Intrawest Corporation announced today its results for the year ended June 30, 2001, which include the results of its discontinued non-resort real estate business. The net income or loss generated by the non-resort business accrues to the holders of the non-resort preferred (“NRP”) shares and the net cash flow from this business is used to redeem NRP shares. This has no impact on the income or cash flow accruing to the common shareholders.
The discontinued operations incurred a loss of $4.4 million for the year ended June 30, 2001. The loss included a write-down of $2.7 million in connection with the Gateway Lands in Surrey, B.C., and reserves totaling $1.2 million in connection with non-resort properties sold in prior years. These reserves relate to water-intrusion claims at two properties and a rental guarantee at another property.
The Gateway Lands were written down to their appraised value. The market for commercially zoned land in this area of metropolitan Vancouver has declined and the size of the site has made it difficult to attract potential purchasers. Although there is no assurance the property will realize its appraised value when it is eventually sold, the appraised value provides the best estimate of sales proceeds at this time.
In addition to the Gateway Lands, the company`s only remaining non-resort assets are a 50 per cent interest in 12 AirCare vehicle-emission testing centres located in Greater Vancouver, and a balance of $6 million remaining outstanding under the revolving line of credit made available in connection with the 1994 bulk sale of non-resort properties. The company`s goal is to sell the two properties and collect the balance outstanding on the receivable within the next 10 months.
The current redemption price of NRP shares is $2.65 per share. Following the current year`s loss and on the assumption of recovering book value on the remaining non-resort assets, the net asset value per share is expected to be distributed by way of redemption of all remaining NRP shares in the range of $1.90 - $2.00 per share. The company currently expects to make the final redemption prior to July 1, 2002.
The statements which are not historical facts contained in this release 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.