Real estate, operation sales boost Intrawest bottom line 

Whistler-Blackcomb numbers a positive note for company as it prepares to go private

By Andrew Mitchell

Vancouver-based Intrawest Corporation, the parent company of Whistler-Blackcomb, summed up its fiscal year this week with reported profits of $115.2 million U.S. for the year ending June 30.

While that kind of news usually provides a boost in share price, traders greeted the year-end report with a collective yawn. Most expect the purchase of Intrawest by Fortress Investment Group of New York for $2.8 billion U.S. to be approved at Intrawest’s Oct. 17 shareholder meeting, after which point the company will no longer be publicly traded.

The profits reflect gains made in several areas, including the sale of real estate and operations by Intrawest.

“Our fiscal 2006 performance was highlighted by the sale of a majority of our interests in both our real estate and mountain operations at Mammoth Mountain, California, which demonstrates our proven ability to create value through acquiring and developing world-class destination resort properties,” said Joe Houssian, chairman and chief executive officer at Intrawest.

The sale of Mammoth back to its parent company generated an after tax gain of $61.3 million for the company. Intrawest still retains a minority interest in the resort.

“We also made considerable progress during the year in strengthening our leadership position in the destination resort and adventure travel industries through the continued expansion of award-winning Abercrombie & Kent, as well as extending our business reach into Europe.”

Whistler-Blackcomb and other resort operations also contributed to the bottom line. Visits to Intrawest’s nine North American resorts, including Whistler-Blackcomb and Panorama, were up six per cent to 6.69 million skier visits, although numbers at eastern resorts were down about three per cent — partly due to a strike by 1,500 unionized workers at Mont Tremblant that slowed traffic to the resort in the early Christmas holiday season, and partly due to conditions. Overall, revenues from mountain operations were up $21.3 million over the previous year.

Whistler-Blackcomb skier visits were up 39 per cent and revenues up 33 per cent in 2005-06 compared to the previous season. The 2004-05 winter is considered to be one of the resorts’ worst years with the lowest snowpack in about 40 years through January and February, although things turned around in March.

However, the report confirms that the increase was largely regional, accounting for 42 per cent of room nights, while the long-haul U.S. market decreased 32 per cent. The end of year report attributes the drop to the higher Canadian dollar, higher cost flights to Vancouver, excellent conditions at western U.S. resorts, and poor weather in Whistler from late November until Christmas. Things turned around on Boxing Day, and January was the snowiest month on record for Whistler.

Copper Mountain and Winter Park in Colorado benefited from their best snow conditions in several years, with numbers up eight per cent over the previous year.

Helicopter operations also reported strong results, with revenues up $2.7 million. That bodes well for Whistler-Blackcomb’s recent purchase of Whistler Heli-Skiing.


Fiscal 2006 Highlights:

• Intrawest earned $1.61 billion in revenue

• Resort and travel operation revenue increased 16 per cent to $936.1 million, led be Abercrombie & Kent adventure travel. A&K’s own revenues were up 18 per cent over the previous year to $294.9 million.

• Real estate presales revenue of $534 million was reported in December of 2005, a record month for Intrawest.

• The sale of Lot Three Ka-anapali, a 26-acre beachfront property in Maui, netted a pre-tax profit of $25.4 million.

• Overall, Intrawest reported $55.3 million in income from operations this past fiscal year, more than double the $24.1 million reported the previous year.

• Intrawest expanded its presence in Europe by adding three village development locations in France and one in Switzerland.

• Based on revenues and earnings, Intrawest will pay a dividend of $0.08 per share on Oct. 2.

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