UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------------------
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16
UNDER
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE MONTH OF DECEMBER 2001
INTRAWEST CORPORATION
(Registrant's name)
SUITE 800, 200 BURRARD STREET, VANCOUVER, BC V6C 3L6 CANADA
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports
under cover Form 20-F or Form 40-F.
Form 20-F Form 40-F X
--- ---
Indicate by check mark whether the registrant by furnishing the information
contained in this Form is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes No X
--- ---
If "Yes" is marked, indicate below the file number assigned to the registrant in
connection with Rule 12g3-2(b): 82-________.
TO OUR SHAREHOLDERS
Second quarter results showed an increase in Total Company EBITDA (earnings
before interest, taxes, non-controlling interest, depreciation and amortization)
of 15 per cent over the same quarter last year. This reflects a successful
marketing effort post-September 11 and the effectiveness of cost-control
measures undertaken over the past year. These factors helped mitigate the impact
on EBITDA of a slow start to the season in the East, the slow economy and
changes in traveler behavior following September 11.
The number of visits at our Discovery Centers indicates healthy interest in our
resort real estate. The very successful launch of our Four Seasons Hotel project
at Whistler and strong interest in our first European project, The Village at
ARC 1950 in Les Arcs, France, provide further evidence that our resort real
estate remains in demand.
At the end of January, the City and County of Denver selected Intrawest to
operate and develop Colorado's Winter Park Resort. This resort, the closest of
any of the state's resorts to Denver, achieves one million skier visits
annually. Our success in winning this contract, which remains under negotiation
with the City, is evidence of the effectiveness of our strategy to seek out good
business opportunities that do not require significant investments of Intrawest
capital.
OPERATING RESULTS (ALL DOLLAR AMOUNTS ARE IN US CURRENCY)
Revenue for the second quarter ended December 31, 2001 was $231.4 million
compared with $207.0 million for the quarter ended December 31, 2000. Total
Company EBITDA increased 15 per cent to $40.0 million from $34.7 million in the
same period last year. Income from continuing operations for the quarter was
$6.0 million or $0.14 per share, on a fully diluted basis, compared with $10.7
million (including a one-time, non-cash income tax recovery of $5.3 million) or
$0.24 per share in the same quarter of fiscal 2001. Excluding this non-recurring
income tax recovery, income from continuing operations would have been $5.4
million or $0.12 per share in the second quarter last year.
Revenue and Total Company EBITDA for the six months ended December 31, 2001 were
$325.1 million and $47.2 million, respectively, compared with $336.9 million and
$50.2 million in the same period last year. Intrawest incurred a loss from
continuing operations of $3.7 million for the six months compared with income
from continuing operations of $7.5 million ($2.2 million excluding the one-time
income tax recovery) last year.
Further information on the Company's operating results is contained in
Management's Discussion and Analysis below.
NRP SHARES
A normal course issuer bid for up to 465,000 of the NRP shares expired on
January 9, 2002. Under such bid, Intrawest purchased 341,600 NRP shares at an
average price of Cdn.$1.58 per share. A Notice of Intention in respect of a new
normal course issuer bid for the purchase of up to 370,000 NRP shares commencing
on February 22, 2002 and terminating on February 21, 2003 has been filed with
The Toronto Stock Exchange on terms consistent with prior normal course issuer
bids.A shareholder may obtain a copy of the Notice of Intention to make a Normal
Course Issuer Bid, without charge, by contacting the Corporate Secretary of the
Company at Suite 800, 200 Burrard Street, Vancouver, British Columbia V6C 3L6.
The due date on the balance of Cdn.$4 million remaining outstanding under the
revolving line of credit made available in connection with the 1994 bulk sale of
non-resort properties has been extended to July 31, 2002. The Company currently
expects to redeem all remaining NRP shares prior to September 30, 2002 in the
range of Cdn.$1.90 to Cdn.$2.00 per NRP share.
OUTLOOK
As of the date of this report we are halfway through the 2001-2002 ski season.
Our results to date have been affected by the weak economy and the aftermath of
September 11 but not to the extent that many people had feared. We are seeing
fewer "fly to" guests at our resorts, notably at our flagship resort, Whistler
Blackcomb, but we are also seeing an increase in visits from our season pass
holders and other regional guests.
The pace of bookings across our resorts is at or above last year's pace to the
end of March. The pace of bookings in April and May remains behind last year's
level indicating some risk. Although this might be the result of travelers
booking closer to their vacation dates - a trend we have seen since September 11
- it may reflect the impact of an early Easter.
On the real estate side of the business we now have $430 million of closed or
pre-sold units (excluding the resort club) for delivery in fiscal 2002, 13% more
than the total revenue recorded in fiscal 2001. We continue to see strong buyer
interest in our properties and our target is to deliver more than $500 million
of real estate revenue in fiscal 2002.
Overall we believe we can achieve Total Company EBITDA of approximately $200
million in fiscal 2002, roughly even with the level we achieved last year. Given
our success to date in meeting the challenges faced this year by the broader
leisure sector, we are confident in our ability to deliver these results.
On behalf of the Board,
/s/ Joe S. Houssian /s/ Daniel O. Jarvis
----------------------------------- -----------------------------------
Joe S. Houssian Daniel O. Jarvis
Chairman, President and Executive Vice President
Chief Executive Officer and Chief Financial Officer
February 19, 2002
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 the Company's June 30, 2001 annual report.
THREE MONTHS ENDED DECEMBER 31, 2001 (THE "2001 QUARTER") COMPARED WITH THE
THREE MONTHS ENDED DECEMBER 31, 2000 (THE "2000 QUARTER")
REVIEW OF SKI AND RESORT OPERATIONS
The slowing economy and the aftermath of the events of September 11 have had an
impact on the Company's business. This impact has, however, been mitigated by
several factors. Approximately 80-85% of skier visits travel from home to the
resorts by car. The only Intrawest resort that has any significant "fly-to"
customers is Whistler Blackcomb and, although this segment has declined relative
to last year, it has been offset by an increase in "drive-to" visitors.
Furthermore, skiers and snowboarders typically have a high level of commitment
for reasons of family or tradition, or because of their passion for the sport.
Ski and resort operation revenue was $87.5 million in the 2001 quarter, down
from $94.3 million in the 2000 quarter. Revenue from the mountain resorts
decreased from $85.6 million to $77.9 million due mainly to late season openings
at the eastern resorts caused by unusually warm weather conditions in November
and December. Skier visits across all the Company's resorts decreased 11% from
1,248,000 to 1,109,000. Skier visits at the eastern resorts declined by 38%
while they were 3% higher at the western resorts. Since December 31 the gap has
narrowed and as of the middle of February skier visits were 2% below last year
on a consolidated season-to-date basis. Partly in response to September 11,
there has been a shift in the mix of skier visits away from destination visits
to regional visits.
Revenue per skier visit across all the resorts increased 3% to $64.25 in the
2001 quarter from $62.60 in the 2000 quarter. The increase was higher at the
eastern resorts because, despite the lack of early season snow, many guests
arrived and spent on services other than skiing. Also, some resorts have seen a
drop in visits from the day-skier segment that typically delivers lower revenue
per visit. On a season-to-date basis, through the middle of February, revenue
per visit was approximately the same as last year. The Company had expected to
increase revenue per visit; however, the shift in visits from destination to
regional had a downward effect as regional guests typically spend less on
non-ticket items.
Revenue from the warm-weather resorts increased 10% to $9.6 million in the 2001
quarter from $8.7 million in the 2000 quarter primarily due to a 12% increase in
room nights at Sandestin. Revenue at the Raven golf courses in Arizona decreased
17% as the weaker economy reduced business travel, Raven's primary customer
segment.
The composition of ski and resort operation revenue was as follows:
2001 Quarter 2000 Quarter Decrease Percentage
(millions) (millions) (millions) Change
------------ ------------ ---------- ----------
(unaudited)
Mountain operations $ 31.7 $ 35.4 $ (3.7) (10%)
Retail and rental 18.8 19.6 (0.8) (4%)
Food and beverage 10.2 11.2 (1.0) (9%)
Lodging and property management 10.2 10.5 (0.3) (3%)
Ski school 6.2 6.6 (0.4) (6%)
Golf 4.0 4.4 (0.4) (9%)
Other 6.4 6.6 (0.2) (3%)
------- ------- ------ ---
$ 87.5 $ 94.3 $ (6.8) (7%)
======= ======= ====== ===
The decreases in each of the business lines, other than golf, were due primarily
to the slow season start in the East. The decline in golf revenue was due mainly
to reduced sales at the Arizona courses.
Ski and resort operation expenses were $73.4 million in the 2001 quarter, 7%
lower than the 2000 quarter due mainly to the delayed hiring of seasonal staff
and tight control over costs. EBITDA from ski and resort operations was $14.1
million in the 2001 quarter, down from $15.7 million in the 2000 quarter.
REVIEW OF REAL ESTATE OPERATIONS
Revenue from the sale of real estate increased 27% to $141.0 million in the 2001
quarter from $110.8 million in the 2000 quarter. A total of 450 units were
closed in the 2001 quarter compared with 343 units in the 2000 quarter. The
average sales price per unit decreased 2%, reflecting unit type and resort mix.
Canadian resorts, which contribute a lower average US-dollar revenue when
converted from Canadian dollars, accounted for 70% of the units closed in the
2001 quarter compared with 19% in the 2000 quarter.
Operating profit from real estate sales increased to $21.1 million from $14.7
million. The margin on sales improved to 15.0% from 13.3%, reflecting the mix of
resorts and unit types. In addition, the margin in the 2000 quarter was reduced
by cost overruns on two projects at Mammoth.
Real estate sales revenue includes the Company's vacation ownership business,
which increased 6% in the 2001 quarter to $7.2 million from $6.8 million in the
2000 quarter. This growth was less than expected as closing rates declined
subsequent to September 11, although they have rebounded since December.
REVIEW OF CORPORATE OPERATIONS
Interest expense was $12.2 million in the 2001 quarter, up from $11.0 million in
the 2000 quarter. The increase was due mainly to interest on borrowings to fund
$94.5 million of capital expenditures since the 2000 quarter, partly offset by
reduced interest rates. These capital expenditures were also responsible for the
increase in depreciation and amortization expense to $10.9 million in the 2001
quarter from $9.5 million in the 2000 quarter.
Corporate general and administrative expenses were $3.4 million in the 2001
quarter compared with $2.2 million in the 2000 quarter. A large portion of the
increase was due to an expansion of the Company's information technology group.
The Company has made significant investments in its front-line and
back-of-the-house information technology systems and the personnel and
infrastructure to support these systems have correspondingly increased.
Pre-tax income increased 25% from $8.7 million to $10.9 million. In the 2001
quarter the Company incurred an income tax expense of $2.4 million compared with
a non-cash income tax recovery of $3.1 million in the 2000 quarter. The income
tax recovery for the 2000 period was due to a $5.3 million reduction in the
recorded amount of the Company's future income tax liabilities due to the tax
rate reductions announced in the October 2000 Canadian federal budget.
Non-controlling interest was $2.4 million in the 2001 quarter, up from $1.1
million in the 2000 quarter. This item related exclusively to the minority
partner's interest in Whistler Blackcomb in the 2001 quarter whereas it also
included the minority partners' interests in Sandestin and the Lodestar golf
course at Mammoth in the 2000 quarter. These latter two partners' interests,
which were acquired by the Company in fiscal 2001, generated a recovery of $0.3
million in the 2000 quarter. The balance of the increase was due to higher real
estate closings and operating earnings at Whistler Blackcomb.
SIX MONTHS ENDED DECEMBER 31, 2001 (THE "2001 PERIOD") COMPARED WITH THE SIX
MONTHS ENDED DECEMBER 31, 2000 (THE "2000 PERIOD")
REVIEW OF SKI AND RESORT OPERATIONS
Ski and resort operation revenue was $146.2 million in the 2001 period, down
from $157.5 million in the 2000 period. Revenue from the mountain resorts
decreased to $118.9 million from $131.0 million due primarily to the slow season
start in the East. In addition the Company's decision to turn over management of
the waterpark at Mountain Creek to a third-party operator resulted in a $4.1
million decline in revenue in the first quarter. Revenue from the warm-weather
resorts increased to $27.2 million in the 2001 period from $26.4 million in the
2000 period due mainly to the opening of the new Raven golf course at Three
Peaks.
These revenue declines led to a decrease in EBITDA from ski and resort
operations to $16.2 million in the 2001 period from $17.3 million in the 2000
period. The EBITDA margin increased slightly to 11.1% in the 2001 period from
11.0% in the 2000 period.
REVIEW OF REAL ESTATE OPERATIONS
Revenue from the sale of real estate was $174.0 million in the 2001 period,
almost the same as the $174.5 million in the 2000 period. A total of 528 units
were closed in the 2001 period compared with 612 units in the 2000 period. A
greater proportion of units are expected to close in the second half of fiscal
2002 than in fiscal 2001. The average sales price per unit increased 15%,
reflecting unit type and resort mix as well as price escalation. The Resort Club
generated $16.1 million of the real estate revenue for the 2001 period, up from
$15.9 million for the 2000 period.
Operating profit from real estate sales was $26.0 million in the 2001 period
compared with $26.8 million in the 2000 period. The margin on sales was 15.0% in
the 2001 period versus 15.4% in the 2000 period.
REVIEW OF CORPORATE OPERATIONS
Interest and other income of $1.4 million and interest expense of $21.6 million
in the 2001 period were approximately the same as these items in the 2000
period. Depreciation and amortization expense increased from $17.0 million in
the 2000 period to $19.7 million in the 2001 period due to capital expenditures
made at the resorts during the past year. Corporate general and administrative
expenses increased from $4.3 million in the 2000 period to $5.6 million in the
2001 period mainly due to higher information technology costs. The Company had
an income tax recovery of $0.3 million in the 2001 period compared with a
recovery of $4.1 million in the 2000 period. The recovery in the 2000 period
included a one-time adjustment of $5.3 million to reduce future income taxes
payable because of a reduction in the Canadian corporate tax rate.
LIQUIDITY AND CAPITAL RESOURCES
At December 31, 2001, the Company had $94.4 million of cash and cash equivalents
and a further $43.1 million available under various non-construction lines of
credit. Given the seasonality of the Company's businesses, the end of the second
quarter is normally the low point of the fiscal year in terms of available
liquidity. The ski and resort operations generate negative cash flow during the
first six months of the fiscal year and then are significantly cash flow
positive in the second half of the fiscal year. In addition the majority of
capital expenditures are normally made during the first two fiscal quarters. On
the real estate side of the business, projects normally begin construction in
the first half of the fiscal year and complete construction in the second half.
The liquidity requirements of the real estate business are therefore normally
greater in the period from July to December.
The major sources and uses of cash in the three and six months ended December
31, 2001 and December 31, 2000 were as follows:
Three months ended Six months ended
December 31 December 31
----------------------- -----------------------
2001 2000 2001 2000
(millions) (millions) (millions) (millions)
---------- ---------- ---------- ----------
(unaudited)
Funds from continuing operations $ 19.3 $ 16.0 $ 18.3 $ 20.2
Working capital for real estate
developed for sale 11.3 (14.7) (66.2) (31.7)
Acquisitions and resort capital
expenditures (35.3) (49.4) (56.6) (66.8)
-------- -------- -------- --------
(4.7) (48.1) (104.5 (78.3)
(Increase) decrease in other net assets (29.8) 34.0 (11.6) (30.9)
-------- -------- -------- --------
Net cash outflows before non-construction
financing inflows (34.5) (14.1) (116.1) (109.2)
Net financing inflows excluding
construction financing 36.8 5.6 124.1 97.5
-------- -------- -------- --------
Increase (decrease) in cash $ 2.3 $ (8.5) $ 8.0 $ (11.7)
======== ======== ======== ========
Net new investment in real estate
developed for sale $ (5.1) $ (36.8) $ (105.0) $ (82.7)
Less: net proceeds from construction
financing 16.4 22.1 38.8 51.0
-------- -------- -------- --------
Working capital for real estate
developed for sale $ 11.3 $ (14.7) $ (66.2) $ (31.7)
======== ======== ======== ========
Working capital for real estate provided $11.3 million of cash in the 2001
quarter compared with a use of cash of $14.7 million in the second quarter last
year. The additional cash flow reflects the increased real estate closings in
the 2001 quarter. For the six-month period real estate development used $66.2
million of cash, up from $31.7 million in the six months last year. Quarterly
changes in working capital for real estate are not necessarily indicative of
annual changes since the timing of project completions, and therefore unit
closings, heavily impacts them. Unit closings are more heavily weighted towards
the second half of the fiscal year in fiscal 2002 than in fiscal 2001. For
fiscal 2002, the working capital requirement for real estate is expected to be
less than the $68.8 million requirement in fiscal 2001.
Acquisitions and resort capital expenditures used $35.3 million of cash in the
2001 quarter compared with $49.4 million in the 2000 quarter. For the six
months, acquisitions and resort capital expenditures used $56.6 million cash,
down from $66.8 million in the same period last year. These reductions are
consistent with the Company's strategy of leveraging its expertise rather than
its capital to grow its business. The Company expects to spend 25-30% less in
fiscal 2002 on these items than the $110.6 million it spent in fiscal 2001. This
downward trend in spending on acquisitions and capital improvements is expected
to continue in fiscal 2003.
Other net assets increased by $29.8 million in the 2001 quarter mainly due to an
increase in receivables (funds held in trust pending release to Intrawest or the
construction lender) in connection with certain real estate closings. For the
six-month period other net assets used $11.6 million cash compared with $30.9
million in the same period last year due mainly to an increase in payables.
ADDITIONAL INFORMATION
TOTAL COMPANY EBITDA
Three months ended Six months ended
December 31 December 31
-------------------- --------------------
2001 2000 2001 2000
-------- -------- -------- --------
(in thousands of US dollars) (unaudited)
Income (loss) before tax $ 10,907 $ 8,704 $ (1,798) $ 4,413
Depreciation and amortization 10,875 9,454 19,712 16,985
Interest expense 12,239 10,987 21,582 21,627
Interest in real estate costs 7,329 5,698 9,050 8,750
Less interest and other income (1,360) (140) (1,385) (1,547)
-------- -------- -------- --------
Total Company EBITDA $ 39,990 $ 34,703 $ 47,161 $ 50,228
======== ======== ======== ========
EBITDA FROM SKI AND RESORT OPERATIONS
Three months ended Six months ended
December 31 December 31
------------------- -------------------
2001 2000 2001 2000
-------- -------- -------- --------
(in thousands of US dollars) (unaudited)
Ski and resort operation revenue $ 87,521 $ 94,278 $146,181 $157,477
Ski and resort operation expenses 73,375 78,551 130,000 140,216
-------- -------- -------- --------
EBITDA from ski and resort operations $ 14,146 $ 15,727 $ 16,181 $ 17,261
======== ======== ======== ========
EBITDA is a cash flow measure and is not required under generally accepted
accounting principles. It may not be comparable to similar measures provided by
other companies.
Statements in this report 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
the impact of the September 11 terrorist attacks on the travel industry and the
earlier than normal timing of the 2002 Easter holiday. Other factors include,
but are not limited to, 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.
CONSOLIDATED STATEMENTS OF OPERATIONS AND RETAINED EARNINGS
Three months ended Six months ended
December 31 December 31
--------------------- ---------------------
2001 2000 2001 2000
-------- -------- -------- --------
(in thousands of US dollars,
except per share amounts) (unaudited)
REVENUE:
Ski and resort operations $ 87,521 $ 94,278 $146,181 $157,477
Real estate sales 140,954 110,846 174,020 174,461
Rental properties 1,549 1,785 3,499 3,423
Interest and other income 1,360 140 1,385 1,547
-------- -------- -------- --------
231,384 207,049 325,085 336,908
EXPENSES:
Ski and resort operations 73,375 78,551 130,000 140,216
Real estate costs 119,843 96,116 147,984 147,612
Rental properties 759 1,039 2,029 1,805
Interest 12,239 10,987 21,582 21,627
Depreciation and amortization 10,875 9,454 19,712 16,985
General and administrative 3,386 2,198 5,576 4,250
-------- -------- -------- --------
220,477 198,345 326,883 332,495
-------- -------- -------- --------
Income (loss) before undernoted 10,907 8,704 (1,798) 4,413
Provision for income taxes 2,435 (3,129) (344) (4,102)
-------- -------- -------- --------
Income (loss) before non-controlling
interest and discontinued operations 8,472 11,833 (1,454) 8,515
Non-controlling interest 2,429 1,141 2,286 1,029
-------- -------- -------- --------
Income (loss) from continuing
operations 6,043 10,692 (3,740) 7,486
Results of discontinued operations
(note 4) (136) 55 28 87
-------- -------- -------- --------
Income (loss) for the period 5,907 10,747 (3,712) 7,573
Retained earnings, beginning of period 178,303 128,779 187,922 131,953
Dividends (2,254) (2,323) (2,254) (2,323)
-------- -------- -------- --------
Retained earnings, end of period $181,956 $137,203 $181,956 $137,203
======== ======== ======== ========
Income (loss) from continuing
operations per common share:
Basic $ 0.14 $ 0.25 $ (0.08) $ 0.17
Fully diluted $ 0.14 $ 0.24 $ (0.08) $ 0.17
Net income (loss) per common share:
Basic $ 0.14 $ 0.25 $ (0.08) $ 0.17
Fully diluted $ 0.14 $ 0.24 $ (0.08) $ 0.17
-------- -------- -------- --------
Weighted average number of
common shares outstanding
(in thousands)
Basic 44,031 43,568 44,030 43,526
Fully diluted 44,370 44,427 44,386 44,405
-------- -------- -------- --------
See accompanying notes to consolidated financial statements.
CONSOLIDATED BALANCE SHEETS
(in thousands of US dollars)
December 31 June 30
----------- -----------
2001 2001
(unaudited) (audited)
----------- -----------
ASSETS
Current assets:
Cash and cash equivalents $ 94,393 $ 86,430
Amounts receivable 102,692 82,536
Other assets 129,068 105,545
Resort properties 401,669 329,177
Future income taxes 3,620 4,168
----------- -----------
731,442 607,856
Ski and resort operations 839,128 813,741
Properties:
Resort 393,305 371,451
Discontinued operations 6,633 7,080
----------- -----------
399,938 378,531
Amounts receivable 57,965 50,416
Other assets 90,318 86,640
Goodwill 17,210 19,128
----------- -----------
$ 2,136,001 $ 1,956,312
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Amounts payable $ 165,409 $ 146,464
Deferred revenue 126,317 81,537
Bank and other indebtedness, current portion:
Resort 334,341 201,558
Discontinued operations -- 82
----------- -----------
626,067 429,641
Bank and other indebtedness:
Resort 821,605 804,991
Discontinued operations 3,001 3,363
----------- -----------
824,606 808,354
Due to joint venture partners 4,823 8,818
Deferred revenue 10,030 26,750
Future income taxes 82,731 83,771
Non-controlling interest in subsidiaries 29,391 30,616
----------- -----------
1,577,648 1,387,950
Shareholders' equity:
Capital stock (note 5) 413,969 414,220
Retained earnings 181,956 187,922
Foreign currency translation adjustment (37,572) (33,780)
----------- -----------
558,353 568,362
----------- -----------
$ 2,136,001 $ 1,956,312
=========== ===========
See accompanying notes to consolidated financial statements.
CONSOLIDATED STATEMENTS OF CASH FLOWS
Three months ended Six months ended
December 31 December 31
---------------------- ----------------------
2001 2000 2001 2000
--------- --------- --------- ---------
(in thousands of US dollars) (unaudited)
CASH PROVIDED BY (USED IN)
OPERATIONS:
Income (loss) from continuing operations $ 6,043 $ 10,692 $ (3,740) $ 7,486
Items not affecting cash:
Depreciation and amortization 10,875 9,454 19,712 16,985
Future income taxes -- (5,276) -- (5,276)
Non-controlling interest 2,429 1,141 2,286 1,029
--------- --------- --------- ---------
Funds from continuing operations 19,347 16,011 18,258 20,224
Recovery of costs through real estate sales 119,843 96,116 147,984 147,612
Acquisition and development of properties
held for sale (124,935) (252,975) (230,290)
Increase in amounts receivable, net (1,774) (248) (7,555) (4,267)
Changes in non-cash operating working
capital (note 8) (23,173) 39,996 371 (22,688)
--------- --------- --------- ---------
Cash provided by (used in) continuing
operating activities (10,692) 18,957 (93,917) (89,409)
Cash provided by (used in) discontinued
operations (note 4) (8) 2,970 1,204 4,360
--------- --------- --------- ---------
(10,700) 21,927 (92,713) (85,049)
FINANCING:
Bank and other borrowings, net 56,756 31,979 167,717 152,835
Issue of common shares for cash -- 1,126 40 1,580
Redemption and repurchase of
non-resort preferred shares (141) (2,482) (291) (2,260)
Dividends paid (2,254) (2,323) (2,254) (2,323)
Distributions to non-controlling
interests (1,124) (1,283) (2,269) (1,283)
--------- --------- --------- ---------
53,237 27,017 162,943 148,549
INVESTMENTS:
Proceeds from (expenditures on):
Revenue-producing properties (364) (3,759) (97) (4,248)
Ski and resort operation assets (34,985) (39,034) (56,512) (55,982)
Other assets (4,871) (8,145) (5,658) (8,417)
Business acquisitions, net of
cash acquired -- (6,549) -- (6,549)
--------- --------- --------- ---------
(40,220) (57,487) (62,267) (75,196)
--------- --------- --------- ---------
Increase (decrease) in cash and cash
equivalents 2,317 (8,543) 7,963 (11,696)
Cash and cash equivalents, beginning of
period 92,076 75,832 86,430 78,985
--------- --------- --------- ---------
Cash and cash equivalents, end of period $ 94,393 $ 67,289 $ 94,393 $ 67,289
========= ========= ========= =========
(Supplemental information (note 8))
See accompanying notes to consolidated financial statements.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands of US dollars, unless otherwise indicated)
1. BASIS OF PRESENTATION:
These interim consolidated financial statements do not include all disclosures
required by Canadian generally accepted accounting principles for annual
financial statements and should be read in conjunction with the Company's
consolidated financial statements for the year ended June 30, 2001. In the
opinion of Management, all adjustments necessary for a fair presentation are
reflected in the interim financial statements. Such adjustments are of a normal
and recurring nature. The results of operations for the interim periods reported
are not necessarily indicative of the operating results expected for the year.
The significant accounting policies used in preparing these consolidated
financial statements are consistent with those used in preparing the Company's
consolidated financial statements for the year ended June 30, 2001, except as
described in note 3 below.
2. SEASONALITY OF OPERATIONS:
Ski and resort operations are highly seasonal which impacts reported quarterly
earnings. The majority of the Company's ski and resort operation revenue is
generated during the period from November to April. Furthermore, during this
period a significant portion of ski and resort operation revenue is generated on
certain holidays (particularly Christmas, Presidents' Day and school spring
breaks) and on weekends.
The Company's real estate operations tend to be somewhat seasonal as well, with
construction primarily taking place during the summer and the majority of sales
closing in the December to June period.
3. CHANGE IN ACCOUNTING POLICY:
The Company has adopted, effective July 1, 2001, the new recommendations of The
Canadian Institute of Chartered Accountants relating to the method of
calculation, presentation and disclosure of earnings per share. These new
recommendations were applied retroactively and have resulted in the restatement
of fully diluted earnings per share for the three months ended December 31,
2000. The net impact of the change was a decrease in the fully diluted earnings
per common share of $0.01 from $0.25 to $0.24. Fully diluted earnings per share
for the other periods presented were not impacted by the change.
4. DISCONTINUED OPERATIONS:
For reporting purposes, the results of operations and cash flow from operating
activities of the non-resort real estate business have been disclosed separately
from those of continuing operations for the periods presented.
The results of discontinued operations are as follows:
Three months ended Six months ended
December 31 December 31
------------------------- -------------------------
2001 2000 2001 2000
(unaudited) (unaudited) (unaudited) (unaudited)
----------- ----------- ----------- -----------
Revenue $ 38 $ 246 $ 441 $ 761
----- ----- ----- -----
Income (loss) before current income
taxes $(128) $ 5 $ 46 $ 87
Provision for current income taxes 8 -- 18 --
----- ----- ----- -----
Income (loss) from discontinued
operations $(136) $ 5 $ 28 $ 87
===== ===== ===== =====
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands of US dollars, unless otherwise indicated)
4. DISCONTINUED OPERATIONS (CONTINUED):
Assets and liabilities presented in the consolidated balance sheets include the
following assets and liabilities of discontinued operations:
December 31 June 30
2001 2001
(unaudited) (audited)
----------- ---------
Current assets:
Amounts receivable $ 2,713 $ 4,126
Other non-cash current assets 21 --
Properties 6,633 7,080
Other non-current assets 153 166
Current liabilities (510) (900)
Non-current liabilities (2,838) (3,258)
The cash flows from discontinued operations are as follows:
Three months ended Six months ended
December 31 December 31
------------------------- -------------------------
2001 2000 2001 2000
(unaudited) (unaudited) (unaudited) (unaudited)
----------- ----------- ----------- -----------
Cash provided by (used in):
Operations $ (8) $ 2,970 $ 1,204 $ 4,360
Financing (424) (2,605) (768) (2,629)
Investing -- (12) -- (62)
------- ------- ------- -------
Increase (decrease) in cash and cash
equivalents $ (432) $ 353 $ 436 $ 1,669
======= ======= ======= =======
The Company has the right to apply the net cash flow from the discontinued
operations from January 1, 1997 to the redemption of non-resort preferred
("NRP") shares.
5. CAPITAL STOCK:
December 31 June 30
2001 2001
(unaudited) (audited)
----------- ---------
Common shares $400,302 $400,262
NRP shares 13,667 13,958
-------- --------
$413,969 $414,220
======== ========
(i) Common shares:
Number of 2001
common shares Amount
(unaudited) (unaudited)
------------- -----------
Balance, beginning of period 44,026,394 $ 400,262
Issued for cash under stock option plan 4,200 40
---------- ----------
Balance, end of period 44,030,594 $ 400,302
========== ==========
In addition to the stock options exercised during the six months, 474,500 stock
options were granted and 44,000 stock options were forfeited. A total of
3,748,800 stock options remain outstanding as at December 31, 2001.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands of US dollars, unless otherwise indicated)
(ii) NRP shares:
Number of 2001
NRP shares Amount
(unaudited) (unaudited)
----------- -----------
Balance, beginning of period 5,513,936 $ 13,958
Purchased for cancellation (333,400) (291)
--------- --------
Balance, end of period 5,180,536 $ 13,667
========= ========
6. EARNINGS PER SHARE:
Basic earnings per common share ("EPS") is calculated by dividing net income
attributable to common shareholders ("numerator") by the weighted average number
of common shares outstanding ("denominator"). Fully diluted EPS reflects the
potential dilution that could occur if outstanding dilutive options were
exercised and the cash received was used to repurchase common shares at the
average market price for the period.
The numerator for basic and fully diluted EPS was the same for all periods
presented. The reconciliation of the denominators used is as follows:
Three months ended Six months ended
December 31 December 31
------------------------- -------------------------
2001 2000 2001 2000
(unaudited) (unaudited) (unaudited) (unaudited)
----------- ----------- ----------- -----------
Denominator (in thousands of shares):
Weighted average number of common shares
outstanding - basic 44,031 43,568 44,030 43,526
Effect of dilutive stock options 339 859 356 879
------ ------ ------ ------
Weighted average number of common shares
outstanding - fully diluted 44,370 44,427 44,386 44,405
====== ====== ====== ======
The computation of fully diluted EPS for the six months ended December 31, 2001
and 2000 excludes the effect of the assumed exercise of options to purchase
2,884,000 and 13,000 common shares, respectively, because the effect would be
anti-dilutive.
7. SEGMENTED INFORMATION:
The following table presents the Company's results from continuing operations by
reportable segment:
Three months ended Six months ended
December 31 December 31
------------------------- -------------------------
2001 2000 2001 2000
(unaudited) (unaudited) (unaudited) (unaudited)
----------- ----------- ----------- -----------
Segment revenue:
Ski and resort $ 77,948 $ 85,588 $118,933 $131,039
Real estate 142,503 112,631 177,519 177,884
Warm-weather 9,573 8,690 27,248 26,438
Corporate and all other 1,360 140 1,385 1,547
-------- -------- -------- --------
$231,384 $207,049 $325,085 $336,908
======== ======== ======== ========
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands of US dollars, unless otherwise indicated)
7. SEGMENTED INFORMATION (CONTINUED):
Three months ended Six months ended
December 31 December 31
------------------------- -------------------------
2001 2000 2001 2000
(unaudited) (unaudited) (unaudited) (unaudited)
----------- ----------- ----------- -----------
Segment operating profit:
Ski and resort $ 14,672 $ 16,891 $ 14,027 $ 15,453
Real estate 21,901 15,476 27,506 28,467
Warm-weather (526) (1,164) 2,154 1,808
Corporate and all other 1,360 140 1,385 1,547
-------- -------- -------- --------
37,407 31,343 45,072 47,275
Less:
Interest 12,239 10,987 21,582 21,627
Depreciation and amortization 10,875 9,454 19,712 16,985
Corporate general and administrative 3,386 2,198 5,576 4,250
-------- -------- -------- --------
26,500 22,639 46,870 42,862
-------- -------- -------- --------
Income (loss) before income taxes,
non-controlling interest and
discontinued operations $ 10,907 $ 8,704 $ (1,798) $ 4,413
======== ======== ======== ========
8. CASH FLOW INFORMATION:
The changes in non-cash operating working capital balance consist of the
following:
Three months ended Six months ended
December 31 December 31
------------------------- -------------------------
2001 2000 2001 2000
(unaudited) (unaudited) (unaudited) (unaudited)
----------- ----------- ----------- -----------
Cash provided by (used in):
Amounts receivable $(50,235) $ (1,156) $(21,570 $ 10,398
Other assets (48,419) (23,348) (34,590) (47,068)
Amounts payable 45,531 27,446 19,252 (11,312)
Due to joint venture partners (2,049) 2,934 (3,936) (4,176)
Deferred revenue 31,999 34,120 41,215 29,470
-------- -------- -------- --------
$(23,173) $ 39,996 $ 371 $(22,688)
======== ======== ======== ========
Supplemental information:
Interest paid included in the
determination of net income
(loss) $ 10,347 $ 13,243 $ 19,899 $ 39,353
Income taxes paid 1,819 1,202 5,255 2,885
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on behalf by the
undersigned, thereunto duly authorized.
INTRAWEST CORPORATION
Date: March 1, 2002 By /s/ ROSS MEACHER
-----------------------------------
Name: Ross Meacher
Title: Corporate Secretary