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Intrawest Corporation Reports Net income of $32.6 million for Fiscal Year Ended
June 30, 2005; Results of Abercrombie & Kent During First Year
of Ownership Exceeds Expectations
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All dollar amounts are in U.S. currency
  • Further execution of real estate joint venture business model delivers positive free cash flow 
  • Geographic and business line diversification provides offsets to impact of adverse winter weather at British Columbia ski operations
VANCOUVER, Sept. 12, 2005 - Intrawest Corporation, one of the world's leading destination resort and adventure-travel companies, announced today its results for the fiscal year ended June 30, 2005.

"The strong performance of Abercrombie & Kent, the newest member of Intrawest's portfolio, was very gratifying and it speaks to the power of its brand," said Joe Houssian, chairman, president and chief executive officer. "We are also pleased at the acceleration and expansion of our partnering strategy in all phases of real estate development. The joint ventures that we entered into in the fourth quarter are great examples of how this strategy is paying off for our shareholders."

Fiscal 2005 Year End Highlights

  • Record total revenue of $1.68 billion compared with $1.55 billion in 2004
  • Total Company EBITDA of $243.1 million, versus $268.3 million the previous year
  • Strong contribution from Abercrombie & Kent and record results at most of our non-British Columbia resorts offset the impact of the worst weather in 40 years at our British Columbia resort operations
  • Net income of $32.6 million after reflecting a non-recurring expense of $30.2 million to refinance high interest rate senior notes. Going forward, this refinancing is expected to save us approximately $15 million per annum. Net income also reflects a non-recurring  write-down of $17.6 million on our non-resort golf properties, resulting from a strategic decision to focus our golf business on  resort-based and branded operations. This compares with net income of $59.9 million in 2004 after reflecting a non-recurring call premium of $12.1 million to refinance senior notes
  • Earnings per share on a diluted basis were $0.68 ($1.68 before non-recurring items) versus $1.25 ($1.48 before non-recurring items) in 2004
  • Real estate joint venture and sale transactions in the fourth quarter contributed to full year positive free cash flow of $62 million
  • Strong balance sheet with year-end Net Debt to EBITDA ratio of 3.6 times, well within target leverage range
"We have made a commitment to our shareholders to maintain our strong balance sheet and to grow with financial discipline," said John Currie, chief financial officer. "Our 2005 results reflect the successful execution of our financial strategies to deliver on this promise."

MANAGEMENT'S DISCUSSION AND ANALYSIS

The following is an extract of the operations and liquidity and capital resources sections of Management's Discussion and Analysis ("MD&A") for the year ended June 30, 2005. The full text of the MD&A will be included in our Annual Information Form and other corporate filings.

SUMMARY OF FISCAL 2005 OPERATIONS

Fiscal 2005 was a year of both challenges and achievements. Our mountain resorts experienced mixed results as generally good weather conditions in the East and the U.S. west were offset by the most unfavourable weather conditions for the ski industry in 40 years in British Columbia. Sandestin was also tested by the weather, particularly in our first fiscal quarter when several hurricanes impacted its operations. The results of Abercrombie & Kent ("A&K"), during our first year of ownership, far exceeded our expectations as the luxury travel tour business rebounded from several years of contraction brought on by economic and geo-political events. We saw significant growth in our management services businesses in 2005 and demand for our real estate was strong across our resorts. Operating profit from real estate development declined in 2005, as expected, after an unusually high number of closings in 2004 due to the timing of project completions.

These factors combined to reduce Total Company EBITDA to $243.1 million in 2005 from $268.3 million in 2004. After several years of disappointing returns from our stand-alone golf courses, we made the decision to exit this business and reinvest our capital in higher returning businesses. As a result, we had our stand-alone golf operations appraised and recorded a write-down of $17.6 million. We improved our capital structure and lowered our borrowing costs by refinancing $394.4 million of senior notes in 2005, on top of the $200 million of senior notes that we refinanced in 2004. The call premium and other costs to redeem senior notes amounted to $30.2 million in 2005, up from $12.1 million in 2004. The golf asset write-down and refinancing expenses lowered our net income in 2005 to $32.6 million ($0.68 per diluted share) from $59.9 million ($1.25 per diluted share) in 2004.

We were very successful in 2004 in generating free cash flow and reducing our debt. This success continued in 2005 as we increased cash flow from our operating businesses and completed a number of transactions with real estate partners enabling us to realize $62.1 million of free cash flow.

FISCAL 2005 REVIEW OF RESORT AND TRAVEL OPERATIONS

The following table highlights the results of our resort and travel operations business.

                                                                       CHANGE
                                                    2005         2004     (%)
    -------------------------------------------------------------------------
    Skier visits(1)                            7,227,000    7,150,000      1
    Revenue (millions)                            $862.5       $541.3     59
    EBITDA (millions)                             $117.6       $105.1     12
    Margin (%)                                      13.6         19.4

    (1) Skier visits for all resorts are at 100% except Mammoth at 59.5% and
        Blue Mountain at 50%.

Revenue from resort and travel operations was $862.5 million in 2005 compared with $541.3 million in 2004. Revenue from the mountain segment increased from $488.2 million to $545.4 million while revenue from the non- mountain segment increased from $53.1 million to $317.1 million.

Mountain Resort and Travel Operations Revenue

On December 15, 2004, we acquired the remaining 55% of Alpine Helicopters that we did not already own and the incremental revenue in 2005 from our increased ownership interest was $26.6 million. On a same-business basis (i.e., excluding the 55% acquisition of Alpine Helicopters), mountain resort and travel operations revenue increased by $30.6 million in 2005 due to:

    (MILLIONS)
    -------------------------------------------------------------------------
    Impact of higher Canadian dollar on reported revenue               $18.8
    Increase in skier visits                                             4.4
    Increase in revenue per skier visit                                  2.7
    Increase in non-skier visit revenue                                  4.7
    -------------------------------------------------------------------------
                                                                       $30.6
    -------------------------------------------------------------------------

The rise in the value of the Canadian dollar, from an average rate of US$0.74 in 2004 to US$0.80 in 2005, increased reported mountain resort and travel operations revenue by $18.8 million.

Our mountain resorts experienced mixed results in 2005 with a 6% increase in revenue at our eastern Canadian and U.S. resorts and an 11% increase in revenue at our western U.S. resorts being partially offset by a 10% decrease in revenue at our western Canadian resorts. British Columbia endured the most challenging weather for the ski industry in 40 years, with heavy rainfall in mid-January followed by warm, dry conditions through mid-March. Although conditions improved after mid-March, it was too late to change market perceptions and the decline in visits continued in the fourth quarter. As a result, skier visits decreased 14% at Whistler Blackcomb and 7% at Panorama in 2005. Our eastern and western U.S. resorts benefited from strong season pass programs, the maturing of their villages and generally good weather conditions, particularly in the third quarter. Consequently, skier visits increased 7% at our eastern resorts and 9% at our western U.S. resorts. For the company as a whole, skier visits increased 1% in 2005, which increased mountain segment revenue by $4.4 million.

Revenue per skier visit increased moderately from $56.36 in 2004 (after adjusting for the impact of the improvement in the Canadian dollar exchange rate) to $56.74 in 2005. Revenue per skier visit is a function of ticket prices and ticket yields, and revenue from non-ticket sources such as retail and rental stores, ski school, and food and beverage services. Ticket yields reflect the mix of ticket types (e.g., adult, child, season pass and group), the proportion of day versus destination visitors (destination visitors tend to be less price sensitive), and the amount of discounting of full-price tickets in regional markets. Revenue per visit from non-ticket sources is also influenced by the mix of day versus destination visitors, the affluence of the visitor base, and the quantity and type of amenities and services offered at the resort.

Revenue per skier visit from ticket sales (our effective ticket price) decreased 2% from $29.31 to $28.61 due mainly to a 6% decline at our British Columbia resorts as we discounted ticket prices at Whistler Blackcomb and Panorama to compensate for the sub-standard snow conditions. Revenue per visit from non-ticket sources increased 4% from $27.06 to $28.13. The impact on non-ticket revenue per visit of the poor weather at our British Columbia resorts was mitigated by the fact that many visitors, who did not access the mountain for skiing, spent on retail, food and beverage and other services in the base area. The increase in revenue per visit increased mountain segment revenue by $2.7 million in 2005.

For the purposes of this MD&A, non-skier visit revenue for our mountain segment comprises revenue from sources that are not driven by skier visits (i.e., golf and other summer activities at our mountain resorts and revenue from businesses such as Alpine Helicopters and the Intrawest Retail Group). Revenue from golf and other summer activities increased 7% across our mountain resorts from $39.1 million in 2004 to $42.0 million in 2005, led primarily by Whistler Blackcomb (due to strong events business and continued growth in mountain bike park visits) and Tremblant (due to a 32% increase in summer lift rides). Golf rounds at our mountain resorts in 2005 were 2% below 2004, however this was offset by higher revenue per round, resulting in a 4% increase in golf revenue. Revenue at Alpine Helicopters (excluding the impact of our increased ownership interest) decreased 4% in 2005 due to reduced heli-skiing revenue in the weather-challenged third quarter and lower revenue from forest fire-fighting activities in the summer. Strong visit growth in the western U.S. and the opening of a new outlet store in Summit County enabled the Intrawest Retail Group to increase its revenue by 21% in 2005. Overall, on a same-business basis, non-skier visit revenue increased by $4.7 million in 2005.

Non-mountain Resort and Travel Operations Revenue

Non-mountain resort and travel operations revenue increased from $53.1 million in 2004 to $317.1 million in 2005 with the acquisition of A&K in July 2004 accounting for $257.0 million of the increase. The luxury-tour and travel industry experienced a rebound in 2005 after several years of contraction resulting from economic pressures and concerns about geo-political events (terrorism, war and health issues). Revenue at A&K in 2005 increased more than 30% compared with last year, before we acquired our ownership interest.

Most of the balance of the increase in non-mountain resort and travel operations revenue was due to a 15% increase in revenue at Sandestin. Food and beverage revenue at Sandestin increased 42% due to the opening of several new outlets, a significant increase in banquet business and higher occupancy levels at the resort. The continued build out of the village and its growing reputation has positively impacted both individual traveler and conference business.

Golf rounds in 2005 were 10% lower than 2004 at Sandestin (due in part to the hurricanes) and 3% lower at our stand-alone golf courses. Demand for golf has not grown over the past few years and the markets in which our warm- weather golf courses operate are highly competitive. The shortfall in rounds was counterbalanced by higher revenue per round, resulting in a 6% decline in golf revenue at Sandestin and a 5% increase in golf revenue at our stand-alone courses. As described elsewhere in this MD&A, we have decided to exit the stand-alone golf business.

Resort and Travel Operations Revenue Breakdown

Resort and travel operations revenue for the mountain and non-mountain segments combined (as reported and on a same-business, constant exchange rate basis) was broken down by major business component as follows:

                        2005               2005     2004    INCREASE   CHANGE
    (MILLIONS)         REVENUE   NOTE(1) ADJUSTED  REVENUE (DECREASE)     (%)
    -------------------------------------------------------------------------
    Mountain
     operations         $285.4   $(37.5)   $247.9   $250.9    $(3.0)      (1)
    Retail and rental
     shops               110.4     (3.7)    106.7    101.3      5.4        5
    Food and beverage     91.6     (1.9)     89.7     81.9      7.8       10
    Ski school            44.4     (1.5)     42.9     41.7      1.2        3
    Golf                  27.9     (0.4)     27.5     27.3      0.2        1
    Adventure-travel
     tours               257.0   (257.0)        -        -        -        -
    Other                 45.8     (0.3)     45.5     38.2      7.3       19
    ----------------------------------------------------------------
                        $862.5  $(302.3)   $560.2   $541.3    $18.9        3
    ----------------------------------------------------------------
    Note (1) Removes the impact of the increase in the value of the Canadian
             dollar and the acquisitions of A&K and additional 55% of Alpine
             Helicopters.

The decrease in mountain operations revenue was due mainly to declines in ticket revenues at our British Columbia resorts and lower heli-skiing revenue at Alpine Helicopters, partially offset by higher ticket revenues at our other resorts.

The increase in retail and rental revenue was due mainly to a 15% increase at our western U.S. resorts, as a result of excellent conditions and strong visitor growth.

Half of the increase in food and beverage revenue came from Sandestin where we opened several new outlets, achieved higher occupancy levels in the village and increased conference business. The remainder came mainly from a 13% increase in revenue at our western U.S. resorts.

Ski school revenue increased 9% at our western U.S. resorts and 7% at our eastern resorts. These increases were partly offset by a 4% decrease in revenue at our British Columbia resorts.

The small increase in golf revenue resulted from a 4% increase at the mountain resorts partially offset by a 2% decrease at the non-mountain courses as competitive pressures and poor weather at key times reduced the number of rounds played.

The "other" category comprises revenue from a host of miscellaneous activities, such as tubing, tennis, aqua centers, club operations, telephone services and one-off businesses like the marina at Sandestin and the service station at Copper. The 2005 amount included $1.1 million of business interruption insurance for Sandestin due to the hurricanes in the first quarter. The balance of the increase was mainly due to higher club operations revenue, particularly at Stratton and Copper and increased activities and events revenues across most of our resorts.

Resort and Travel Operations Expenses and EBITDA

Resort and travel operations expenses increased from $436.2 million in 2004 to $744.9 million in 2005. The mountain segment increased by $63.2 million to $445.8 million while the non-mountain segment increased by $245.5 million to $299.1 million.

Our acquisition of the remaining 55% of Alpine Helicopters increased mountain resort and travel expenses by $19.7 million and the translation effect of the stronger Canadian dollar increased it by a further $13.8 million. Excluding these two factors, mountain resort and travel expenses increased by $29.7 million (8%) in 2005 due mainly to increased business volumes at our eastern resorts and our western U.S. resorts and higher insurance, marketing and administrative costs. In order to control our third- party costs of insurance, we have a program of self insurance for all our major lines of coverage. In 2005, we chose to adopt a more conservative position and increased our estimated reserves for unreported workers' compensation and general liability claims by $3.0 million. Following on from the formation of the Leisure and Travel Group in May 2004, we introduced several new cross-resort marketing programs that increased mountain segment expenses by $3.5 million in 2005. In addition, as described under Review of Corporate Operations below, we transferred personnel from corporate operations to the Leisure and Travel Group, which increased resort and travel expenses by approximately $5 million in 2005.

The acquisition of A&K added $236.6 million of non-mountain resort and travel operations expenses in 2005. The balance of the increase of $8.9 million in the non-mountain segment was almost entirely due to Sandestin as increased business volumes, and the opening of new retail and food and beverage outlets resulted in higher labor costs and costs of goods sold. In addition, fixed costs at Sandestin rose by $2.1 million resulting mainly from increased resort association fees, workers' compensation insurance, utility costs and rent expense for the new outlets.

EBITDA from resort and travel operations increased 12% from $105.1 million in 2004 to $117.6 million in 2005. The acquisitions of A&K and 55% of Alpine Helicopters increased EBITDA by $20.4 million and $6.9 million, respectively. In addition, the translation effect of the higher Canadian dollar increased EBITDA by a further $5.0 million. On a same-business, constant exchange rate basis, EBITDA from the mountain segment decreased from $105.6 million to $87.7 million while EBITDA from the non-mountain segment declined from a loss of $0.5 million to a loss of $2.4 million.

The poor ski season in British Columbia reduced EBITDA in the mountain segment by $17.7 million. Given the fixed cost nature of many operating expenses at a resort, we had limited ability to reduce costs in response to the decline in revenue. Furthermore, we chose to spend more on grooming and snow management in order to maintain the quality of the limited terrain and on guest services to compensate for the substandard conditions. The decline in EBITDA at our British Columbia resorts was partially offset by a 12% increase in EBITDA from our eastern and western U.S. resorts, as several resorts achieved record results.

The decrease in EBITDA from the non-mountain segment was due mainly to the higher fixed costs at Sandestin, as described above.

A&K's EBITDA in 2005 was augmented by $6.5 million of licensing fees from an operator of destination clubs, who was given the right to use A&K's brand name for marketing the clubs. The licensing agreement terminated in August 2005. While replacement licensing arrangements may be negotiated in the future, EBITDA of $13.9 million from A&K's tour business is a more indicative base for projecting EBITDA in the future.

The margin on resort and travel operations decreased from 19.4% in 2004 to 13.6% in 2005 due to the inclusion of A&K and lower profitability from our British Columbia operations. Excluding A&K, the margin in 2005 was 16.1%.

FISCAL 2005 REVIEW OF MANAGEMENT SERVICES

    Management services revenue increased by 46% from $124.4 million in 2004
to $180.7 million in 2005. The breakdown of management services revenue and
EBITDA was as follows:

                                                 2005              2004
                                          ----------------- -----------------
    (MILLIONS)                            Revenue   EBITDA  Revenue   EBITDA
    -------------------------------------------------------------------------
    Lodging and property management         $87.7    $16.4    $71.2    $11.2
    Other resort and travel fees             18.8      0.2     18.7      0.9
    Real estate development services fees    24.3     13.2     12.5      5.4
    Playground sales fees                    49.9     13.2     22.0     10.0
    -------------------------------------------------------------------------
                                           $180.7    $43.0   $124.4    $27.5
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

The $16.5 million increase in revenue from lodging and property management was due mainly to increases in the occupied room nights and average daily rates (ADR). The growth in occupied room nights came both from increased supply of available room nights, as we continued to build out our resort villages, and higher average occupancy rates during the year. At our mountain resorts, occupied room nights increased 8% and ADR increased 4%, with particularly strong growth at Mammoth, Copper and Stratton. Since we do not have a portfolio of managed lodging units at Whistler Blackcomb, the decline in visitors to that resort did not have a significant impact on the management services segment. We also saw growth of 23% and 6%, respectively, in occupied room nights and ADR at our warm-weather locations (Sandestin and Lake Las Vegas). In addition to higher occupancy levels, revenue in 2005 was augmented by $1.4 million of reservation fees (these fees were not charged in 2004) and increased charges for housekeeping and miscellaneous lodging services. The translation effect of the stronger Canadian dollar also increased reported lodging and property management revenue by $1.6 million in 2005.

Higher revenues increased EBITDA from lodging and property management services by $5.2 million. Our margin increased from 15.7% in 2004 to 18.7% in 2005, reflecting improved operating leverage from managing more units and spreading our costs over a higher number of occupied room nights.

Other resort and travel fees comprise reservation fees earned by our central call center, RezRez, golf course management fees and club management fees earned by Intrawest Resort Club. An increase of $1.9 million in club management fees was offset by a decrease of the same amount in reservation fees. RezRez continues to expand its role as our internal call center and to move away from selling to third parties. Golf course management fees increased by $0.1 million to $2.1 million in 2005. At June 30, 2005, we managed 17 third-party golf courses, a decrease of one from the end of the previous year. The decrease of $0.7 million in EBITDA from other resort and travel fees was due to incurring a higher loss at RezRez, principally from its Fly4Less and Moguls business units, both of which have now been sold.

Real estate development services fees increased by $11.8 million as we managed more projects for partnerships and the value of construction expenditures, on which the fees are based, was much higher in 2005. We also realized higher marketing fees from partnerships as projects completed construction in 2005 and units closed. We expect the rate of growth of real estate development fee revenue and EBITDA to level off somewhat now that we have completed the ramp-up stage of our partnering strategy.

Approximately half of the increase of $27.9 million in Playground sales fees was due to executing additional sales contracts on behalf of Leisura. Leisura is categorized as a third-party developer and therefore the fees that Playground earns on sales for Leisura are included in the management services segment. Prior to implementing our partnering strategy for real estate, Playground would have sold more units for Intrawest and the sales fees that it charged to Intrawest would not have been recorded in the management services segment. Instead, they would have been eliminated on consolidation against the corresponding commission expenses included in real estate cost of sales. The other half of the increase in Playground sales fees was due to new business with third-party developers and strong resales markets, particularly at Sandestin and Stratton. Playground's profile as a leader in recreational property sales and marketing continues to grow, resulting in new opportunities across North America and abroad. The rate of growth in EBITDA of $3.2 million in 2005 was less than the rate of growth in revenue because of the lower commission structure on sales for Leisura and a greater allocation of Playground general and administrative costs to management services expenses from real estate development expenses.

FISCAL 2005 REVIEW OF REAL ESTATE DEVELOPMENT

The following table highlights the results of our real estate business in 2005 compared with 2004.

                                                                       CHANGE
                                                      2005     2004       (%)
    -------------------------------------------------------------------------
    Units closed(1)                                    557    1,334      (58)
    Revenue (millions)                              $628.8   $879.9      (29)
    Operating profit (millions)                      $67.7    $91.4      (26)
    Margin (%)                                        10.8     10.4
 

    (1) Units closed excludes units in projects sold to partnerships. In
        2005 Leisura closed an additional 467 units.

Revenue for 2005 includes $200.5 million for sales of 10 projects and one land parcel to partnerships compared with $193.0 million for sales of 14 projects and one land parcel to partnerships in 2004. These sales proceeds comprise the fair market value of the land for the projects as well as accumulated development costs. In addition, in 2005, we sold commercial properties at seven of our resort villages for a total of $109.5 million to a partnership in which CNL Income Properties, Inc., a real estate investment trust, is an 80% partner and we are a 20% partner. Excluding these sales to partnerships, revenue from real estate development decreased from $686.9 million in 2004 to $318.8 million in 2005. Revenue generated by Intrawest Placemaking decreased from $642.4 million to $274.1 million while revenue generated by Intrawest Resort Club increased from $44.5 million to $44.7 million.

Intrawest Placemaking Revenue

We closed a total of 557 units in 2005 down from 1,334 in 2004 due to the implementation of our partnering strategy. Closings of units in projects sold to partnerships are excluded from our reported closings. In 2005 Leisura closed 467 units. The number of closings in 2004 does not reflect our strategy of using partnerships for vertical development and therefore our closings in 2005 represent a more indicative base of closings for future years.

The translation effect of the higher Canadian dollar increased reported real estate development revenue by $3.2 million in 2005. The average price per closed unit increased from $480,000 in 2004 to $483,000 (on a constant exchange rate basis) in 2005. In an effort to sell long-standing inventory at Solitude and Copper we discounted prices and closed 62 units at an average price of $286,000 per unit. Excluding these units, the average price per closed unit in 2005 was $507,000, 6% higher than in 2004.

The average price per closed unit was also impacted by the mix of product types (i.e., condo-hotel, townhome and single-family lot). Closings were weighted more towards townhomes and lots and less towards condo-hotels in 2005, reflecting our strategy of selling the most capital-intensive projects (typically condo-hotels) to partnerships. In total, 46% of the closings in 2005 were condo-hotel units, 31% were townhomes and 23% were lots, compared with 78% condo-hotel units, 17% townhomes and 5% lots in 2004.

Intrawest Resort Club Revenue

The resort club group generated $44.7 million in sales revenue in 2005, up slightly from $44.5 million in 2004. The translation effect of the higher Canadian dollar increased reported resort club revenue by $2.6 million in 2005. The decline in visitors to Whistler Blackcomb reduced revenue at that club location by 20%, however, increases in sales at the Blue Mountain club and higher add-on points sales to existing resort club members offset the decline. We had expected stronger revenue growth from the resort club over the past few years, however, sales were impacted by the slow economy and the uncertainty created by recent world events. This product type appears to be more of a consumer purchase than our other real estate products and confidence is an important factor in the purchase consideration. Furthermore, resort club product does not have the same sense of scarcity as other types of real estate so purchasers are under less pressure to buy.

Sales to Partnerships

As mentioned above, revenue from sales of projects and land parcels to partnerships totaled $200.5 million in 2005, up from $193.0 million in 2004. The nature of our investment in these partnerships determines how we account for them. Profits on sales of projects and land parcels to partnerships that we account for using the equity method are initially deferred under Canadian GAAP and then recognized on the same basis as the partnership recognizes its real estate revenue. In 2005 revenue from sales to such partnerships totaled $170.7 million and we recorded real estate expenses of the same amount, comprising land and accumulated development costs of $97.7 million and deferred profits of $73.0 million. Subsequently, when the partnership recognizes its real estate revenue, we record a portion of the deferred land profit as a credit to real estate development expenses in our statement of operations. Any properties that are sold at a loss to an equity accounted partnership are recognized at the closing date. Profits on sales to partnerships that we account for using the cost method are recognized in full on the closing date.

Real Estate EBITDA

Real estate EBITDA decreased, as expected, from $156.1 million to $103.1 million. Real estate EBITDA comprises operating profit from real estate plus interest included in real estate expenses. During the development process, interest is capitalized to properties and the interest is expensed when the properties are closed. Operating profit from real estate, rather than real estate EBITDA, factors into the computation of net income.

Operating profit from real estate development decreased from $91.4 million in 2004 to $67.7 million in 2005. The 58% decrease in unit closings reduced operating profit from Intrawest units from $82.2 million in 2004 to $38.0 million in 2005. The margin on these sales was 12.0% in both years. Operating profit from sales to partnerships (land profit and equity income) increased from $9.2 million in 2004 to $33.9 million in 2005. The 2005 amount includes a loss of $3.4 million on the sale of commercial properties to the CNL partnership. We have now sold the majority of our commercial properties at all resorts except for Lake Las Vegas and Squaw Valley. We wrote-down the carrying value of our Lake Las Vegas commercial properties by $4.2 million in 2005 to maintain a more conservative book value as we prepare the properties for sale.

Real Estate Pre-sales

At August 31, 2005, real estate pre-sales amounted to $218 million for delivery in fiscal 2006 and an additional $77 million for delivery in fiscal 2007. In addition, the real estate partnerships had pre-sales of $300 million and $196 million, respectively, to close in fiscal 2006 and fiscal 2007.

FISCAL 2005 REVIEW OF CORPORATE OPERATIONS

Interest and Other Income

Interest and other income was $5.2 million in 2005, down from $6.1 million in 2004 due mainly to the recovery in 2004 of $2.6 million of fuel spill remediation costs at Mammoth partially offset by higher interest income in 2005, including $1.1 million earned by A&K.

Interest Costs

Interest incurred decreased from $94.6 million in 2004 to $80.9 million in 2005 due mainly to the refinancing of senior notes in both 2004 and 2005 and lower interest on construction debt as a result of our real estate partnering strategy, partially offset by $1.5 million of interest incurred at A&K. In the second quarter of 2004 we redeemed our $200 million, 9.75% senior notes by issuing $350 million, 7.5% senior notes and using the surplus proceeds to pay down our senior credit facility. Then in the second and third quarters of 2005 we redeemed our $394.4 million, 10.5% senior notes by issuing $329.9 million of 7.5% and 6.875% senior notes and drawing on our senior credit facility. These refinancings have helped to reduce the weighted average cost of our bank and other indebtedness from 8.2% at June 30, 2004 to 6.7% at June 30, 2005.

In total, $62.2 million of the interest incurred in 2005 was expensed ($44.6 million as interest expense and $17.6 million of interest within real estate expenses), down from $71.3 million in 2004 ($45.8 million as interest expense and $25.5 million within real estate expenses).

We expensed call premiums and unamortized deferred financing costs of $30.2 million in 2005 and $12.1 million in 2004 to redeem the senior notes.

General and Administrative Costs

All general and administrative ("G&A") costs incurred by our resorts and other Leisure and Travel Group businesses are included in resort and travel operations and management services expenses. Similarly, G&A costs incurred in the development of real estate are initially capitalized to properties, and then expensed as part of real estate costs in the period when the properties are closed. Corporate G&A expenses, which mainly comprise executive employee costs, public company costs, audit and legal fees, corporate information technology costs and head office occupancy costs are disclosed as a separate line in the statement of operations.

Corporate G&A expenses increased from $20.4 million in 2004 to $20.6 million in 2005. This small change is the net result of a number of larger increases and decreases that offset each other. The unification of our resort and travel operations businesses into the Leisure and Travel Group in May 2004 and the transfer of personnel from corporate operations to the Leisure and Travel Group reduced corporate G&A (and increased resort and travel operations expenses) by approximately $5 million in 2005. This reduction in corporate G&A was offset by an increase of approximately $4 million primarily for higher internal and external audit costs, higher compensation costs (including the cost of expensing stock options and mark-to-market adjustments of long-term incentive plans) and increased corporate governance and privacy compliance expenses. In addition, the higher Canadian dollar increased reported corporate G&A by $1.3 million.

Depreciation and Amortization

Depreciation and amortization expense increased from $68.6 million in 2004 to $78.3 million in 2005. The acquisitions of A&K and the remaining 55% of Alpine Helicopters increased depreciation and amortization expense by $6.6 million and the translation effect of the higher Canadian dollar added a further $2.2 million. The balance of the increase was attributable to our increased fixed asset base due to normal capital expenditures.

Write-down of Stand-alone Golf Course Assets

We own five stand-alone golf courses - Swaneset in British Columbia (two), Three Peaks in Colorado, South Mountain in Arizona and Big Island Country Club in Hawaii. We have decided that these courses no longer serve our financial or strategic objectives and we plan to sell them. In preparation for sale, we engaged independent appraisers to value the operations and as a result we have written down the golf assets by $17.6 million.

We remain committed to the golf business at our resorts where golf adds to the diversity of activities we can offer our visitors, drives multiple sources of revenue (e.g., lodging, food and beverage, retail as well as golf) and enhances real estate values.

Income Taxes

Income tax expense was $0.1 million in 2005 compared with $10.4 million in 2004. We had expected that our effective income tax rate in 2005 would be in the range of 10% to 15%, however the decline in our pre-tax income, mainly from lower resort and travel operations EBITDA in British Columbia and the write-down of our stand-alone golf courses, reduced the amount of income taxed at higher marginal rates, lowering our overall tax rate. Our income tax provision was further reduced by the utilization of income tax losses that we had previously expected to expire unutilized. We expect our effective tax rate to be approximately 15% in fiscal 2006.

Non-Controlling Interest

We fully consolidate the results of Whistler Blackcomb and A&K and record the third-party owner's share of income in non-controlling interest. We also fully consolidate three variable interest entities, however they have not yet started to generate income and therefore do not impact non-controlling interest in the statement of operations. Non-controlling interest decreased from $12.9 million in 2004 to $9.4 million in 2005. Lower resort and travel operations EBITDA and significantly reduced real estate closings at Whistler Blackcomb reduced non-controlling interest by $8.3 million, while the acquisition of A&K increased it by $4.8 million.

2005 FOURTH QUARTER RESULTS

Total Company EBITDA was $43.5 million in the fourth quarter of 2005 (the "2005 quarter"), down from $62.7 million in the fourth quarter of 2004 (the "2004 quarter") mainly due to lower profits from real estate development. As described above, we wrote-down our stand-alone golf assets by $17.6 million and this contributed to a net loss of $21.5 million ($0.45 per diluted share) in the 2005 quarter compared with net income of $2.6 million ($0.05 per diluted share) in the 2004 quarter. Excluding this unusual item, the loss in the 2005 quarter was $4.0 million ($0.08 loss per diluted share).

Resort and travel operations revenue increased from $76.2 million in the 2004 quarter to $146.5 million in the 2005 quarter. The acquisitions of A&K in the first quarter and the remaining 55% of Alpine Helicopters in the second quarter increased resort and travel operations revenue by $50.9 million and $11.5 million, respectively, and the impact of the higher Canadian dollar increased reported revenue by a further $7.9 million. Declines in revenue at our British Columbia resorts due to the continuation of trends from the third quarter were offset by increases at our other resorts. Resort and travel operations incurred an EBITDA loss of $17.0 million in the 2005 quarter compared with a $20.7 million loss in the 2004 quarter. Increases in EBITDA of $4.2 million for A&K and $3.4 million for our additional interest in Alpine Helicopters were partially offset by a $2.8 million decline in EBITDA at our British Columbia resorts. In addition, higher insurance, marketing and G&A expenses in the 2005 quarter reduced EBITDA by $1.1 million.

Management services revenue increased from $29.2 million in the 2004 quarter to $49.8 million in the 2005 quarter due mainly to increases of $11.9 million in fees charged by Playground and $6.5 million in development and sales service fees charged to partnerships. In the 2005 quarter, we allocated $7.5 million of Playground G&A costs, which included a catch-up for the first three quarters, to management services expenses. The reallocation of these G&A costs from real estate expenses reflects the categorization of Playground revenue and expenses related to Leisura projects as third-party business. This limited the growth in management services EBITDA to $6.5 million in the 2005 quarter from $5.7 million in the 2004 quarter.

Revenue from real estate development decreased from $379.7 million in the 2004 quarter to $334.0 million in the 2005 quarter. We sold nine properties to partnerships for $180.7 million in the 2005 quarter compared with five properties for $84.2 million in the 2004 quarter. We closed 243 units in the 2005 quarter at an average price per unit of $592,000 compared with 540 units in the 2004 quarter at an average price per unit of $531,000. The higher average price per unit reflects a much greater weighting of closings at Canadian resorts in 2004. The reduced closings lowered operating profit from real estate development from $49.0 million in the 2004 quarter to $40.8 million in the 2005 quarter.

Interest and other income was a loss of $0.4 million in the 2005 quarter compared with income of $1.3 million in the 2004 quarter. The amount in the 2005 quarter was reduced by foreign exchange losses recorded by A&K and a provision against a loss on sale after the quarter of a Colorado-based reservations company. Interest expense increased from $11.1 million to $12.3 million as reduced interest due to the refinancing of senior notes in the second quarter was offset by capitalizing less interest to real estate properties. Corporate G&A expenses decreased from $6.7 million to $5.2 million due mainly to the transfer of personnel to the Leisure and Travel Group and the inclusion of their costs in resort and travel operations expenses. Depreciation and amortization expense increased from $13.9 million to $17.1 million due to the acquisitions of A&K and Alpine, adjustments to accelerate depreciation of certain technology systems and depreciation related to capital expenditures during the year.

LIQUIDITY AND CAPITAL RESOURCES

We achieved a number of important objectives in 2005 that improved our liquidity and capital structure:

    -   We generated $62.1 million of free cash flow.
    -   We sold more projects to real estate partners and extended our
        partnering strategy to include the horizontal development phase.
    -   We sold our commercial properties at seven of our resorts for
        $109.5 million and used the majority of the proceeds to repay debt.
    -   We renewed our senior credit facility for a three-year term,
        increasing its credit availability by $75 million to $425 million and
        improving its covenant patterns and definitions to give us greater
        flexibility.
    -   We redeemed our $394.4 million, 10.5% senior notes due 2010 by
        issuing Cdn$125 million, 6.875% senior notes due 2009 and
        US$230.3 million, 7.5% senior notes due 2013 and drawing on our
        senior credit facility. This reduced our weighted average cost of
        debt to 6.7% at June 30, 2005.
    -   We finished the fiscal year with our net debt to EBITDA ratio at 3.6
        times, comfortably within our target range of below 4.0 times.

    Cash Flows in 2005 compared with 2004

The major sources and uses of cash in 2005 and 2004 are summarized in the table below. This table should be read in conjunction with the Consolidated Statements of Cash Flows, which are more detailed as prescribed by GAAP.

    (MILLIONS)                                        2005     2004   CHANGE
    -------------------------------------------------------------------------
    Funds from operations                           $116.2   $148.7   ($32.5)
    Cash flow from real estate development,
     including investments in partnerships           (13.0)   218.3   (231.3)
    Cash for resort and travel operations
     capex and other assets                         (101.6)   (92.6)    (9.0)
    Net cash flow from long-term receivables
     and working capital                              60.5     18.5     42.0
    -------------------------------------------------------------------------
    Free cash flow                                    62.1    292.9   (230.8)
    Cash for business acquisitions,
     net of asset disposals                          (20.3)    15.9    (36.2)
    -------------------------------------------------------------------------
    Net cash flow from operating and
     investing activities                             41.8    308.8   (267.0)
    Net financing outflows                           (10.7)  (325.8)   315.1
    -------------------------------------------------------------------------
    Increase (decrease) in cash                      $31.1   ($17.0)   $48.1
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

We generated $116.2 million of funds from operations in 2005, down from $148.7 million in 2004 due mainly to lower real estate profits partially offset by increased resort and travel operations and management services EBITDA. In addition, we spent $15.6 million more in 2005 to redeem senior notes. For more details see the Review of Operations sections above.

The most significant year-over-year change in our cash flows was in real estate, where we invested $13.0 million in 2005 versus a recovery of $218.3 million in 2004. These amounts include cash requirements for real estate that we develop on our own as well as our net investment in real estate partnerships. The significant shift was due mainly to the first year impact of selling projects to partnerships in 2004. Since 2004 was the first year that we implemented our strategy of selling our most capital-intensive projects to partnerships, we benefited from recovering the book value of several major condo-hotel projects that pre-date this strategy, while restricting our capital requirements for new projects to our investment in the partnerships. Real estate cash flow in 2005 was improved by $100.4 as a result of selling our commercial properties.

Resort and travel operations capital expenditures ("capex") and other assets used $101.6 million of cash in 2005, up from $92.6 million in 2004. Capex comprised $79.4 million and $69.3 million, respectively, in 2005 and 2004 of these amounts. Each year we spend about $40 million on maintenance capex at our resorts and in our other businesses. Maintenance capex is considered non-discretionary (since it is required to maintain the existing level of service) and comprises such things as snow grooming machine or golf cart replacement, snowmaking equipment upgrades and building refurbishments. Expansion capex (e.g., new lifts or new restaurants) is considered discretionary and the annual amount varies year by year. In 2005 our major expansion capex items included a conference center and second golf course at Blue Mountain, employee housing and a new lift at Mammoth and an administration building at Tremblant. We expect maintenance and expansion capex to be about the same in 2006 as 2005. Our planned expansion capex for 2006 includes approximately $20 million for new lifts, buildings and equipment at our mountain resorts and $13 million for resort operations IT infrastructure.

We spent $22.2 million on other assets in 2005, slightly below the $23.3 million that we spent in 2004. These expenditures mainly comprise furniture, fixtures and equipment outside of our resorts, information technology systems, long-term financing costs and miscellaneous investments.

Long-term receivables and working capital generated $60.5 million of cash in 2005, up from $18.5 million in 2004. This represents the cash flow from changes in receivables, other assets, payables and deferred revenue. Cash from pre-booked revenue for next fiscal year (mainly season passes and lodging deposits) was $15.9 million higher at June 30, 2005 than the end of last year. The balance of the change was mainly due to increasing payables and deferred revenue.

We generated $62.1 million of free cash flow in 2005, down from $292.9 million in 2004. Our free cash flow in 2004 was unusually high because of the large volume of real estate closings and the first-year impact of our strategy of developing real estate with partners. On an ongoing basis, we manage both of our divisions (Leisure and Travel Group and Intrawest Placemaking) to generate positive annual free cash flow.

We used $21.8 million of our free cash flow in 2005 for acquisitions. We spent $36.9 million (net) to acquire 55% of Alpine Helicopters but we gained $15.1 million (net) on the acquisition of 67% of A&K. Proceeds from asset sales generated $1.5 million of cash in 2005, down from $15.9 million in 2004 when we sold our investment in Compagnie des Alpes. We plan to sell our stand- alone golf courses in fiscal 2006 and we have identified other non-core assets for disposal.

In total, our operating and investing activities generated $41.8 million of cash in 2005, which we mainly used to pay dividends and distributions to non-controlling interests. By comparison, in 2004 we generated $308.8 million from operating and investing activities that we mainly used to repay debt.
 
 

    ADDITIONAL INFORMATION

    Total Company EBITDA

    (MILLIONS)                                                2005      2004
    -------------------------------------------------------------------------
    Cash flow provided by operating activities              $223.6    $422.9
    Add (deduct):
    Changes in non-cash operating assets and liabilities    (107.4)   (274.2)
    Current income tax expense                                29.5      11.6
    Interest expense                                          44.6      45.8
    Interest in real estate costs                             35.4      64.7
    Call premium and unamortized costs
     on senior notes redeemed                                 30.2      12.1
    Write-down of stand-alone golf course assets              17.6         -
    -------------------------------------------------------------------------
                                                             273.5     282.9
    Interest and other income net of non-cash items          (30.4)    (14.6)
    -------------------------------------------------------------------------
    Total Company EBITDA                                    $243.1    $268.3
    -------------------------------------------------------------------------
 

    Resort and Travel Operations EBITDA

    (MILLIONS)                                                2005      2004
    -------------------------------------------------------------------------
    Resort operations revenue                               $862.5    $541.3
    Resort operations expenses                               744.9     436.2
    -------------------------------------------------------------------------
    Resort operations EBITDA                                $117.6    $105.1
    -------------------------------------------------------------------------
 

    Management Services EBITDA

    (MILLIONS)                                                2005      2004
    -------------------------------------------------------------------------
    Management services revenue                             $180.7    $124.4
    Management services expenses                             137.7      96.9
    -------------------------------------------------------------------------
    Management services EBITDA                               $43.0     $27.5
    -------------------------------------------------------------------------
 

    Selected Annual Information
    (in millions of dollars, except per share amounts)

    -------------------------------------------------------------------------
                                                    2005      2004      2003
    -------------------------------------------------------------------------
    Total revenue                               $1,677.1  $1,551.7  $1,103.2
    Income from continuing operations               32.6      59.9      34.8
    Results of discontinued operations                 -         -      (0.6)
    Net income                                      32.6      59.9      34.2
    Total assets                                 2,644.3   2,255.8   2,515.7
    Total long-term liabilities                  1,794.2   1,468.4   1,804.6

    PER COMMON SHARE
    Income from continuing operations
      Basic                                         0.68      1.26      0.73
      Diluted                                       0.68      1.25      0.73
    Net income
      Basic                                         0.68      1.26      0.73
      Diluted                                       0.68      1.25      0.73
    Cash dividends declared (Canadian dollars)      0.16      0.16      0.16
 

    Quarterly Financial Summary
    (in millions, except per share amounts)

                             2005 Quarters               2004 Quarters
    -------------------------------------------------------------------------
                        1st    2nd    3rd    4th    1st    2nd    3rd    4th
    -------------------------------------------------------------------------
    Total revenue    $206.5 $436.2 $504.8 $529.6 $276.6 $350.0 $437.9 $487.2
    Net income (loss)  (6.7)  (8.0)  68.8  (21.5)   0.9    0.2   56.2    2.6
    Per common share:
    Net income (loss)
      Basic           (0.14) (0.17)  1.44  (0.45)  0.02   0.01   1.18   0.05
      Diluted         (0.14) (0.17)  1.44  (0.45)  0.02   0.01   1.17   0.05
 

    Several factors impact comparability between quarters:
    -   The timing of acquisitions. In the first quarter of 2005 we acquired
        67% of A&K and in the second quarter of 2005 we acquired the 55% of
        Alpine Helicopters that we did not already own.
    -   The seasonality of our resort and travel operations. Revenue and
        EBITDA from this business are weighted disproportionately to our
        third quarter.
    -   The timing of project completions and real estate closings. Generally
        we close more units in the fourth quarter.
    -   The timing of refinancings. In the second quarter of both 2004 and
        2005 we redeemed senior notes and expensed call premium and
        unamortized financing costs.
    -   The timing of recording reserves and valuation adjustments. In the
        fourth quarter of 2005 we wrote down the value of our stand-alone
        golf courses.

    OUTSTANDING SHARE DATA

As at September 2, 2005, we have issued and there are outstanding 48,298,026 common shares and stock options exercisable for 3,826,100 common shares.

A conference call is scheduled for Tuesday, September 13, 2005 at 11:00am ET (8:00am PT) to review Intrawest's fiscal 2005 results. To access this call dial 1-888-896-0863 before the scheduled start time. A playback version of the conference call will be available until September 20, 2005 at 1-877-519-4471 with password 6334993. The call will also be webcast live on www.intrawest.com.

Intrawest Corporation (IDR:NYSE; ITW:TSX) is a world leader in destination resorts and adventure travel. The company has interests in 10 resorts at North America's most popular mountain destinations, including Whistler Blackcomb, a host venue for the 2010 Winter Olympic and Paralympic Games. Intrawest owns Canadian Mountain Holidays, the largest heli-skiing operation in the world, and an 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 develops real estate at its resorts and at other locations across North America and in Europe. Intrawest is headquartered in Vancouver, British Columbia. For more information, visit www.intrawest.com.

Statements contained in this release that are not historical facts are forward-looking statements that involve risks and uncertainties. Intrawest's 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, Intrawest's ability to implement its business strategies, seasonality, weather conditions, competition, general economic conditions, currency fluctuations and other risks detailed in the company's filings with the Canadian securities regulatory authorities and the U.S. Securities and Exchange Commission.

If you would like to receive future news releases by email, please contact investor.relations@intrawest.com

    INTRAWEST CORPORATION
    CONSOLIDATED BALANCE SHEETS
    (in thousands of United States dollars)
                                                        JUNE 30,     JUNE 30,
                                                           2005         2004
                                                       (AUDITED)    (AUDITED)
    -------------------------------------------------------------------------
    ASSETS
    CURRENT ASSETS:
      Cash and cash equivalents                      $  140,878   $  109,816
      Amounts receivable                                162,102      142,427
      Other assets                                      184,860       94,105
      Resort properties                                 388,510      412,343
      Future income taxes                                29,927       18,638
    -------------------------------------------------------------------------
                                                        906,277      777,329
    Resort and travel operations                      1,034,187      940,949
    Resort properties                                   403,252      368,309
    Amounts receivable                                   78,877       52,958
    Investment in and advances to partnerships          109,037       50,899
    Other assets                                         85,181       65,306
    Goodwill                                             27,483            -
    -------------------------------------------------------------------------
                                                     $2,644,294   $2,255,750
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    LIABILITIES AND SHAREHOLDERS' EQUITY
    CURRENT LIABILITIES:
      Amounts payable                                $  275,176   $  209,037
      Deferred revenue and deposits                     194,367       87,649
      Bank and other indebtedness                        82,144      109,685
    -------------------------------------------------------------------------
                                                        551,687      406,371
    Bank and other indebtedness                         941,279      849,132
    Deferred revenue and deposits                       132,866       82,211
    Future income taxes                                  92,010       87,461
    Non-controlling interest                             76,339       43,266
    -------------------------------------------------------------------------
                                                      1,794,181    1,468,441
    SHAREHOLDERS' EQUITY:
      Capital stock                                     469,162      463,485
      Retained earnings                                 345,348      318,883
      Foreign currency translation adjustment            35,603        4,941
    -------------------------------------------------------------------------
                                                        850,113      787,309
    -------------------------------------------------------------------------
                                                     $2,644,294   $2,255,750
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
 
 

    INTRAWEST CORPORATION
    CONSOLIDATED STATEMENTS OF OPERATIONS AND RETAINED EARNINGS
    (in thousands of United States dollars, except per share amounts)

                                  THREE MONTHS ENDED
                                             JUNE 30      YEAR ENDED JUNE 30
                                    2005        2004        2005        2004
                              (UNAUDITED) (UNAUDITED)   (AUDITED)   (AUDITED)
    -------------------------------------------------------------------------
    RESORT AND TRAVEL OPERATIONS:
      Revenue                  $ 146,517   $  76,224   $ 862,537   $ 541,315
      Expenses                   163,491      96,906     744,946     436,184
    -------------------------------------------------------------------------
      Resort and travel
       operations contribution   (16,974)    (20,682)    117,591     105,131
    -------------------------------------------------------------------------
    MANAGEMENT SERVICES:
      Revenue                     49,764      29,200     180,659     124,394
      Expenses                    43,284      23,539     137,703      96,909
    -------------------------------------------------------------------------
      Management services
       contribution                6,480       5,661      42,956      27,485
    -------------------------------------------------------------------------
    REAL ESTATE DEVELOPMENT:
      Revenue                    334,044     379,707     626,728     878,195
      Expenses                   292,958     331,581     561,098     788,504
    -------------------------------------------------------------------------
                                  41,086      48,126      65,630      89,691
      Income (loss) from
       equity accounted
       investments                  (271)        837       2,039       1,683
    -------------------------------------------------------------------------
      Real estate development
       contribution               40,815      48,963      67,669      91,374
    -------------------------------------------------------------------------
    Income before undernoted
     items                        30,321      33,942     228,216     223,990
    Interest and other income
     (expense)                      (407)      1,285       5,192       6,117
    Interest expense             (12,338)    (11,054)    (44,605)    (45,766)
    Corporate general and
     administrative expenses      (5,235)     (6,713)    (20,571)    (20,369)
    Depreciation and
     amortization                (17,093)    (13,908)    (78,323)    (68,626)
    Call premium and unamortized
     costs of senior notes
     redeemed                          -           -     (30,173)    (12,074)
    Write-down of golf course
     assets                      (17,568)          -     (17,568)          -
    -------------------------------------------------------------------------
    Income (loss) before
     income taxes and non-
     controlling interest        (22,320)      3,552      42,168      83,272
    Provision for income taxes      (106)      1,063        (106)    (10,434)
    Non-controlling interest         907      (2,009)     (9,448)    (12,889)
    -------------------------------------------------------------------------
    Net income (loss)            (21,519)      2,606      32,614      59,949
    Retained earnings,
     beginning of period         369,985     319,147     318,883     264,640
    Dividends                     (3,118)     (2,870)     (6,149)     (5,706)
    -------------------------------------------------------------------------
    Retained earnings,
     end of period             $ 345,348   $ 318,883   $ 345,348   $ 318,883
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Net income (loss) per
     common share
      Basic                    $   (0.45)  $    0.05   $    0.68   $    1.26
      Diluted                  $   (0.45)  $    0.05   $    0.68   $    1.25
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Weighted average number of
     common shares outstanding
     (in thousands)
      Basic                       47,882      47,591      47,814      47,588
      Diluted                     48,175      47,783      47,924      47,798
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
 
 

    INTRAWEST CORPORATION
    CONSOLIDATED STATEMENTS OF CASH FLOWS
    (in thousands of United States dollars)

                                  THREE MONTHS ENDED
                                             JUNE 30      YEAR ENDED JUNE 30
                                    2005        2004        2005        2004
                              (UNAUDITED) (UNAUDITED)   (AUDITED)   (AUDITED)
    -------------------------------------------------------------------------
    CASH PROVIDED BY (USED IN):

    OPERATIONS:
      Net income               $ (21,519)  $   2,605   $  32,614   $  59,949
      Items not affecting cash:
        Depreciation and
         amortization             17,093      13,908      78,323      68,626
        Future income taxes      (29,447)     (1,240)    (29,447)     (1,240)
        Non-cash costs of
         senior notes redeemed         -           -       4,842       2,324
        Income from equity
         accounted investment        271        (837)     (2,039)     (1,683)
        Amortization of
         financing costs             663       1,566       2,484       4,117
        Stock-based compensation     228         290         883         290
        Amortization of
         benefit plan                291         493       1,159       1,992
        Write-down of stand-
         alone golf course
         assets                   17,568                  17,568           -
        Non-controlling interest    (907)      2,009       9,448      12,889
        Loss (gain) on asset
         disposals                  (177)        717         372       1,388
    -------------------------------------------------------------------------
      Funds from operations      (15,936)     19,511     116,207     148,652

      Recovery of costs through
       real estate sales         310,358     286,482     533,498     743,405
      Acquisition and
       development of
       properties held for sale (209,426)   (113,916)   (486,629)   (487,659)
      Changes in long-term
       amounts receivable, net     3,812      44,289       2,703      42,396
      Changes in non-cash
       operating working capital  72,640       5,001      57,842     (23,929)
    -------------------------------------------------------------------------
                                 161,448     241,367     223,621     422,865
    FINANCING:
      Bank and other borrowings,
       net                       (77,291)   (180,039)      9,529    (304,046)
      Issue of common shares
       for cash                    1,762      (1,447)      3,635         461
      Dividends paid              (3,118)     (2,870)     (6,149)     (5,706)
      Distributions to non-
       controlling interests      (1,801)     (5,357)    (17,734)    (16,543)
    -------------------------------------------------------------------------
                                 (80,448)   (189,713)    (10,719)   (325,834)
    INVESTMENTS:
      Proceeds from
       (expenditures on):
        Resort and travel
         operations assets       (13,784)    (18,672)    (79,375)    (69,342)
        Investment in real
         estate partnerships     (58,462)    (20,188)    (59,912)    (37,260)
        Other assets               1,611      (2,081)    (22,227)    (23,321)
        Business acquisitions,
         net of cash acquired        (44)          -     (21,788)          -
        Asset disposals            1,079       1,441       1,462      15,876
    -------------------------------------------------------------------------
                                 (69,600)    (39,500)   (181,840)   (114,047)
    -------------------------------------------------------------------------
    Increase (decrease) in
     cash and cash equivalents    11,400      12,154      31,062     (17,016)

    Cash and cash equivalents,
     beginning of period         129,478      97,662     109,816     126,832
    -------------------------------------------------------------------------
    Cash and cash equivalents,
     end of period             $ 140,878   $ 109,816   $ 140,878   $ 109,816
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

.
Contact:
Intrawest Corporation
.
Also See: Bob Schrader, former Four Seasons and Ritz Carlton Executive, Named Chief Operating Officer for Private Retreats by Abercrombie & Kents / December 2003
Residence Clubs Gaining Acceptance in the Vacation Industry; 10 Questions that Help Define the Structure of Residence Clubs / March 2005


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