949 Resort properties 409,489 368,309 Amounts receivable 100,299 52,958 Investment in and advances to Leisura 56,157 50,899 Other assets 87,202 65,306 Goodwill 30,549 - ------------------------------------------------------------------------- $ 2,653,642 $ 2,255,750 ------------------------------------------------------------------------- ------------------------------------------------------------------------- LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Amounts payable $ 271,788 $ 209,037 Deferred revenue and deposits 259,710 87,649 Bank and other indebtedness 132,569 109,685 ------------------------------------------------------------------------- 664,067 406,371 Bank and other indebtedness 952,919 849,132 Deferred revenue and deposits 79,653 82,211 Future income taxes 89,752 87,461 Non-controlling interest in subsidiaries 42,289 43,266 ------------------------------------------------------------------------- 1,828,680 1,468,441 SHAREHOLDERS' EQUITY: Capital stock 465,435 463,485 Retained earnings 301,144 318,883 Foreign currency translation adjustment 58,383 4,941 ------------------------------------------------------------------------- 824,962 787,309 ------------------------------------------------------------------------- $ 2,653,642 $ 2,255,750 ------------------------------------------------------------------------- ------------------------------------------------------------------------- CONSOLIDATED STATEMENTS OF OPERATIONS AND RETAINED EARNINGS (in thousands of United States dollars, except per share amounts)(unaudited) THREE MONTHS SIX MONTHS ENDED DECEMBER 31 ENDED DECEMBER 31 2004 2003 2004 2003 ------------------------------------------------------------------------- RESORT AND TRAVEL OPERATIONS: Revenue $ 195,283 $ 111,278 $ 324,583 $ 165,629 Expenses 164,790 89,841 287,014 140,734 ------------------------------------------------------------------------- Resort and travel operations contribution 30,493 21,437 37,569 24,895 ------------------------------------------------------------------------- MANAGEMENT SERVICES: Revenue 36,608 24,355 71,688 48,839 Expenses 29,397 20,897 58,767 42,764 ------------------------------------------------------------------------- Management services contribution 7,211 3,458 12,921 6,075 ------------------------------------------------------------------------- REAL ESTATE DEVELOPMENT: Revenue 200,950 213,691 240,571 406,979 Expenses 188,763 195,287 223,313 374,032 ------------------------------------------------------------------------- 12,187 18,404 17,258 32,947 Income from equity accounted investment 2,128 - 2,588 - ------------------------------------------------------------------------- Real estate development contribution 14,315 18,404 19,846 32,947 ------------------------------------------------------------------------- Income before undernoted items 52,019 43,299 70,336 63,917 Interest and other income 1,199 657 3,244 5,110 Interest expense (11,768) (12,257) (23,140) (22,151) Corporate general and administrative expenses (5,488) (5,363) (9,941) (9,477) Depreciation and amortization (14,686) (11,480) (26,023) (21,563) Call premium and unamortized costs of senior notes redeemed (28,069) (12,074) (28,069) (12,074) ------------------------------------------------------------------------- Income (loss) before income taxes and non-controlling interest (6,793) 2,782 (13,593) 3,762 Provision for income taxes 941 (381) 1,942 (528) Non-controlling interest (2,172) (2,163) (3,051) (2,058) ------------------------------------------------------------------------- Net income (loss) (8,024) 238 (14,702) 1,176 Retained earnings, beginning of period 312,205 265,578 318,883 264,640 Dividends (3,037) (2,836) (3,037) (2,836) ------------------------------------------------------------------------- Retained earnings, end of period $ 301,144 $ 262,980 $ 301,144 $ 262,980 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Net income (loss) per common share: Basic and diluted $ (0.17) $ 0.01 $ (0.31) $ 0.02 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Weighted average number of common shares outstanding (in thousands) Basic 47,645 47,586 47,634 47,580 Diluted 47,645 47,841 47,634 47,787 ------------------------------------------------------------------------- ------------------------------------------------------------------------- CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands of United States dollars)(unaudited) THREE MONTHS SIX MONTHS ENDED DECEMBER 31 ENDED DECEMBER 31 2004 2003 2004 2003 ------------------------------------------------------------------------- CASH PROVIDED BY (USED IN): OPERATIONS: Net income (loss) $ (8,024) $ 238 $ (14,702) $ 1,176 Items not affecting cash: Depreciation and amortization 14,686 11,480 26,023 21,563 Non-cash costs of senior notes redeemed 4,371 2,324 4,371 2,324 Income from equity accounted investments (2,128) - (2,588) - Amortization of financing costs 685 874 1,275 1,659 Stock-based compensation 230 - 440 - Non-controlling interest 2,172 2,163 3,051 2,058 Loss on asset disposals 208 - 208 676 ------------------------------------------------------------------------- Funds from operations 12,496 17,586 18,651 30,447 Recovery of costs through real estate sales 143,763 195,287 178,313 374,032 Acquisition and development of properties held for sale (107,649) (121,940) (184,682) (275,485) Changes in long-term amounts receivable, net 3,766 (1,141) (1,319) 1,175 Changes in non-cash operating working capital 49,209 (4,629) 24,121 (26,556) ------------------------------------------------------------------------- 101,585 85,163 35,084 103,613 FINANCING: Bank and other borrowings, net 28,173 (16,040) 88,940 (58,960) Issue of common shares for cash 663 32 937 250 Dividends paid (3,037) (2,836) (3,037) (2,836) Distributions to non-controlling interest (3,131) (9,386) (5,446) (11,186) ------------------------------------------------------------------------- 22,668 (28,230) 81,394 (72,732) ------------------------------------------------------------------------- INVESTMENTS: Proceeds from (expenditures on): Resort and travel operations assets (24,373) (22,620) (41,795) (38,013) Investment in Leisura 468 (7,494) (1,435) (14,091) Other assets (19,271) (6,041) (24,516) (9,805) Business acquisitions, net of cash acquired (36,974) - (21,297) - Asset disposals 59 - 59 14,222 ------------------------------------------------------------------------- (80,091) (36,155) (88,984) (47,687) ------------------------------------------------------------------------- Increase (decrease) in cash and cash equivalents 44,162 20,778 27,494 (16,806) Cash and cash equivalents, beginning of period 93,148 89,248 109,816 126,832 ------------------------------------------------------------------------- Cash and cash equivalents, end of period $ 137,310 $ 110,026 $ 137,310 $ 110,026 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Intrawest Corporation (IDR:NYSE; ITW:TSX) is one of the world's leading destination resort and adventure-travel companies. Intrawest has interests in 10 mountain resorts in North America's most popular mountain destinations, including Whistler Blackcomb, a host venue for the 2010 Winter Olympic and Paralympic Games. The company owns Canadian Mountain Holidays, the largest heli-skiing operation in the world, and a 67% interest in Abercrombie & Kent, the world leader in luxury adventure travel. The Intrawest network also includes Sandestin Golf and Beach Resort in Florida and Club Intrawest - a private resort club with nine locations throughout North America. Intrawest is developing five additional resort village developments at locations in North America and Europe. Intrawest is headquartered in Vancouver, British Columbia. For more information, visit http://www.intrawest.com/. For additional information, please contact Mr. John Currie, chief financial officer, at (604) 669-9777 or Mr. Tim McNulty, director, investor relations at (604) 623-6620 or at If you would like to receive future news releases by email, please contact DATASOURCE: Intrawest Corporation CONTACT: Mr. John Currie, chief financial officer, at (604) 669-9777 or Mr. Tim McNulty, director, investor relations at (604) 623-6620 or at . If you would like to receive future news releases by email, please contact ; To request a free copy of this organization's annual report, please go to http://www.newswire.ca/ and click on reports@cnw.

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