Moody's expects the firm to move from a net user of cash to a net generator in the next two years and anticipates a reduction in leverage due to continued growth in operating cash flow and declining capital spending. At the end of fiscal 1999, debt to cash flow was approximately 5.5 times, which dropped to below fives times a year later. This ratio is projected to remain stable through fiscal 2001, after which Intrawest should be able to take advantage of the development and infrastructure improvements it has made over the past few years. Looking forward, however, the rating agency expects the capital spending will resume, some of it coming from external financing.
The rating also reflects Moody's belief that improved operating results, due in part to the wide geographic distributed of its resorts, which should help reduce the impact of local economic downturns and adverse weather.
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