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 MARCH 2002
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-________.
INTRAWEST 3
THIRD QUARTER
NINE MONTHS ENDED MARCH 31, 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 MARCH 31, 2002 (THE "2002 QUARTER") COMPARED WITH THE THREE
MONTHS ENDED MARCH 31, 2001 (THE "2001 QUARTER")
REVIEW OF SKI AND RESORT OPERATIONS
Ski and resort operation revenue was $273.1 million in the 2002 quarter, up from
$267.9 million in the 2001 quarter. Revenue from the mountain resorts increased
from $254.7 million to $260.3 million due mainly to a 4% increase in skier
visits from 4,348,000 to 4,527,000. Given the slow economy and in the aftermath
of September 11, the Company was very pleased with this performance. A number of
factors contributed to the skier visit growth, including:
o The addition of approximately 1,000 new beds across the Company's resorts
after the 2001 third quarter.
o The timing of Easter in the 2002 quarter versus the fourth quarter of
fiscal 2001.
o A 9% increase in the number of season passes and frequency cards sold
during the year from 249,000 to 271,000.
o The strong competitive position of each of the Company's resorts due to
past investments in on-mountain facilities, village amenities and
snowmaking.
o The Company's marketing capability, including its centralized call center
at Resort Reservations, which enabled a quick response to the shortened
booking trends experienced this year.
Revenue per skier visit across all the resorts decreased 2% from $53.34 to
$52.17 due to the shift in visits from destination to local and regional. Local
and regional guests typically generate lower revenue per visit since they spend
less on non-ticket items. Revenue per visit actually increased at all of the
Company's resorts except for Whistler Blackcomb which has a higher proportion of
"fly-to" customers than the other resorts. Revenue from the Company's non-skier
visit related businesses (Alpine, the Breeze/Max retail chain and Resort
Reservations) increased a combined 6% to $24.1 million in the 2002 quarter
compared with the 2001 quarter.
Revenue from the warm-weather resorts was $12.8 million in the 2002 quarter,
down from $13.2 million in the 2001 quarter mainly due to reduced corporate and
group business at the Raven golf courses in Arizona.
The composition of ski and resort operation revenue was as follows:
--------------------------------------------------------------------------------------------------------
2002 Quarter 2001 Quarter Increase Percentage
(millions) (millions) (decrease) Change
(millions)
(unaudited) (%)
--------------------------------------------------------------------------------------------------------
Mountain operations $ 128.9 $ 129.2 $ (0.3) --
Retail and rental 48.7 46.1 2.6 6
Food and beverage 31.9 31.7 0.2 1
Lodging and property management 28.6 27.5 1.1 4
Ski school 21.0 19.5 1.5 8
Golf 5.9 6.3 (0.4) (6)
Other 8.1 7.6 0.5 7
--------------------------------------------------------------------------------------------------------
$ 273.1 $ 267.9 $ 5.2 2
--------------------------------------------------------------------------------------------------------
The flat performance of mountain operations reflects the impact of increased
season pass and other regional visits. The 6% increase in retail and rental
revenue was due mainly to additional outlets at Blue Mountain and Tremblant and
to a maturing of the new village at Copper. The 4% increase in lodging and
property management
revenue was due to 19,000 additional room nights booked during the 2002 quarter
and a $10 increase in the average daily room rate. The 8% increase in ski school
revenue was attributable mainly to the timing of Easter and spring break, which
are traditionally high demand periods for ski school programs. The 6% decline in
golf revenue was due mainly to lower yields at the Arizona courses in response
to reduced hotel occupancies in Phoenix and Tucson.
Ski and resort operations EBITDA increased to $99.6 million in the 2002 quarter
from $93.2 million in the 2001 quarter. The cost control measures that had a
positive impact on ski and resort operations EBITDA in the first two quarters of
fiscal 2002 continued to benefit the Company in the third quarter and, while
revenue grew by 1.9%, costs declined by 0.7%. The EBITDA margin improved from
34.8% to 36.5%.
REVIEW OF REAL ESTATE OPERATIONS
Revenue from the sale of real estate was $64.2 million in the 2002 quarter
compared with $65.5 million in the 2001 quarter. A total of 126 units were
closed in the 2002 quarter compared with 171 units in the 2001 quarter. The
closings in the 2002 quarter were below expectations as construction delays at
the First Ascent project in Squaw Valley moved some closings of pre-sold units
into the fourth quarter of fiscal 2002. The average sales price per unit
increased 24%, reflecting unit type and resort mix as well as price escalation.
Approximately one-third of the units closed in the 2002 quarter were at Squaw
Valley which has high average prices in excess of $600 per square foot. The
Company's vacation ownership business, Club Intrawest, experienced a strong
third quarter, with revenue of $16.5 million compared with $13.2 million in the
2001 quarter.
Operating profit from real estate sales was $11.9 million in the 2002 quarter,
down slightly from $12.0 million in the 2001 quarter. The margin on sales
improved to 18.6% from 18.3%, reflecting the change in resort and unit type mix
referred to above.
REVIEW OF CORPORATE OPERATIONS
Interest and other income for the 2002 quarter was $1.7 million compared with
$3.1 million in the 2001 quarter due mainly to lower interest rates. Interest
expense was $10.2 million in the 2002 quarter, up slightly from $10.0 million in
the 2001 quarter as the impact of higher debt balances was offset by reduced
interest rates. Depreciation and amortization expense increased to $30.1 million
in the 2002 quarter from $26.7 million in the 2001 quarter due to new capital
expenditures at the resorts over the past year. The tax rate decreased to 12% in
the 2002 quarter from 18% in the 2001 quarter due mainly to utilization of
available tax shelter and to reductions in Canadian federal and provincial
corporate tax rates. Non-controlling interest decreased to $6.4 million in the
2002 quarter from $7.5 million in the 2001 quarter due to reduced real estate
closings at Whistler Blackcomb.
NINE MONTHS ENDED MARCH 31, 2002 (THE "2002 PERIOD") COMPARED WITH THE NINE
MONTHS ENDED MARCH 31, 2001 (THE "2001 PERIOD")
REVIEW OF SKI AND RESORT OPERATIONS
Ski and resort operation revenue was $419.3 million in the 2002 period compared
with $425.4 million in the 2001 period. Revenue from the mountain resorts
decreased from $385.7 million to $379.2 million as the increase in revenue in
the third quarter described above was offset by revenue reductions in the first
and second quarters. Late season openings at the eastern resorts, caused by
unusually warm weather in November and December, and the aftermath of the events
of September 11, reduced mountain resort revenue in the second quarter by $7.7
million. In addition, the Company's decision to turn over management of the
waterpark at Mountain Creek to a third-party operator reduced revenue by $4.1
million in the first quarter.
Revenue from the warm-weather resorts increased to $40.0 million in the 2002
period from $39.7 million in the 2001 period. An increase in revenue due to the
opening of the new Raven golf course at Three Peaks was offset by a reduction in
revenue at the Arizona courses due mainly to slower group and corporate
business.
Ski and resort operations EBITDA increased to $115.8 million in the 2002 period
from $110.5 million in the 2001 period as effective control over costs more than
offset the decline in revenue. The margin on sales was 27.6% in the 2002 period
compared with 26.0% in the 2001 period.
REVIEW OF REAL ESTATE OPERATIONS
Revenue from the sale of real estate was $238.2 million in the 2002 period, down
from $240.0 million in the 2001 period. A total of 654 units were closed in the
2002 period compared with 783 units in the 2001 period. The average sales price
per unit increased 17%, reflecting unit type and resort mix as well as price
escalation. The Resort Club generated $32.7 million of the real estate revenue
for the 2002 period, 12% more than the 2001 period.
Operating profit from real estate sales was $38.0 million in the 2002 period,
down from $38.8 million in the 2001 period. The margin on sales was 15.9% in the
2002 period compared with 16.2% in the 2001 period. The lower margin reflects
the lower weighting of lot sales in the 2002 period (9% of closings versus 16%
in the 2001 period). Lots typically have a higher margin than condo-hotel units
or townhomes.
REVIEW OF CORPORATE OPERATIONS
Interest and other income was $3.1 million in the 2002 period compared with $4.6
million in the 2001 period due to lower interest rates. Interest expense was
$31.8 million in the 2002 period, up slightly from $31.7 million in the 2001
period as the impact of higher debt in the 2002 period was offset by lower
interest rates. Depreciation and amortization expense was $49.9 million in the
2002 period, up from $43.7 million in the 2001 period mainly because of the
capital expenditures at the resorts during the past two fiscal years. Corporate
general and administrative expense was $8.8 million for the 2002 period compared
with $7.0 million for the 2001 period due primarily to increased information
technology costs.
LIQUIDITY AND CAPITAL RESOURCES
The major sources and uses of cash in the three and nine months ended March 31,
2002 and March 31, 2001 were as follows:
--------------------------------------------------------------------------------------------------------------
Three months ended March 31 Nine months ended March 31
2002 2001 2002 2001
(millions) (millions) (millions) (millions)
(unaudited)
--------------------------------------------------------------------------------------------------------------
Funds from continuing operations $ 90.9 $ 82.4 $ 109.2 $ 102.7
Working capital for real estate developed
for sale (79.7) (15.5) (145.9) (47.4)
Acquisitions and resort capital
expenditures (13.1) (20.1) (69.6) (80.4)
--------------------------------------------------------------------------------------------------------------
(1.9) 46.8 (106.3) (25.1)
(Increase) decrease in other net assets 52.5 8.8 40.3 (28.7)
--------------------------------------------------------------------------------------------------------------
Net cash flows before non-construction
financing 50.6 55.6 (66.0) (53.8)
Net financing inflows (repayments) excluding
construction financing (30.4) (30.2) 94.1 67.5
--------------------------------------------------------------------------------------------------------------
Increase in cash $ 20.2 $ 25.4 $ 28.1 $ 13.7
--------------------------------------------------------------------------------------------------------------
Net new investment in real estate
developed for sale $ (82.3) $ (53.9) $ (187.3) $ (136.5)
Less: net proceeds from construction
financing 2.6 38.4 41.4 89.1
--------------------------------------------------------------------------------------------------------------
Working capital for real estate developed
for sale $ (79.7) $ (15.5) $ (145.9) $ (47.4)
--------------------------------------------------------------------------------------------------------------
Working capital for real estate used $79.7 million of cash in the 2002 quarter
compared with $15.5 million in the third quarter last year. The increase in use
of cash reflects the increased number of units under development. 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. During the nine-month period real estate
development used $145.9 million cash, up from $47.4 million in the nine months
last year. The Company expects to close significantly more units in the fourth
quarter of fiscal 2002 than the fourth quarter of fiscal 2001 which will result
in working capital for real estate for fiscal 2002 being similar to fiscal 2001.
The net investment in real estate developed for sale is expected to decline
significantly in fiscal 2003 as the production of units levels off and spending
on up-front infrastructure costs begins to decline.
Acquisitions and resort capital expenditures used $13.1 million of cash in the
2002 quarter compared with $20.1 million in the 2001 quarter. For the nine
months, acquisitions and resort capital expenditures used $69.6 million cash,
down from $80.4 million in the same period last year. These reductions are in
keeping with the Company's strategy of leveraging its expertise rather than its
capital to grow its business. The Company expects to spend significantly less in
fiscal 2002 and future years on these items than it spent in past years as it
assembled and upgraded its network of resorts.
Other net assets decreased by $52.5 million in the 2002 quarter mainly due to
collection of receivables in connection with certain real estate closings in the
second quarter. For the nine-month period other net assets provided $40.3
million cash compared with a use of cash of $28.7 million in the same period
last year due mainly to an increase in payables and deferred revenue, resulting
from increased real estate pre-sales.
At March 31, 2002, the Company had net debt (i.e., bank and other indebtedness
net of cash and cash equivalents) of $1,019.6 million. The ratio of net debt to
net tangible assets stood at approximately 50%. The Company's goal is to move
this ratio down to approximately 35% within the next three years and it expects
to achieve this objective primarily by increasing funds from continuing
operations, reducing its net investment in real estate developed for sale,
selling selected non-core assets and continuing to reduce resort capital
expenditures.
ADDITIONAL INFORMATION
TOTAL COMPANY EBITDA
Three months ended Nine months ended
March 31 March 31
---------------------------------------------------------------------------------------------------------
2002 2001 2002 2001
---------------------------------------------------------------------------------------------------------
(in thousands of US dollars) (unaudited)
Income before tax $ 71,305 $ 70,191 $ 69,507 $ 74,604
Depreciation and amortization 30,141 26,725 49,853 43,710
Interest expense 10,201 10,028 31,783 31,655
Interest in real estate costs 3,097 3,174 12,147 11,925
Less interest and other income (1,678) (3,083) (3,063) (4,630)
---------------------------------------------------------------------------------------------------------
Total Company EBITDA $ 113,066 $ 107,035 $ 160,227 $ 157,264
---------------------------------------------------------------------------------------------------------
EBITDA FROM SKI AND RESORT OPERATIONS
Three months ended Nine months ended
March 31 March 31
---------------------------------------------------------------------------------------------------------
2002 2001 2002 2001
---------------------------------------------------------------------------------------------------------
(in thousands of US dollars) (unaudited)
Ski and resort operation revenue $ 273,105 $ 267,932 $ 419,286 $ 425,409
Ski and resort operation expenses 173,458 174,688 303,458 314,904
---------------------------------------------------------------------------------------------------------
EBITDA from ski and resort operations $ 99,647 $ 93,244 $ 115,828 $ 110,505
---------------------------------------------------------------------------------------------------------
EBITDA does not have a standardized meaning prescribed by generally accepted
accounting principles (GAAP) and may not be comparable to similar measures
presented by other publicly traded companies. A reconciliation between net
earnings as determined in accordance with Canadian GAAP and EBITDA is presented
above.
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,
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 Nine months ended
March 31 March 31
----------------------------------------------------------------------------------------------------
2002 2001 2002 2001
----------------------------------------------------------------------------------------------------
(in thousands of US dollars, except per share amounts) (unaudited)
REVENUE:
Ski and resort operations $ 273,105 $ 267,932 $ 419,286 $ 425,409
Real estate sales 64,213 65,508 238,233 239,969
Rental properties 3,146 2,490 6,645 5,913
Interest and other income (199) 1,269 1,186 2,816
Income from equity accounted investment 1,877 1,814 1,877 1,814
----------------------------------------------------------------------------------------------------
342,142 339,013 667,227 675,921
EXPENSES:
Ski and resort operations 173,458 174,688 303,458 314,904
Real estate costs 52,285 53,550 200,269 201,162
Rental properties 1,507 1,106 3,536 2,911
Interest 10,201 10,028 31,783 31,655
Depreciation and amortization 30,141 26,725 49,853 43,710
Corporate general and administrative 3,245 2,725 8,821 6,975
----------------------------------------------------------------------------------------------------
270,837 268,822 597,720 601,317
----------------------------------------------------------------------------------------------------
Income before undernoted 71,305 70,191 69,507 74,604
Provision for income taxes 8,660 12,670 8,316 8,568
----------------------------------------------------------------------------------------------------
Income before non-controlling interest
and discontinued operations 62,645 57,521 61,191 66,036
Non-controlling interest 6,441 7,456 8,727 8,485
----------------------------------------------------------------------------------------------------
Income from continuing operations 56,204 50,065 52,464 57,551
Results of discontinued operations (note 4) (45) (130) (17) (43)
----------------------------------------------------------------------------------------------------
Income for the period 56,159 49,935 52,447 57,508
Retained earnings, beginning of period 181,956 137,203 187,922 131,953
Dividends -- -- (2,254) (2,323)
----------------------------------------------------------------------------------------------------
Retained earnings, end of period $ 238,115 $ 187,138 $ 238,115 $ 187,138
Income from continuing operations
per common share:
Basic $ 1.28 $ 1.15 $ 1.19 $ 1.32
Fully diluted $ 1.25 $ 1.12 $ 1.18 $ 1.29
----------------------------------------------------------------------------------------------------
Net income per common share:
Basic $ 1.28 $ 1.15 $ 1.19 $ 1.32
Fully diluted $ 1.25 $ 1.12 $ 1.18 $ 1.29
Weighted average number of
common shares outstanding (in
thousands)
Basic 44,031 43,721 44,031 43,590
Fully diluted 45,024 44,587 44,417 44,474
----------------------------------------------------------------------------------------------------
See accompanying notes to consolidated financial statements.
CONSOLIDATED BALANCE SHEETS
(in thousands of US dollars) March 31 June 30
-----------------------------------------------------------------------------------------------
2002 2001
(unaudited) (audited)
-----------------------------------------------------------------------------------------------
ASSETS
Current assets:
Cash and cash equivalents $ 114,546 $ 86,430
Amounts receivable 68,580 82,536
Other assets 96,580 105,545
Resort properties 437,743 329,177
Future income taxes 3,619 4,168
-----------------------------------------------------------------------------------------------
721,068 607,856
Ski and resort operations 832,746 813,741
Properties:
Resort 439,472 371,451
Discontinued operations 6,334 7,080
-----------------------------------------------------------------------------------------------
445,806 378,531
Amounts receivable 58,437 50,416
Other assets 96,341 86,640
Goodwill 16,545 19,128
-----------------------------------------------------------------------------------------------
$ 2,170,943 $ 1,956,312
===============================================================================================
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Amounts payable $ 159,221 $ 146,464
Deferred revenue 124,303 81,537
Bank and other indebtedness, current portion:
Resort 330,869 201,558
Discontinued operations -- 82
-----------------------------------------------------------------------------------------------
614,393 429,641
Bank and other indebtedness:
Resort 800,430 804,991
Discontinued operations 2,846 3,363
-----------------------------------------------------------------------------------------------
803,276 808,354
Due to joint venture partners 5,816 8,818
Deferred revenue 7,818 26,750
Future income taxes 83,676 83,771
Non-controlling interest in subsidiaries 32,890 30,616
-----------------------------------------------------------------------------------------------
1,547,869 1,387,950
Shareholders' equity:
Capital stock (note 5) 414,030 414,220
Retained earnings 238,115 187,922
Foreign currency translation adjustment (29,071) (33,780)
-----------------------------------------------------------------------------------------------
623,074 568,362
-----------------------------------------------------------------------------------------------
$ 2,170,943 $ 1,956,312
===============================================================================================
See accompanying notes to consolidated financial statements.
CONSOLIDATED STATEMENTS OF CASH FLOWS
Three months ended Nine months ended
March 31 March 31
--------------------------------------------------------------------------------------------------------------------------
2002 2001 2002 2001
--------------------------------------------------------------------------------------------------------------------------
(in thousands of US dollars) (unaudited)
CASH PROVIDED BY (USED IN)
OPERATIONS:
Income from continuing operations $ 56,204 $ 50,065 $ 52,464 $ 57,551
Items not affecting cash:
Depreciation and amortization 30,141 26,725 49,853 43,710
Future income taxes -- -- -- (5,276)
Income from equity accounted investment (1,877) (1,814) (1,877) (1,814)
Non-controlling interest 6,441 7,456 8,727 8,485
--------------------------------------------------------------------------------------------------------------------------
Funds from continuing operations 90,909 82,432 109,167 102,656
Recovery of costs through real estate sales 52,285 53,550 200,269 201,162
Acquisition and development of properties held for sale (134,556) (107,403) (387,531) (337,693)
Increase in amounts receivable, net (1,086) (4,336) (8,641) (8,603)
Changes in non-cash operating working capital (note 8) 58,560 20,060 58,931 (2,628)
--------------------------------------------------------------------------------------------------------------------------
Cash provided by (used in) continuing operating activities 66,112 44,303 (27,805) (45,106)
Cash provided by (used in) discontinued operations (note 4) 299 (395) 1,503 3,965
--------------------------------------------------------------------------------------------------------------------------
66,411 43,908 (26,302) (41,141)
FINANCING:
Bank and other borrowings, net (25,319) 7,099 142,398 157,703
Issue of common shares for cash 74 1,106 113 2,541
Redemption and repurchase of
non-resort preferred shares (13) (1,673) (303) (3,788)
Dividends paid -- -- (2,254) (2,323)
Distributions to non-controlling interests (2,532) -- (4,801) (1,283)
--------------------------------------------------------------------------------------------------------------------------
(27,790) 6,532 135,153 152,850
INVESTMENTS:
Proceeds from (expenditures on):
Revenue-producing properties (226) 87 (323) (4,161)
Ski and resort operation assets (13,075) (20,092) (69,587) (76,074)
Other assets (5,167) (5,006) (10,825) (13,423)
Business acquisitions, net of cash acquired -- -- -- (4,318)
--------------------------------------------------------------------------------------------------------------------------
(18,468) (25,011) (80,735) (97,976)
--------------------------------------------------------------------------------------------------------------------------
Increase in cash and cash equivalents 20,153 25,429 28,116 13,733
Cash and cash equivalents, beginning of period 94,393 67,289 86,430 78,985
--------------------------------------------------------------------------------------------------------------------------
Cash and cash equivalents, end of period $ 114,546 $ 92,718 $ 114,546 $ 92,718
--------------------------------------------------------------------------------------------------------------------------
(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 and nine months ended
March 31, 2001. The fully diluted earnings per share for the three months ended
March 31, 2002 and March 31, 2001 are more dilutive by $0.03 than it would have
been under the previous standard. The fully diluted earnings per share for the
nine months ended March 31, 2002 and March 31, 2001 are more dilutive by $0.01
and $0.03, respectively, than it would have been under the previous standard.
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 March 31 Nine months ended March 31
2002 2001 2002 2001
(unaudited) (unaudited) (unaudited) (unaudited)
--------------------------------------------------------------------------------------------------------------
Revenue $ 362 $ 309 $ 803 $ 1,070
--------------------------------------------------------------------------------------------------------------
Loss before current income taxes $ (46) $ (130) $ -- $ (43)
Provision for current income taxes (1) -- 17 --
--------------------------------------------------------------------------------------------------------------
Loss from discontinued operations $ (45) $ (130) $ (17) $ (43)
--------------------------------------------------------------------------------------------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands of US dollars, unless otherwise indicated)
--------------------------------------------------------------------------------
Assets and liabilities presented in the consolidated balance sheets include the
following assets and liabilities of discontinued operations:
--------------------------------------------------------------------
MARCH 31 June 30
2002 2001
(unaudited) (audited)
--------------------------------------------------------------------
Current assets:
Amounts receivable $ 2,767 $ 4,126
Other non-cash current assets (22) --
Properties 6,634 7,080
Other non-current assets 26 166
Current liabilities (465) (900)
Non-current liabilities (2,683) (3,258)
--------------------------------------------------------------------
The cash flows from discontinued operations are as follows:
------------------------------------------------------------------------------------------------------------
Three months ended March 31 Nine months ended March 31
2002 2001 2002 2001
(unaudited) (unaudited) (unaudited) (unaudited)
------------------------------------------------------------------------------------------------------------
Cash provided by (used in):
Operations $ 299 $ (395) $ 1,503 $ 3,965
Financing (134) (2,044) (902) (4,673)
Investing -- 366 -- 304
------------------------------------------------------------------------------------------------------------
Increase (decrease) in cash and cash equivalents $ 165 $ (2,073) $ 601 $ (404)
------------------------------------------------------------------------------------------------------------
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:
-------------------------------------------------------------------------------------------
MARCH 31 June 30
2002 2001
(unaudited) (audited)
-------------------------------------------------------------------------------------------
Common shares $ 400,375 $ 400,262
NRP shares 13,655 13,958
-------------------------------------------------------------------------------------------
$ 414,030 $ 414,220
-------------------------------------------------------------------------------------------
(i) Common shares:
-------------------------------------------------------------------------------------------
Number of
common shares AMOUNT
(unaudited) (unaudited)
-------------------------------------------------------------------------------------------
Balance, June 30, 2001 44,026,394 $ 400,262
Issued for cash under stock option plan 14,150 113
-------------------------------------------------------------------------------------------
Balance, March 31, 2002 44,040,544 $ 400,375
-------------------------------------------------------------------------------------------
In addition to the stock options exercised during the quarter, 2,000 stock
options were forfeited and 3,736,800 common stock options remain outstanding as
at March 31, 2002.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands of US dollars, unless otherwise indicated)
--------------------------------------------------------------------------------
(ii) NRP shares:
-------------------------------------------------------------------------------------------
Number of
NRP shares AMOUNT
(unaudited) (unaudited)
-------------------------------------------------------------------------------------------
Balance, June 30, 2001 5,513,936 $ 13,958
Purchased for cancellation (344,600) (303)
-------------------------------------------------------------------------------------------
Balance, March 31, 2002 5,169,336 $ 13,655
-------------------------------------------------------------------------------------------
(iii) Stock compensation:
The Company has early-adopted effective July 1, 2001, section 3870 of The
Canadian Institute of Chartered Accountants ("CICA 3870") relating to the method
of accounting for stock-based compensation. The recommendations require that
stock-based compensation be accounted for based on a fair value methodology,
although it allows an entity to continue to measure stock-based compensation
costs using the intrinsic value based method of accounting. Accordingly, no
compensation expense has been recognized for the periods presented. Had
compensation expense been determined in accordance with the provisions of CICA
3870 using the Black-Scholes option pricing model at the date of the grant, the
following weighted average assumptions would be used for options granted in the
current period:
--------------------------------------------------------------------------------
Dividend yield 0.6%
Risk-free interest rate 4.88%
Expected option life 7 years
Expected volatility 84%
--------------------------------------------------------------------------------
Using the above assumptions, the Company's net income for the nine months ended
March 31, 2002 would have been reduced to the pro forma amount indicated below:
--------------------------------------------------------------------------------
Net income as reported 52,447
Estimated fair value of option grants (569)
--------------------------------------------------------------------------------
Pro forma 51,878
--------------------------------------------------------------------------------
The estimated fair value of option grants is based on those options granted
since the date of adoption and excludes the effect of those granted before July
1, 2001.
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:
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands of US dollars, unless otherwise indicated)
--------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------
Three months ended March 31 Nine months ended March 31
2002 2001 2002 2001
(unaudited) (unaudited) (unaudited) (unaudited)
------------------------------------------------------------------------------------------------------
Denominator (in thousands of shares):
Weighted average number of common shares
outstanding - basic 44,031 43,721 44,031 43,590
Effect of dilutive stock options 993 866 386 884
------------------------------------------------------------------------------------------------------
Weighted average number of common shares
outstanding - fully diluted 45,024 44,587 44,417 44,474
------------------------------------------------------------------------------------------------------
The computation of fully diluted EPS for the nine months ended March 31, 2002
and 2001 excludes the effect of the assumed exercise of options to purchase
2,275,000 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 March 31 Nine months ended March 31
2002 2001 2002 2001
(unaudited) (unaudited) (unaudited) (unaudited)
-------------------------------------------------------------------------------------------------------
Segment revenue:
Ski and resort $ 260,315 $ 254,708 $ 379,248 $ 385,747
Real estate 67,359 67,998 244,878 245,882
Warm-weather 12,790 13,224 40,038 39,662
Corporate and all other 1,678 3,083 3,063 4,630
-------------------------------------------------------------------------------------------------------
$ 342,142 $ 339,013 $ 667,227 $ 675,921
-------------------------------------------------------------------------------------------------------
Segment operating profit :
Ski and resort $ 99,611 $ 91,868 $ 113,638 $ 107,321
Real estate 13,567 13,342 41,073 41,809
Warm-weather 36 1,376 2,190 3,184
Corporate and all other 1,678 3,083 3,063 4,630
-------------------------------------------------------------------------------------------------------
114,892 109,669 159,964 156,944
Less:
Interest 10,201 10,028 31,783 31,655
Depreciation and amortization 30,141 26,725 49,853 43,710
Corporate general and administrative 3,245 2,725 8,821 6,975
-------------------------------------------------------------------------------------------------------
43,587 39,478 90,457 82,340
-------------------------------------------------------------------------------------------------------
Income before income taxes, non-controlling
interest and discontinued operations $ 71,305 $ 70,191 $ 69,507 $ 74,604
-------------------------------------------------------------------------------------------------------
8. CASH FLOW INFORMATION:
The changes in non-cash operating working capital consist of the following:
-------------------------------------------------------------------------------------------------------
Three months ended March 31 Nine months ended March 31
2002 2001 2002 2001
(unaudited) (unaudited) (unaudited) (unaudited)
-------------------------------------------------------------------------------------------------------
Cash provided by (used in):
Amounts receivable $ 34,206 $ 6,059 $ 12,636 $ 16,457
Other assets 29,811 57,655 (4,779) 10,587
Amounts payable (6,256) (12,860) 12,996 (24,172)
Due to joint venture partners 993 (1,269) (2,943) (5,445)
Deferred revenue (194) (29,525) 41,021 (55)
-------------------------------------------------------------------------------------------------------
$ 58,560 $ 20,060 $ 58,931 $ (2,628)
-------------------------------------------------------------------------------------------------------
Supplemental information:
Interest paid included in the
determination of net income $ 4,909 $ 7,108 $ 24,808 $ 46,461
Income taxes paid 2,210 1,461 7,465 4,346
-------------------------------------------------------------------------------------------------------
[INTRAWEST LOGO]
Suite 800, 200 Burrard Street
Vancouver, B.C. Canada V6C 3L6
Tel: (604) 669-9777 Fax: (604) 669-0605
Web site: www.intrawest.com
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: May 28, 2002 By /s/ ROSS MEACHER
-----------------------------------
Name: Ross Meacher
Title: Corporate Secretary