Company Overview

TWC is engaged in golf club and resort operations under the trademark “ClubLink”. ClubLink is Canada’s largest owner and operator of golf clubs with 55 ½, 18-hole equivalent championship courses and six 18-hole equivalent academy courses at 45 locations in Ontario, Quebec and Florida.

TWC is also engaged in rail, tourism and port operations based in Skagway, Alaska, which operates under the trade name "White Pass." The railway stretches approximately 177 kilometres (110 miles) from Skagway, Alaska, through British Columbia to Whitehorse, Yukon. In addition, White Pass operates three docks primarily for cruise ships.

Overview of Business Segments

TWC operates in two distinct business segments: (a) golf club and resort operations and (b) rail, tourism and port operations. In addition, the corporate operations segment oversees the two business segments.

The quarterly earnings performance of the Company reflects the highly seasonal nature of both business segments. The majority of revenue and earnings from these businesses occur during the second and third quarters of the year. Accordingly, the quarterly reported net earnings of the Company will fluctuate with those of the underlying business segments. This seasonality will be mitigated somewhat by ClubLink's recent expansion into the Florida marketplace, as the primary golf season in Florida is from November to April.

Golf Club Operations Segment

The Golf Club clusters are located in densely populated metropolitan areas and the resort destinations frequented by those who live and work in these areas. By operating in Regions, ClubLink is able to offer golfers a wide variety of unique membership, corporate event and resort opportunities. ClubLink is also able to obtain the benefit of operating synergies to maximize revenue and achieve economies of scale to reduce costs.

Revenue at all golf club and resort properties is enhanced by cross-marketing, as the demographics of target markets for each are substantially similar. Revenue is further improved by corporate golf events, business meetings and social events that utilize golf capacity and related facilities at times that are not in high demand by ClubLink's Members.

Member and Hybrid Golf Club revenue is maximized by the sale of flexible personal and corporate memberships that offer reciprocal playing privileges at ClubLink Golf Clubs and, on payment of an additional fee, inter-regional play within ClubLink and ClubCorp of America Golf Clubs. Daily Fee Golf Club revenue is maximized through unique and innovative marketing programs. Resort revenue is maximized by the integration of high quality golf facilities, which are recognized throughout the leisure industry as the key amenity for successfully attracting corporate groups and leisure guests.

Rail, Tourism and Port Operations Segment

The railway was constructed by White Pass during the Klondike Gold Rush of 1898/1899 and completed in 1900. From 1900 until 1982, it was used for the carriage of general freight, ore concentrates, petroleum products and passengers. Railway operations were suspended in 1982 when a major ore concentrate customer shut down its mine. The South Klondike Highway between Whitehorse and Skagway, subsequently constructed in 1985, transferred the transportation of ore concentrates from rail to road service. The railway reopened in 1988 and has since been operating as a seasonal passenger tourism railway. ClubLink acquired White Pass in 1997.

White Pass operates three docks, which provide four berths for cruise ships operating west coast schedules throughout the May to September tourism season. The largest of the three docks, with two berths, is owned while the two remaining docks are situated on state and city property and operate under long-term tideland leases.

The primary market is the cruise industry, which recognizes Skagway as a marquee port on its Alaskan cruises. White Pass maintains a symbiotic relationship with the cruise lines - carrying almost half of all cruise passengers - making it Alaska's most popular shore excursion and a high volume, highly rated and profitable shore excursion for the cruise lines. The relationship is supported with an existing incentive program and extensive cooperative pre-cruise and on-board promotion. White Pass also markets to motorcoach tour companies and independent travelers who arrive via ferry and the South Klondike Highway.

The results of White Pass are self-sustaining and its US operations are translated into Canadian currency using average exchange rates during the period. Changes in average exchange rates will impact the net earnings of the Company.

Corporate Operations Segment

TWC's objective at the corporate level is to identify opportunities to generate incremental returns and cash flow. Historically, the nature of these investments included debt and equity instruments in both public and private organizations. Currently, management is focused on improving the returns of both operating business segments.

Clublink

White Pass & Yukon Route