Edgar Filing: Intrawest Resorts Holdings, Inc.

Document

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K

x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended June 30, 2016

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-36286

Intrawest Resorts Holdings, Inc.

(Exact Name of Registrant as Specified in Its Charter)



Delaware	46-3681098
(State or Other Jurisdiction of	(I.R.S. Employer
Incorporation or Organization)	Identification No.)

1621 18th Street, Suite 300
Denver, Colorado	80202
(Address of Principal Executive Offices)	(Zip Code)

(303) 749-8200
(Registrant’s Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Act:
Title of each class	Name of each exchange on which registered
Common Stock, $0.01 par value	New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act:
None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. o Yes x No

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934. o Yes x No

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. x Yes oNo

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). x Yes o No

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (Section 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. x

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.



Large accelerated filer	o		Accelerated filer	x

Non-accelerated filer	o	(Do not check if a smaller reporting company)	Smaller reporting company	o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). o Yes x No

The aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant, based on the closing price of $7.82 per share as reported on the New York Stock Exchange Composite Tape on December 31, 2015 (the last business day of the registrant’s most recently completed second fiscal quarter) was $99,295,201.

As of September 2, 2016, 39,770,271 shares of the registrant’s common stock were outstanding.



DOCUMENTS INCORPORATED BY REFERENCE
Portions of the registrant’s Definitive Proxy Statement for its 2016 Annual Meeting of Stockholders are incorporated by reference into Part III of this Annual Report on Form 10-K, to be filed within 120 days of the registrant’s fiscal year ended June 30, 2016.

Table of Contents



PART I

Item 1.	Business	3
Item 1A.	Risk Factors	13
Item 1B.	Unresolved Staff Comments	26
Item 2.	Properties	27
Item 3.	Legal Proceedings	29
Item 4.	Mine Safety Disclosures	29

PART II

Item 5.	Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	29
Item 6.	Selected Financial Data	32
Item 7.	Management's Discussion and Analysis of Financial Condition and Results of Operations	33
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	53
Item 8.	Financial Statements and Supplementary Data	54
Item 9.	Change in and Disagreements with Accountants on Accounting and Financial Disclosure	95
Item 9A.	Controls and Procedures	96
Item 9B.	Other Information	96

PART III
Item 10.	Directors, Executive Officers and Corporate Governance	96
Item 11.	Executive Compensation	96
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	96
Item 13.	Certain Relationships and Related Transactions, and Director Independence	97
Item 14.	Principal Accountant Fees and Services	97

PART IV
Item 15.	Exhibits and Financial Statement Schedules	97

SIGNATURES		99



	1



Table of Contents

CAUTIONARY NOTE ABOUT FORWARD-LOOKING STATEMENTS

This Annual Report on Form 10-K contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements contained in this Annual Report on Form 10-K other than statements of historical fact, including statements regarding our future results of operations and financial position, our business strategy and plans, and our objectives for future operations, are forward-looking statements. The words “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,” “intend,” “expect,” and similar expressions are intended to identify forward-looking statements. We have based these forward-looking statements largely on our current expectations and projections about future events and trends that we believe may affect our financial condition, results of operations, business strategy, short-term and long-term business operations and objectives, and financial needs. These forward-looking statements are subject to a number of risks, uncertainties and assumptions, including:


•	weakness in general economic conditions;


•	lack of adequate snowfall and unfavorable weather conditions;


•	lack of access to adequate supplies of water to make snow and otherwise conduct our operations;


•	adverse events that occur during our peak operating periods;


•	our failure to achieve the expected benefits of our strategic alliance, real estate development, acquisition and other growth strategies;


•	Steamboat Ski & Resort’s dependence on contracted direct air service;


•	risks related to information technology;


•	our potential failure to maintain the integrity of our customer or employee data;


•	adverse consequences of ongoing legacy litigation or future legal claims;


•	our ability to monetize real estate assets;


•	a partial or complete loss of Alpine Helicopters Inc.’s services;


•	the effects of climate change on our business operations;


•	our ability to maintain effective internal control over financial reporting;


•	risks of foreign currency fluctuations which could reduce the U.S. dollar value of our Canadian earnings;


•	risks associated with the ownership of a majority of our outstanding common stock by entities managed or controlled by Fortress Investment Group, LLC, (collectively “Fortress”), including potential sales of shares held by Fortress, governance rights in our stockholders' agreement with Fortress and potential conflicts of interests;


•	our substantial leverage, which could adversely affect our ability to raise additional capital to support our growth strategy; and


•	our limited public float and therefore trading volume.

You should carefully consider the risks described in Part I - Item 1A, Risk Factors, of this Annual Report on Form 10-K. Moreover, we operate in a competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties and assumptions, the future events and trends discussed in this Annual Report on Form 10-K may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements.

We undertake no obligation to revise or publicly release the results of any revision to these forward-looking statements, except as required by law. Given these risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements.



	2



Table of Contents

PART I

ITEM 1. BUSINESS.

Overview

We are a North American mountain resort, adventure, and real estate company, delivering distinctive vacation and travel experiences to our customers for over three decades. We wholly own and/or operate six four-season mountain resorts geographically diversified across North America’s major ski regions with approximately 8,000 skiable acres and over 1,120 acres of land available for real estate development. We also operate an adventure travel business, which includes Canadian Mountain Holidays (“CMH”), a leading heli-skiing adventure company in North America. CMH provides helicopter accessed skiing, mountaineering and hiking over approximately 3.0 million tenured acres. Additionally, we operate a comprehensive real estate business through which we manage condominium hotel properties and sell and market residential real estate.

Intrawest Resorts Holdings, Inc. is a Delaware corporation that was formed on August 30, 2013, and had not, prior to the completion of the restructuring transactions in which it acquired substantially all of the assets, liabilities and operations of Intrawest Cayman L.P. (the “Partnership”), conducted any activities other than those incident to its formation for the preparation of its initial public offering, which was consummated on February 5, 2014. The Partnership was formed on February 22, 2007 as a holding company that operated through various subsidiaries primarily engaged in the operation of mountain resorts, adventure, and real estate businesses, principally throughout North America. See Part II- Item 8, Financial Statements and Supplementary Data, Note 1, "Formation and Business" under “Restructuring”.

Unless the context suggests otherwise, references in this document to the “Company”, “our”, “us”, or “we” refer to the Partnership and its consolidated subsidiaries prior to the consummation of the Restructuring, as defined in Part II- Item 8, Financial Statements and Supplementary Data, Note 1, "Formation and Business" under “Restructuring”, and to Intrawest Resorts Holdings, Inc. and its consolidated subsidiaries after the consummation of the restructuring transactions.

We operate our business through three segments: Mountain, Adventure and Real Estate.

Mountain Segment

The Mountain segment includes our mountain resort and lodging operations at Steamboat Ski & Resort (“Steamboat”) and Winter Park Resort (“Winter Park”) in Colorado, Stratton Mountain Resort (“Stratton”) in Vermont, Snowshoe Mountain Resort (“Snowshoe”) in West Virginia, Mont Tremblant Resort (“Tremblant”) in Quebec, and Blue Mountain Ski Resort (“Blue Mountain”) in Ontario, of which we owned a 50.0% equity interest for all relevant periods prior to our acquisition of the remaining 50.0% equity interest in September 2014. Our Mountain segment contributed 74.2%, 73.2% and 68.6% of total segment revenue for the years ended June 30, 2016, 2015 and 2014, respectively.

Steamboat Ski & Resort (operating since 1963) is located in the Colorado Rocky Mountains, 157 miles northwest of Denver, with access via direct flights from several major national airports including: New York, Los Angeles, Chicago, Houston, Atlanta, Minneapolis, Seattle, Dallas, San Francisco, and Washington D.C. The town of Steamboat Springs, Colorado, where Steamboat is located, has a strong heritage of winter sports, as evidenced by the 88 winter Olympians that have trained in the town. The resort features a combination of high-end customer services (such as a full service spa and fine dining restaurants), an 1880’s western atmosphere and some of the most consistent snowfall in the Rocky Mountain region. Known for its Champagne Powder® snow, the average snowfall at Steamboat is approximately 25% more than the historical Rocky Mountain regional resort average of 239 inches. Steamboat features 2,965 skiable acres and a maximum vertical drop of 3,668 feet.

Winter Park Resort (operating since 1939) is located in the Colorado Rocky Mountains, 67 miles west of Denver, and is one of the closest resorts to the Denver metropolitan area’s nearly 3.0 million residents. The resort, which is comprised of seven unique territories, including Winter Park Mountain, Mary Jane Mountain, Vasquez Cirque and Vasquez Ridge, is the longest operating mountain resort in Colorado. The resort offers more than 3,000 skiable acres, a maximum vertical drop of 3,060 feet, six terrain parks, and ‘‘world-class’’ mogul skiing, as described by Powder Magazine. Each summer, Winter Park transforms into a mountain biking destination, Mountain Bike Capital USA®, with one of the largest bike parks in the United States.

Mont Tremblant Resort (operating since 1939) is located in Quebec, Canada, within a two hour drive from the Montreal metropolitan area’s approximately 4.0 million residents and the Ottawa metropolitan area’s nearly 1.2 million residents. The resort is consistently ranked as one of the top ski resorts in Eastern North America by Ski Magazine. With 2,116 feet of vertical drop and snowmaking on over 70% of trails, Tremblant offers customers the opportunity to ski down one of the biggest vertical drops in eastern Canada. In the summer, customers can play golf on two 18-hole golf courses, mountain bike, and enjoy the pedestrian village, attractions, and outdoor concerts and events.



	3



Table of Contents

Blue Mountain Ski Resort (operating since 1941), of which we owned a 50.0% equity interest until our acquisition of the remaining 50.0% equity interest in September 2014, is located in Ontario, Canada, approximately 90 miles northwest of the Greater Toronto area’s approximately 6.0 million residents. With approximately 360 skiable acres and snowmaking on 93% of trails, Blue Mountain is the largest ski resort in Ontario and one of the most popular four-season resorts in Canada. Blue Mountain also operates year round conference centers and offers a suite of summer amenities, including an 18-hole golf course, an open-air gondola, a mountain coaster, an aerial adventure park, a mountain biking facility and a waterfront park.

Stratton Mountain Resort (operating since 1961) is located in Southern Vermont, approximately 220 miles north of New York City and approximately 150 miles northwest of Boston, whose metropolitan areas have a combined population of more than 24.5 million residents. Situated on one of the tallest peaks in New England, Stratton features a vertical drop of 2,003 feet and snowmaking on 93% of trails. Stratton’s summer amenities include 27 holes of golf, a 22-acre golf school and a sports and tennis complex. Winter and summer customers also enjoy Stratton’s pedestrian village. For the 2015/2016 ski season, Stratton remodeled the base lodge to modernize facilities, differentiate its food and beverage offerings and add capacity for 354 additional seats.

Snowshoe Mountain Resort (operating since 1974) is located in West Virginia and is one of the largest ski resorts in the Southeast region of the United States. Snowshoe primarily draws customers from the Baltimore-Washington D.C. and Pittsburgh metropolitan areas' combined 11.7 million residents, as well as the Southeastern United States. The resort has the biggest vertical drop in the region (1,500 feet) and 100% snowmaking coverage. The resort’s mountaintop village offers a variety of nightlife, dining and retail options.

Competition

There are significant barriers to entry for new ski resort developments in North America resulting from the limited number of remaining suitable sites, the difficulty in obtaining necessary government permits and the significant capital required for development and construction. As such, no major ski resorts have been developed in North America in the past 30 years, with the last major resorts opened being Blackcomb Mountain and Beaver Creek in 1980 and Deer Valley in 1981.

Competition within the ski resort industry is based on multiple factors, including location, price, weather conditions, the quality and location of resorts included in multi-resort pass products, the uniqueness and perceived quality of the terrain for various levels of skill and ability, the atmosphere of the base village, the quality of food and entertainment and ease of travel to the resort (including direct flights by major airlines). We believe we compete effectively and our competitive position is strong, due to the unique attributes and geographic diversity among our portfolio of mountain resorts. We believe that our mountain resorts feature a sufficient quality and variety of terrain and activities to make them highly competitive with other mountain resorts.

Each of our resorts directly competes with other mountain resorts in its respective local and regional markets, as well as with other major destination resorts. Our individual mountain resorts primarily compete as follows:


•	Steamboat’s primary competition is from Breckenridge Ski Resort in Colorado, Park City Mountain Resort in Utah and other large international ski destinations.


•	Winter Park’s primary competition is from Copper Mountain Resort, Keystone Resort and other ski resorts located in proximity to Colorado’s Front Range.


•	Tremblant’s primary competition is from Mont-Sainte-Anne, Mont Blanc, Le Massif and Mont Saint-Sauveur, all located in Quebec, other resorts in the Laurentian Mountains, and both Jay Peak and Stowe Mountain in Northern Vermont.


•	Blue Mountain’s primary competition is from Horseshoe Valley Resort and Mount St. Louis, both located in Ontario, and Holiday Valley Resort in western New York.


•	Stratton’s primary competition is from other mid-to-large size ski resorts in Southern Vermont, including Okemo Mountain Resort, Mount Snow and Killington Resort.


•	Snowshoe’s primary competition is from ski resorts in the mid-Atlantic, such as Seven Springs Mountain Resort located in Pennsylvania, and Bryce Resort and Wintergreen Resort, both located in Virginia.



	4



Table of Contents

Adventure Segment

The cornerstone of our Adventure segment is CMH, a leading heli-skiing adventure company in North America. CMH has been providing helicopter accessed skiing trips for more than 50 years and currently operates in the Purcell, Selkirk, Monashee and Cariboo mountains of eastern British Columbia from 11 lodges, nine of which we own. CMH’s operating area encompasses 3.0 million tenured acres of terrain granted under renewable 10 to 30-year licences from the government of British Columbia for helicopter accessed skiing, mountaineering, and hiking operations. CMH’s acreage amounts to more skiable terrain than all lift access mountain resorts in North America combined. Our Adventure segment contributed 18.4%, 16.6% and 20.0% of total segment revenue for the years ended June 30, 2016, 2015 and 2014, respectively.

The majority of CMH’s customers for the year ended June 30, 2016 were repeat customers. CMH’s client base is geographically diverse as, during the year ended June 30, 2016, 54% of its total customers came from North America, 35% came from Europe and 11% came from Australia, Asia and South America.

To support CMH’s skiing, guiding and hospitality operations, we own a modified fleet of 36 Bell helicopters and operate Alpine Aerotech L.P. ("Alpine Aerotech"), a platinum-certified Bell helicopter maintenance, repair and overhaul ("MRO") business. Alpine Aerotech is one of only 11 platinum-certified Bell helicopter MRO businesses in the world and, in addition to servicing our owned helicopters, the business caters to over 500 customers from around the world. We lease a majority of our fleet of helicopters to Alpine Helicopters Inc. ("Alpine Helicopters"), of which we own 20%, which in turn acts as the exclusive provider of helicopter services to CMH. In January 2013, we restructured the Alpine Helicopters business to bring it into compliance with Canadian foreign ownership regulations governing aviation flight services in Canada. Alpine Helicopters has been offering helicopter operations from bases across western Canada for over 50 years and has long-standing relationships with the British Columbia Ministry of Forests, the Alberta Forest Service and Parks Canada. Our integrated operating model enables us to scale the business and increase customer visits with limited reliance on third party providers, which we believe differentiates us from other heli-ski operations. In addition, by utilizing the same pilots each ski season, who have an average of over 7,000 hours of experience and who possess extensive knowledge of the terrain, we believe CMH is able to provide a more consistent high quality customer experience.

To more efficiently utilize our aircraft year round, during the summer months, our partially owned U.S. subsidiary, Eagle Helicopters Inc. ("Eagle Helicopters"), which operates under the name Kachina Aviation, provides fire suppression and other helicopter services under contracts with the U.S. Forest Service ("USFS"), the Bureau of Land Management ("BLM") and various State governments. We also lease aircraft to unaffiliated third parties.

Competition

CMH directly competes with other heli-ski and snowcat operations in Canada and the United States. We believe that there are currently less than 75 heli-ski and catski operators in North America, with most heli-skiing and catskiing occurring in British Columbia due to the vast alpine wilderness and consistent annual snowfall. CMH also competes to a lesser extent with lift-accessed ski resorts in North America and other parts of the world. Additionally, our ancillary aviation businesses compete with small independent operators that are able to bid on certain government contracts that are allocated to small businesses.

Real Estate Segment

Our Real Estate segment is comprised of our real estate management, marketing and sales businesses, as well as our real estate development activities. Our Real Estate segment includes Intrawest Hospitality Management ("IHM"), which manages condominium hotel properties in Maui, Hawaii and in Mammoth Lakes, California, Playground, our residential real estate sales and marketing business, our 50.0% interest in Mammoth Hospitality Management L.L.C. ("MHM"), our 57.1% economic interest in Chateau M.T. Inc. ("Chateau"), and included Intrawest Resort Club Group ("IRCG"), a vacation club business, until we sold the business on January 29, 2016 (the "Disposition Date"). Our Real Estate segment also includes costs associated with real estate development activities, such as planning activities and land carrying costs. Our Real Estate segment contributed 7.5%, 10.2% and 11.4% of total segment revenue for the years ended June 30, 2016, 2015 and 2014, respectively.

IHM, our hospitality management business, was established in 1998 and is focused on providing management services to properties owned by third parties, including the Honua Kai Resort and Spa in Maui, Hawaii and the Westin Monache Resort at Mammoth Lakes, California.

Playground, our residential real estate sales and marketing business, was established as a stand-alone business in 2001. The Playground brand is used in certain resale and brokerage operations at our mountain resorts. As we develop the land surrounding our mountain resorts, we expect Playground to provide sales and marketing expertise for these properties. Through Playground, we managed the fractional condo sales process at the Four Seasons in Vail on behalf of a third party until June 2014.



	5



Table of Contents

Until the Disposition Date, we derived revenue from four core IRCG activities: selling vacation club points in Club Intrawest, an unaffiliated not-for-profit vacation club; providing financing for the purchase by consumers of vacation club points; managing Club Intrawest's nine properties; and running a private exchange company for Club Intrawest's members.

We own a significant amount of land available for development at our mountain resorts and, through our Real Estate segment, are focused on designing strategies for future development of this land in concert with planning for on-mountain and base village improvements.

Prior to 2010, we were actively engaged in the development of resort real estate. In late 2009, in light of the then-existing poor economic environment for real estate, we ceased new development activities and substantially reduced our related administrative overhead. As a result of our prior development activities, we accumulated a portfolio of core development parcels surrounding the bases of our Steamboat, Winter Park, Tremblant, Stratton and Snowshoe resorts, which we believe will provide us with the ability to increase our revenue through the potential future development of this land. We currently own core entitled land surrounding the base of our resorts totaling more than 1,120 acres, much of which is located adjacent or proximate to the ski trails at our resorts, including ski-in and ski-out parcels.

Finally, we have a 57.1% economic ownership interest in Chateau, which owns a hotel and conference center in Mont-Tremblant, Quebec that is managed by Fairmont. We also have a 50.0% economic interest in MHM, which runs the hospitality and lodging operations at Mammoth Mountain in California.

Competition

We compete with other property management companies in providing management services at IHM’s properties. Our managed properties compete with rental management companies, locally owned independent hotels, as well as facilities and timeshare companies that are owned or managed by national and international chains. These properties also compete for convention and conference business across the North American market. Competition within the hotel and lodging industry is generally based on quality and consistency of rooms, restaurants and meeting facilities and services, attractiveness of locations, availability of a global distribution system, price and other factors.

Legacy, Non-Core and Other Items

Certain activities and assets, and the resulting expenses, gains and losses from such activities and assets, are either deemed to be non-core by our Chief Operating Decision Maker ("CODM") when they are not sufficiently related to our ongoing business, we plan to divest or wind them down or they are not reviewed by our CODM in evaluating the performance of our business. Non-core activities and assets that influenced our consolidated results during the financial periods presented but that have not been allocated to our segments include:


•	legacy real estate carrying costs and litigation;


•	divested non-core operations; and


•	remaining non-core operations, including non-core retail revenue, MMSA Investors, LLC and Mammoth Resorts LLC (together with MMSA Investors, LLC, collectively referred to herein as the "Mammoth family of resorts").

We disposed of legacy real estate assets and non-core operations during the years ended June 30, 2015 and 2014. In addition, we recognized an impairment loss of $0.6 million on the carrying value of our legacy real estate portfolio during the year ended June 30, 2014. There were no comparable charges in fiscal 2015 or 2016. We divested all of our legacy real estate as of June 30, 2015.

Expenses related to legacy real estate development activities include the carrying costs of legacy real estate assets and legacy litigation consisting of claims for damages related to alleged construction defects, purported disclosure violations and allegations that we failed to construct planned amenities. Many of the claims brought against us were similar to claims brought against residential developers industry-wide in the wake of the 2008 housing market collapse. The vast majority of these claims were filed in 2009 and 2010 when we began litigating hundreds of cases with purchasers who had entered into pre-sale contracts prior to 2010, failed to close on their purchases, and were seeking a return of their security deposits. We have been settling these and other legacy real estate claims on a consistent basis over the past few years. New claims filings relating to legacy real estate litigation are infrequent due to the amount of time that has passed since our last construction project.

We believe expenses associated with our legacy real estate development activities will diminish in future periods though the trend may not continue. We expect any remaining costs and expenses that we incur in future periods to primarily relate to ongoing real estate litigation in which we are either the defendant or plaintiff. We also expect to incur additional remediation expenses related to pre-2009 construction projects.



	6



Table of Contents

We incur additional costs that we do not allocate to our segments because they relate to items that management does not believe are representative of the underlying performance of our ongoing operations. These include items such as non-cash compensation and restructuring costs.

Seasonality

Our business is seasonal in nature. Although our resorts are four-season businesses, we generate the highest revenue between our second and third fiscal quarters, which includes the peak ski season. As a result of the seasonality of our business, our mountain resorts and CMH typically experience operating losses during the first and fourth quarters of each fiscal year. During our peak quarters, we generate the highest daily revenue on weekends, during the Christmas/New Year’s and Presidents’ Day holiday periods and, in the case of our mountain resorts, during school spring breaks. See Part II - Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, "Factors Affecting our Business—Seasonality and Fluctuations in Quarterly Results".

In an effort to partially counterbalance the concentration of revenue in the winter months, we offer non-ski season attractions at our mountain resorts during the summer months, such as lift accessed sightseeing, mountain biking, guided hiking, mountain coasters and other recreational activities. We also operate golf courses at Stratton, Tremblant, Snowshoe and Blue Mountain. These activities help attract destination conference and group business to our mountain resorts. Similarly, CMH offers helicopter accessed hiking and mountaineering adventures during the summer months.

During seasonally slow times, we control operating costs by reducing operating hours and, in the case of CMH, closing a majority of our lodges. We also lease out a number of the helicopters from our aviation business for fire suppression activities. Employment levels required for peak operations are met largely through part-time and seasonal hiring.

The following table contains selected unaudited segment information for each quarter in the years ended June 30, 2016 and June 30, 2015 (in thousands):



	Three Months Ended
	June 30, 2016		March 31, 2016		December 31, 2015		September 30, 2015
Mountain revenue	$	36,781	$	255,357	$	79,436	$	49,758
Adventure revenue	18,939		48,835		12,368		24,263
Real Estate revenue	9,245		9,973		11,403		11,812
Total segment revenue	$	64,965	$	314,165	$	103,207	$	85,833

	June 30, 2015		March 31, 2015		December 31, 2014		September 30, 2014
Mountain revenue	$	36,869	$	258,092	$	94,655	$	36,313
Adventure revenue	19,362		44,579		10,244		22,614
Real Estate revenue	11,416		17,635		15,152		15,071
Total segment revenue	$	67,647	$	320,306	$	120,051	$	73,998



	June 30, 2016			March 31, 2016		December 31, 2015			September 30, 2015
Mountain Adjusted EBITDA	$	(26,447	)	$	136,704	$	(5,136	)	$	(20,787	)
Adventure Adjusted EBITDA	(471		)	21,246		(3,489		)	4,860
Real Estate Adjusted EBITDA	(191		)	3,346		1,697			1,773
Total Adjusted EBITDA	$	(27,109	)	$	161,296	$	(6,928	)	$	(14,154	)

	June 30, 2015			March 31, 2015		December 31, 2014			September 30, 2014
Mountain Adjusted EBITDA	$	(25,222	)	$	135,721	$	2,467		$	(23,994	)
Adventure Adjusted EBITDA	538			15,449		(4,817		)	2,135
Real Estate Adjusted EBITDA	966			5,221		2,489			1,747
Total Adjusted EBITDA	$	(23,718	)	$	156,391	$	139		$	(20,112	)



	7



Table of Contents

Government Regulation and Environmental, Health and Safety

United States

Steamboat and Winter Park

Federal Regulations

The 1986 Ski Area Permit Act (the “1986 Act”) allows the USFS to grant Term Special Use Permits (each, a “SUP”) for the operation of ski areas and construction of related facilities on National Forest lands. In addition, the 1986 Act requires a Master Development Plan for each ski area that is granted a SUP. Under the SUPs, the USFS has the right to review and approve the location, design and construction of improvements in the permit area and many operational matters. In addition, each distinct area of National Forest lands is required by the National Forest Management Act of 1976 to develop and maintain a Land and Resource Management Plan (a “Forest Plan”), which establishes standards and guidelines for the USFS to follow and consider in reviewing and approving proposed actions. In November 2011, the Ski Area Recreational Opportunity Enhancement Act amended the 1986 Act to clarify that the USFS is authorized to permit year-round recreational activities on National Forest lands.

A majority of the skiable terrain at Steamboat and substantially all of the skiable terrain at Winter Park is located on USFS land. As a result, each of Steamboat and Winter Park operate under a SUP.

Steamboat operates under a SUP for the use of 3,740 acres that expires on June 30, 2047. Steamboat also operates on 245 acres that it owns, essentially comprising the lower portion of the ski mountain. Winter Park operates under a SUP for the use of approximately 7,555 acres that expires on April 29, 2056.

Each SUP contains a number of requirements, including that we indemnify the USFS from third-party claims arising out of our operations under the SUP and that we comply with applicable federal laws, such as those relating to water quality and endangered or threatened species.

For use of the SUPs, we pay a fee to the USFS. The fee for Steamboat and Winter Park is calculated as a percentage of sales occurring on USFS land and ranges between 1.5% and 4.0% of such sales. The SUPs may be amended by us or by the USFS to change the permit area or permitted uses. The USFS may amend a SUP if the USFS determines that such amendment is in the public interest. While the USFS is required to seek our consent to any amendment, an amendment may be finalized over our objection. Permit amendments must be consistent with the Forest Plan and are subject to the provisions of the National Environmental Policy Act (“NEPA”), both of which are discussed below.

The USFS can also terminate a SUP if it determines that termination is required in the public interest. However, to our knowledge, no SUP has ever been terminated by the USFS over the opposition of the permitee.

Master Development Plans

All improvements that we propose to make on National Forest lands under any of our SUPs must be included in a Master Development Plan (“MDP”). MDPs describe the existing and proposed facilities, developments and area of activity within the permit area. We prepare MDPs, which set forth a conceptual overview of all potential projects at each resort. The MDPs are reviewed by the USFS for compliance with the Forest Plan and other applicable law and, if found to be compliant, are accepted by the USFS. Notwithstanding acceptance by the USFS of the conceptual MDPs, individual projects still require separate applications to be submitted evidencing compliance with NEPA and other applicable laws before the USFS will approve such projects. We update or amend our MDPs for Steamboat and Winter Park on an as needed basis or as required under the terms of the SUPs. Our current MDPs at Steamboat and Winter Park have been accepted by the USFS for expansion of our total skiable acres at those ski areas, subject to approval of individual applications for each project under NEPA and other applicable laws.

National Forest Plans

Operational and development activities on National Forest lands at Steamboat are subject to the additional regulatory and planning requirements set forth in the 1996 Revision of the Routt National Forest Land and Resource Management Plan. Operational and development activities on National Forest lands at Winter Park are subject to the additional regulatory and planning requirements set forth in the 1997 Revision of the Land and Resource Management Plan for Arapaho/Roosevelt National Forest. When approving our application for development, area expansion and other activities on National Forest lands, the USFS must adhere to the applicable Forest Plan. Any such decision may be subject to judicial review in federal court if a party, with standing, challenges a USFS decision that applies the requirements of a Forest Plan.



	8



Table of Contents

National Environmental Policy Act

NEPA requires the USFS to consider the environmental impact of major proposed actions on National Forest land, such as expansion of a ski area, installation of new lifts or snowmaking facilities, or construction of new trails or buildings. The studies, prepared by the USFS, are subject to public review and comment. An Environmental Impact Statement (“EIS”) is required for projects with significant impacts to the environment and the process can be lengthy to complete. Projects that require an EIS typically take longer to approve than projects that require an Environmental Assessment (“EA”), which is prepared for projects with less significant impacts.

In each study, the USFS is required to analyze alternatives to the proposed action, including not taking the proposed action, as well as impacts that may be unavoidable. Following completion of the study, the USFS may decide not to approve the proposed action or may decide to approve an alternative action. Completion of the NEPA process does not guarantee that a project will be built.

Projects may also be completed under NEPA absent an EIS or an EA if they are eligible under a Categorical Exclusion (“Cat Ex”). Cat Ex projects consist of those projects that are not expected to have a significant environmental impact. The USFS has a list of Cat Ex projects, and some projects at Steamboat and Winter Park are eligible to be completed under a Cat Ex.

Stratton

Act 250 is a land use and development control law enforced by the Vermont Agency of Natural Resources that requires developers to consider impacts to, among other things, waterways, air, wildlife and earth resources using 10 criteria that are designed to safeguard the environment, community life and aesthetic character of Vermont. The State of Vermont Natural Resources Board, District Environmental Commission has the power to issue or deny a permit to real estate developers for any project that encompasses more than 10 acres, or more than one acre for towns that do not have permanent zoning and subdivision bylaws. The law also applies to any development project with more than 10 housing units or housing lots, and may apply for proposed construction above 2,500 feet of elevation. Stratton has a Master Plan detailing the real estate development considerations within the resort boundary. All projects within Stratton’s Master Plan have completed or will need to complete the Act 250 process at the project level.

The Vermont Department of Public Service is the state agency charged with oversight of propane facilities in Vermont for the Federal Government’s Office of Pipeline Safety, which administers the United States Department of Transportation’s Pipeline and Hazardous Materials Safety Administration’s propane pipeline regulatory program. Stratton owns an extensive propane distribution system consisting of three 30,000 gallon above-ground propane storage tanks and related piping, regulators, vaporizers and other equipment for the purpose of providing propane to homes in the Stratton area and to Stratton’s facilities. A third party supplies and operates the system.

Stratton also operates a waste water treatment facility. Operation of the waste water treatment facility requires state and local permits, and we are currently subject to a water quality remediation plan to reduce heat and sediment discharges.

Snowshoe

Snowshoe is home to the Cheat Mountain salamander, a threatened endangered species. Prior to conducting certain development activities at Snowshoe, we must submit a site survey to the U.S. Fish and Wildlife Service demonstrating the impact of the development activities on the Cheat Mountain salamander habitat at Snowshoe.

Snowshoe, through its subsidiary, Cheat Mountain Water Company, Inc., a private utility, owns and operates a potable water facility that is approximately 40 years old and requires state and local permits to operate in Pocahontas County in the State of West Virginia. Due to the age of this facility and increasingly more stringent water discharge standards, we are evaluating our options with respect to the facility, including potentially transferring the facility to a private operator, not-for-profit or municipality in the next few years.

USTs

The federal Solid Waste Disposal Act provides authority to the U.S. Environmental Protection Agency (“EPA”) to regulate underground storage tanks (“USTs”). USTs are present at Steamboat, Winter Park and Stratton and assist in storing fuel for base and mountain operations. In some states, if approved by the EPA, the state UST program will take precedence over the federal regulations.

Canada

Tremblant

Our operations at Tremblant are subject to a variety of federal, provincial and local laws, including environmental laws and health and safety regulations. Our ski operations are also subject to provincial regulations pertaining to the safety of our lifts and of individuals using



	9



Table of Contents

our facilities at Tremblant for downhill activities. In addition, our operations at Tremblant are subject to the Province of Quebec’s labor code. At Tremblant, there is one UST and it is regulated by the Ministry of Sustainable Development, Environment, Wildlife and Parks.

Our operations at Tremblant are also subject to municipal bylaws and regulations enacted by the Municipality of Mont-Tremblant that regulate, most notably, zoning, development, commercial advertising and the environment. Furthermore, in 1991, Tremblant entered into a master agreement with the Municipality of Mont-Tremblant. The agreement governs Tremblant’s real estate development and the operation of its village, as well as the use of municipal water for the purposes of snow making.

Blue Mountain

Blue Mountain operates under a variety of federal, provincial, and municipal laws and regulations. Land use development is regulated by Grey County and the Town of the Blue Mountains through their respective Official Plan and Zoning By-laws. Furthermore, development activities located along the Niagara Escarpment are regulated by the Niagara Escarpment Commission through the Niagara Escarpment Plan. In terms of environmental laws and regulations, the primary government ministries and agencies regulating Blue Mountain operations include the Ministry of the Environment, Ministry of Natural Resources, and local area conservation authorities, including Grey Sauble Conservation Authority and Nottawasaga Valley Conservation Authority. In terms of health and safety, Blue Mountain is regulated by the Ontario Ministry of Labour and the Workplace Safety and Insurance Board.

Non-potable water for snowmaking, golf course irrigation, and landscaping is sourced through a pipeline that connects the resort to Nottawasaga Bay, Georgian Bay and is supplied under a Permit to Take Water (PTTW), issued by the Ministry of the Environment. Permits and/or agreements with the Ministry of Transportation and Grey County permit us to locate our watermain under their respective road allowances. Blue Mountain’s water supply system also includes a water intake pipe and pumphouse located on lands owned by the municipality in which Blue Mountain has a 30-year lease agreement that expires on May 31, 2024 (with a 30-year renewal option).

CMH

CMH operates on land tenures issued by the Province of British Columbia in extensive areas inside and outside parks and protected areas. Pursuant to British Columbia’s Land Act, tenures are issued by the Ministry of Forests, Lands and Natural Resource Operations as Licences of Occupation or Leases outside park and protected areas, on lands designated as vacant Crown land. Pursuant to British Columbia’s Park Act, tenures are issued, in the form of permits, by the same ministry.

Detailed management plans and maps are submitted as a foundation for the applications for tenures. The tenure applications are reviewed by the ministry and shared with a range of other government departments and public groups as referrals. They are also advertised in local newspapers for public comment. Applications must also be referred to local First Nations groups for comment. Most of the tenures that CMH holds are 30 years in length and are renewable at mid-term. CMH is required to renew or replace its tenure applications. While CMH has been able to renew its tenures several times in the past, the province retains the right not to renew all or a portion of the tenures for reasons of non-compliance, environmental protection or when the land is needed for what the province deems to be a “higher and better use.”

Currently, CMH is the only helicopter accessed ski and hiking operator operating within its tenured land, although the province has the legal right to issue additional tenures for the same use. The land management environment in British Columbia is such that the tenured operating areas for CMH can and do overlap with a range of other activities, such as forest management, mining and mineral exploration, and public recreation.

Alpine Aerotech

Alpine Aerotech is subject to a variety of federal, provincial and local laws and regulations applicable in the field of manufacturing, maintenance and repair of airframe parts and engines.

Water

We rely on a supply of water to operate our ski areas for domestic use and snowmaking purposes. Availability of water depends on the existence of adequate water rights as well as physical delivery of the water when and where it is needed.

At our mountain resorts in Colorado, we own or have ownership or leasehold interests in water rights individually or through stock ownership in ditch and reservoir companies, groundwater wells and other sources. The primary source of snowmaking water for Steamboat is the Yampa River, in which we have adjudicated absolute water rights granting us access to water in accordance with those rights. The primary water source for Winter Park’s snowmaking operations is the Vasquez Canal, which is part of the Denver Water Moffat Collection System located, in part, on the ski area, and owned and operated by the Water Department of the City and County of Denver (“Denver Water”). Through our leasehold interest in water rights obtained by acquisition of shares in the Clinton Ditch and Reservoir Company at



	10



Table of Contents

its formation in 1992 and our subsequent agreements with other water users in the region, we obtained the right to use water from the Denver Water canal in sufficient amounts to support our snowmaking operations at Winter Park. At both of our Colorado resorts, base area water is obtained through municipal suppliers and on-mountain water needs are satisfied primarily from on-mountain wells for which adequate water rights are owned or obtained through leasehold arrangements. We believe we have rights to sufficient quantities of water for the operation of our mountain resorts for the foreseeable future.

Delivery of the snowmaking water to each resort typically comes from water diverted directly into the snowmaking system. The streams that deliver the water are subject to minimum stream flows, freezing and other limitations that may prevent or reduce the amount of water physically available to the resort. Other on-mountain water comes from wells from which water is pumped to on-site storage facilities where it is treated and then supplied to the various facilities where it will be used.

Intellectual Property

To protect the Company and our resorts as branded businesses with strong name recognition, we have registered trademarks in the United States, Canada and internationally. We also rely on a combination of trademark licenses and other contracts, both as licensee and licensor of third party trademarks, as well as common law trademark and trade name rights. Third party policies governing reporting of unauthorized use of trademarks also assist in the protection of our trademark rights. The duration of our trademark registrations varies from country to country; however, trademarks are generally valid and may be renewed indefinitely as long as they are in use and/or their registrations are properly maintained.

Monitoring the unauthorized use of our intellectual property is difficult, and the steps we have taken, including sending demand letters and taking actions against third parties, may not prevent unauthorized use by others in all instances. The failure to adequately build, maintain and enforce our trademark portfolio could impair the strength of our brands.

Employees

Given the seasonal nature of our business, the number of people that we employ varies considerably throughout the fiscal year. We employ significantly more people during the peak ski season than during the summer season. During the peak 2015/2016 ski season, we had approximately 10,900 employees, approximately 2,850 of whom were employed on a full-time basis. As of June 30, 2016, we had approximately 5,350 employees, approximately 2,850 of whom were employed on a full-time basis.

As of June 30, 2016, approximately 200 of Tremblant’s year-round employees and the majority of its additional seasonal employees were members of the union Le Syndicat Des Travailleurs(euses) de La Station du Mont Tremblant (CSN). The current contract with the union was recently renegotiated and a five-year agreement was signed in January 2016, and is set to expire in October 2020. In addition, approximately 70 ski patrol employees at Steamboat are members of the Communication Workers of America / Steamboat Professional Ski Patrol Association. In December 2015, the parties approved a new contract with the union, which expired on September 1, 2016. We are currently negotiating a new contract with the union and do not believe it will have a significant impact on our operations at Steamboat during the upcoming 2016/2017 ski season. Other than as noted above, none of our employees are covered by a collective bargaining agreement.

We consider our relations with our employees to be good.

Information about Segment and Geographic Revenue

Information about segment and geographic revenue is set forth in Part II- Item 8, Financial Statements and Supplementary Data, Note 17, "Segment Information".

Corporate Information

Our website can be accessed at http://www.intrawest.com. The website contains information about us and our operations. Our principal executive offices are located at 1621 18th Street, Suite 300, Denver, Colorado 80202. Our telephone number is (303) 749-8200. The information posted on or accessible through our website is not incorporated by reference into and does not form a part of this Annual Report on Form 10-K.

Available Information

We file or furnish periodic reports and amendments thereto, including our Annual Reports on Form 10-K, our Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, proxy statements and other information with the Securities and Exchange Commission ("SEC"). Such reports, amendments, proxy statements and other information may be obtained by visiting the Public Reference Room of the SEC at 100 F Street, NE, Washington, D.C. 20549. Information on the operation of the Public Reference Room can be obtained by calling the



	11



Table of Contents

SEC at 1-800-SEC-0330. In addition, the SEC maintains a website (www.sec.gov) that contains reports, proxy and information statements, and other information regarding issuers that file electronically. Our reports, amendments thereto, proxy statements and other information are also made available, free of charge, on the investor relations section of our website at http://ir.intrawest.com as soon as reasonably practicable after we electronically file or furnish such information with the SEC. The information posted on or accessible through our website is not incorporated by reference into and does not form a part of this Annual Report on Form 10-K.



	12



Table of Contents

ITEM 1A. RISK FACTORS.

Our operations and financial results are subject to various risks and uncertainties that could adversely affect our financial position, results of operations and cash flows. The risks described below should be carefully considered together with the other information contained in this report.

Risks Related to Our Business

Our industry is sensitive to weakness in the economy and we are subject to risks associated with the overall leisure industry.

If economic conditions in the United States and Canada or elsewhere in the world were to weaken, including high unemployment and erosion of consumer confidence, it could have a material adverse effect on our industry. We provide skiing and mountain adventure experiences with a relatively high cost of participation. An economic downturn or weak economic conditions generally could reduce consumer spending on recreational activities, resulting in declines in visits to, and spending at, our mountain resorts and CMH, which could have a material adverse effect on our business, prospects, financial condition, results of operations and cash flows. In addition, we may be unable to increase the price of our lift products or other offerings during an economic downturn despite our history of being successful in raising such prices under a variety of economic conditions.

Leisure and business travel are particularly susceptible to various factors outside of our control, including terrorism,

the uncertainty of military conflicts, outbreaks of contagious diseases and the cost and availability of travel options.

Our business is sensitive to the willingness of our guests to travel. Acts of terrorism, the spread of contagious diseases, political events and developments in military conflicts in areas of the world from which we draw our guests could depress the public's propensity to travel and cause severe disruptions in both domestic and international air travel and consumer discretionary spending, which could reduce the number of visitors to our resorts and have an adverse effect on our results of operations and cash flows. Many of our guests travel by air and the impact of higher prices for commercial airline services and availability of air services could cause a decrease in visitation to our resorts. A significant portion of our guests also travel by vehicle and higher gasoline prices could adversely impact our guests' willingness to travel to our resorts. Higher cost of travel may also affect the amount that guests are willing to spend at our resorts and could negatively impact our revenue, particularly for ancillary services.

Our industry is vulnerable to lack of adequate snowfall or unseasonable weather conditions.

The ability to attract winter customers to mountain resorts is influenced by adequate snowfall and weather conditions. Warm weather may result in rain, snow melt and inadequate natural snowfall and may render snowmaking wholly or partially ineffective in maintaining skiing conditions. For example, the Eastern United States 2015/2016 ski season was marked by some of the warmest temperatures in the past 100 years and we experienced a decline in skier visits during the 2015/2016 ski season compared to prior years. Conversely, extreme weather conditions may adversely affect the customer experience or result in lift closures and may also make it difficult for customers to access mountain resorts. The early season snow conditions and skier perceptions of early season snow conditions influence the momentum and success of the overall ski season, including advance sales of season passes and frequency pass products at our mountain resorts. Although helicopter accessed skiing is less susceptible to customer fluctuations due to weather conditions than our mountain resorts, as most helicopter accessed skiing customers book their visits significantly in advance of the ski season, CMH remains susceptible to risks related to inclement weather because we provide customers with credits, which may be used during future seasons, if weather conditions prevent customers from reaching the guaranteed amount of vertical feet of skiing. As a result, inclement weather at our CMH sites during any given ski season may materially adversely affect our CMH results of operations. In addition, unseasonable weather or rain can adversely affect summer visits to our mountain resorts and helicopter accessed hiking sites.

Additionally, there is a growing political and scientific consensus that emissions of greenhouse gases continue to alter the composition of the global atmosphere in ways that are affecting and are expected to continue affecting the global climate. The effects of climate change, including any impact of global warming, could have a material adverse effect on our business, prospects, financial condition, results of operations and cash flows.



	13



Table of Contents

Our business is highly seasonal and the occurrence of adverse events during our peak periods could have a material adverse effect on our results of operations and cash flows.

Although we operate four-season resorts, we generate the vast majority of our revenue during our third fiscal quarter, which is the peak ski season, followed by the second fiscal quarter. As a result of the seasonality of our business, many of our mountain resorts and CMH typically experience operating losses during the first and fourth fiscal quarters of each fiscal year. In addition, throughout our peak quarters, we generate the highest daily revenue on weekends, during the Christmas/New Year’s and Presidents’ Day holiday periods and, in the case of our mountain resorts, during school spring breaks. Furthermore, we sell a significant portion of our season pass products, pre-sold destination packages and CMH trips during our first fiscal quarter and the first month of our second fiscal quarter. The seasonality of our revenue and our dependence on peak operating and selling periods increases the impact of certain events on our results of operations. The occurrence of any of the other risk factors discussed herein during these peak operating or selling periods could have a disproportionate and material adverse effect on our results of operations and cash flows.

Variations in the timing of peak holidays and weekends may affect the comparability of our results of operations.

Depending on how peak holidays and weekends fall on the calendar, in any given year we may have more or fewer peak holidays and weekends in any given fiscal quarter compared to prior years, with a corresponding difference in a preceding or subsequent fiscal quarter. These differences can result in material differences in our quarterly results of operations and affect the comparability of our quarterly results of operations from one fiscal year to the next.

We are vulnerable to the risk of natural disasters, including forest fires, avalanches, landslides, drought and hurricanes.

A severe natural disaster, such as a forest fire, avalanche, landslide, drought or hurricane, may not be fully covered by our insurance policies and may interrupt our operations, require evacuations, severely damage our properties and impede access to our properties in affected areas, any of which could have a material adverse effect on our business, prospects, financial condition, results of operations and cash flows. In addition, our ability to attract customers to our properties is influenced by the aesthetics and natural beauty of the outdoor environment where our properties are located. In the recent past, the combination of drought conditions and a pine-beetle epidemic led to an increase in forest fires in the Western United States, including Colorado. A severe forest fire or other natural disaster could damage our properties or surrounding areas and have a long-term negative impact on customer visitation, as it would take several years for the environment to recover. Our insurance policies may not cover lost revenue due to a decline in visitation caused by damage to our properties or surrounding areas.

There is a risk of accidents occurring at our mountain resorts or competing mountain resorts, which may reduce visitation and negatively impact our operations.

Our ability to attract and retain guests depends, in part, upon the external perceptions of the Company and the industry, the quality and safety of our resorts, services and activities, including summer activities, and our corporate and management integrity. While we maintain and promote an on-mountain safety program, there are inherent risks associated with our resort activities. An accident or injury at any of our resorts or at resorts operated by our competitors, particularly an accident or injury involving the safety of guests and employees that receives media attention, could negatively impact our brand or reputation, cause loss of consumer confidence in the Company, reduce visitation at our resorts, and negatively impact our results of operations. The considerable expansion in the use of social media over recent years has compounded the impact of negative publicity. If any such incident occurs during a time of high seasonal demand, the effect could disproportionately impact our results of operations in a fiscal year.



	14



Table of Contents

A disruption in our water supply would impact our snowmaking capabilities and operations.

Our operations are heavily dependent upon our access to adequate supplies of water to make snow and otherwise conduct our operations. Availability of adequate supplies of water depends on the existence of adequate water rights as well as physical delivery of the water when and where it is needed. Additionally, our mountain resorts are subject to federal, state, provincial and local laws and regulations relating to water rights. Changes in these laws and regulations may adversely affect our operations. In addition, drought conditions may adversely affect our water supply. At our mountain resorts in Colorado, we own or have ownership or leasehold interests in water rights individually or through stock ownership in ditch and reservoir companies, groundwater wells and other sources, and the availability of water through these sources is subject to change. In addition, in recent years the USFS had sought to obtain ownership of certain water rights owned by ski resorts located on USFS land. However, on December 23, 2015, following significant opposition by ski areas, the USFS issued a Final Directive abandoning this position and approving new ski area permit terms that do not require ski resorts to transfer water rights to the federal government as a condition of operating on public land, but focus instead on requiring ski areas to, among other things, (i) demonstrate that they have sufficient water to sustain their operations (which Winter Park has established and we expect Steamboat to also establish) and (ii) offer their water rights of whatever kind they may have to a proposed successor operator of the ski area. This new water provision is included in a new Special Use Permit that was issued for the Winter Park resort on April 28, 2016 and is expected to be included in all other ski area special use permits for use of National Forest lands in the future. Notwithstanding the foregoing, USFS policies are subject to review and change over time, and a significant change in law or policy, or actions by permit administrators under the current policy, that interfere with our access to adequate supplies of water to support our current operations or an expansion of our operations could have a material adverse effect on our business, prospects, financial condition, results of operations and cash flows.

We face significant competition.

Our mountain resorts directly compete with other resorts in their respective local and regional markets, as well as with other major destination resorts and non-ski vacation options. We also compete with other large resort operators for the sale of multi-mountain passes. Competition within the ski resort industry is based on multiple factors, including location, price, weather conditions, the uniqueness and perceived quality of the terrain for various levels of skill and ability, the atmosphere of the base village, the quality of food and entertainment and ease of travel to the resort (including direct flights by major airlines). In our Adventure segment, we face competition from heli-skiing and snowcat operators in Canada and the United States. Our ancillary aviation businesses face increasing competition from small independent operators that have certain advantages, including an ability to bid on certain government contracts that are allocated to small businesses. Within our Real Estate segment, our managed properties compete with rental management companies, locally-owned independent hotels, as well as facilities and timeshare companies that are owned or managed by national and international chains. These properties also compete for convention and conference business across the North American market. Competition within the hotel and lodging industry is generally based on quality and consistency of rooms, restaurants and meeting facilities and services, attractiveness of locations, availability of a global distribution system, price and other factors. Our competitors may have access to greater financial, marketing and other resources and may have access to financing on more attractive terms than us. As a result, they may be able to devote more resources to improving and marketing their offerings or more readily take advantage of acquisitions or other opportunities. If we are unable to compete successfully, our business, prospects, financial condition, results of operations and cash flows will be materially adversely affected.

We are not the sole property manager at our resorts.

We manage a significant portion of the lodging rooms available at our resorts and manage rental properties. We cannot require individuals who purchased condominiums in our U.S. developments to use our rental management services and, in recent years, third-party services that assist condominium owners in leasing their units without our involvement have become more prevalent. As a result, we have experienced a decline in the number of condominium owners using our rental management services.

In addition, since we are not involved in transactions where the condominium owner uses a third-party manager, we are unable to control the quality of the leased units or the customer experience. If customers are unsatisfied, the reputation of the entire development, including units we manage, may be harmed, as most customers do not distinguish between units managed by us and units managed by third parties. If a development’s reputation for a positive customer experience deteriorates, it may become more challenging for us to attract customers to these developments. A decline in customers at a development located at one of our mountain resorts may also lead to a decline in revenue throughout the resort’s business.



	15



Table of Contents

We operate on government land pursuant to the terms of governmental permits that may be revoked or not renewed.

We do not own all of the land on which we conduct our operations. Certain of our mountain resorts and CMH operate on federal or Crown land or land owned by other governmental entities pursuant to the terms of governmental permits, leases or other agreements. In many cases, the permits, leases or other agreements give the applicable agency, including the USFS, the right to review and comment on the construction of improvements in the applicable area and on certain other operational matters. Certain permits, leases or other agreements may also be terminated or modified by the applicable agency for specific reasons or in the event we fail to perform our obligations under the applicable permits, leases or other agreements. In addition, the permits, leases or other agreements may not be renewed. A termination or modification of any of our permits, leases or other agreements could have a material adverse effect on our business, prospects, financial condition, results of operations and cash flows. Finally, British Columbia may issue additional permits or licences to third parties related to the land on which CMH operates, and such additional permits and licences may deteriorate the heli-skiing experience at CMH and increase competition.

Our operations are subject to extensive laws, rules, regulations and policies administered by various federal, state, provincial and other governmental authorities.

Our operations are subject to a variety of federal, state, provincial and local laws and regulations, including those relating to lift operations, emissions to the air, discharges to water, storage, treatment and disposal of fuel, water and waste, land use, remediation of contaminated sites and protection of the environment, natural resources and wildlife. For example, future expansions of certain of our U.S. mountain facilities must comply with applicable forest plans approved under the National Forest Management Act, federal, state and foreign wildlife protection laws or local zoning requirements. In addition, most projects to improve, upgrade or expand our ski areas are subject to environmental review under the NEPA. The NEPA requires the Forest Service, or other governmental entities, to study any proposal for potential environmental impacts and include various alternatives in its analysis. Our ski area improvement proposals may not be approved or may be approved with modifications that substantially increase the cost or decrease the desirability of implementing the project.

We are also subject to worker health and safety laws and regulations. From time to time our operations are subject to inspections by environmental regulators or other regulatory agencies and we may be required to undertake certain remediation activities, including in connection with the onsite use and storage of chemicals and petroleum products that may result in spills or releases. Although to date the costs associated with remediation activities have been immaterial, we may be required to incur material remediation costs in the future. Our efforts to comply with applicable laws and regulations do not eliminate the risk that we may be held liable for breaches of these laws and regulations, which may result in fines and penalties or subject us to claims for damages. Liability for any fines, penalties, damages or remediation costs, or changes in applicable laws or regulations, could have a material adverse effect on our business, prospects, financial condition, results of operations and cash flows.

We are dependent on significant infrastructure and our business and growth plans are capital intensive.

We must regularly expend capital to construct, maintain and renovate our properties in order to remain competitive, maintain the safety, value and brand standards of our properties and comply with applicable laws and regulations. Our infrastructure and equipment, including lifts and helicopters, are costly to maintain, repair and replace and are susceptible to unscheduled maintenance. Much of our infrastructure and equipment will eventually need to be replaced or significantly repaired or modernized, which could result in interruptions to our business. We cannot always predict where capital will need to be expended in a given fiscal year and capital expenditures can increase due to forces beyond our control. In certain cases, the cost of infrastructure or equipment repair or replacement may not be justified by the revenue at the applicable property. As a result, we may close a property, or reduce its offerings, if we determine that it is not cost efficient to replace, maintain or repair our infrastructure and equipment at the property.

We also plan to grow through investments in our revenue-generating infrastructure and acquisitions. We cannot be certain that we will have enough capital or that we will be able to raise capital by issuing equity or debt securities or through other financing methods on reasonable terms, if at all, to execute our business plan. A lack of available funds for capital expenditures could have a material adverse effect on our business, prospects, financial condition, results of operations and cash flows.

In addition, our ability to construct, maintain and renovate our properties is subject to a number of risks, including:

•construction delays or cost overruns, including those related to labor and materials;

•the requirement to obtain zoning, occupancy and other required permits or authorizations;

•governmental restrictions on the size or kind of development;

•force majeure events, including forest fires, avalanches, landslides, drought or hurricanes;



	16



Table of Contents

•design defects; and

•environmental concerns.

If we are not able to complete capital projects on schedule, or if our investments fail to improve the properties in the manner that we expect, our ability to compete effectively would be diminished and our business, prospects, financial condition, results of operations and cash flows could be materially adversely affected.

Our future strategic alliance, acquisitions or other growth opportunities may not be successful.

We evaluate strategic alliance and acquisition opportunities both domestically and internationally where the opportunity would provide a strategic fit within our existing portfolio of businesses and we may actively pursue such opportunities from time to time, some of which could be significant. In addition, we intend to evaluate “capital light” opportunities, such as managing third-party resort assets and entering into real estate development partnerships. We cannot predict whether we will realize all of the anticipated benefits and synergies from businesses we acquire. We may also underestimate the resources and costs required to integrate acquired operations and we may be unable to predict the impact any acquisition will have on our future results of operations. The integration process is inherently unpredictable and subject to delay and unexpected costs.

Acquisitions involve significant risks, including:


•	our potential over-valuation of acquired companies, properties or assets;


•	delays in realizing or a failure to realize the benefits, revenue, cost savings and synergies that we anticipate;


•	failure to retain key personnel or business relationships and maintain the reputation of the acquired company, property or asset;


•	the potential impairment of acquired assets;


•	insufficient, or no, indemnification for legal liabilities;


•	the assumption of known or unknown liabilities and additional risks of the acquired businesses or properties, including environmental liabilities; and


•	operating difficulties that require significant financial and managerial resources that would otherwise be available for the ongoing development or expansion of our existing operations.

We may not be able to obtain financing for acquisitions or other transactions on attractive terms, or at all, and the ability to obtain financing may be restricted by the terms of our outstanding indebtedness or other indebtedness we may incur. In addition, our competitors may be able to obtain financing on more attractive terms than us.

Steamboat is highly dependent on contracted direct air service from major hub airports.

A significant portion of Steamboat’s destination customers fly directly from large hub airports to the Yampa Valley Regional Airport, which is approximately 25 miles from the resort. Each ski season, we enter into agreements with major airlines to fly these routes and provide the airlines with subsidies if passenger volume falls below certain pre-established levels. If the routes prove unprofitable to the airlines and any of these airlines decides to stop service to this airport, Steamboat’s skier visits could be materially adversely affected.

We rely on information technology to operate our businesses and maintain our competitiveness, and any failure to adapt to technological developments or industry trends could harm our business.

We depend on the use of information technology and systems, including technology and systems used for reservations, point of sale, e-commerce, accounting, procurement, administration and technologies we make available to our customers. We are currently in the process of updating or replacing many of these systems. Delays or difficulties in implementing these new or enhanced systems may prevent us from achieving the desired results in a timely manner or at all. Additionally, we may face attempts by others to gain unauthorized access through the Internet to our information technology and systems, to intentionally hack, interfere with or cause physical or digital damage to or failure of such systems (such as significant viruses or worms), which attempts we may be unable to prevent. We could be unaware of an incident or its magnitude and effects until after it is too late to prevent it and the damage it may cause. We have experienced minor outages in the past. Any future interruptions, outages or delays in our systems, or deterioration in their performance, could impair our ability to process transactions and could decrease the quality of service that we offer to our customers.



	17



Table of Contents

Our future success depends on our ability to adapt our infrastructure to meet rapidly evolving consumer trends and demands and to respond to competitive service and product offerings. The failure to adopt new technologies and systems in the future may have a material adverse effect on our business, prospects, financial condition, results of operations and cash flows.

Non-compliance with Payment Card Industry Data Security Standards (“PCI DSS”) may subject us to fines, penalties and civil liability.

We are subject to compliance with PCI DSS, an information security standard for organizations that handle cardholder information from major debit and credit card companies. Currently, we are generally compliant within our applicable PCI DSS merchant level and its requisite criteria; however, our level and the requisite criteria are subject to change. We continue to take steps to improve our PCI DSS compliance, but our efforts may result in significant expenses and failure to fully comply with PCI DSS may subject us to fines, penalties and civil liability, and other potential enforcement actions, and may result in the loss of our ability to accept debit and credit card payments or prohibit us from processing transactions through American Express, MasterCard, VISA and other card and payment networks. Even if we are compliant with PCI DSS or other applicable standards, we still may not be able to prevent security breaches involving customer transaction data, though we have taken steps to diminish this risk.

Failure to maintain the integrity of customer or employee data or to use data properly could result in damage to our reputation and subject us to fines, penalties and civil liability.

We collect and store personally identifiable information from customers and employees in the course of doing business and use it for a variety of business purposes, including marketing to our customers through various forms of media. State, provincial and federal governments have enacted laws and regulations to protect consumers and employees against unwanted communications and identity theft, including laws governing treatment of personally identifiable information. The regulatory environment and increased threats to the data we store has increased our costs of doing business. Additionally, the regulatory environment, as well as the requirements imposed on us by the payment card industry, governing information, security and privacy laws are increasingly demanding and continue to evolve and, on occasion, may be inconsistent from one jurisdiction to another. Any failure on our part to implement appropriate safeguards or to detect and provide prompt notice of breaches or unauthorized access as required by applicable laws, or failure on our part to comply with applicable laws regarding consent to consumer communications, could result in damage to our reputation, early termination of our contracts, increased processing fees, litigation or regulatory investigations, or subject us to fines, penalties and civil liabilities. If we are required to pay any significant amounts in satisfaction of claims under these laws, or if we are forced to cease our business operations for any length of time as a result of our inability to comply fully with any such law, our business, prospects, financial condition, results of operations and cash flows may be materially adversely affected.

Despite our efforts, information networks and systems are vulnerable to service interruptions or to security breaches from inadvertent or intentional actions by our employees or vendors, or from attacks by malicious third parties. In recent years, there has been a rise in the number of sophisticated cyber-attacks on network and information systems, and as a result, the risks associated with such an event continue to increase. Although we have taken, and continue to take steps to address these concerns by implementing network security and internal controls, there can be no assurance that a system interruption, security breach or unauthorized access will not occur. Any such interruption, breach or unauthorized access to our network or systems could adversely affect our business operations and/or result in the loss of critical or sensitive confidential information or intellectual property, and could result in financial, legal, business and reputational harm to us.

Our business depends on the quality and reputation of our brands, and any deterioration in the quality or reputation of our brands could have an adverse impact on our business.

A negative public image or other adverse events could affect the reputation of one or more of our mountain resorts and other businesses or more generally impact the reputation of our company. If the reputation or perceived quality of our brands declines, our business, prospects, financial condition, results of operations and cash flows could be materially adversely affected. The unauthorized use of our trademarks could also diminish the value of our brands and their market acceptance, competitive advantages or goodwill, which could adversely affect our business. In addition, a negative public image or other adverse event occurring in an industry where we operate or a related industry may harm our reputation even if such image or event does not directly relate to our brands or business.

We are subject to risks related to currency fluctuations.

We present our financial statements in United States dollars ("USD"). Our operating results are sensitive to fluctuations in foreign currency exchange rates, as a significant portion of our revenue and operating expenses are transacted in Canadian dollars. During fiscal 2016, total Canadian dollar denominated revenue comprised approximately 41% of our total revenue. Any negative impact on revenue would be naturally hedged, in part, by our Canadian dollar denominated operating expenses. A significant fluctuation in the Canada/U.S. exchange rate could therefore have a significant impact on our results of operations after translating our Canadian operations into United States dollars. See Part II-Item 7A., Quantitative and Qualitative Disclosures About Market Risk, "Foreign Currency Fluctuations".



	18



Table of Contents

Currency variations can also contribute to variations in sales at our Canadian mountain resorts and CMH because volatility in foreign exchange rates can impact our customers’ willingness to purchase lift passes or CMH packages. For example, an increase in the value of the Canadian dollar compared to the United States dollar or euro may make our CMH packages less attractive to American and European skiers, respectively.

Certain circumstances may exist whereby our insurance coverage may not cover all possible losses and we may not be able to renew our insurance policies on favorable terms, or at all.

Although we maintain various property and casualty insurance policies and undertake safety and loss prevention programs to address certain risks, our insurance policies do not cover all types of losses and liabilities and in some cases may not be sufficient to cover the ultimate cost of claims which exceed policy limits. If we are held liable for amounts exceeding the limits of our insurance coverage or for claims outside the scope of our coverage, our business, prospects, financial condition, results of operations and cash flows could be materially adversely affected.

In addition, we may not be able to renew our current insurance policies on favorable terms, or at all. Our ability to obtain future insurance coverage at commercially reasonable rates could be materially adversely affected if we or other companies within or outside our industry sustain significant losses or make significant insurance claims.

We are subject to litigation in the ordinary course of business and related to our legacy real estate development activities.

We are involved in various lawsuits and claims that may include, among other things, claims or litigation relating to personal injury and wrongful death, allegations of violations of laws and regulations relating to our real estate activities, labor and employment, intellectual property and environmental matters, and commercial contract disputes. For example, we are, from time to time, subject to various lawsuits and claims related to injuries occurring at our properties, including due to the use, operation or maintenance of our trails, lifts, aircraft and other facilities.

In addition, we are a defendant in lawsuits related to our pre-2010 legacy real estate development and sales activities, including claims related to alleged construction defects and alleged violations of state and federal laws that require providing purchasers with certain mandated disclosures. Any such claims, regardless of merit, are time consuming and expensive to defend and could divert management’s attention and resources and may materially adversely affect our reputation, even if resolved in our favor. Accordingly, the outcome or existence of current or future litigation may have a material adverse effect on our business, prospects, financial condition, results of operations and cash flows.

If we do not retain our key personnel, our business may suffer.

The success of our business is heavily dependent on the leadership of key management personnel, including our senior executive officers. If any of these persons were to leave, it could be difficult to replace them, and our business could be harmed. We do not maintain “key-man” life insurance on any of our employees.

We depend on a seasonal workforce.

We recruit year-round to fill thousands of seasonal positions. Because much of this hiring is done months in advance of the start of the applicable season, we may not be able to accurately predict our staffing needs. In addition, we may not be able to recruit and hire adequate seasonal personnel or hire such personnel at costs consistent with our costs in prior years. This risk is heightened in periods of economic strength, as the market for seasonal labor may become more competitive.

We are subject to risks associated with our workforce.

We are subject to various federal, state and provincial laws governing matters such as minimum wage requirements, overtime compensation and other working conditions, citizenship requirements, discrimination and family and medical leave. Changes to any of these laws, including, but not limited to, further potential increases in state and federally mandated minimum wages, could significantly impact our labor costs. Our operations in Canada are also subject to laws that may require us to make severance or other payments to employees upon their termination.

Immigration law reform could also impact our workforce because we recruit and hire foreign nationals as part of our seasonal workforce. If our labor-related expenses increase, our operating expenses would increase and our business, financial condition and results of operations could be harmed.

From time to time, we have also experienced non-union employees attempting to unionize. While only a small portion of our employees are unionized at present, we may experience additional union activity in the future. In addition, future legislation could make it easier



	19



Table of Contents

for unions to organize and obtain collectively bargained benefits, which could increase our operating expenses and negatively affect our business, prospects, financial condition, results of operations and cash flows.

We may be requested to contribute capital to entities in which we own a minority interest, which would reduce our liquidity or dilute our ownership interest.

We own non-controlling interests in several entities, as well as a controlling 20% interest in Alpine Helicopters. From time to time we may need to contribute capital to one or more of these entities to preserve the value of our investment or for other reasons. Historically, we have made contributions to entities in which we own a minority interest and may make additional contributions in future periods. In addition, from time to time we contribute funds to legacy development partnerships to defend claims against those entities to avoid having default judgments entered which could then potentially be asserted against us. In fiscal 2016, we contributed $0.6 million to these legacy development partnerships. These contributions reduce our cash available for operations and growth initiatives.

Our real estate development strategy may not be successful.

Our real estate development activities are focused on designing strategies for the development of the land surrounding the base areas of our mountain resorts. Prior to 2010, we were actively engaged in the development of residential real estate, primarily in the United States and Canada. Since 2010, our real estate development activities have been limited to the preservation of core development parcels located at our resorts and, more recently, designing strategies for the future development of this land. Our ability to implement any of these strategies and realize the anticipated benefits of future real estate development projects is subject to a number of risks, including:


•	lack of improvement, or deterioration, in real estate markets;


•	difficulty in selling units or the ability of buyers to obtain necessary funds to close on units;


•	escalation in construction costs due to price increases in commodities, unforeseen conditions, cost of insurance, inadequate designs or other causes;


•	work stoppages and inadequate internal resources to manage projects;


•	shortages in building materials;


•	difficulty in financing real estate development projects; and


•	difficulty in receiving necessary regulatory approvals.

If these projects are not implemented, in addition to not realizing intended profits from the real estate developments and sales from ancillary products, our customers may choose to go to other resorts that they perceive to have better residential offerings, which could have a material adverse effect on our business, prospects, financial condition, results of operations and cash flows. In addition, even if we increase the number of units or beds at our mountain resorts, the projects may not be successful and we may be unable to realize incremental visitor growth or profits.

CMH is dependent on Alpine Helicopters.

In January 2013, we restructured our Alpine Helicopters business to comply with Canadian foreign ownership regulations governing aviation flight services in Canada. The restructuring involved the formation of a new flight services company, Alpine Helicopters. Alpine Helicopters is a variable interest entity for which the Company is the primary beneficiary and is consolidated in the consolidated financial statements. We own a 20% equity interest in Alpine Helicopters and the remaining 80% equity interest is held in trust for the benefit of the management and employees of Alpine Helicopters, including the pilots and crew members that support our helicopter operations, and is reflected as a non-controlling interest in the consolidated financial statements.

Alpine Helicopters employs all the pilots who fly the helicopters in the CMH land tenures. As a result of its reliance on Alpine Helicopters, CMH’s business and operations would be negatively affected if Alpine Helicopters were to experience significant disruption affecting its ability to provide helicopter services to CMH. The partial or complete loss of Alpine Helicopter’s services, or a significant adverse change in our relationship with Alpine Helicopters, could result in lost revenue and added costs and harm the image and reputation of CMH as well as negatively impact the CMH customer experience.



	20



Table of Contents

We have underfunded pension obligations.

As of June 30, 2016, we had underfunded pension plan liabilities in frozen pension plans in the amount of $33.6 million. Significant changes in the market values of the investments held to fund the pension obligations or a change in the discount rate used to measure these pension obligations may result in a significant increase or decrease in the valuation of these pension obligations, and these changes may affect the net periodic pension cost in the year the change is made and in subsequent years. We may not generate sufficient cash flow to satisfy these obligations. Any inability to satisfy these pension obligations could have a material adverse effect on our business, prospects, financial condition, results of operations and cash flows.

We may not be able to fully utilize our net operating loss carryforwards.

We have recorded a full valuation allowance against these net operating loss carryforwards because we believe that uncertainty exists with respect to the future realization of the loss carryforwards. Additionally, the amount of the loss carryforwards that will be available in future periods could change in the event of adjustments related to audits by the relevant tax authorities for open years. A portion of these loss carryforwards has been reduced as a result of the Restructuring. To the extent available, we intend to use these net operating loss carryforwards to offset future taxable income associated with our operations. There can be no assurance that we will generate sufficient taxable income in the carryforward period to utilize any remaining loss carryforwards before they expire.

In addition, Section 382 and related provisions of the Internal Revenue Code of 1986, as amended (the “Code”), contain rules that limit for U.S. federal income tax purposes the ability of a company that undergoes an “ownership change” to utilize its net operating losses and certain other tax attributes existing as of the date of such ownership change. Under these rules, such an ownership change is generally an increase in ownership by one or more “five percent shareholders,” within the meaning of Section 382 of the Code, of more than 50% of a company’s stock, directly or indirectly, within a rolling three-year period. If we undergo one or more ownership changes within the meaning of Section 382 of the Code, or if one has already occurred, our net operating losses and certain other tax attributes existing as of the date of each ownership change may be unavailable, in whole or in part, to offset our income and/or reduce or defer our future taxable income associated with our operations, which could have a negative effect on our financial results. While we believe that we have not undergone such an ownership change as of the date hereof, because such an event is outside of our control, no assurance can be given that an ownership change has not already occurred or that future transactions will not result in an ownership change. Any future offerings of equity securities by us or sales of common stock by entities managed or controlled by Fortress Investment Group, LLC (collectively “Fortress”) would increase the likelihood that we undergo an “ownership change” within the meaning of Section 382 of the Code. If an ownership change occurs, the annual utilization of our net operating loss carryforwards and certain other tax attributes may be materially and adversely affected. Our ability to raise future capital by issuing common stock without causing an ownership change may be materially limited.

If we are unable to implement and maintain effective internal control over financial reporting in the future, investors may lose confidence in the accuracy and completeness of our financial reports and the trading price of our common stock may be negatively affected.

We are required to maintain internal control over financial reporting and to report any material weaknesses in such internal controls. We are also required, under Section 404 of the Sarbanes-Oxley Act of 2002 (the "Sarbanes-Oxley Act"), to furnish a report by management on, among other things, the effectiveness of our internal control over financial reporting. This assessment includes disclosure of any material weaknesses identified by our management in our internal control over financial reporting. Section 404 of the Sarbanes-Oxley Act also generally requires an attestation from our independent registered public accounting firm on the effectiveness of our internal control over financial reporting. However, for as long as we remain an emerging growth company as defined in the JOBS Act, we intend to take advantage of the exemption permitting us not to comply with the independent registered public accounting firm attestation requirement. Our compliance with Section 404 of the Sarbanes-Oxley Act will require that we incur substantial accounting expense and expend significant management efforts. If we fail to fully implement the requirements of Section 404 of the Sarbanes-Oxley Act in a timely manner, we may be subject to sanctions or investigations by regulatory authorities, including the SEC and the NYSE. Furthermore, if we are unable to conclude that our internal control over financial reporting is effective, we could lose investor confidence in the accuracy and completeness of our financial reports, the market price of our common stock could decline, and we could be subject to sanctions or investigations by regulatory authorities, including the SEC and the NYSE. Failure to remedy any material weakness in our internal control over financial reporting, or to implement or maintain other effective control systems required of public companies, could also restrict our future access to the capital markets.



	21



Table of Contents

Risks Related to Our Organization and Capital Structure

Ownership of our common stock is highly concentrated and Fortress maintains a right to nominate up to a majority, plus two, of our directors, which may prevent stockholders from influencing significant corporate decisions and may result in conflicts of interest.

Fortress beneficially owns approximately 68.0% of our outstanding common stock. As a result, Fortress will beneficially own shares sufficient for the majority vote over all matters requiring a stockholder vote, including:


•	the election of directors;


•	mergers, consolidations and acquisitions;


•	the sale of all or substantially all of our assets and other decisions affecting our capital structure;


•	the amendment of our certificate of incorporation and our bylaws; and


•	our winding up and dissolution.

In addition, pursuant to the stockholders' agreement with Fortress, Fortress may designate directors for nomination and election to our board of directors. Pursuant to these provisions, Fortress has the ability to appoint up to a majority of the members of our board of directors, plus two directors, for so long as Fortress beneficially owns, directly or indirectly, at least 30% of our issued and outstanding common stock and certain other conditions are met.

This concentration of ownership may delay, deter or prevent acts that would be favored by our other stockholders. The interests of Fortress may not always coincide with our interests or the interests of our other stockholders. Also, Fortress may seek to cause us to take courses of action that, in its judgment, could enhance its investment in us, but which might involve risks to our other stockholders or adversely affect us or our other stockholders. As a result, the market price of our common stock could decline or stockholders might not receive a premium over the then-current market price of our common stock upon a change in control. In addition, this concentration of share ownership and the ability of Fortress to appoint up to a majority of the members of our board of directors, plus two directors, may adversely affect the trading price of our common stock because investors may perceive disadvantages in owning shares in a company with significant stockholders.

We do not anticipate paying dividends on our common stock.

Any declaration and payment of future dividends to holders of our common stock will be at the discretion of our board of directors in accordance with applicable law after taking into account various factors, including our financial condition, our operating results, our current and anticipated cash needs, the impact on our effective tax rate, our indebtedness, legal requirements and other factors that our board of directors deems relevant. Our debt agreements limit our ability to pay dividends.

Because we are a holding company, our ability to pay cash dividends on our common stock will depend on the receipt of dividends or other distributions from our subsidiaries. Under Delaware law, dividends may be payable only out of surplus, which is calculated as our net assets less our capital, or, if we have no surplus, out of our net profits for the fiscal year in which the dividend is declared and/or the preceding fiscal year. Until such time that we pay a dividend, our investors must rely on sales of their common stock after price appreciation, which may never occur, as the only way to realize any future gains on their investment.

Future offerings of equity securities by us or sales of our common stock by Fortress may adversely affect us.

In the future, we may issue additional shares of our common stock or other equity securities in connection with financing transactions, our incentive plans or acquisitions. Issuing additional shares of our common stock or other equity securities or securities convertible into equity may dilute the economic and voting rights of our existing stockholders or reduce the market price of our common stock or both. Preferred shares, if issued, could have a preference with respect to liquidating distributions or a preference with respect to dividend payments that could limit our ability to pay dividends to the holders of our common stock. Holders of our common stock bear the risk that our future offerings may reduce the market price of our common stock and dilute their ownership of us.



	22



Table of Contents

In addition, any issuances of stock by us or sales of stock by Fortress would increase the likelihood that we undergo, or may cause, an “ownership change” within the meaning of Section 382 of the Code. If we undergo one or more ownership changes within the meaning of Section 382 of the Code, our net operating losses and certain other tax attributes existing as of the date of each ownership change may be unavailable, in whole or in part, to offset our income and/or reduce or defer our future taxable income associated with our operations, which could have a negative effect on our liquidity. No assurance can be given that any such stock issuance or sale will not cause us to undergo an ownership change within the meaning of Section 382 of the Code. The interests of Fortress may differ from our interests or the interests of our other stockholders and Fortress may decide to sell shares of stock even if such sale would not be favorable to us or our other stockholders or would result in us undergoing an “ownership change” within the meaning of Section 382 of the Code.

We are a party to various joint purchasing agreements with Fortress that enable us to purchase some goods and services used in the normal course of business at reduced or discounted rates. If we were to undergo an ownership change, it may cause us to need to renegotiate purchasing agreements that may result in increased prices on goods and services acquired.

Certain provisions of the stockholders' agreement, our restated certificate of incorporation and our amended and restated bylaws could hinder, delay or prevent a change in control of us, which could adversely affect the price of our common stock.

Our stockholders' agreement with Fortress, our restated certificate of incorporation and our amended and restated bylaws contain provisions that could make it more difficult for a third party to acquire us without the consent of our board of directors and Fortress. These provisions provide:


•	for a classified board of directors with staggered three-year terms;

•

for removal of directors only for cause and only with the affirmative vote of at least 80% of the voting interest of stockholders entitled to vote (provided, however, that for so long as Fortress beneficially owns, directly or indirectly, at least 30% of our issued and outstanding common stock, directors may be removed with or without cause with the affirmative vote of a majority of the voting interest of stockholders entitled to vote);


•	for prohibitions on stockholders in regards to calling special meetings of our stockholders (provided, however, that for so long as Fortress beneficially owns, directly or indirectly, at least 20% of our issued and outstanding common stock, any stockholders that collectively beneficially own at least 20% of our issued and outstanding common stock may call special meetings of our stockholders);


•	for advance notice requirements by stockholders with respect to director nominations and actions to be taken at annual meetings;


•	certain rights to Fortress with respect to the designation of directors for nomination and election to our board of directors, including the ability to appoint up to a majority of the members of our board of directors, plus two directors, for so long as Fortress beneficially owns, directly or indirectly, at least 30% of our issued and outstanding common stock and certain other conditions are met.


•	for no cumulative voting in the election of directors, which means that the holders of a majority of the outstanding shares of our common stock can elect all the directors standing for election;


•	that action by our stockholders outside a meeting may only occur by unanimous written consent; provided, however, that for so long as Fortress beneficially owns, directly or indirectly, at least 20% of our issued and outstanding common stock, our stockholders may act without a meeting by written consent of a majority of our stockholders; and

•

that our board of directors has the authority to cause the issuance of preferred stock from time to time in one or more series and to establish the terms, preferences and rights of any such series of preferred stock, all without approval of our stockholders. Nothing in our restated certificate of incorporation precludes future issuances without stockholder approval of the authorized but unissued shares of our common stock.

In addition, these provisions may make it difficult and expensive for a third party to pursue a tender offer, change in control or takeover attempt that is opposed by Fortress, our management or our board of directors. Public stockholders who might desire to participate in these types of transactions may not have an opportunity to do so, even if the transaction is favorable to stockholders. These anti-takeover provisions could substantially impede the ability of public stockholders to benefit from a change in control or change our management and board of directors and, as a result, may adversely affect the market price of our common stock and the ability to realize any potential change of control premium.



	23



Table of Contents

Fortress has the right to engage or invest in the same or similar businesses as we do and waiver of the corporate opportunity provisions in our restated certificate of incorporation could enable Fortress and certain stockholders to benefit from corporate opportunities that might otherwise be available to us.

Fortress has other investments and business activities in addition to their ownership of us, including in the industries in which we operate. Fortress has the right, and has no duty to abstain from exercising such right, to engage or invest in the same or similar businesses as us, do business with any of our customers or vendors or employ or otherwise engage any of our officers, directors or employees.

Under our restated certificate of incorporation, if Fortress or any of its officers, directors or employees acquire knowledge of a potential transaction that could be a corporate opportunity, they have no duty to offer such corporate opportunity to us, our stockholders or affiliates. In addition, we have renounced any interest or expectancy in, or in being offered an opportunity to participate in, such corporate opportunities and, in the event that any of our directors and officers who is also a director, officer or employee of Fortress, acquires knowledge of a corporate opportunity or is offered a corporate opportunity, provided that this knowledge was not acquired solely in such person’s capacity as our director or officer and such person acted in good faith, then such person is deemed to have fully satisfied such person’s fiduciary duty and is not liable to us if Fortress pursues or acquires such corporate opportunity or if such person did not present the corporate opportunity to us.

Our restated certificate of incorporation designates the Court of Chancery of the State of Delaware as the exclusive forum for certain litigation that may be initiated by our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us.

Pursuant to our restated certificate of incorporation, unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware will be the sole and exclusive forum for:


•	any derivative action or proceeding brought on our behalf;


•	any action asserting a claim of breach of a fiduciary duty owed by any of our directors, officers, employees or agents or our stockholders;


•	any action asserting a claim arising pursuant to any provision of the General Corporation Law of the State of Delaware; or


•	any action asserting a claim governed by the internal affairs doctrine,

in each such case subject to the Court of Chancery having personal jurisdiction over the indispensable parties named as defendants. In the event that the Court of Chancery lacks jurisdiction over any such action or proceeding, our restated certificate of incorporation provides that the sole and exclusive forum for such action or proceeding will be another state or federal court located within the State of Delaware. Our restated certificate of incorporation further provides that any person or entity purchasing or otherwise acquiring any interest in shares of our common stock is deemed to have notice of and consented to the foregoing provision. The forum selection clause in our amended and restated certificate of incorporation may limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us.



	24



Table of Contents

Risks Related to Our Indebtedness

Our credit agreement contains, and future debt agreements may contain, restrictions that may limit our flexibility in operating our business.

Our credit agreement contains, and documents governing our future indebtedness may contain, numerous covenants that limit the discretion of management with respect to certain business matters. These covenants place restrictions on, among other things, our ability and the ability of our subsidiaries to incur or guarantee additional indebtedness, pay dividends and make other distributions and restricted payments, make certain loans, acquisitions and other investments, enter into agreements restricting our subsidiaries’ ability to pay dividends, engage in certain transactions with stockholders or affiliates, sell certain assets or engage in mergers, acquisitions and other business combinations, reinvest the proceeds from certain asset sales, amend or otherwise alter the terms of our subordinated indebtedness and create liens. Our credit agreement also requires, and documents governing our future indebtedness may require, us or our subsidiaries to meet certain financial ratios and tests in order to incur certain additional debt, make certain loans, acquisitions or other investments, reinvest the proceeds from certain asset sales, or pay dividends or make other distributions or restricted payments. Our ability and the ability of our subsidiaries to comply with these and other provisions of our debt agreements are dependent on our future performance, which will be subject to many factors, some of which are beyond our control. The breach of any of these covenants or noncompliance with any of these financial ratios and tests could result in an event of default under the applicable debt agreement, which, if not cured or waived, could result in acceleration of the related debt and the acceleration of debt under other instruments evidencing indebtedness that may contain cross-acceleration or cross-default provisions. In addition, variable rate indebtedness, which represents approximately 99.8% of our total outstanding debt, subjects us to the risk of higher interest rates, which could cause our future debt service obligations to increase significantly.

Our substantial leverage could adversely affect our ability to raise additional capital to fund our growth strategy, limit our ability to react to changes in the economy or our industry, expose us to interest rate risk to the extent of our variable rate debt and prevent us from meeting our obligations under our indebtedness.

We are significantly leveraged, which could have important consequences, including the following:


•	a substantial portion of our cash flows from operations will be dedicated to the payment of principal and interest on indebtedness, thereby reducing the funds available for operations, future business opportunities and capital expenditures;


•	our ability to obtain additional financing for working capital, capital expenditures, debt service requirements, acquisitions and general corporate purposes in the future may be limited;


•	we may be required to repay our indebtedness from the proceeds of certain asset sales, rather than reinvesting the proceeds;


•	certain of our borrowings are at variable rates of interest, which increase our vulnerability to increases in interest rates;


•	we will be at a competitive disadvantage to lesser leveraged competitors;


•	we may be unable to adjust rapidly to changing market conditions;


•	the debt service requirements of our indebtedness could make it more difficult for us to satisfy our financial obligations; and


•	we may be vulnerable in a downturn in general economic conditions or in our business and we may be unable to carry out activities that are important to our growth.

Our ability to make scheduled payments of the principal of, to pay interest on or to refinance indebtedness depends on and is subject to our financial and operating performance, which in turn is affected by general and regional economic, financial, competitive, business and other factors beyond our control, including the availability of financing in the international banking and capital markets.

Risks Related to Our Equity

The market price of our common stock could be negatively affected by sales of substantial amounts of our common stock in the public markets.

As of September 2, 2016, there were 39,770,271 shares of our common stock outstanding. All of our issued and outstanding shares are freely tradable, except for any shares held by our “affiliates,” as that term is defined in Rule 144 under the Securities Act of 1933 (the “Securities Act”). Approximately 27,038,250 shares, or 68.0% of our outstanding shares, are held by affiliates and can be resold into the public markets in the future in accordance with the requirements of Rule 144.



	25



Table of Contents

Pursuant to our stockholders' agreement with Fortress, Fortress and permitted third party transferees have the right, in certain circumstances, to require us to register their shares of our common stock under the Securities Act for sale into the public markets. The timing of such sales is uncertain and could be influenced by numerous factors, including the market price of our common stock, economic conditions and the contractual obligations or liquidity needs of Fortress.

The market price of our common stock may decline significantly when Fortress elects to sell a significant number of shares of our common stock. A decline in the price of our common stock might impede our ability to raise capital through the issuance of additional shares of common stock or other equity securities.

The market price and trading volume of our common stock have been and may continue to be volatile, which could result in rapid and substantial losses for our stockholders.

The market price of our common stock may fluctuate or decline significantly in the future. Some of the factors that could negatively affect our share price or result in fluctuations in the price or trading volume of our common stock include:


•	quarterly variations in our operating results;


•	operating results that vary from the expectations of securities analysts and investors;


•	change in valuations;


•	changes in the industries in which we operate;


•	announcements by us or companies in our industries of significant contracts, acquisitions, dispositions, strategic partnerships, joint ventures, capital commitments, plans, prospects, service offerings or operating results;


•	additions or departures of key personnel;


•	future sales of our securities;


•	our limited public float and therefore trading volume;


•	other risk factors discussed herein; and


•	other unforeseen events.

Stock markets in the United States have experienced extreme price and volume fluctuations. Market fluctuations, as well as general political and economic conditions such as acts of terrorism, prolonged economic uncertainty, a recession or interest rate or currency rate fluctuations, could adversely affect the market price of our common stock.

ITEM 1B. UNRESOLVED STAFF COMMENTS.

None.



	26



Table of Contents

ITEM 2. PROPERTIES.

The following table summarizes our principal properties. We also own additional parcels of real estate at certain of these properties.



Location		Owned		Permit/Leased	Segment
Denver Colorado, United States			l	Office space (corporate head office)	Our corporate office is used across all segments.
Steamboat Colorado, United States	l	272 acres, including resort operations and undeveloped land	l	3,740 acres, including skiable terrain, rental/retail outlets and undeveloped land ⁽¹⁾	These properties are used across the Mountain and Real Estate segments in complementary and interdependent ways.
Winter Park Colorado, United States	l	81 acres, including undeveloped land and rental/retail outlets	l	7,555 acres, including skiable terrain, rental/retail outlets and undeveloped land ⁽¹⁾⁽²⁾	These properties are used across the Mountain and Real Estate segments in complementary and interdependent ways.
Tremblant Quebec, Canada	l	1,400 acres, including resort operations, skiable terrain, rental/retail outlets, village areas and two golf courses	l	4,987 acres, including skiable terrain and undeveloped land ⁽³⁾	These properties are used across the Mountain and Real Estate segments in complementary and interdependent ways.
Blue Mountain Ontario, Canada	l	633 acres, including resort operations, skiable terrain, rental/retail outlets and one golf course	l	320 acres, including skiable terrain, retail space and a pumphouse ⁽⁴⁾	Mountain
Stratton Vermont, United States	l	3,700 acres, including resort operations, skiable terrain, rental/retail outlets and undeveloped land			These properties are used across the Mountain and Real Estate segments in complementary and interdependent ways.
Snowshoe West Virginia, United States	l	11,000 acres, including resort operations, skiable terrain, rental/retail outlets and undeveloped land			These properties are used across the Mountain and Real Estate segments in complementary and interdependent ways.
Columbia Mountains British Columbia, Canada			l	3.0 million acres of terrain for helicopter accessed skiing, mountaineering and hiking operations ⁽⁵⁾	Adventure

(1) See Part I- Item 1, Business, "Government Regulation and Environmental, Health and Safety--United States--Steamboat and Winter Park"

(2) See "Winter Park Operations".

(3) See "Tremblant Operations".

(4) See "Blue Mountain Operations".

(5) See "CMH Operations".



	27



Table of Contents

Winter Park Operations

The operations at Winter Park are conducted on land and with operating assets that are beneficially owned by the City and County of Denver. Winter Park Recreational Association (“WPRA”) holds the Special Use Permit and Term Special Use Permit issued by the USFS for Winter Park (collectively, the "Permits"). Pursuant to an agreement between the City and County of Denver and WPRA (as amended, the "City Agreement"), WPRA has entered into a Second Amended and Restated Ground Lease Agreement ("Arlberg Club Lease") with the Colorado Arlberg Club under which WPRA leases certain lands used in the operation of the Winter Park ski areas. The Arlberg Club Lease terminates on April 30, 2078. Also pursuant to the terms of the City Agreement, WPRA has entered into a Lease and Operating Agreement (the “Lease”) with our subsidiary Intrawest/Winter Park Operations Corporation (“IWPOC”) under which IWPOC may be the operator of the Winter Park resort (including the Winter Park ski areas) until 2078. The USFS has given its consent to the Lease and operation of Winter Park by IWPOC. The Colorado Arlberg Club has also given its consent to WPRA’s subleasing of the land leased under the Arlberg Club Lease to IWPOC. IWPOC has, subject to the terms of the Permits, the City Agreement, the Arlberg Club Lease and the Lease, the full and legal right to enter into agreements and use the physical assets described in those documents in the operation, maintenance and development of Winter Park.

Tremblant Operations

A portion of Tremblant’s lifts and trails, and some of its buildings, are located on land leased to our subsidiary, Mont Tremblant Resorts and Company, LP (“Tremblant LP”), by the Province of Quebec under a ski area agreement that expires in 2051 (the “Ski Area Agreement”). Pursuant to the Ski Area Agreement, Tremblant LP pays a nominal lease payment annually. These payments may be adjusted annually for changes in the Consumer Price Index. The Ski Area Agreement contains ongoing covenants on the part of Tremblant LP, including a requirement that Tremblant LP comply with all applicable laws. Pursuant to the Ski Area Agreement, Tremblant LP has also agreed to indemnify the provincial government from third-party claims arising out of Tremblant LP’s operations under the Ski Area Agreement. The Ski Area Agreement may be amended by mutual agreement between Tremblant LP and the provincial government to change the applicable ski area or permitted uses. Tremblant LP must submit to the provincial government for those areas under lease a capital investment program each year as well as a master development plan every five years.

Blue Mountain Operations

A portion of Blue Mountain’s lands, including a number of ski lifts and trails, are located on lands leased from Blue Mountain Ski Club (1940) Inc. under a 999-year Lease Agreement dated January 31, 1948 (the "Blue Mountain Lease Agreement"), at a nominal cost. There is also a Lease Amending Agreement dated November 16, 1971 adding Toronto Ski Club as a party to the Blue Mountain Lease Agreement. Blue Mountain also currently has lease agreements for several retail stores it operates in the Blue Mountain Village. Blue Mountain’s Georgian Bay Pumphouse is located on lands leased from the Town of the Blue Mountains under a 30-year Lease Agreement, dated July 11, 1994 (the "1994 Lease Agreement") at a nominal rental rate. The 1994 Lease Agreement commenced on June 1, 1994 and may be renewed for a second consecutive 30-year term upon the same terms and conditions and the same monetary consideration. The lands subject to the 1994 Lease Agreement can only be used for the intake of non-potable water, the pumping of non-potable water and the conveying of non-potable water to the resort’s recreational operations. The 1994 Lease Agreement also states that Blue Mountain will save harmless the Town of the Blue Mountains against any liability and damages resulting from the operation of the pumphouse building and the related operational facilities.

CMH Operations

CMH’s skiing and hiking operations occur on Crown land that is owned by the Government of the Province of British Columbia. As a result, each of CMH’s 11 operating areas has a series of land tenures, which are legal contractual documents between CMH and the government, issued under either British Columbia’s Land Act or Park Act. Licences of Occupation are the most common form of tenure held by CMH for its operating areas outside provincial parks or protected areas and for its ancillary facilities (such as radio repeaters and remote fuel caches). Licences of Occupation are issued under the Land Act, are normally 30 years in length and are renewable at mid-term. Pursuant to the Licences of Occupation, CMH pays a land rental amount on a per skier-day basis. CMH’s Licences of Occupation are non-exclusive and contain provisions whereby they can be amended or revoked by the Province for non-compliance or where the Province requires the land for what it deems to be a “higher and better use.” In CMH’s existence, the Province has not exercised this right. In some cases, a portion of a CMH operating area lies inside a provincial park or protected area. In those cases, CMH also holds a required Park Use Permit issued under the Park Act. Park Use Permits are normally issued for 10-year terms, are renewable at mid-term and are non-exclusive. CMH also holds a small number of other forms of Land Act tenures, such as leases and rights-of-way for 30 or more years.



	28



Table of Contents

ITEM 3. LEGAL PROCEEDINGS.

We are involved in various lawsuits and claims arising in the ordinary course of business and others arising from our legacy real estate development. These lawsuits and claims may include, among other things, claims or litigation relating to personal injury and wrongful death, allegations of violations of laws and regulations relating to our real estate activities and labor and employment, intellectual property and environmental matters and commercial contract disputes. We operate in multiple jurisdictions and, as a result, a claim in one jurisdiction may lead to claims or regulatory penalties in other jurisdictions.

Due to the nature of the activities at our mountain resorts and CMH, we are exposed to the risk that customers or employees may be involved in accidents during the use, operation or maintenance of our trails, lifts, helicopters and facilities. As a result, we are, from time to time, subject to various lawsuits and claims in the ordinary course of business related to injuries occurring at our properties.

In addition, our pre-2010 legacy real estate development and sales activities, combined with the significant downward shift in real estate asset values that occurred in 2007 and 2008, resulted in claims arising in the ordinary course of business being filed against us by owners and prospective purchasers of residences in our real estate developments. In some instances, we have been named as a defendant in lawsuits alleging construction defects at certain of our existing developments or that we failed to construct planned amenities. In other lawsuits, purchasers are seeking rescission of real estate purchases and/or return of deposits paid on pre-construction purchase and sale agreements. These claims are related to alleged violations of state and federal laws.

We believe that we have adequate insurance coverage or have adequately accrued for loss contingencies for all material matters in which we believe a loss is probable and the amount of the loss is reasonably estimable. Although the ultimate outcome of claims against us cannot be ascertained, current pending and threatened claims are not expected to have a material adverse effect, individually or in the aggregate, on our financial position, results of operations or cash flows. However, regardless of their merits or their ultimate outcomes, such matters are costly, divert management's attention and may affect our reputation, even if resolved in our favor.

ITEM 4. MINE SAFETY DISCLOSURES.

None.

PART II



	29



Table of Contents

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.

Market Information for Common Stock

Our common stock has been listed on the New York Stock Exchange ("NYSE") under the symbol "SNOW" since January 31, 2014. Prior to that time, there was no public market for our stock. As of September 2, 2016, the closing price of our common stock was $14.85 per share as reported on the NYSE. The following table sets forth, for the indicated periods, the high and low sales prices per share for our common stock on the NYSE.



	High		Low
Year ended June 30, 2016
First Quarter	$	12.07	$	8.38
Second Quarter	$	10.24	$	7.81
Third Quarter	$	9.37	$	6.95
Fourth Quarter	$	13.06	$	8.23

Year ended June 30, 2015
First Quarter	$	12.00	$	9.53
Second Quarter	$	12.14	$	8.86
Third Quarter	$	12.15	$	8.25
Fourth Quarter	$	12.75	$	8.59

Holders of Record

As of September 2, 2016, there were 6 stockholders of record of our common stock. This figure does not include an estimate of the indeterminate number of beneficial holders whose shares may be held of record by brokerage firms and clearing agencies.

Dividend Policy

We have never declared or paid any cash dividend on our common stock. We intend to retain any future earnings and do not expect to pay dividends in the foreseeable future.

Recent Sale of Unregistered Securities

None.

Issuer Purchases of Equity Securities

None.

Stock Performance Graph

This performance graph shall not be deemed "soliciting material" or to be "filed" with the SEC for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (Exchange Act), or otherwise subject to the liabilities under that Section, and shall not be deemed to be incorporated by reference into any filing of Intrawest Resorts Holdings, Inc. under the Securities Act of 1933, as amended, or the Exchange Act.



	30



Table of Contents

The following graph shows a comparison from January 31, 2014 (the date our common stock commenced trading on the NYSE) through June 30, 2016 of the cumulative total return for our common stock, the Russell 2000 Index and the Dow Jones U.S. Travel and Leisure Index ("DJ US Travel & Leisure Index"). The graph assumes that $100 was invested at the market close on January 31, 2014 in the common stock of the Company, the Russell 2000 Index and the DJ US Travel & Leisure Index and the data for the comparative indices assumes reinvestments of dividends. The stock price performance of the following graph is not necessarily indicativeof future stock price performance.



	31



Table of Contents

ITEM 6. SELECTED FINANCIAL DATA.

The following selected consolidated financial information should be read in conjunction with the consolidated financial statements and the notes thereto in Item 8 of Part II, “Financial Statements and Supplementary Data,” and the information contained in Item 7 of Part II, “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” The information below is presented in thousands except per share data, Skier Visits, Mountain Segment Revenue Per Visit, and ETP.



	Year Ended June 30,
	2016			2015			2014			2013			2012

Statement of Operations Data:
Revenue:
Mountain
Lift	$	179,841		$	182,286		$	151,490		$	146,194		$	133,287
Lodging	60,129			57,814			42,294			41,982			39,380
Ski School	30,974			33,086			28,943			27,042			24,669
Retail and Rental	51,984			56,125			45,214			44,385			40,208
Food and Beverage	57,234			56,726			46,335			43,711			38,464
Other	41,170			39,892			36,587			35,186			34,024
Total Mountain revenue	421,332			425,929			350,863			338,500			310,032
Adventure	104,405			96,799			102,070			112,556			105,929
Real estate	42,433			59,274			58,530			64,726			61,439
Total segment revenue	568,170			582,002			511,463			515,782			477,400
Legacy, non-core, and other ⁽¹⁾	2,742			5,587			13,790			7,056			31,747
Total revenue	570,912			587,589			525,253			522,838			509,147
Operating expenses	474,453			492,917			452,202			446,274			449,620
Depreciation and amortization	60,123			59,076			55,413			59,582			57,655
(Gain) on sale of Intrawest Resort Club Group ⁽²⁾	(40,401		)	—			—			—			—
(Gain) loss on disposal of assets	(1,926		)	(2,280		)	267			12,448			9,443
Impairment of real estate and long-lived assets	—			—			871			1,195			8,919
Goodwill impairment	—			—			—			—			3,575
Loss on remeasurement of equity method investment	—			1,454			—			—			—
Income (loss) from operations	78,663			36,422			16,500			3,339			(20,065		)
Interest income	2,863			4,185			4,728			6,630			7,467
Interest expense on third party debt	(40,377		)	(43,891		)	(53,004		)	(99,629		)	(136,344		)
Interest expense on notes payable to affiliates	—			—			(119,858		)	(236,598		)	(195,842		)
Earnings (loss) from equity method investments	1,933			(3,810		)	(271		)	(5,147		)	538
Gain on disposal of equity method investments ⁽³⁾	—			—			—			18,923			—
Loss on extinguishment of debt	—			(676		)	(35,480		)	(11,152		)	—
Other income (expense), net ⁽⁴⁾	1,757			(1,231		)	(986		)	1,824			1,021
Income (loss) from operations before income taxes	44,839			(9,001		)	(188,371		)	(321,810		)	(343,225		)
Income tax expense (benefit)	1,773			(3,902		)	677			(23,616		)	(5,836		)
Net income (loss)	43,066			(5,099		)	(189,048		)	(298,194		)	(337,389		)
Income (loss) attributable to noncontrolling interest	2,193			1,821			369			(757		)	—
Net income (loss) attributable to Intrawest Resorts Holdings, Inc.	$	40,873		$	(6,920	)	$	(189,417	)	$	(297,437	)	$	(337,389	)



	32



Table of Contents



Weighted average shares of common stock outstanding:
Basic	43,236		45,099			43,132			41,882			41,882
Diluted	43,270		45,099			43,132			41,882			41,882
Net income (loss) attributable to Intrawest Resorts Holdings, Inc. per share:
Basic income (loss) per share	$	0.95	$	(0.15	)	$	(4.39	)	$	(7.10	)	$	(8.06	)
Diluted income (loss) per share	$	0.94	$	(0.15	)	$	(4.39	)	$	(7.10	)	$	(8.06	)

Key Business Metrics Evaluated by Management:

Skier Visits ⁽⁵⁾	3,606,394		4,192,492			3,412,141			3,146,119			2,758,970
Mountain Segment Revenue Per Visit⁽⁶⁾	$	94.92	$	86.03		$	87.27		$	90.88		$	93.53
ETP ⁽⁷⁾	$	48.18	$	42.21		$	43.03		$	44.84		$	46.57

Balance Sheet Data ⁽⁸⁾:
Cash and cash equivalents	$	107,066	$	90,580		$	56,020		$	59,775		$	46,908
Real estate held for development	$	137,283	$	139,951		$	149,716		$	161,670		$	175,508

Total assets	$	1,037,805	$	1,094,995		$	1,096,045		$	1,104,086		$	1,338,428
Third party long-term debt (including current portion) ⁽⁹⁾	$	576,198	$	612,943		$	560,034		$	568,957		$	732,439
Notes payable to affiliates (including current portion)	$	—	$	—		$	—		$	1,356,604		$	1,105,900
Total long-term debt (including current portion)	$	576,198	$	612,943		$	560,034		$	1,925,561		$	1,838,339


(1)	Legacy, non-core and other revenue represents legacy and other non-core operations that are not reviewed regularly by the CODM to assess performance and make decisions regarding the allocation of resources. It includes legacy real estate asset sales, divested non-core operations, and non-core retail revenue.


(2)	In January 2016, we sold IRCG and recorded a $40.4 million gain on the disposition, see Part II- Item 8, Financial Statements and Supplementary Data, Note 3, “Acquisitions and Dispositions” under "IRCG Transaction".


(3)	In December 2012, we sold our investment in Whistler Holdings and recorded a $17.9 million gain related to this disposition.


(4)	Other income (expense), net, primarily includes gains or losses on currency rate fluctuations and other non-operating expenses that management does not believe are representative of the underlying performance of our ongoing operations.


(5)	A Skier Visit represents an individual’s use of a paid or complimentary ticket, frequency product or season pass to ski or snowboard at our Steamboat, Winter Park, Tremblant, Stratton, Snowshoe and Blue Mountain resorts for any part of one day.


(6)	Mountain Segment Revenue Per Visit is defined as total Mountain revenue recorded during the ski season from November 1st to April 30th divided by total Skier Visits during such period.


(7)	Effective ticket price ("ETP") is calculated by dividing lift revenue from November 1st to April 30th by total Skier Visits.


(8)	Balance sheet data for the years ended June 30, 2015, 2014, 2013 and 2012 were revised to present the assets and liabilities related to the disposition of IRCG as assets held for sale.


(9)	Includes capital lease obligations due within one year and long-term capital lease obligations.



	33

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

The following discussion of our financial condition and results of operations should be read in conjunction with the consolidated financial statements and the notes thereto included in this Annual Report on Form 10-K. In addition to historical consolidated financial information, the following discussion contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. See “Cautionary Note About Forward-Looking Statements” included elsewhere in this Annual Report on Form 10-K.

Overview

We are a North American mountain resort, adventure, and real estate company, delivering distinctive vacation and travel experiences to our customers for over three decades. We wholly own and/or operate six four-season mountain resorts with approximately 8,000 skiable acres and over 1,120 acres of land available for real estate development. Our mountain resorts are geographically diversified across North America’s major ski regions, including the Eastern United States, the Rocky Mountains and Canada. Our mountain resorts are located within an average of approximately 160 miles of major metropolitan markets with high concentrations of affluent skiers and several major national airports, including: New York City, Boston, Washington D.C., Denver, Pittsburgh, Montreal and Toronto. We also operate an adventure travel business, which includes CMH, a leading heli-skiing adventure company in North America. CMH provides helicopter accessed skiing, mountaineering and hiking over approximately 3.0 million tenured acres. Additionally, we operate a comprehensive real estate business through which we manage condominium hotel properties and sell and market residential real estate.

Our three segments are as follows:


•	Mountain: Our Mountain segment includes our mountain resort and lodging operations at Steamboat, Winter Park, Tremblant, Stratton, Snowshoe and Blue Mountain. Our Mountain segment included our 50.0% equity interest in Blue Mountain prior to our acquisition (the "Blue Mountain Acquisition") of the remaining 50.0% equity interest in Blue Mountain on September 19, 2014 (the "Acquisition Date").


•	Adventure: Our Adventure segment is comprised of CMH, which provides helicopter accessed skiing, mountaineering and hiking in British Columbia, and our ancillary businesses that support CMH and provide commercial aviation services, such as firefighting, leasing, and helicopter maintenance, repair and overhaul ("MRO") services to third parties.

•

Real Estate: Our Real Estate segment includes our real estate management, marketing and sales businesses, as well as our real estate development activities. Our Real Estate segment includes Intrawest Hospitality Management, Inc. ("IHM"), which manages condominium hotel properties, Playground, our residential real estate sales and marketing business, our 50.0% interest in MHM, our 57.1% economic interest in Chateau, and included Intrawest Resort Club Group ("IRCG"), a vacation club business, until the Disposition Date. Our Real Estate segment also includes costs associated with real estate development activities, such as planning activities and land carrying costs.

In addition to our segments, our consolidated financial results reflect items related to our legacy real estate development and sales activities and non-core assets and operations (referred to herein as “Legacy, non-core and other”).

Recent Transactions

Amendment to Credit Agreement

On April 8, 2016, we and certain of our subsidiaries that guarantee our Senior Debt (as defined below) executed the fourth amendment (the "Fourth Amendment") to our existing Credit Agreement, dated as of December 9, 2013 (the "Credit Agreement"). All capitalized terms used in connection with the discussion of the Fourth Amendment but which are not herein defined have the meaning assigned to them in the Credit Agreement and/or the Fourth Amendment. The Fourth Amendment, among other items, increased the applicable margins for base rate loans and Euro dollar rate loans under our facility (the "Term Loan") from 2.75% to 3.00% and from 3.75% to 4.00%, respectively. Additionally, solely for purposes of calculating the permissible amount of Incremental Term Loan borrowings, the amount of Unrestricted Cash to be deducted from our Total Secured Debt was reduced to amounts in excess of $65.0 million, instead of amounts in excess of $40.0 million.

The Fourth Amendment also modified the former requirement that the Net Cash Proceeds from any disposition of our property be used solely to reinvest in assets useful in our business or to repay the amounts due under the Term Loan so that the Net Cash Proceeds received from the sale of certain specified assets may now also be used by us for other purposes, including for Restricted Payments, subject to the satisfaction of certain conditions described therein.

Additionally, the Fourth Amendment amended Section 6.1 of the Credit Agreement by deleting the provision thereto in its entirety that provided that we were not subject to the financial covenant defined therein when the outstanding amount of the Revolving Loans plus the Swing Line Loans plus the Revolving Facility Letter of Credit Usage was less than 30% of the aggregate Revolving Commitments. Pursuant to the Fourth Amendment, we will now be subject to the financial covenant defined therein on the last day of each Test Period.

The Fourth Amendment also revised the definition of “Permitted Acquisition” so that, after an acquisition, instead of requiring Pro Forma Compliance with a Total Secured Debt Ratio of 5.50:1:00 or a ratio that is no higher than before the Permitted Acquisition, the Credit Agreement, as amended by the Fourth Amendment, now requires Pro Forma Compliance with a Total Gross Debt Leverage Ratio of 5.50:1.00. Additionally, the definition was further amended to require that any acquisition must be in a substantially related business.

Self-Tender Offer

On January 12, 2016, we announced the commencement of a modified “Dutch auction” self-tender offer (the "Tender Offer") to purchase for cash up to $50.0 million of shares of our common stock at a price per share not greater than $10.00 nor less than $9.00, less applicable withholding taxes and without interest. The Tender Offer expired on February 10, 2016. Pursuant to the Tender Offer, we purchased approximately 5.6 million shares of our common stock at a purchase price of $9.00 per share. The tendered shares were accounted for as treasury stock, at cost, and resulted in a reduction of the outstanding shares used to calculate the weighted-average common shares outstanding for basic and diluted earnings per share.

IRCG Transaction

On November 24, 2015, we, through our wholly owned indirect subsidiaries, Intrawest U.S. Holdings Inc. and Intrawest ULC, entered into a definitive agreement (the “Purchase Agreement”) to sell IRCG to Diamond Resorts Corporation (the “Purchaser”) and Diamond Resorts International, Inc. (together with the Purchaser, “Diamond”) for a purchase price of approximately $84.6 million (the “IRCG Transaction”), which included certain purchase price adjustments. IRCG is engaged in the business of developing, selling interests in, and managing (a) Club Intrawest, a points-based timeshare vacation club at certain locations in the United States, Canada and Mexico, (b) a fractional timeshare program with properties located in Zihuatanejo, Mexico, and (c) an internal exchange program for members of the vacation club operated through Extraordinary Escapes Corporation.

The purchase price consisted of cash consideration and the assumption of certain liabilities, including certain lease obligations and certain other continuing contractual obligations. The Purchase Agreement contained customary representations, warranties, covenants and indemnities of the parties.

Upon closing the IRCG Transaction on January 29, 2016, Diamond acquired substantially all of the assets used in the operations of IRCG, including, but not limited to, certain management contracts, accounts receivable, notes and other amounts receivable, certain real property, the resort points available for sale, and all of the equity interests in certain wholly-owned indirect subsidiaries of IRCG.

Factors Affecting our Business

Economic Conditions

Our results of operations are affected by consumer discretionary spending. Numerous economic trends support the notion that the health of the general economy has improved in recent periods. We believe that if the economy continues to improve, consumers will have more disposable income and a greater inclination to engage in and spend money on leisure activities, which will positively impact our results of operations. We also believe that lower fuel prices experienced in recent periods can, if sustained, benefit the travel and leisure industry.

Snowfall and Weather

The timing and amount of snowfall and other weather conditions can have an impact on visitation and the financial results in our Mountain and Adventure segments. Our resorts are geographically diversified and have strong snowmaking capabilities, which help to partially mitigate the impact of localized snow conditions and weather. In addition, our increasing percentage of revenue derived from season pass and frequency products sold prior to the ski season helps to insulate us from variations in snowfall and weather conditions. Prolonged periods of severe weather at our resorts and helicopter accessed skiing tenures can force us to cancel or suspend operations which may have a negative impact on our financial results. Weather may also have an effect on our summer fire suppression activities and flight hours.



	34



Table of Contents

Season Pass and Frequency Product Usage

Season pass products offer unlimited access to lifts at our resorts, subject to certain exceptions and restrictions, for a fixed upfront payment. Frequency products are valid for a specific period of time or number of visits, providing our customers with flexibility to ski on multiple dates for a fixed price. The number of visits from season pass and frequency product holders is influenced by sales volume and usage levels. In recent ski seasons, season pass and frequency product sales have been increasing, while usage levels vary from one ski season to the next primarily due to changes in weather, snowfall and skiing conditions. A greater proportion of visits from season pass and frequency product holders results in downward pressure on the effective ticket price (“ETP”) since these passholders are skiing for a fixed upfront payment, regardless of the number of times they visit. This downward pressure on ETP is more pronounced in ski seasons with higher snowfall, as season pass holders increase their usage. Similarly, a greater proportion of visits from season pass and frequency product holders may result in downward pressure on Revenue Per Visit, as defined in "Key Business Metrics Evaluated by Management". We expect the volume and pricing of season pass and frequency product sales to continue to increase in future ski seasons; however, ETP and Revenue Per Visit in any given ski season may increase or decrease as a result of the mix of visitors and pass products. For the years ended June 30, 2016, 2015 and 2014, 43.1%, 40.2% and 37.5%, respectively, of total lift revenue consisted of season pass and frequency product revenue.

Seasonality and Fluctuations in Quarterly Results

Our business is seasonal in nature. Although we operate four-season resorts, based upon historical results, we generate the highest revenue between our second and third fiscal quarters, which includes the peak ski season. As a result of the seasonality of our business, our mountain resorts and CMH typically experience operating losses during the first and fourth quarters of each fiscal year. In addition, during our peak quarters, we generate the highest daily revenue on weekends, during the Christmas/New Year’s and Presidents’ Day holiday periods and, in the case of our mountain resorts, during school spring breaks. Depending on how peak periods, holidays and weekends fall on the calendar, in any given year we may have more or fewer peak periods, holidays and weekends in our second fiscal quarter compared to prior years, with a corresponding difference in our third fiscal quarter. These differences can result in material differences in our quarterly results of operations and affect the comparability of our results of operations.

Resort Real Estate Markets

We intend to resume development of residential vacation homes at our mountain resorts when market conditions are favorable. The value and sales volume of vacation homes fluctuate with macroeconomic trends and consumer sentiment. During recent periods we have seen a partial recovery in the market for vacation homes.

Potential for Volatility in Ancillary Services within our Adventure Segment

A significant share of the ancillary firefighting services in our Adventure segment is performed through "as needed" contracts. Revenue from these arrangements is based almost entirely on flight hours, which is largely a function of the level of forest fire activity at any given time, with limited or no minimum flight hour guarantees. Accordingly, our ability to generate ancillary revenue is, in part, dependent on higher forest fire levels and our ability to opportunistically deploy our helicopters in other industries and/or lines of business during the off season.

Currency Fluctuation Risk

We present our financial statements in United States dollars ("U.S. dollars"). Our operating results are sensitive to fluctuations in foreign currency exchange rates, as a significant portion of our revenue and operating expenses is transacted in Canadian dollars, principally at Tremblant, Blue Mountain and within our Adventure segment. A significant fluctuation in the Canada/U.S. exchange rate could therefore have a significant impact on our results of operations after translating our Canadian operations into U.S. dollars. See Part II-Item 7A., Quantitative and Qualitative Disclosures About Market Risk, "Foreign Currency Fluctuations".

Where we discuss the impact of foreign currency adjustments on our results of operations, the impact is calculated on a constant U.S. dollar basis. We calculate constant U.S. dollar amounts by applying prior period average exchange rates to the current comparable period.



	35



Table of Contents

Results of Operations

The following historical consolidated statements have been derived from the audited consolidated financial statements included in this Annual Report on Form 10-K. Set forth below is a discussion of our consolidated results of operations, followed by a discussion of our segment results.

Comparison of Results of Operations for the Years Ended June 30, 2016, 2015 and 2014 (dollars in thousands)



	Year Ended June 30,									2016 vs. 2015					2015 vs. 2014
	2016			2015			2014			$ Change			% Change		$ Change			% Change
Revenue	$	570,912		$	587,589		$	525,253		$	(16,677	)	(2.8	)%	$	62,336		11.9	%
Operating expenses	474,453			492,917			452,202			(18,464		)	(3.7	)%	40,715			9.0	%
Depreciation and amortization	60,123			59,076			55,413			1,047			1.8	%	3,663			6.6	%
(Gain) on sale of Intrawest Resort Club Group	(40,401		)	—			—			(40,401		)	n/m		—			n/m
(Gain) loss on disposal of assets	(1,926		)	(2,280		)	267			354			(15.5	)%	(2,547		)	n/m
Impairment of real estate and long-lived assets	—			—			871			—			n/m		(871		)	(100.0	)%
Loss on remeasurement of equity method investment	—			1,454			—			(1,454		)	(100.0	)%	1,454			100.0	%
Income from operations	78,663			36,422			16,500			42,241			116.0	%	19,922			120.7	%
Interest income	2,863			4,185			4,728			(1,322		)	(31.6	)%	(543		)	(11.5	)%
Interest expense on third party debt	(40,377		)	(43,891		)	(53,004		)	3,514			(8.0	)%	9,113			(17.2	)%
Interest expense on notes payable to affiliates	—			—			(119,858		)	—			n/m		119,858			(100.0	)%
Earnings (loss) from equity method investments	1,933			(3,810		)	(271		)	5,743			(150.7	)%	(3,539		)	n/m
Loss on extinguishment of debt	—			(676		)	(35,480		)	676			(100.0	)%	34,804			(98.1	)%
Other income (expense), net	1,757			(1,231		)	(986		)	2,988			(242.7	)%	(245		)	24.8	%
Income (loss) before income taxes	44,839			(9,001		)	(188,371		)	53,840			n/m		179,370			(95.2	)%
Income tax expense (benefit)	1,773			(3,902		)	677			5,675			(145.4	)%	(4,579		)	n/m
Net income (loss)	43,066			(5,099		)	(189,048		)	48,165			n/m		183,949			(97.3	)%
Income attributable to noncontrolling interest	2,193			1,821			369			372			20.4	%	1,452			n/m
Net income (loss) attributable to Intrawest Resorts Holdings, Inc.	$	40,873		$	(6,920	)	$	(189,417	)	$	47,793		n/m		$	182,497		(96.3	)%

n/m - Calculation is not meaningful

Revenue

Revenue decreased in fiscal 2016 compared to fiscal 2015 due to a decrease of $13.8 million and $2.8 million in total segment revenue and Legacy, non-core and other revenue, respectively. Total segment revenue in fiscal 2016 included decreases of $4.6 million and $16.8 million in Mountain revenue and Real Estate revenue, respectively, partially offset by an increase of $7.6 million in Adventure revenue. The decrease in Legacy, non-core and other revenue of $2.8 million in fiscal 2016 was primarily a result of $2.8 million of non-core real estate sales during fiscal 2015. There were no comparable transactions in fiscal 2016. Revenue in fiscal 2016 was impacted by an unfavorable foreign currency adjustment of $27.4 million.



	36



Table of Contents

Revenue increased in fiscal 2015 compared to fiscal 2014 due to an increase in fiscal 2015 of $70.5 million in total segment revenue, partially offset by a decrease of $8.2 million in Legacy, non-core and other revenue. Total segment revenue in fiscal 2015 included increases of $75.1 million and $0.7 million in Mountain revenue and Real Estate revenue, respectively, partially offset by a decrease of $5.3 million in Adventure revenue. The decrease in Legacy, non-core and other revenue of $8.2 million in fiscal 2015 was primarily a result of $10.9 million of non-core real estate sales during fiscal 2014 versus $2.8 million of non-core real estate sales in fiscal 2015. Revenue in fiscal 2015 was impacted by an unfavorable foreign currency adjustment of $25.5 million.

Operating expenses

Operating expenses decreased in fiscal 2016 compared to fiscal 2015 as a result of a decrease in fiscal 2016 of $16.5 million and $2.0 million in total segment operating expenses and in Legacy, non-core and other expenses, respectively. Total segment operating expenses in fiscal 2016 included decreases of $0.1 million, $1.9 million and $14.4 million in Mountain, Adventure and Real Estate operating expenses, respectively. The decrease in Legacy, non-core and other expenses of $2.0 million in fiscal 2016 was primarily due to the cost of sales in fiscal 2015 associated with the parcels of non-core real estate sold. There were no comparable transactions in fiscal 2016.

Operating expenses increased in fiscal 2015 compared to fiscal 2014 as a result of an increase in fiscal 2015 of $50.8 million in total segment operating expenses partially offset by a decrease of $10.1 million in Legacy, non-core and other expenses. Total segment operating expenses in fiscal 2015 included increases of $55.2 million in Mountain operating expenses, partially offset by decreases of $3.9 million and $0.5 million in Adventure and Real Estate operating expenses, respectively. The decrease in Legacy, non-core and other expenses of $10.1 million in fiscal 2015 was primarily due to expenses incurred related to the sale of non-core real estate during fiscal 2014.

Depreciation and amortization

The increase in depreciation and amortization expense in fiscal 2016 compared to the prior fiscal year was primarily due to the inclusion of 100% of Blue Mountain's depreciation and amortization for the full year in fiscal 2016 compared to the prior year, which only included 100% of Blue Mountain's depreciation and amortization expense subsequent to the Acquisition Date.

The increase in depreciation and amortization expense in fiscal 2015 compared to the prior fiscal year was primarily due to an increase in fixed assets assumed in the Blue Mountain Acquisition and an increase in assets placed in service within our Mountain segment. These increases were partially offset by a decrease in amortization of customer relationships at CMH that reached the end of their amortizable lives during fiscal 2015.

(Gain) loss on disposal of assets

In fiscal 2016, the gain on disposal of assets of $1.9 million was primarily due to a non-monetary exchange of helicopter assets with an independent third party in which we acquired four helicopters in exchange for two helicopters. The $1.7 million gain from that transaction resulted from the fair value of the helicopters received exceeding the net book value of helicopters given. In fiscal 2015, the gain on disposal of assets of $2.3 million was primarily due to the sale of a helicopter. In fiscal 2014, the loss on disposal of assets was $0.3 million.

Impairment of real estate and long-lived assets

There were no real estate or long-lived asset impairments in fiscal 2016 or fiscal 2015. In fiscal 2014, we recognized an impairment charge of $0.6 million on our legacy real estate assets as a result of a decline in the fair value of our legacy real estate holdings.



	37



Table of Contents

Loss on remeasurement of equity method investment

In fiscal 2015, we recognized a $1.5 million loss on remeasurement of our equity method investment in Blue Mountain in connection with the Blue Mountain Acquisition. There were no comparable transactions in either fiscal 2016 or fiscal 2014.

Interest income

The decrease in interest income in fiscal 2016 compared to the prior fiscal year was primarily due to the closing of the IRCG Transaction in January 2016, which resulted in us no longer recording the interest income from IRCG's financing activities. The decrease in interest income in fiscal 2015 compared to the prior fiscal year was primarily due to a decrease in IRCG interest income as a result of a decline in the average outstanding IRCG long-term receivables balance.

Interest expense on third party debt

Interest expense on third party debt decreased in fiscal 2016 compared to fiscal 2015 due to the repricing of our Senior Debt in April 2015, which lowered the average annual effective rate from approximately 5.5% to approximately 4.75%. Additionally, in fiscal 2016 we reduced the outstanding principal balance of the Term Loan due to an excess cash flow prepayment of $8.8 million paid in January 2016 and a $25.0 million principal repayment in April 2016 in conjunction with executing the Fourth Amendment. These decreases were partially offset by an increase in the average annual effective rate from approximately 4.75% to 5.00% as part of the Fourth Amendment.

Interest expense on third party debt decreased in fiscal 2015 compared to fiscal 2014 as a result of refinancing our senior debt facilities in December 2013, which lowered the average annual effective interest rate from approximately 9.0% to approximately 5.5% and reduced the average outstanding principal balance.

Interest expense on notes payable to affiliates

The decrease in interest expense on notes payable to affiliates in fiscal 2016 and fiscal 2015 compared to fiscal 2014 was due to the Restructuring in December 2013, which resulted in notes payable to affiliates, including accrued and unpaid interest, either exchanged for our common stock or canceled, or pursuant to which our subsidiaries were released from their obligations, including guarantor obligations.

Earnings (loss) from equity method investments

The earnings from equity method investments in fiscal 2016 compared to the loss in the prior fiscal year was primarily a result of earnings from our investments in the Mammoth family of resorts. In March 2015, the Mammoth family of resorts added Snow Summit Mountain Resort and Bear Mountain. The Mammoth family of resorts experienced an increase in Skier Visits (as defined below) driven by improved snowfall and better ski conditions compared to the prior fiscal year.

The increase in the loss from equity method investments in fiscal 2015 compared to the prior fiscal year was primarily a result of acquiring the remaining 50.0% equity interest in Blue Mountain that we did not already own on September 19, 2014 and, therefore, no longer accounting for Blue Mountain as an equity method investment. The loss from equity method investments in fiscal 2014 includes Blue Mountain's results for the entire fiscal year, including the peak ski season, in which Blue Mountain experienced operating income, whereas the loss from equity method investments in fiscal 2015 only includes Blue Mountain's results for a portion of the first quarter, in which Blue Mountain experienced operating losses.

Loss on extinguishment of debt

In fiscal 2015, we recognized a $0.7 million loss on extinguishment of debt as a result of amending our Senior Debt in the fourth quarter of fiscal 2015. In fiscal 2014, we recognized a $35.5 million loss on extinguishment of debt as a result of refinancing our senior debt facilities in December 2013. There was no comparable transaction in fiscal 2016.

Other income (expense), net

Other income, net, increased by $3.0 million in fiscal 2016 compared to the prior fiscal year primarily due to a favorable legacy legal settlement partially offset by approximately $1.7 million of foreign currency transaction losses. Other expense, net, increased by $0.2 million in fiscal 2015 compared to the prior fiscal year.



	38



Table of Contents

Income tax expense (benefit)

In fiscal 2016, we recognized $1.8 million of tax expense related to tax paying entities primarily in Canada. The $3.9 million tax benefit for fiscal 2015 was primarily attributable to our restructuring of the wholly owned interest in Blue Mountain subsequent to the Blue Mountain Acquisition. This benefit was partially offset by income tax expense related to tax paying entities primarily in Canada. The resulting effective tax rates were 4.0% and 43.4% in fiscal 2016 and 2015, respectively. The effective tax rate in fiscal 2016 and 2015 differs from the federal blended statutory rate of 28.2% and 23.5%, respectively, due to changes in recorded valuation allowances for entities in the United States and Canada.

The $0.7 million tax expense for fiscal 2014 was the result of tax paying entities primarily in Canada. The resulting effective tax rate for fiscal 2014 was (0.4)%. The effective tax rate in fiscal 2014 differs from the federal blended statutory rate of 27.8% due to changes in recorded valuation allowances for entities in the United States and Canada.

Results of Segment Operations (in thousands)



	Year Ended June 30,
	2016		2015		2014
Mountain revenue	$	421,332	$	425,929	$	350,863
Adventure revenue	104,405		96,799		102,070
Real Estate revenue	42,433		59,274		58,530
Total segment revenue	$	568,170	$	582,002	$	511,463

Mountain Adjusted EBITDA	$	84,334	$	88,972	$	75,417
Adventure Adjusted EBITDA	22,146		13,305		16,558
Real Estate Adjusted EBITDA	6,625		10,423		9,219
Total Adjusted EBITDA	$	113,105	$	112,700	$	101,194

See "Non-GAAP Financial Measures" below for reconciliations between non-GAAP financial measures and the most directly comparable GAAP (as defined below) measures.

Mountain

Revenue and Mountain Adjusted EBITDA

The Mountain segment earns revenue from a variety of business activities conducted at our mountain resorts.

Lift revenue. Lift revenue is derived from a variety of lift pass products, including multi-resort and single-resort passes, season pass products, frequency card products of varying durations and single and multi-day lift tickets. Our season pass products, including our multi-resort products, are predominately sold prior to the start of the ski season. Season pass revenue, although primarily collected prior to each ski season, is recognized in our consolidated financial statements during such fiscal year based on the prior three-year average pass product usage patterns. Frequency product revenue is recognized based on usage, and revenue on unused products is recognized based on the prior three-year average usage for each frequency product. During the summer season, Lift revenue primarily relates to mountain biking and sightseeing lift products.

Lodging revenue. Lodging revenue is derived primarily from our management of rental programs for condominium properties located at or in close proximity to our mountain resorts. We typically receive 25% to 50% of the daily room revenue, with the condominium owners receiving the remaining share. We also earn lodging revenue from hotel properties we own at Winter Park, Stratton and Snowshoe.

Ski School revenue. Ski School revenue is derived from our operation of ski and ride schools at each of our mountain resorts. We are the exclusive provider of these services at each of our resorts. During the summer season, Ski School revenue is derived from mountain bike instruction and child care.

Retail and Rental revenue. Retail and Rental revenue is derived from the rental of ski, snowboard and bike equipment and the sale of ski, snowboard and bike accessories, equipment, apparel, logo wear, gifts and sundries at our on-mountain and base area outlets.



	39



Table of Contents

Food and Beverage revenue. Food and Beverage revenue is derived from our operation of restaurants, bars and other food and beverage outlets at our resorts.

Other revenue. Other revenue is derived from fees earned through a wide variety of activities and ancillary operations, including private clubs, municipal services, call centers, parking operations, golf, summer base area activities, sponsorships, entertainment events and other resort activities.

Mountain Adjusted EBITDA. Mountain Adjusted earnings before interest, taxes, depreciation and amortization (“EBITDA”) is Mountain revenue less Mountain operating expenses, adjusted for our pro rata share of EBITDA for our equity method investment in Blue Mountain for all periods prior to our acquisition of the remaining 50.0% interest in September 2014. Mountain operating expenses include: wages, incentives and benefits for resort personnel; direct costs of food, beverage and retail inventory; general and administrative expenses; and resort operating expenses, such as contract services, utilities, fuel, permit and lease payments, credit card fees, property taxes, and maintenance and operating supplies.

Key Business Metrics Evaluated by Management

“Skier Visits” We measure visitation volume during the ski season, which is when most of our lift revenue is earned, by the number of “Skier Visits” at our resorts, each of which represents an individual’s use of a paid or complimentary ticket, frequency card or season pass product to ski or snowboard at our mountain resorts for any part of one day. The number of Skier Visits, viewed in conjunction with ETP, is an important indicator of our Lift revenue. Changes in the number of Skier Visits have an impact on Mountain revenue. The number of Skier Visits is affected by numerous factors, including the quality of the guest experience, the effectiveness of our marketing efforts, pricing policies, snow and weather conditions, overall industry trends, macroeconomic factors and the relative attractiveness of our resort offerings compared to competitive offerings.

“Revenue per Visit” Revenue per Visit is defined as total Mountain revenue recorded during the ski season divided by total Skier Visits during such period. For each fiscal year, this means total Mountain revenue as used in this calculation only includes revenue from November 1st through April 30th. This metric excludes non-ski season revenue, which is not directly correlated to skier visit growth. Revenue per Visit is influenced by our mix of guests. Destination guests are more likely to purchase ancillary products and services than regional guests and a higher percentage of destination guests in our skier mix typically increases Revenue per Visit.

“ETP” Effective ticket price, or "ETP", is defined as Lift revenue recorded during the ski season divided by total Skier Visits. For each fiscal year, this means total Mountain revenue as used in this calculation only includes revenue from November 1st through April 30th. ETP is influenced by lift product mix and other factors. Season pass products offer unlimited access, subject to certain exceptions and restrictions, for a fixed upfront payment. As a result, season passholders skiing more frequently in a given fiscal period as compared to the corresponding prior year period will result in downward pressure on ETP. This downward pressure on ETP is more pronounced in ski seasons with higher snowfall, as season pass holders increase their usage. Conversely, single and multi-day lift ticket products are priced per visit, and therefore a greater proportion of use of these products will tend to increase our ETP. Other factors that influence ETP include the number of complimentary or special promotional passes issued by us, the average age of skiers visiting our resorts, the volume of group or promotional sales and the relative volume of products sold through different sales channels, including our call centers, our ecommerce platform and our network of third-party online and traditional travel companies. Products sold at the ticket counter, which has been a declining percentage of Lift revenue in recent years, are typically priced higher relative to other channels because walk-up customers are our least price sensitive guests.

“Revenue per available room” or “RevPAR” is determined by dividing gross room revenue during a given period by the number of units available to guests during such period.

“Average Daily Rate” or"ADR"is determined by dividing gross room revenue during a given period by the number of occupied units under management during such period. ADR is a measure commonly used in the lodging industry, as well as by our management to track lodging pricing trends. ADR trends provide useful information concerning the pricing environment and the nature of the customer base of a lodging operation. ADR is affected by numerous factors, including the quality of the guest experience, the effectiveness of our marketing efforts, snow and weather conditions, overall industry trends, macroeconomic factors and the relative attractiveness of our resort offerings compared to competing offerings.



	40



Table of Contents

Comparison of Mountain Results for the Years Ended June 30, 2016, 2015 and 2014 (dollars in thousands)



	Year Ended June 30,						2016 vs. 2015					2015 vs. 2014
	2016		2015		2014		Change			% Change		Change			% Change
Skier Visits	3,606,394		4,192,492		3,412,141		(586,098		)	(14.0	)%	780,351			22.9	%
Revenue per Visit	$	94.92	$	86.03	$	87.27	$	8.89		10.3	%	$	(1.24	)	(1.4	)%
ETP	$	48.18	$	42.21	$	43.03	$	5.97		14.1	%	$	(0.82	)	(1.9	)%
RevPAR	$	61.88	$	62.79	$	53.55	$	(0.91	)	(1.4	)%	$	9.24		17.3	%
ADR	$	151.56	$	158.02	$	155.41	$	(6.46	)	(4.1	)%	$	2.61		1.7	%

Mountain revenue:
Lift	$	179,841	$	182,286	$	151,490	$	(2,445	)	(1.3	)%	$	30,796		20.3	%
Lodging	60,129		57,814		42,294		2,315			4.0	%	15,520			36.7	%
Ski School	30,974		33,086		28,943		(2,112		)	(6.4	)%	4,143			14.3	%
Retail and Rental	51,984		56,125		45,214		(4,141		)	(7.4	)%	10,911			24.1	%
Food and Beverage	57,234		56,726		46,335		508			0.9	%	10,391			22.4	%
Other	41,170		39,892		36,587		1,278			3.2	%	3,305			9.0	%
Total Mountain revenue	$	421,332	$	425,929	$	350,863	$	(4,597	)	(1.1	)%	$	75,066		21.4	%
Mountain Adjusted EBITDA	$	84,334	$	88,972	$	75,417	$	(4,638	)	(5.2	)%	$	13,555		18.0	%

Mountain revenue

Mountain revenue decreased in fiscal 2016 compared to fiscal 2015 primarily due to an unfavorable foreign currency adjustment of $14.9 million. Excluding the foreign currency adjustment, Mountain revenue increased $10.3 million, or 2.4%, in fiscal 2016 compared to fiscal 2015. The increase was primarily attributable to owning Blue Mountain for the entire fiscal 2016 period whereas Mountain revenue in fiscal 2015 only included Blue Mountain revenue subsequent to the Acquisition Date. Prior to the Acquisition Date, Blue Mountain was accounted for under the equity method and therefore the associated revenue was not included in Mountain revenue. Excluding the foreign currency adjustment and Blue Mountain, Mountain revenue increased $2.2 million, or 0.6%, due to a 10% increase in revenue at our Colorado resorts partially offset by a 9.0% decrease in revenue at our Eastern resorts due to unprecedented warm weather during the 2015/2016 ski season.

Mountain revenue increased in fiscal 2015 compared to fiscal 2014 primarily due to the inclusion of revenue from owning 100% of Blue Mountain since the Acquisition Date. Excluding Blue Mountain and an unfavorable foreign currency adjustment of $7.5 million, Mountain revenue increased $24.9 million, or 7.1%, in fiscal 2015 primarily due to increases in season pass and frequency product revenue, Ski School revenue and other guest services revenue compared to the prior fiscal year.

Lift revenue

Lift revenue decreased in fiscal 2016 compared to fiscal 2015 primarily due to an unfavorable foreign currency adjustment of $4.7 million. Excluding the foreign currency adjustment, Lift revenue increased $2.3 million, or 1.2%, primarily due to higher revenue at our Colorado resorts driven by increased season pass sales and increased pricing on paid tickets. Season pass and frequency product revenue for the 2015/2016 ski season increased 5.6% compared to the prior fiscal year and comprised 43.1% and 40.2% of Lift revenue in fiscal 2016 and 2015, respectively. Season pass revenue, for which cash is generally collected prior to the ski season, is recognized based on historical usage patterns. Frequency product revenue is recognized as used, and unused portions ("breakage") are recognized based on historical usage patterns for each frequency product. During the summer season, Lift revenue primarily relates to mountain biking and sightseeing products, which increased in fiscal 2016 compared to fiscal 2015 primarily due to higher summer visitation.

Lift revenue increased in fiscal 2015 compared to fiscal 2014 primarily due to the inclusion of revenue from owning 100% of Blue Mountain since the Acquisition Date. Excluding Blue Mountain and an unfavorable foreign currency adjustment of $3.1 million, Lift revenue increased $13.9 million, or 9.2%, in fiscal 2015 compared to the prior fiscal year primarily due to a 14.2% increase in season pass and frequency product sales across our resorts, select price increases primarily at our Colorado resorts and modest skier visit growth. Excluding Blue Mountain, season pass and frequency product revenue comprised 39.9% and 37.5% of Lift revenue for fiscal 2015 and fiscal 2014, respectively.



	41



Table of Contents

Lodging revenue

Lodging revenue increased in fiscal 2016 compared to fiscal 2015 primarily due to the inclusion of revenue from owning 100% of Blue Mountain during all of fiscal 2016 compared to fiscal 2015, which only included revenue from Blue Mountain since the Acquisition Date. Excluding Blue Mountain and an unfavorable foreign currency adjustment of $1.9 million, Lodging revenue decreased $1.0 million, or 2.2%, in fiscal 2016 compared to the prior fiscal year. The decrease was primarily due to a 7.2% decrease in revenue at our Eastern resorts driven by a 9.4% decrease in room nights, which was partially offset by a 12.9% increase in lodging revenue at our Colorado resorts due to higher ADR and a 4.9% increase in room nights.

Lodging revenue increased in fiscal 2015 compared to fiscal 2014 primarily due to the inclusion of revenue from owning 100% of Blue Mountain since the Acquisition Date. Excluding Blue Mountain and an unfavorable foreign currency adjustment of $1.4 million, Lodging revenue increased $1.5 million, or 3.7%, in fiscal 2015 compared to the prior fiscal year primarily due to higher RevPAR at Tremblant.

Ski School revenue

Ski School revenue decreased in fiscal 2016 compared to fiscal 2015 primarily due to a decrease in Skier Visits at our Eastern resorts. Ski School revenue decreased 20.8% at our Eastern resorts, partially offset by an increase in Ski School revenue of 4.1% at our Colorado resorts. Excluding Blue Mountain and an unfavorable foreign currency adjustment of $0.4 million, Ski School revenue decreased $1.2 million, or 3.7%, in fiscal 2016 compared to fiscal 2015. During the summer season, Ski School revenue is derived from mountain bike instruction and child care, which increased slightly in fiscal 2016 compared to fiscal 2015.

Ski School revenue increased in fiscal 2015 compared to fiscal 2014 primarily due to the inclusion of revenue from owning 100% of Blue Mountain since the Acquisition Date. Excluding Blue Mountain and an unfavorable foreign currency adjustment of $0.4 million, Ski School revenue increased $2.8 million, or 9.6%, in fiscal 2015 compared to the prior fiscal year due to a higher yield per Skier Visit offset slightly by decreases in mountain bike instruction and child care revenue.

Retail and Rental revenue

Retail and Rental revenue decreased in fiscal 2016 compared to fiscal 2015 primarily due to a 14.2% decrease in Retail and Rental revenue at our Eastern resorts as a result of decreased retail sales and rental volume attributable to the unprecedented warm weather during the 2015/2016 ski season. The decrease at our Eastern resorts was partially offset by a 9.6% increase at our Colorado resorts driven by higher retail and rental sales from strong summer visitation and higher retail sales due to snowy conditions during the 2015/2016 ski season and the positive impact of owning Blue Mountain for all of fiscal 2016. Excluding Blue Mountain and an unfavorable foreign currency adjustment of $1.7 million, Retail and Rental revenue decreased $2.4 million, or 4.9%, in fiscal 2016 compared to the prior fiscal year.

Retail and Rental revenue increased in fiscal 2015 compared to fiscal 2014 primarily due to the inclusion of revenue from owning 100% of Blue Mountain since the Acquisition Date. Excluding Blue Mountain and an unfavorable foreign currency adjustment of $1.4 million, Retail and Rental revenue increased $4.9 million, or 10.8%, compared to the prior fiscal year primarily due to select price increases, increased retail sales volume in the East due to periods of unusually cold weather, an increase in mountain bike rentals and sales and successful summer liquidation sales.



	42



Table of Contents

Food and Beverage revenue

Food and Beverage revenue increased in fiscal 2016 compared to fiscal 2015 primarily due to higher Revenue per Visit at our Colorado resorts and the inclusion of revenue from owning 100% of Blue Mountain during all of fiscal 2016 compared to fiscal 2015, which only included results of Blue Mountain since the Acquisition Date, partially offset by decreases in Food and Beverage revenue at our Eastern resorts. Excluding Blue Mountain and an unfavorable foreign currency adjustment of $1.0 million, Food and Beverage revenue increased $0.4 million, or 0.9%, in fiscal 2016 compared to fiscal 2015 driven by higher revenue at our Colorado resorts, higher summer visitation and an increase in group business revenue.

Food and Beverage revenue increased in fiscal 2015 compared to fiscal 2014 primarily due to the inclusion of revenue from owning 100% of Blue Mountain since the Acquisition Date. Excluding Blue Mountain and an unfavorable foreign currency adjustment of $0.8 million, Food and Beverage revenue increased $2.2 million, or 4.7%, in fiscal 2015 compared to the prior fiscal year due to an increase in yield per Skier Visit and an increase in weddings and banquets, primarily at our Colorado resorts.

Other revenue

Other revenue increased in fiscal 2016 compared to fiscal 2015 primarily due to the inclusion of revenue from owning 100% of Blue Mountain during all of fiscal 2016 compared to fiscal 2015, which only included results of Blue Mountain since the Acquisition Date. Excluding Blue Mountain and an unfavorable foreign currency adjustment of $0.9 million, Other revenue increased $0.3 million, or 0.7%, in fiscal 2016 compared to the prior fiscal year.

Other revenue increased in fiscal 2015 compared to fiscal 2014 primarily due to the inclusion of revenue from owning 100% of Blue Mountain since the Acquisition Date. Excluding Blue Mountain and an unfavorable foreign currency adjustment of $0.5 million, Other revenue decreased $0.5 million, or 1.2%, in fiscal 2015 compared to the prior fiscal year.

Mountain Adjusted EBITDA

Mountain Adjusted EBITDA decreased in fiscal 2016 compared to fiscal 2015 primarily due to a $4.6 million decrease in Mountain revenue, partially offset by a $0.1 million decrease in Mountain operating expenses. The decrease in Mountain operating expenses from $337.1 million in fiscal 2015 to $337.0 million in fiscal 2016 was primarily due to a favorable foreign currency adjustment of $13.0 million partially offset by the inclusion of 100% of Blue Mountain during all of fiscal 2016 compared to fiscal 2015, which only included results of Blue Mountain since the Acquisition Date. Prior to the Acquisition Date, Blue Mountain was accounted for under the equity method and, therefore, the associated operating expenses were not included in Mountain operating expenses. Mountain Adjusted EBITDA in the prior year period included $0.3 million of our pro rata share of EBITDA from Blue Mountain for the period from July 1, 2014 through the Acquisition Date. Excluding Blue Mountain and unfavorable foreign currency adjustments, Mountain revenue increased $2.2 million, or 0.6%, in fiscal 2016, partially offset by a $1.5 million, or 0.5%, increase in Mountain operating expenses, resulting in an increase to Mountain Adjusted EBITDA of $0.8 million, or 1.0%.

Mountain Adjusted EBITDA increased in fiscal 2015 compared to fiscal 2014 primarily due to a $75.1 million increase in Mountain revenue, partially offset by a $55.2 million increase in Mountain operating expenses. The increase in Mountain operating expenses from $281.9 million in fiscal 2014 to $337.1 million in fiscal 2015 was primarily due to the inclusion of $44.5 million of Blue Mountain operating expenses as well as increases in staffing at our resorts, health and medical coverage expense, compensation expense, and higher IT service costs. In fiscal 2015, Mountain operating expenses included 100% of Blue Mountain's operating expenses subsequent to the Acquisition Date, whereas prior to the Blue Mountain Acquisition, Blue Mountain was accounted for under the equity method. In fiscal 2014, Mountain Adjusted EBITDA included $6.6 million of our pro rata share of EBITDA from Blue Mountain while fiscal 2015 included 100% of Blue Mountain’s revenue and operating expenses, which were $57.7 million and $44.5 million, respectively, following the Acquisition Date. Excluding Blue Mountain and unfavorable foreign currency adjustments, Mountain revenue increased $24.9 million, or 7.1%, in fiscal 2015, partially offset by a $16.5 million increase in Mountain operating expenses, resulting in an increase to Mountain Adjusted EBITDA of $8.4 million.

Same Store Comparison of Mountain Results for the Year Ended June 30, 2016

Given the impact that the foreign currency adjustments, the disposition of IRCG in fiscal 2016 and the acquisition of Blue Mountain in fiscal 2015 had on our results, we believe same store metrics are useful in analyzing the underlying performance of our business. Same store growth is calculated in constant currency, as if we owned 100% of Blue Mountain during all of fiscal 2015 and excluding IRCG in both fiscal 2015 and fiscal 2016 ("Same Store"). We calculate constant U.S. dollar amounts by applying prior period average exchange rates to the current comparable period. The following table presents the percentage change of Mountain results as reported and on a Same Store basis from the prior year period:



	43



Table of Contents



	Change in Fiscal 2016 vs. Fiscal 2015
	As Reported		Same Store
Skier Visits	(14.0	)%	(14.0	)%
Revenue per Visit	10.3	%	13.5	%
ETP	14.1	%	16.9	%
RevPAR	(1.4	)%	1.0	%
ADR	(4.1	)%	2.8	%

Mountain revenue:
Lift	(1.3	)%	1.1	%
Lodging	4.0	%	1.2	%
Ski School	(6.4	)%	(4.8	)%
Retail and Rental	(7.4	)%	(4.5	)%
Food and Beverage	0.9	%	0.9	%
Other	3.2	%	0.0	%
Total Mountain revenue	(1.1	)%	(0.2	)%
Mountain Adjusted EBITDA	(5.2	)%	(2.9	)%

Adventure

Revenue and Adventure Adjusted EBITDA

Revenue. The Adventure segment earns revenue from a variety of activities conducted at CMH. CMH revenue is derived primarily from the sale of adventure packages that include helicopter accessed skiing, mountaineering or hiking, lodging at facilities owned or leased by CMH and food and beverage services. In addition to package revenue, CMH earns ancillary revenue from the sale of additional vertical meters of skiing, retail merchandise, alcoholic beverages, spa services and the sale of other products and services not included in the vacation package.

The Adventure segment also generates ancillary revenue relating to performance of fire suppression services during the summer months in the Western United States and Western Canada. These activities are performed on an as-needed basis or pursuant to contracts that have a term of one to five years. Ancillary revenue is also derived from MRO services performed by Alpine Aerotech LP on third-party aircraft, as well as from leasing aircraft to unaffiliated third parties.

Adventure Adjusted EBITDA. Adventure Adjusted EBITDA is Adventure revenue less Adventure operating expenses, adjusted for Adjusted EBITDA attributable to noncontrolling interests. Adventure operating expenses consist primarily of compensation and benefits, fuel, aircraft and facility maintenance and manufacturing expenses, insurance, utilities, permit and lease payments, credit card fees, food and beverage costs, and general and administrative expenses.

Comparison of Adventure Results for the Years Ended June 30, 2016, 2015 and 2014 (dollars in thousands)



	Year Ended June 30,						2016 vs. 2015				2015 vs. 2014
	2016		2015		2014		$ Change		% Change		$ Change			% Change

Adventure revenue	$	104,405	$	96,799	$	102,070	$	7,606	7.9	%	$	(5,271	)	(5.2	)%
Adventure Adjusted EBITDA	$	22,146	$	13,305	$	16,558	$	8,841	66.4	%	$	(3,253	)	(19.6	)%



	44



Table of Contents

Adventure revenue

Adventure revenue increased in fiscal 2016 compared to fiscal 2015 primarily due to a $6.6 million increase in CMH revenue and a $1.0 million increase in ancillary service revenue. Excluding the impact of an unfavorable foreign currency adjustment of $11.5 million, CMH and ancillary services revenue would have been $13.0 million, or 26.2%, and $6.1 million, or 12.9%, higher than the prior fiscal year, respectively. The increase in CMH revenue was primarily driven by an increase in guest nights, higher yields and operating one additional lodge for summer operations. The increase in ancillary services revenue was primarily due to an increase in fire suppression related activities as a result of above average forest fire activity in the first quarter of fiscal 2016 and an increase in helicopter MRO services and part sales.

Adventure revenue decreased in fiscal 2015 compared to fiscal 2014 primarily due to a decrease of $7.8 million in CMH revenue, partially offset by an increase of $2.5 million in ancillary services. Excluding the impact of an unfavorable foreign currency adjustment of $5.8 million, CMH revenue would have been $2.0 million, or 3.5%, lower than the prior fiscal year. The decrease in CMH revenue was primarily due to poor snowfall and warm temperatures resulting in deferred or canceled trips. Excluding the impact of an unfavorable foreign currency adjustment of $4.1 million, in fiscal 2015, ancillary services would have been $6.7 million, or 15.0%, higher than the prior fiscal year. The increase in revenue from ancillary services was primarily attributable to an increase in fire suppression activities as a result of above average forest fire activity in Western Canada in the fourth quarter of fiscal 2015.

Adventure Adjusted EBITDA

Adventure Adjusted EBITDA increased in fiscal 2016 compared to fiscal 2015 primarily due to a $7.6 million increase in Adventure revenue coupled with a $1.9 million decrease in Adventure operating expenses, from $81.0 million in fiscal 2015 to $79.1 million in fiscal 2016. After removing $3.2 million of Adjusted EBITDA attributable to the 80.0% interest in Alpine Helicopters that is owned by a third party, Adventure Adjusted EBITDA increased $8.8 million. The decrease in Adventure operating expenses in fiscal 2016 compared to fiscal 2015 was primarily attributable to an $8.3 million favorable foreign currency adjustment. Excluding the foreign currency adjustment, Adventure operating expenses increased $6.4 million, or 7.9%, in fiscal 2016 compared to fiscal 2015, primarily due to higher variable expenses associated with the increase in CMH guest nights and fire suppression activities.

Adventure Adjusted EBITDA decreased in fiscal 2015 compared to fiscal 2014 primarily due to a $5.3 million decrease in Adventure revenue, partially offset by a $3.9 million decrease in Adventure operating expenses, from $84.9 million in fiscal 2014 to $81.0 million in fiscal 2015. The decrease in operating expenses is primarily attributable to lower helicopter operational expenses at CMH as a result of fewer helicopter flight hours and favorable changes in fuel costs. After removing $2.5 million of Adjusted EBITDA attributable to the third party's interest in Alpine Helicopters, Adventure Adjusted EBITDA decreased by $3.3 million in fiscal 2015 compared to fiscal 2014. Excluding an unfavorable foreign currency adjustment of $2.5 million, Adventure Adjusted EBITDA decreased by $0.8 million in fiscal 2015 compared to the prior year.

Same Store Comparison of Adventure Results for the Year Ended June 30, 2016

The following table presents the percentage change of Adventure results as reported and on a Same Store basis from the prior year period:



	Change in Fiscal 2016 vs. Fiscal 2015
	As Reported		Same Store
Adventure revenue	7.9	%	19.7	%
Adventure Adjusted EBITDA	66.4	%	90.5	%

Real Estate

Revenue and Real Estate Adjusted EBITDA

Revenue. The Real Estate segment primarily earns revenue from IHM and Playground. IHM generates revenue from managing rental operations at the Honua Kai Resort and Spa in Maui, Hawaii and the Westin Monache Resort in Mammoth Lakes, California. Playground earns revenue primarily from commissions on the sales of real estate. During the fiscal periods presented, we did not have any active development projects. We also manage commercial real estate for our properties and third parties through our Real Estate segment. The Real Estate segment also included revenue generated by IRCG until the Disposition Date.



	45



Table of Contents

Real Estate Adjusted EBITDA. Real Estate Adjusted EBITDA is Real Estate revenue less Real Estate operating expenses, adjusted for our pro rata share of EBITDA for our equity method investments in MHM and Chateau. Real Estate operating expenses include: compensation and benefits; insurance; general and administrative expenses; and land carrying costs and development planning and appraisal expenses related to the core entitled land surrounding the bases of our Steamboat, Winter Park, Tremblant, Stratton and Snowshoe resorts. Until the Disposition Date, Real Estate Adjusted EBITDA also included interest income earned from receivables related to IRCG operations.

Comparison of Real Estate Results for the Years Ended June 30, 2016, 2015 and 2014 (dollars in thousands)



	Year Ended June 30,						2016 vs. 2015					2015 vs. 2014
	2016		2015		2014		$ Change			% Change		$ Change		% Change

Real Estate revenue	$	42,433	$	59,274	$	58,530	$	(16,841	)	(28.4	)%	$	744	1.3	%
Real Estate Adjusted EBITDA	$	6,625	$	10,423	$	9,219	$	(3,798	)	(36.4	)%	$	1,204	13.1	%

Real Estate revenue

Real Estate revenue decreased in fiscal 2016 compared to fiscal 2015 primarily due to decreases of $17.1 million and $0.7 million at IRCG and Playground, respectively, partially offset by an increase of $1.0 million at IHM. The decrease in revenue at IRCG was primarily due to lower sales volume, an unfavorable foreign currency adjustment of $1.0 million and the closing of the IRCG Transaction subsequent to which we no longer recorded any activity associated with the business of IRCG. The decrease in Playground revenue was primarily due to $2.2 million of revenue from the sale of a parcel of land at Tremblant in March 2015, compared to $1.9 million of revenue from the sale of a parcel of land at Tremblant in June 2016.

Real Estate revenue increased in fiscal 2015 compared to fiscal 2014 primarily due to $2.2 million of revenue from the sale of a parcel of land at Tremblant in March 2015, partially offset by a decrease in revenue at IRCG. Excluding an unfavorable foreign currency adjustment of $1.5 million, IRCG revenue increased $1.2 million, or 4.4%, in fiscal 2015 compared to fiscal 2014. At IRCG, sales of vacation club products may be made in exchange for cash or be financed. For sales where we provide financing, we defer revenue recognition until we receive an executed agreement and a minimum down payment equal to 10.0% of the purchase price plus the fair value of any sales incentives provided to the purchaser. In fiscal 2015, we had a higher volume of financed sales with at least 10.0% of the purchase price paid as compared to fiscal 2014, which increased the amount of previously deferred revenue recognized.

Real Estate Adjusted EBITDA

Real Estate Adjusted EBITDA decreased in fiscal 2016 compared to fiscal 2015 due to a $16.8 million decrease in Real Estate revenue partially offset by a $14.4 million decrease in Real Estate operating expenses, from operating expenses of $55.7 million in fiscal 2015 to $41.3 million in fiscal 2016. We also recognized a $0.6 million increase in our pro rata share of EBITDA from our equity method investments in MHM and Chateau during fiscal 2016. Excluding a favorable foreign currency adjustment of $1.2 million, in fiscal 2016, Real Estate operating expenses decreased $13.2 million, or 23.6%, of which $7.6 million was due to the closing of the IRCG Transaction, subsequent to which we no longer recorded any activity associated with the business of IRCG. Real Estate operating expenses also decreased by $4.4 million in fiscal 2016 due to lower sales volume and associated selling costs at IRCG prior to the Disposition Date.

Real Estate Adjusted EBITDA increased in fiscal 2015 compared to fiscal 2014 due to a $0.7 million increase in Real Estate revenue and a $0.5 million