In Colorado, it owns and operates Copper Mountain and operates Winter Park on behalf of the City of Denver. It also is developing a ski village at Aspen Skiing Co.'s Snowmass Ski area, and it has a joint venture agreement for developing Keystone Resort with competitor Vail Resorts Inc.

Intrawest's production-phase real estate business includes all activities from groundbreaking to delivery and sale of final real estate units. If Intrawest were already employing this approach, the current portion of its production-phase real estate that would move into these new companies has an asset value of approximately $380 million.

By placing the production-phase real estate business in separate and independent companies, Intrawest hopes to achieve 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.

"For several years now Intrawest has been migrating from a capital-intensive business towards a business model where our reputation, our expertise and our customers are the basis for future growth," says Joe Houssian, Intrawest's chairman, president and CEO. "Our recent and successful introduction of several new expertise-based businesses is compelling evidence of this direction and today's announcement regarding our real estate division is a dramatic step forward in our evolution…This new business model will generate significant free cash flow to support our growth in our various divisions while at the same time creating a more conservative capital structure for Intrawest."

Intrawest has partnered to create the new companies: Leisura Developments US and Leisura Developments Canada, or collectively known as Leisura. Beginning this spring, Leisura will acquire land parcels at fair market value from Intrawest and the first projects will commence construction in April.

The Leisura companies will carry the business through to completion and final sale of the resort homes, which is generally 12 to 18 months depending on the type of project. This year, the Leisura companies are expected to take on 15 projects from nine resorts.

In the future, the bulk of the production-phase development at Intrawest's resorts is expected to be carried out in a similar fashion. Intrawest will have a minority equity investment in each company; the other partners are major Canadian and US institutional investors.

The Leisura companies will establish financing on their own credit with no guarantees or other financial support from Intrawest or the other investors. The capital commitments for the Canadian company have been finalized. Commitments for the US company are being finalized with an expected closing within 60 days.

Intrawest will realize the fair market value for its land as parcels are sold to the Leisura companies. Consideration for this land will be 75% in cash, with the balance in a land note. In addition, Intrawest will continue to participate directly in the earnings and cash flow of the projects developed by Leisura through its investment interests. It will also earn fees for its development services provided to Leisura.

Intrawest expects the overall impact on earnings per share to be roughly neutral in the near term and modestly positive in the longer term. Leisura will purchase the land parcels from Intrawest for each project prior to the start of construction. Consequently, Intrawest will continue to retain long-term control of the remainder of the land at its resorts and will benefit from the long-term appreciation in land values.

"This completes an investment picture that combines a unique and compelling growth story with a business model based more on expertise and reputation than on capital," says Daniel Jarvis, EVP and CFO.