Intrawest Reports Double Digit Q3 Revenue Increase

Houssian continued, “The diversified nature of our resort network also proved valuable as record snowfall in Colorado partially offset the challenging weather conditions experienced at our eastern resorts and the strike situation at Tremblant. Three of nine resorts posted record results and although our resort operations in British Columbia improved year-over-year, Whistler Blackcomb was impacted by the spill-over effect of the substandard weather conditions last year and a strong Canadian dollar.”

On May 9, 2006, the Board of Directors declared a dividend of Cdn.$0.08 per common share payable on July 26, 2006 to shareholders of record on July 12, 2006.

The following management's discussion and analysis (“MD&A”) should be read in conjunction with the more detailed MD&A (which includes a discussion of business risks) contained in our June 30, 2005 annual report. Statements contained in this report that are not historical facts are forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those expressed or implied by such forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, our ability to implement our business strategies, seasonality, weather conditions, competition, general economic conditions, currency fluctuations, world events and other risks detailed in our filings with the Canadian securities regulatory authorities and the U.S. Securities and Exchange Commission.

Our financial statements are prepared in accordance with Canadian generally accepted accounting principles (“GAAP”). We use several non-GAAP measures to assess our financial performance, such as EBITDA(1) and free cash flow. Such measures do not have a standardized meaning prescribed by GAAP and they may not be comparable to similarly titled measures presented by other companies. We have provided reconciliations between any non-GAAP measures mentioned in this MD&A and our GAAP financial statements. These non-GAAP measures are referred to in this disclosure document because we believe they are indicative measures of a company's performance and are generally used by investors to evaluate companies in the resort and travel operations and resort development industries.

Additional information relating to our company, including our annual information form, is on SEDAR at www.sedar.com. The date of this interim MD&A is May 9, 2006.

Income from continuing operations was $61.0 million ($1.23 per diluted share) in the 2006 quarter compared with $62.7 million ($1.31 per diluted share) in the 2005 quarter. Income in the 2005 quarter included an income tax recovery of $4.6 million (refer to REVIEW OF CORPORATE OPERATIONS below) compared with an income tax expense of $5.9 million in the 2006 quarter. The 2005 quarter also included $2.1 million of call premium and other costs to redeem senior notes. Total Company EBITDA increased 25% from $109.5 million to $136.5 million due mainly to the closing of the first phase of Mammoth lands to a joint venture with an entity controlled by Starwood Capital Group Global, L.L.C. (Starwood Capital). This transaction followed on from the sale of the majority of our interest in Mammoth Mountain Ski Area to Starwood Capital in the second quarter of fiscal 2006. Mammoth's results for the 2005 quarter (net income of $3.5 million) have been disclosed as discontinued operations.

Resort and travel operations revenue increased from $356.6 million in the 2005 quarter to $386.2 million in the 2006 quarter. In August 2005 we entered into a lease to operate Parque de Nieve, an indoor snowdome in Spain, and revenue in the 2006 quarter included $2.2 million from this new business. The rise in the value of the Canadian dollar from an average rate of US$0.80 in the 2005 quarter to US$0.85 in the 2006 quarter increased reported resort and travel operations revenue by $9.5 million. On a same-business, constant exchange rate basis, resort and travel operations revenue increased by 5% to $374.5 million. Revenue from our mountain segment increased from $275.7 million to $289.9 million while revenue from our non-mountain segment increased from $80.9 million to $84.6 million.

Skier visits increased from 4,400,000 in the 2005 quarter to 4,572,000 in the 2006 quarter with an increase of 11% at our western resorts being partially offset by a decrease of 6% at our eastern resorts. In comparing these skier visit changes readers should note that the timing of Easter in April in 2006 and in March in 2005 decreased skier visits (as well as resort and travel operations revenue and EBITDA) in the 2006 quarter but did not have a similar negative impact on the 2005 quarter.

Whistler Blackcomb saw a 15% increase in skier visits compared with the 2005 quarter when all our British Columbia operations experienced very challenging weather conditions, with heavy rainfall in mid-January followed by warm, dry conditions through mid-March. We continue, however, to see some spill-over effect from the sub-standard ski season last year, evidenced by the fact that notwithstanding near record snowfall, Whistler Blackcomb's skier visits in the 2006 quarter were 3% lower than the comparable period in 2004. In Colorado, Copper and Winter Park benefited from the best snow conditions in many years, enabling them to increase skier visits by 9% on a combined basis in the 2006 quarter. In the East, the direct and lingering impact of the workers' strike over Christmas and early January as well as seven weekends of either rain or extremely low temperatures reduced Tremblant's skier visits by 8% in the 2006 quarter. The poor weather also impacted Stratton and to a lesser extent Snowshoe, where skier visits declined by 11% and 5%, respectively. Our other eastern resorts, Blue Mountain and Mountain Creek, were not as impacted by the weather, realizing skier visit increases of 5% and 2%, respectively.

Revenue per skier visit, adjusted for a constant Canadian dollar exchange rate, increased 1% in the 2006 quarter. At Whistler Blackcomb, a shift in the mix of visits from higher-yielding destination visitors to lower-yielding regional visitors resulted in a 4% decline in revenue per visit at that resort. A lack of bookings from long-haul U.S. markets, which were down by 34% compared with last season, was the main reason for the decline in destination visits. The high Canadian dollar, the cost of air lift into Vancouver and generally excellent conditions at resorts in the U.S. West contributed to the reduced bookings. It is also likely that the lack of snow and generally poor weather at Whistler Blackcomb in November and December during the prime booking window for the 2006 quarter enticed potential visitors to book elsewhere. For the season to the end of April, our skier visit mix was 49% regional and 51% destination in fiscal 2006 compared with 42% regional and 58% destination in fiscal 2005. Revenue per visit also declined in the 2006 quarter at Tremblant (by 1%) as we discounted many of our prices during the period when the workers' strike limited our operations and then afterwards to stimulate demand. Excluding Tremblant, our eastern resorts saw a 6% increase in revenue per skier visit. At our Colorado resorts, revenue per skier visit was the same in the 2006 quarter as the 2005 quarter due mainly to a higher mix of lower-yielding season pass visits as pass holders took advantage of the excellent snow conditions.

The increase in revenue from the non-mountain segment in the 2006 quarter was primarily due to a 7% increase in adventure-travel tour revenue at Abercrombie & Kent (“A&K”) from $67.8 million to $72.3 million. A&K saw good growth in tour revenues from most of its major destinations, particularly East Africa, India and Egypt. Resort and travel operations revenue at Sandestin decreased by $0.7 million or 7%, due mainly to a regional downturn related to last summer's hurricanes. Although Sandestin did not sustain significant physical damage from the hurricanes its business was impacted during the 2006 quarter as many potential visitors assumed that the Florida Panhandle suffered serious damage.

The breakdown of resort and travel operations revenue by major business
component was as follows:

                                        2006      2005
    (MILLIONS)                         QUARTER   QUARTER  INCREASE  CHANGE(%)
    -------------------------------------------------------------------------
    Mountain operations                 $173.3    $156.5     $16.8        11
    Retail and rental shops               58.1      54.1       4.0         7
    Food and beverage                     40.6      38.1       2.5         7
    Ski school                            26.4      25.1       1.3         5
    Golf                                   5.1       5.2      (0.1)       (2)
    Adventure-travel tours                72.3      67.8       4.5         7
    Other                                 10.4       9.8       0.6         6
    ---------------------------------------------------------------
                                        $386.2    $356.6     $29.6         8
    ---------------------------------------------------------------
    ---------------------------------------------------------------

Resort and travel operations expenses increased from $273.5 million in the 2005 quarter to $302.9 million in the 2006 quarter, of which $2.3 million and $6.8 million, respectively, were due to the lease of Parque de Nieve and the impact on reported expenses of the higher Canadian dollar. On a same- business, constant exchange rate basis expenses in the mountain segment increased by $16.4 million to $209.5 million, partly due to:

• Higher business volumes at our British Columbia operations (Whistler
  Blackcomb, Panorama and Alpine Helicopters) and our Colorado resorts,
  which increased mountain segment expenses by $3.6 million.

• The opening of nine new stores by The Intrawest Retail Group in
  fiscal 2006 resulting in $2.5 million of incremental costs.

• The workers' strike at Tremblant, which added $1.4 million of direct
  expenses, mainly comprising security, marketing and extra costs of
  the employees who filled in for the striking workers.

• An increase of $0.9 million in fuel and utility costs.
• A new operational excellence initiative (modeled off Six Sigma)
  designed to change our work processes in order to derive cost savings
  and efficiencies in the future, which added $1.2 million of costs.

• An increase of $1.9 million in divisional operations group overhead,
  mainly related to marketing and sales and information technology.

Expenses in the non-mountain segment increased by $3.8 million to $84.3 million. The higher business volumes at A&K increased expenses by $2.4 million and expenses at Sandestin increased by $1.1 million due mainly to higher labor and resort association costs.

Resort and travel operations EBITDA increased slightly from $83.0 million in the 2005 quarter to $83.3 million in the 2006 quarter. The lease of Parque de Nieve and the reporting impact of the higher Canadian dollar in aggregate increased EBITDA in the 2006 quarter by $2.6 million. On a same-business, constant exchange rate basis EBITDA in the mountain segment increased by $0.3 million to $82.9 million while EBITDA from our non-mountain segment was flat at $0.4 million.

Superior weather and snow conditions in the 2006 quarter compared with the 2005 quarter at our British Columbia operations increased EBITDA by $4.6 million, however this was significantly below our expectations due to the shortfall in higher-margin destination visitors at Whistler Blackcomb discussed above. In Colorado, excellent conditions and record skier visits increased EBITDA in the 2006 quarter by $4.9 million. These positive factors were offset by a number of negative factors, including the direct and lingering impact of the workers' strike at Tremblant, which reduced EBITDA by $5.8 million in the 2006 quarter and the timing of Easter being in April this year and in March last year, which decreased EBITDA in the 2006 quarter by approximately $4.1 million.

In the non-mountain segment, an increase of $2.0 million in EBITDA at A&K due mainly to tour sales growth and improved tour yields was offset by a decrease of approximately the same amount in EBITDA at Sandestin.