Intrawest Announces Formation of Leisura U.S.

Intrawest Corporation, the world`s leading operator and developer of village-centered resorts, announced that it has formed a partnership with global asset management leader JPMorgan Fleming Asset Management to create Leisura Developments LLC (Leisura Developments U.S.). The partnership will carry out Intrawest`s production- phase real estate business in the U.S. and will finance its business on its own credit.
“This partnership with JPMorgan Fleming is an important step in the advancement of our new strategy for real estate development,” said Joe Houssian, Intrawest`s chairman, president and chief executive officer. “The creation of Leisura allows us to reduce the amount of capital we invest in real estate development without limiting growth.”

By placing the production-phase real estate business in a separate and independent company, Intrawest is achieving several objectives: significantly reducing the capital requirements of its real estate business; significantly reducing debt levels; and implementing separate and appropriate capital structures for Intrawest`s resort business and real estate business.

“We are very excited about this opportunity to partner with Intrawest,” said Larry Ellman, Managing Director and Head of Acquisitions for JPMorgan Fleming`s Real Estate Investment Group. “The Leisura venture represents a natural extension of our multi-family residential investment program with a top-tier operating company in a product type with very attractive supply and demand fundamentals. Through our institutional JPMorgan Fleming Special Situation Property Fund, Leisura gives our clients access to a portfolio of irreplaceable resort assets and an opportunity to invest alongside Intrawest, a top-tier developer with a successful track record in resort condominium development throughout North America. We look forward to a successful long- term relationship with Intrawest.”
The establishment of Leisura Developments U.S. completes the process of structurally separating the bulk of Intrawest`s production-phase real estate business into independent companies and is the key component of the company`s new business strategy for its real estate development activities. In February 2003 Intrawest announced the formation of Leisura Developments Canada. (Leisura Developments U.S. and Leisura Developments Canada are referred to collectively as “Leisura”.) In the future, the bulk of the production-phase development at Intrawest`s resorts is expected to be carried out in a similar fashion.

The formation of these partnerships will allow Intrawest to recover the bulk of its investment in this part of its business, which at December 31, 2002 amounted to approximately US$380 million. This investment will be recovered as projects currently under construction are completed over the next 12 to 18 months. Intrawest capital expenditures to support this business in future will
be limited to its investment in Leisura, which is expected to be about US$40 million to US$50 million. The difference between the large amount of capital recovered from current projects as they complete and the much smaller investment in Leisura will generate significant positive free cash flow over the next 12 months. As a consequence, Intrawest has reaffirmed that:

- the cash flow received from the move to the new Leisura approach, together with cash flow from the rest of its business, is expected to amount to US$250 million in free cash flow in fiscal 2004; and - by June 30, 2004, net debt is expected to decline by approximately US$300 million from the level recorded at December 31, 2002.


“The Leisura structure allows Intrawest to move to lower debt levels with a high degree of certainty,” said Daniel Jarvis, Intrawest`s executive vice president and chief financial officer. “Furthermore it means that we can continue to grow real estate while at the same time generating free cash flow because our capital requirements will be limited to our minority equity investment in Leisura.”

NOTE: The term Free Cash Flow 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. Free Cash Flow consists of cash provided by continuing operating activities less ski and resort operations capital expenditures and Intrawest`s investment in Leisura (Canada and U.S.).
As a part of J.P. Morgan Chase & Co., JPMorgan Fleming Asset Management is a global asset management leader providing world-class investment solutions to corporations, governments, institutions, endowments, foundations and individuals. With assets of $495(x) billion in global assets under management, JPMorgan Fleming offers global reach, local presence, and product leadership in every asset class for defined benefit and defined contribution pension plans, segregated accounts, proprietary and sub-advised funds, and asset management for high-net-worth individuals.

Intrawest Corporation (IDR:NYSE; ITW:TSX) is the world`s leading developer and operator of village-centered resorts. The company owns or controls 10 mountain resorts, including Whistler Blackcomb, North America`s most popular mountain resort. Intrawest also owns Sandestin Golf and Beach Resort in Florida and has a premier vacation ownership business, Club Intrawest. The Company is developing additional resort villages at six resorts in North America and Europe. The Company has a 45 per cent interest in Alpine Helicopters Ltd., owner of Canadian Mountain Holidays, the largest heli-skiing operation in the world. Intrawest is headquartered in Vancouver, British Columbia and is located on the World Wide Web at