whistler reserach

8/13/2019 Whistler Reserach

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Find CIBC research on Bloomberg, Reuters, firstcall.com CIBC World Markets Inc., P.O. Box 500, 161 Bay Street, Brookfield Place, Toronto, Canada M5J 2S8 (416) 594-7000and ResearchCentral.cibcwm.com

Institutional Equity Researc

Earnings Updat

May 8, 2013 Real Estate

Whistler Blackcomb Holdings Inc.In-line Quarter; Strong Pricing Power; RefinancingOpportunity Nears

FQ2/13 EBITDA was $73.7 mln, close to our $73.2 mln estimate, up from$69.4 mln a year ago. Skier visits during FQ2 declined slightly to 1,330,00

from 1,338,000 a year ago, while ETP rose 4.2% to $53.44 from $51.31 la

year. Revenues were $132.2 mln, up 5.4% from FQ2/12.

Skier visits for the 2012-2013 season reached 2.0 mln at the end of April,down slightly from 2.08 mln last year. The mix of skier visits was relatively

unchanged from last year, with local and regional guests estimated at 62%

and destination visitors estimated at 38%, vs. 61% and 39% last year.

On Jan. 18, WB announced an $18MM capital investment, involving two nelift upgrades at Whistler Blackcomb, expected to be open for the 2013-20

ski season. The upgrades should improve skier experience and increase

resort capacity (capacity at the upgraded lifts will rise +56%).

WB trades at 10.1x F2013E EBITDA and 12.0x F2013E AFFO. We rate WBSP, balancing an attractive fully covered 6.8% yield and best-in-class asse

with its limited comparable peer group and relatively fair valuation. Our 12

to 18-month PT is $14.00 (from $13.25), or ~10.0x F2013E EBITDA.

Stock Price Performance

Source: Reuters

All f igures in Canadian dollars, unless otherwise stated. 13-122972

CIBC World Markets does and seeks to do business with companies covered inits research reports. As a result, investors should be aware that the firm may

have a conflict of interest that could affect the objectivity of this report.

Investors should consider this report as only a s ingle factor in making their

investment decision.

See "Important Disclosures" section at the end of this report for important

required disclosures, including potential conflicts of interest.

See "Price Target Calculation" and "Key Risks to Price Target" sections at th

end of this report, where applicable.

Alex Avery, CFA, MRICS

Troy MacLean, CFA

Chris Girard, CFA

Brad Sturges, CFA

Stock Rating:

Sector PerformerSector Weighting:

Market Weight12-18 mo. Price Target $14.00

WB-TSX (5/8/13) $14.25

Key Indices: None

3-5-Yr. EPS Gr. Rate (E) NM

52-week Range $10.32-$14.35Shares Outstanding 38.0M

Float 28.9M Shrs

Avg. Daily Trading Vol. 57,000Market Capitaliza tion $541.5M

Dividend/Div Yield $0.98 / 6.8%

Fiscal Year Ends SeptemberBook Value $11.13 per Shr

2013 ROE (E) NM

LT Debt $257.4MPreferred Nil

Common Equity $422.8MConvertible Av ailable No

EBI TDA ($ mln s.) Prev Current

2012 $85.2A2013 $89.2E $89.2E

2014 $94.5EEV/EBITDA2012 10.6x2013 10.1x 10.1x2014 9.5x

AFFO per Share2012 $1.12A2013 $1.19E $1.19E2014 $1.28E

P/AFFO2012 12.7x2013 12.0x 12.0x

2014 11.1x

Company DescriptionWhistler Blackcomb operates the largest ski and four-season mountain resort in North America, with over 2mln annual skier visits and the most vertical, skiableterrain, lifts, snowfall, and trails.www.whistlerblackcomb.com


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In-line Quarter; Strong Pricing Power; Ref inancing Opportunity Nears - May 08, 2013

2

Whistler Blackcomb Holdings Inc. Sector PerformWB-TSX 5/8/2013 Alex Avery, CFA, MRICS (416-594-8179) Alex.Avery@cibc12 - 18 month Price Target: Chris Girard, CFA (416-956-3807) Chris.Girard@cibcReal Estate & Related Current Yield: 6.8% Troy MacLean, CFA (416-956-3643) Troy.MacLean@cibc

Sector Weight ing: Market Weight Market Capitalizat ion ($ mlns): $541.5 Brad Sturges, CFA (416-594-7399) Brad Sturges@cibc

Price Target Calculation Company Description

CIBC 2013E EBITDA: $89.2

Target Multiple (2013E EBITDA): 10.0x

CIBC Price Target: $14.00

Implied 12-18 Month Total Return: 5%Book Value: $11.13 Strategy

Price/Book 1.3x

Total Return2011 2012 2013 - YTD

Price Return (11.9%) 15.0% 15.9% Investment Thesis: Sector Performer

Yield 8.0% 9.1% 4.0%

Total (3.9%) 24.1% 19.8%

Management

Dave Brownlie - President and CEOJeremy Black - Senior VP and CFO

www.whistlerblackcomb.com

Earnings Summary Overall Visitor Mix

Financial Metric F2012A F2013E F2014E

EBITDA ($mlns) $85.2 $89.2 $94.5

YoY Change 13.4% 4.7% 5.9%

AFFO Per Share $1.12 $1.19 $1.28

YoY Change 13.1% 6.2% 7.6%

Earnings Multiples

EV/EBITDA MULTIPLES F2012A F2013E F2014E

Whistler Blackcomb 10.6x 10.1x 9.5x

AFFO Multiples F2012A F2013E F2014E

Whistler Blackcomb 12.7x 12.0x 11.1x

AFFO Payout Ratio F2012A F2013E F2014E

Whistler Blackcomb 87% 82% 76% Skier Visitor History

Resort Revenue Breakdown: Fiscal 2010-2012

(in thousands) Fiscal 2010 Fiscal 2011 Fiscal 2012

Resort Revenues

Lift Operations 43% 51% 51%

Retail and Rental Ops 8% 17% 17%

Ski School Operations 17% 9% 11%

Other Resort Operations 11% 10% 9%

Food and Beverage Ops 22% 12% 13%

Total Revenue 100% 100% 100%

Effective Ticket Price History

Canadian Dollar / US Dollar

Source: Company reports, Bloomberg, CIBC World Markets.

- ATTRACTIVE YIELD: The current 6.8% dividend yield provides very attractive income and serves to reduce the agency ris

associated with many other similar investments with no dividends. Whistler's dividend policy helps focus the company on

maximizing the operating performance of the resort.

Whistler Blackcombs overall strategy is to grow the total number of visitors that visit the resort and maximize the ensuing

effective ticket price (ETP) and related revenues. Leading up to the 2010 Winter Olympic Games, over $150 million was

invested to upgrade the infrastructure at Whistler Blackcomb. Whistler plans to leverage the exposure created by Olympic

media coverage through targeted marketing efforts to drive future growth in destination guests to the resort.

- LIMITED TRACK RECORD, LIQUIDITY AND COMPARABILITY:The company has only been public for two ski seasons,

limiting historical comparability. WB's ~$540 million market cap limits trading liquidity. There are very few comparable

companies that trade in the public market.

$14.25 Per Share$14.00 Per Share

Whistler Blackcomb operates the largest ski and four-season mountain resort in North America, with more than 2 mln annual

skier visits, the most vertical, skiable terrain, lifts, snowfall, and trails. The company holds a 75% interest in Whistler L.P. and

Blackcomb L.P. WB's IPO was completed during November 2010.

- UNIQUE AND ICONIC MOUNTAIN RESORT:Whistler is the most commercially successful mountain resort in North

America, generating industry high skier visits and EBITDA margins.

2,0452,230

2,120 2,050

1,745

1,9892,174 2,190

1,8781,667

2,0302,1312,1892,160

98/99 99/00 00/01 01/02 02/03 03/04 04/05 05/06 06/07 07/08 08/09 09/10 10/11 11/12

Actual Skier Visits Average: 2,043 2,150*

*Management's estimated skier visits excluding the impact of the Olympic Winter Games.

*The 09/10 ski season was adversely impacted by the Olympic Winter Games.

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

F2007 F2008 F2009 F2010 F2011 F2012

Local/Regional Destination

$0.50

$0.60

$0.70

$0.80

$0.90

$1.00$1.10

Jul-98

Jul-99

Jul-00

Jul-01

Jul-02

Jul-03

Jul-04

Jul-05

Jul-06

Jul-07

Jul-08

Jul-09

Jul-10

Jul-11

Jul-12

CanadianDollar/US

Dollar $36.05 $39.11

$41.86$40.66 $40.29

$41.75$40.11 $40.33

$42.94$45.09

$47.06$49.23$47.80

$44.57*

98/99 99/00 00/01 01/02 02/03 03/04 04/05 05/06 06/07 07/08 08/09 09/10 10/11 11/12

EffectiveTick

etPrice


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Q2/F13 Results

Q2/F13 EBITDA was $73.7 million, up +6.2% from $69.4 million a year ago an

in line with our $73.2 million estimate. Q2/F13 EBITDA benefitted from higher

pricing and volumes compared to the same quarter last year, partly offset by a

increase in operating expenses. FQ2 is the most important quarter from a

financial perspective and typically accounts for 80%+ of annual EBITDA.

Q2/F13 resort revenue was $132.2 million, up from $125.5 million a year ago,boosted by a +4.2% higher effective ticket price (ETP) and higher revenue per

visit driven by strong results across a ll divisions. Resort operating expenses

increased to $50.3 million, from $48.2 million a year ago, mainly due to the

increased volume of snow school lessons and higher food and beverage

volumes. SG&A costs increased +3.2% over last year to $8.2 million.

Skier visits for the 2012-2013 season reached 2.0 million as of April 30, 2013,

slightly below 2.08 million as of April 30, 2012. The visitor mix for the 2012-

2013 ski season, up until April 30, 2013, is estimated at approximately 62% o

visits were from local and regional guests and approximately 38% were from

destination guests, compared to approximately 61% and 39%, respectively, in

the comparable period in the prior year.

The six month period ended March 31, 2013 included most of the Easter

vacation period (March 29 to April 1, 2013); in the prior year the Easter vacati

period fell in FQ3 (April 6 to April 9, 2012). The six months ended March 31,

2013 also included the new B.C. statutory holiday Family Day on February 11

2013, while 2012 was a leap year with an extra operational day on February 2

2012. The timing of holiday periods and operational days can have a meaningf

effect on the comparability of results between periods.

Destination skiers tend to provide higher ETP and account for a s ignificantly

higher proportion of non-lift-ticket revenues relative to local and regional

visitors, and have historically accounted for closer to 50% of total visits. While

regional visits drive less non-lift-ticket revenues, they provide stability and are

less impacted by global economic volatility compared to destination visits.

Effective ticket price during Q2/F13 increased by +4.2% to $53.44 from $51.3

a year ago.

Major Capital Expansion PlannedOn January 18, Whistler Blackcomb (WBSP) announced plans for a major lift

expansion at a total cost of $18 million, involving the upgrading of two lifts at

Whistler Blackcomb, which are expected to open for the 20132014 ski season

The investment w ill result in the replacement of the Harmony high-speed quad

chairlift with a new high-speed, six-person chairlift. Blackcomb Mountain will g

a high-speed quad chairlift with a new alignment, replacing the existing

fixed-grip Crystal triple chair. The addition of the new lifts will increase thetransportation capacity by 2,145 skiers per hour (a +56% increase for the runs

The $18 million includes the cost to install the two new lifts as well as

snowmaking enhancements, terrain work and other improvements. The projec

will be funded with cash on hand.


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Well CapitalizedAt Q2/F13 Whistler had a $77.1 million cash balance. Debt to F2013E EBITDA

was 2.9x at March 31, before considering the cash balance.

Stable Operations, Big Refinancing SoonWB delivered another solid quarter of operating results, which add to a growin

track record of stability and income for investors. We believe this growing trackrecord could result in a higher valuation over time. WB expects to refinance

~$126 million of debt in November 2013, which carries a high 8.75% interest

rate. The anticipated refinancing of this debt at lower rates is a significant

contributor to our sharp estimated growth in AFFO in 2014.

The C$/US$ exchange rate can tend to constrain destination skier visits in yea

of C$ strength, making Whistler vacations more expensive relative to U.S.

alternatives. Any improvements in the economic, housing and employment

outlook in the U.S. could provide a ttractive upside for Whistlers business, with

American visitors a key source of destination visitors, and economic

improvements generally being a positive for the US$.

Our 2013E EBITDA remains at $89.2 million and our 2014E EBITDA isunchanged at $94.5 million. Similarly, our 2013E and 2014E AFFO remain

unchanged at $1.19 and $1.28, respectively.

We continue to believe that Whistlers North American mountain-resort

industry-leading commercial attributes, its recent infrastructure investments,

and the companys attractive and alignment-enhancing 6.8% dividend yield

could tend to support a higher valuation for Whistler Blackcomb as investors

become more familiar with the company over time.

Attractive 6.8% Dividend YieldWhistler Blackcombs annualized dividend of $0.975, paid quarterly, reflects a

current yield of 6.8%. We believe Whistlers dividend is sustainable over the loterm, even through bad snowfall/lower-skier-visit years. Our F2013E AFFO

payout ratio is 82% and our F2014E AFFO payout ratio is 76%.

Price Target Calculation

We rate Whistler Blackcomb Holdings Sector Performer, reflecting its North

American mountain-resort industry-leading commercial attributes and the

companys attractive and alignment-enhancing 6.8% dividend yield, balanced

with its lack of comparable publicly traded peers, limited but growing track

record, and relatively limited trading liquidity. Our 12- to 18-month price targe

is $14.00 (from $13.25 reflecting a growing track-record and pending AFFO

growth) or approximately 10.0x F2013E EBITDA and 11.5x12.0x F2013E AFF

Our price target implies a 12- to 18-month total return of approximately 5%.

Key Risks To Price Target

Risks include exposure to the C$/US$ exchange rate, exposure to weather,

exposure to economic conditions, dependence upon agreements with the

province, and credit facilities and interest rate risk.


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Our EBITDA ($mln) estimates are shown below:

1 Qtr. 2 Qtr. 3 Qtr. 4 Qtr. Yearly

2012 Current $10.7A $69.4A $4.9A $0.2A $85.2A2013 Prior $10.2A $73.2E $5.6E $0.2E $89.2E

2013 Current $10.2A $73.7A $5.1E $0.2E $89.2E

2014 Current -- -- -- -- $94.5E

Our AFFO estimates are shown below:

1 Qtr. 2 Qtr. 3 Qtr. 4 Qtr. Yearly

2012 Current -- -- -- -- $1.12A

2013 Prior -- -- -- -- $1.19E2013 Current -- -- -- -- $1.19E

2014 Current -- -- -- -- $1.28E


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IMPORTANT DISCLOSURES:

Analyst Certification: Each CIBC World Markets research analyst named on the front page of this research report, or

at the beginning of any subsection hereof, hereby certifies that (i) the recommendations and opinions expressed herein

accurately reflect such research analyst's personal views about the company and securities that are the subject of this

report and all other companies and securities mentioned in this report that are covered by such research analyst and (i

no part of the research analyst's compensation was, is, or will be, directly or indirectly, related to the specific

recommendations or views expressed by such research analyst in this report.

Potential Conflicts of Interest: Equity research analysts employed by CIBC World Markets are compensated from

revenues generated by various CIBC World Markets businesses, including the CIBC World Markets Investment Banking

Department. Research analysts do not receive compensation based upon revenues from specific investment banking

transactions. CIBC World Markets generally prohibits any research analyst and any member of his or her household fro

executing trades in the securities of a company that such research analyst covers. Additionally, CIBC World Markets

generally prohibits any research analyst from serving as an officer, director or advisory board member of a company th

such analyst covers.

In addition to 1% ownership positions in covered companies that are required to be specifically disclosed in this report,

CIBC World Markets may have a long position of less than 1% or a short position or deal as principal in the securities

discussed herein, related securities or in options, futures or other derivative instruments based thereon.

Recipients of this report are advised that any or all of the foregoing arrangements, as well as more specific disclosuresset forth below, may at times give rise to potential conflicts of interest.

Important Disclosure Footnotes for Whistler Blackcomb Holdings Inc(WB)

2g CIBC World Markets Inc. expects to receive or intends to seek compensation for investment banking services

from Whistler Blackcomb Holdings Inc. in the next 3 months.


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Important Disclosure Footnotes for Companies Mentioned in this Report that Are Coveredby CIBC World Markets Inc.:

Stock Prices as of 05/09/2013:

Whistler Blackcomb Holdings Inc. (2g) (WB-TSX, $14.25, Sector Performer)

Important disclosure footnotes that correspond to the footnotes in this table may be found in the "Key to

Important Disclosure Footnotes" section of this report.


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Key to Important Disclosure Footnotes:

1 CIBC World Markets Corp. makes a market in the securities of this company.

2a This company is a client for which a CIBC World Markets company has performed investment banking services

in the past 12 months.

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past 12 months.

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past 12 months.

2d CIBC World Markets Corp. has received compensation for investment banking services from this company in

the past 12 months.

2e CIBC World Markets Inc. has received compensation for investment banking services from this company in the

past 12 months.

2f CIBC World Markets Corp. expects to receive or intends to seek compensation for investment banking services

from this company in the next 3 months.

2g CIBC World Markets Inc. expects to receive or intends to seek compensation for investment banking services

from this company in the next 3 months.

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securities-related services in the past 12 months.

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from this company in the past 12 months.

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from this company in the past 12 months.

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services from this company in the past 12 months.

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services from this company in the past 12 months.

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equity securities.

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company has a long position in the common equity securities of this company.

7 CIBC World Markets Corp., CIBC World Markets Inc., and their affiliates, in the aggregate, beneficially own 1%

or more of a class of equity securities issued by this company.

8 An executive of CIBC World Markets Inc. or any analyst involved in the preparation of this research report has

provided services to this company for remuneration in the past 12 months.

9 A senior executive member or director of Canadian Imperial Bank of Commerce ("CIBC"), the parent company

to CIBC World Markets Inc. and CIBC World Markets Corp., or a member of his/her household is an officer,

director or advisory board member of this company or one of its subsidiaries.

10 Canadian Imperial Bank of Commerce ("CIBC"), the parent company to CIBC World Markets Inc. and CIBC

World Markets Corp., has a significant credit relationship with this company.11 The equity securities of this company are restricted voting shares.

12 The equity securities of this company are subordinate voting shares.

13 The equity securities of this company are non-voting shares.

14 The equity securities of this company are limited voting shares.


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CIBC World Markets Inc. Price Chart

HISTORICAL PERFORMANCE OF CIBC WORLD MARKETS INC. RECOMMENDATIONS FOR WHISTLER

BLACKCOMB HOLDINGS INC. (WB)

Date Change Type Closing Price Rating Price Target Coverage

01/16/2011 12.80 SO 13.75 Alex Avery, CFA, MRICS

05/13/2011 11.60 SP 12.25 Alex Avery, CFA, MRICS






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CIBC World Markets Inc. Stock Rating System

Abbreviation Rating Description

Stock Ratings

SO Sector Outperformer Stock is expected to outperform the sector during the next 12-18 months.

SP Sector Performer Stock is expected to perform in line with the sector during the next 12-18 months.

SU Sector Underperformer Stock is expected to underperform the sector during the next 12-18 months.

NR Not Rated CIBC World Markets does not maintain an investment recommendation on the stock

R Restricted CIBC World Markets is restricted*** from rating the stock.

Sector Weightings**

O Overweight Sector is expected to outperform the broader market averages.

M Market Weight Sector is expected to equal the performance of the broader market averages.

U Underweight Sector is expected to underperform the broader market averages.

NA None Sector rating is not applicable.

**Broader market averages refer to the S&P 500 in the U.S. and the S&P/TSX Composite in Canada.

"Speculative" indicates that an investment in this security involves a high amount of risk due to volatility and/or liquid ity issues.

***Restricted due to a potential conflict of interest.

Ratings Distribution*: CIBC World Markets Inc. Coverage Universe

(as of 09 May 2013) Count Percent Inv. Banking Relationships Count Percen

Sector Outperformer (Buy) 156 40.3% Sector Outperformer (Buy) 154 98.7%

Sector Performer (Hold/Neutral) 194 50.1% Sector Performer (Hold/Neutral) 193 99.5%

Sector Underperformer (Sell) 30 7.8% Sector Underperformer (Sell) 28 93.3%

Restricted 6 1.6% Restricted 6 100.0%

Ratings Distribution: Real Estate Coverage Universe

(as of 09 May 2013) Count Percent Inv. Banking Relationships Count Percen

Sector Outperformer (Buy) 10 33.3% Sector Outperformer (Buy) 10 100.0%

Sector Performer (Hold/Neutral) 17 56.7% Sector Performer (Hold/Neutral) 17 100.0%

Sector Underperformer (Sell) 1 3.3% Sector Underperformer (Sell) 1 100.0%

Restricted 2 6.7% Restricted 2 100.0%

Real Estate Sector includes the following tickers: AAR.UN, ACC, AP.UN, AX.UN, BEI.UN, BOX.UN, BPO, BRE, CAR.UN, CRR.UN,CSH.UN, CUF.UN, CWT.UN, D.UN, EXE, FCR, HR.UN, INN.UN, KMP, KRE.UN, LW, MRT.UN, NPR.UN, NWH.UN, PAR.UN, REF.UN,

REI.UN, RMM.UN, RYL, WB.

*Although the investment recommendations within the three-tiered, relative stock rating system utilized by CIBC World Markets Inc.

do not correlate to buy, hold and sell recommendations, for the purposes of complying with NYSE and NASD rules, CIBC World

Markets Inc. has assigned buy ratings to securities rated Sector Outperformer, hold ratings to securities rated Sector Performer, and

sell ratings to securities rated Sector Underperformer without taking into consideration the analyst's sector weighting.

Important disclosures required by IIROC Rule 3400, including potential conflicts of interest information, our system forrating investment opportunities and our dissemination policy can be obtained by visiting CIBC World Markets on the we

athttp://researchcentral.cibcwm.comunder 'Quick Links' or by writing to CIBC World Markets Inc., Brookfield Place, 16Bay Street, 4th Floor, Toronto, Ontario M5J 2S8, Attention: Research Disclosures Request.
http://researchcentral.cibcwm.com/http://researchcentral.cibcwm.com/http://researchcentral.cibcwm.com/http://researchcentral.cibcwm.com/


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