<PAGE> 1
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A
AMENDMENT NO. 1
TO
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): February 26, 1998
Booth Creek Ski Holdings, Inc.
(Exact Name of Registrant as Specified in its Charter)
<TABLE>
<S> <C> <C>
DELAWARE 333-26091 84-1359604
(State or Other
Jurisdiction (Commission File (IRS Employer
of Incorporation) Number) Identification No.)
Highway 267 and Northstar Drive
Truckee, California 96160
(Address of Principal Executive Offices) (Zip Code)
(Registrant's Telephone Number, Including
Area Code) (530) 562-1010
</TABLE>
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<PAGE> 2
The undersigned Registrant hereby amends its Current Report on Form 8-K
dated February 26, 1998, which was filed with the Securities and Exchange
Commission on March 9, 1998. The Registrant is filing this amendment solely for
the purpose of revising and supplementing pro forma financial data, after giving
effect to the acquisition by the Registrant of Loon Mountain Recreation
Corporation and the related transactions, and to provide more current financial
data for Loon Mountain Recreation Corporation.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial Statements of Business Acquired.
Loon Mountain Recreation Corporation Consolidated Balance Sheets as of
January 30, 1998 and January 26, 1997 (unaudited)
Loon Mountain Recreation Corporation Consolidated Statements of
Operations and Retained Earnings for the nine months ended January 30,
1998 and January 26, 1997 (unaudited)
Loon Mountain Recreation Corporation Consolidated Statements of Cash
Flows for the nine months ended January 30, 1998 and January 26, 1997
(unaudited)
Notes to Consolidated Financial Statements (unaudited)
(b) Pro Forma Financial Information.
Booth Creek Ski Holdings, Inc. Unaudited Pro Forma Condensed
Consolidated Balance Sheet as of January 30, 1998
Notes to Unaudited Pro Forma Condensed Consolidated Balance Sheet
Booth Creek Ski Holdings, Inc. Unaudited Pro Forma Condensed
Consolidated Statement of Operations for the three months ended January
30, 1998
Notes to Unaudited Pro Forma Condensed Consolidated Statement of
Operations
Booth Creek Ski Holdings, Inc. Unaudited Pro Forma Condensed
Consolidated Statement of Operations for the year ended October 31, 1997
Notes to Unaudited Pro Forma Statement Condensed Consolidated Statement
of Operations
2
<PAGE> 3
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
BOOTH CREEK SKI HOLDINGS, INC.
By: /s/ JEFFREY J. JOYCE
------------------------------------
Jeffrey J. Joyce
Executive Vice President, Finance
(principal financial and accounting
officer)
Date April 3, 1998
- ---------------------------------
3
<PAGE> 4
INDEX TO FINANCIAL STATEMENTS AND PRO FORMA FINANCIAL INFORMATION
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Loon Mountain Recreation Corporation
Financial Statements -- January 30, 1998 and January 26,
1997 (unaudited)
Loon Mountain Recreation Corporation
Consolidated Balance Sheets (unaudited)................... F-2
Loon Mountain Recreation Corporation
Consolidated Statements of Operations and Retained
Earnings (unaudited)...................................... F-3
Loon Mountain Recreation Corporation
Consolidated Statements of Cash Flows (unaudited)......... F-4
Notes to Consolidated Financial Statements (unaudited)...... F-5
Pro Forma Financial Information............................. F-6
Booth Creek Ski Holdings, Inc.
Unaudited Pro Forma Condensed Balance Sheet as of January
30, 1998.................................................. F-8
Notes to Unaudited Pro Forma Condensed Consolidated Balance
Sheet..................................................... F-9
Booth Creek Ski Holdings, Inc.
Unaudited Pro Forma Condensed Consolidated Statement of
Operations for the three months ended January 30, 1998.... F-10
Notes to Unaudited Pro Forma Condensed Consolidated
Statement of Operations................................... F-11
Booth Creek Ski Holdings, Inc.
Unaudited Pro Forma Condensed Consolidated Statement of
Operations for the year ended October 31, 1997............ F-13
Notes to Unaudited Pro Forma Statement Condensed
Consolidated Statement of Operations...................... F-14
</TABLE>
F-1
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LOON MOUNTAIN RECREATION CORPORATION
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(DOLLAR AMOUNTS IN THOUSANDS)
<TABLE>
<CAPTION>
JANUARY 30, JANUARY 26,
1998 1997
----------- -----------
<S> <C> <C>
ASSETS
Current assets:
Cash...................................................... $ -- $ 279
Accounts receivable....................................... 197 169
Inventories............................................... 489 471
Prepaid expenses.......................................... 3 16
------- -------
Total current assets........................................ 689 935
Land held for resale........................................ 705 705
Property and equipment, at cost:
Land and land improvements................................ 2,552 2,440
Slopes and trails......................................... 1,599 1,562
Buildings................................................. 8,312 7,396
Ski lifts................................................. 8,741 8,628
Operating equipment....................................... 7,257 6,942
Snowmaking equipment...................................... 9,665 7,554
Construction in progress.................................. 1,749 2,091
------- -------
39,875 36,613
Less accumulated depreciation and amortization............ 18,981 17,397
------- -------
20,894 19,216
Deferred tax assets......................................... -- 28
Other assets................................................ 67 81
------- -------
Total assets................................................ $22,355 $20,965
======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable.......................................... $ 774 $ 623
Current portion of long-term debt......................... 155 915
Current portion of obligations under capital leases....... 140 128
Accrued expenses.......................................... 832 573
Advance deposits and deferred revenue..................... 699 456
------- -------
Total current liabilities................................... 2,600 2,695
Long-term debt, less current portion........................ 11,267 10,317
Obligations under capital leases, less current portion...... 289 210
Accrued stock options....................................... 55 63
Deferred income taxes....................................... 238 -
------- -------
Total liabilities........................................... 14,449 13,285
Commitments and contingencies
Stockholders' equity:
Preferred stock, 7% noncumulative, par value $100
(callable at $107 per share); authorized 2,250 shares;
none issued or outstanding at January 30, 1998 (1,461
shares issued at January 30, 1997 including 127 shares
held in treasury)...................................... -- 146
Common stock, par value $.10; authorized 750,000 shares;
issued 671,100 including 80,830 and 81,385 shares held
in treasury............................................ 67 67
Additional paid-in capital................................ 71 61
Retained earnings......................................... 8,311 7,961
Less cost of treasury stock............................... (543) (555)
------- -------
Total stockholders' equity.................................. 7,906 7,680
------- -------
Total liabilities and stockholders' equity.................. $22,355 $20,965
======= =======
</TABLE>
See accompanying notes.
F-2
<PAGE> 6
LOON MOUNTAIN RECREATION CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS AND RETAINED EARNINGS (UNAUDITED)
(DOLLAR AMOUNTS IN THOUSANDS)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
-------------------------
JANUARY 30, JANUARY 26,
1998 1997
----------- -----------
<S> <C> <C>
Revenues:
Winter lifts.............................................. $ 4,258 $ 3,754
Food and beverage......................................... 1,962 1,824
Ski School................................................ 405 509
Ski rental and repair..................................... 416 355
Mountain Club............................................. 122 84
Summer programs........................................... 807 821
Real estate commissions................................... 158 117
Concessions............................................... 48 42
Retail sales.............................................. 318 353
Property services......................................... 191 174
Locker and basket......................................... 52 67
Day care.................................................. 138 91
Other..................................................... 107 116
------- -------
8,982 8,307
Expenses:
Employee costs............................................ 3,834 3,839
Depreciation and amortization............................. 1,125 1,093
Utilities................................................. 964 952
Materials, supplies and maintenance....................... 851 824
Purchases for resale...................................... 836 820
Interest.................................................. 696 789
Insurance................................................. 537 506
Marketing................................................. 513 420
Administrative............................................ 234 211
Outside services.......................................... 772 328
U.S. Forest Service lease................................. 95 93
Property taxes............................................ 329 290
Real estate commission.................................... 79 59
Other..................................................... 28 20
------- -------
10,893 10,244
------- -------
Loss before income taxes.................................... (1,911) (1,937)
Income tax benefit.......................................... (765) (775)
------- -------
Net loss.................................................... (1,146) (1,162)
Retained earnings, beginning of period...................... 9,535 9,162
Dividends................................................... (78) (39)
------- -------
Retained earnings, end of period............................ $ 8,311 $ 7,961
======= =======
</TABLE>
See accompanying notes.
F-3
<PAGE> 7
LOON MOUNTAIN RECREATION CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(DOLLAR AMOUNTS IN THOUSANDS)
<TABLE>
<CAPTION>
NINE MONTHS
ENDED
--------------------------
JANUARY 30, JANUARY 26,
1998 1997
----------- -----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss.................................................. $(1,146) $(1,162)
Adjustments to reconcile net loss to net cash provided by
(used in) operating activities:
Depreciation and amortization.......................... 1,125 1,093
Deferred income tax benefit............................ (765) (775)
Net changes in operating assets and liabilities:
Accounts receivable.................................. 112 (59)
Inventories.......................................... (92) (109)
Prepaid expenses..................................... 33 78
Accounts payable..................................... 230 79
Accrued expenses..................................... (46) (349)
Advance deposits and deferred revenue................ 632 402
Other................................................ 2 --
------- -------
Net cash provided by (used in) operating
activities................................... 85 (802)
------- -------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment....................... (3,023) (1,314)
------- -------
Net cash used in investing activities........... (3,023) (1,314)
------- -------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net proceeds from seasonal line of credit................. 1,286 814
Net proceeds from revolving credit loan................... 1,902 1,470
Proceeds from option exercise............................. 1 3
Redemption of preferred stock............................. (133) -
Payment of capital lease obligations...................... (80) (98)
Payment of dividends...................................... (78) (39)
------- -------
Net cash provided by financing activities....... 2,685 2,150
------- -------
Net (decrease) increase in cash............................. (253) 34
Cash, beginning of period................................... 253 245
------- -------
Cash, end of period......................................... $ -- $ 279
======= =======
</TABLE>
See accompanying notes.
F-4
<PAGE> 8
LOON MOUNTAIN RECREATION CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
JANUARY 30, 1998 AND JANUARY 26, 1997
1. ORGANIZATION AND BASIS OF PRESENTATION
Loon Mountain Recreation Corporation (the "Company") provides facilities
for skiing and other outdoor recreational activities in Lincoln, New Hampshire.
Loon Realty Corp., a wholly-owned subsidiary of the Company, owns land held for
future development adjacent to land owned or leased by the Company, and also
conducts real estate brokerage operations under the name of Loon Mountain Real
Estate Company.
The accompanying consolidated financial statements as of January 30, 1998
and January 26, 1997 and for the nine months ended January 30, 1998 and January
26, 1997 are unaudited, but include all adjustments (consisting only of normal
recurring adjustments) which, in the opinion of management of the Company, are
considered necessary for a fair presentation of the Company's financial position
at January 30, 1998 and January 26, 1997, and its operating results and cash
flows for the nine months ended January 30, 1998 and January 26, 1997. Due to
the highly seasonal nature of the Company's business, the results for the
interim periods are not necessarily indicative of results for the entire year.
Certain information and footnote disclosures normally included in annual
financial statements prepared in accordance with generally accepted accounting
principles have been omitted pursuant to generally accepted accounting
principles applicable for interim periods. The unaudited interim financial
statements should be read in conjunction with the following notes and the
audited financial statements of the Company as of April 30, 1997 and 1996 and
for the years then ended.
2. CONTINGENCIES
Restore: The North Woods v. Department of Agriculture. This case is pending
in the United State District Court for the District of New Hampshire. It was
filed in 1997 under National Environmental Policy Act ("NEPA") arising out of
the decision by the Forest Service to allow the Company to install a new
pipeline connecting the new infiltration gallery in the Pemigewasset River to
the up-mountain pump house. The infiltration gallery, which had been properly
permitted by the State authorities and the Army Corps of Engineers, was
installed to improve the draw of water from the river.
Forest Service authorization was required because the pipeline connecting
that infiltration gallery to the up-mountain pump house runs across the forest
land upon which the Company operates. Restore asserted that the Forest Service
permit was improperly issued based upon a variety of procedural grounds. Restore
sought an injunction prohibiting further work on the pipeline and a declaration
that the permit was improperly issued.
The Company intervened as defendant. The Forest Service and the Company
asserted various defenses. On January 20, 1998, the District Court held that the
pipeline may be analyzed and approved by the Forest Service separately from the
South Mountain expansion, but that the Forest Service violated NEPA by failing
to consider the potential environmental effects of the resulting asserted
increase in snowmaking capacity. Whether this failure warrants injunctive relief
will be addressed at a future hearing. The Company would expect the pipeline to
be re-approved following further proceedings by the Forest Service. However, no
assurance can be given regarding the outcome or timing of this litigation or any
resulting Forest Service review.
3. SUBSEQUENT EVENT
In August 1997, the Company established an additional revolving credit
agreement for $2,570,000. Interest is fixed at 8.75% and availability reduces
annually through April 30, 2002.
On February 26, 1998, the Company and Booth Creek Ski Holdings, Inc., as
assignee of Booth Creek Ski Group, Inc., executed a plan of merger pursuant to
which Booth Creek Ski Holdings, Inc. acquired all of the outstanding common
shares of the Company for a net purchase price of approximately $29.0 million
(including the assumption of debt which was repaid in connection with the
acquisition).
F-5
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PRO FORMA FINANCIAL INFORMATION
(UNAUDITED)
The following unaudited pro forma financial information give effect to a
number of transactions of Booth Creek Ski Holdings, Inc. (the "Company" or
"Booth Creek") that have occurred since October 1996. In November 1996, the
Company acquired the Waterville Valley and the Mt. Cranmore ski resorts in New
Hampshire (collectively, the "New Hampshire Resorts") and in December 1996, the
Company acquired Northstar-at-Tahoe, Sierra-at-Tahoe and the Bear Mountain ski
resorts in Southern California (collectively, the "California Resorts"). In
January 1997, the Company acquired the Summit at Snoqualmie ski resort complex
which consists of four separate and distinct resorts (the "Summit") in the
Cascade Mountains of Washington and in March 1997, the Grand Targhee ski resort
("Grand Targhee") in the Grand Tetons in Wyoming.
The Company financed the purchase of the New Hampshire Resorts and the
California Resorts with the proceeds from: (i) $90.0 million of senior
subordinated notes (the "Bridge Notes"); (ii) $10.0 million of subordinated
option notes (the "Hancock Option Notes," and together with the Bridge Notes,
the "Bridge Financing Facilities") issued by Booth Creek Ski Group, Inc.
("Parent"); (iii) the issuance of a promissory note to American Skiing Company
in the aggregate principal amount of $2.75 million (the "ASC Seller Note") and
(iv) the investment in the Company of $40.0 million of equity by Parent, which
was funded through the issuance by Parent of debt and equity securities to John
Hancock Mutual Life Insurance Company ("John Hancock") and affiliates of George
N. Gillett, Jr. and CIBC Oppenheimer Corp. ("CIBC"). Pursuant to a Securities
Purchase Agreement dated as of March 13, 1997, the Company sold (the "1997
Offering") 12 1/2% senior notes in an aggregate principal amount of $110.0
million issued under the Indenture, dated as of March 18, 1997, as amended and
supplemented (the "Indenture") to CIBC on March 18,1997, and an additional $6.0
million aggregate principal amount of such notes to CIBC on April 25, 1997
pursuant to the exercise of an option by CIBC. The notes sold pursuant to the
1997 Offering were subsequently exchanged by the Company in August 1997 for
$116.0 million aggregate principal amount of the Company's 12 1/2% Series B
Senior Notes due 2007 (the "Series B Notes") issued under the Indenture in a
transaction registered under the Securities Act of 1933, as amended. In
addition, concurrently with the consummation of the 1997 Offering, the Amended
and Restated Credit Agreement dated as of March 18, 1997, as amended, among the
Company, certain of its subsidiaries and BankBoston, N.A. (the "Senior Credit
Facility"), which initially provided borrowing availability of up to $10.0
million, was amended to, among other things, provide a total revolving credit
commitment of $20.0 million. The Company used the proceeds from the 1997
Offering, together with available cash on hand and an additional equity
contribution of $6.5 million by Parent, (i) to repay the Bridge Financing
Facilities, and certain debt assumed or incurred in connection with the
acquisition of the Summit, (ii) to finance the purchase price for the
acquisition of Grand Targhee and repay certain assumed indebtedness in
connection therewith, (iii) to pay fees and expenses in connection with the 1997
Offering and the Senior Credit Facility and (iv) for general corporate purposes.
The acquisitions of the New Hampshire Resorts, the California Resorts, the
Summit, Grand Targhee and Loon Mountain Recreation Corporation ("Loon Mountain"
or "LMRC") (as discussed below) are sometimes collectively referred to herein as
the "Acquisitions." The foregoing transactions, except for the acquisition of
LMRC (the "Loon Mountain Acquisition"), are hereinafter referred to collectively
as the "Historical Transactions."
On February 26, 1998, the Company acquired LMRC for an aggregate net
purchase price of approximately $29.0 million (including the assumption of debt
which was repaid in connection with the acquisition). The Loon Mountain
Acquisition was financed through (i) proceeds from the offering at par of
$17,500,000 aggregate principal amount of the Company's 12 1/2% Series C Senior
Notes due 2007 (the "1998 Offering") issued under the Indenture, (ii) a capital
contribution of $10.5 million to the Company by Parent (the "Equity Financing"),
and (iii) available cash on hand and borrowings pursuant to an amendment to the
Senior Credit Facility (the "Senior Credit Facility Amendment"). Prior to the
consummation of the Loon Mountain Acquisition, the Company solicited and
received sufficient consents (the "Consent Solicitation") from the holders of
its Series B Notes to, among other things, (i) permit the 1998 Offering, (ii)
permit the consummation of the Senior Credit Facility Amendment and (iii) modify
certain definitions and make minor modifications to the Indenture. The Loon
Mountain Acquisition, the Equity Financing, the Senior Credit
F-6
<PAGE> 10
Facility Amendment, the Consent Solicitation, the 1998 Offering and the
application of the net proceeds therefrom, are hereinafter referred to
collectively as the "Loon Mountain Transactions."
The following unaudited pro forma condensed consolidated balance sheet of
the Company give effect to the Loon Mountain Transactions as if they had
occurred on January 30, 1998. The following unaudited pro forma condensed
consolidated statements of operations give effect to the Loon Mountain
Transactions and the Historical Transactions as if they had occurred on November
1, 1996.
The pro forma financial information presented below should be read in
conjunction with the separate historical consolidated financial statements of
the Company and LMRC included in the Company's reports filed under the
Securities Exchange Act of 1934 and the historical consolidated financial
statements of LMRC included elsewhere in this current report on Form 8-K. The
pro forma condensed consolidated financial statements do not purport to be
indicative of the results that actually would have been obtained had the
Historical Transactions or the Loon Mountain Transactions occurred as of the
assumed dates and for the periods presented and are not intended to be a
projection of future results or trends. The pro forma adjustments, as described
in the accompanying Notes to Unaudited Pro Forma Financial Information, are
based on available information and certain assumptions that management believes
are reasonable. The allocation of the purchase price of the Loon Mountain
Acquisition is subject to revision when additional information is obtained, and
such revisions could be material.
F-7
<PAGE> 11
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
AS OF JANUARY 30, 1998
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
THE LOON
COMPANY MOUNTAIN PRO FORMA
HISTORICAL HISTORICAL ADJUSTMENTS PRO FORMA
---------- ---------- ----------- ---------
<S> <C> <C> <C> <C>
ASSETS
Cash................................................. $ 1,511 $ -- $ 29,000(a) $ 1,511
(28,250)(b)
(750)(c)
Other current assets................................. 8,667 689 (750)(b) 8,306
(300)(c)
-------- ------- -------- --------
Total current assets.......................... 10,178 689 (1,050) 9,817
Property and equipment, net.......................... 127,125 20,894 9,315(d) 157,334
Real estate held for development and sale............ 11,335 705 195(e) 12,235
Deferred charges and other assets.................... 12,913 67 1,000(c) 13,920
(60)(f)
Goodwill............................................. 31,287 -- 31,287
-------- ------- -------- --------
Total Assets.................................. $192,838 $22,355 $ 9,400 $224,593
======== ======= ======== ========
LIABILITIES AND SHAREHOLDER'S EQUITY
Senior Credit Facility............................... $ 6,500 $ -- $ 1,000(h) $ 7,500
Current portion of long-term debt.................... 1,924 295 (295)(h) 1,924
Accounts payable and accrued liabilities............. 27,034 2,305 450(c) 29,789
-------- ------- -------- --------
Total current liabilities..................... 35,458 2,600 1,155 39,213
Long-term debt....................................... 120,249 11,556 5,944(h) 137,749
Other................................................ 251 293 (55)(f) 251
(238)(g)
Preferred stock of subsidiary........................ 3,288 -- 3,288
Shareholder's equity................................. 33,592 7,906 10,500(a) 44,092
(7,906)(i)
-------- ------- -------- --------
Total Liabilities and Shareholder's Equity.... $192,838 $22,355 $ 9,400 $224,593
======== ======= ======== ========
</TABLE>
F-8
<PAGE> 12
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
(a) Reflects the 1998 Offering of $17.5 million of the Series C Notes at
par value, the additional equity contribution by Parent, and assumed
borrowings under the Senior Credit Facility as follows (dollars in
thousands):
<TABLE>
<S> <C>
Series C Notes.............................................. $17,500
Equity contribution by Parent............................... 10,500
Assumed borrowings under Senior Credit Facility............. 1,000
-------
Proceeds.......................................... $29,000
=======
</TABLE>
(b) Reflects the acquisition of Loon Mountain for an aggregate net purchase
price of $29.0 million (including the assumption of debt which was
repaid in connection with the acquisition), less a purchase deposit of
$750,000 included in other current assets at January 30, 1998.
(c) Reflects estimated total fees and expenses of $1.5 million incurred in
connection with the 1998 Offering ($1.0 million) and Loon Mountain
Acquisition ($500,000), less $300,000 of such costs included in other
current assets at January 30, 1998 and $450,000 to be paid in
subsequent months.
(d) Adjusts property and equipment related to the Loon Mountain Acquisition
to estimated fair value pursuant to purchase accounting. This is
estimated based on a preliminary purchase price allocation which is
subject to final allocation upon completion of valuation procedures.
(e) Adjusts real estate held for development and sale to estimated fair
value pursuant to purchase accounting. This is estimated based on
preliminary purchase price allocation which is subject to final
allocation upon completion of valuation procedures.
(f) Reflects the elimination of certain assets and liabilities in purchase
accounting.
(g) Under purchase accounting, deferred tax liabilities recognized for Loon
Mountain as a result of the acquisition are offset by operating loss
carryforwards of the Company.
(h) Reflects the following (dollars in thousands):
<TABLE>
<S> <C>
Series C Notes.............................................. $ 17,500
Assumed borrowings under Senior Credit Facility............. 1,000
Repayment of Loon Mountain debt............................. (11,851)
--------
Net............................................... $ 6,649
========
Reflected in pro forma balance sheet as:
Adjustment to Senior Credit Facility...................... $ 1,000
Adjustment to current portion of long-term debt........... (295)
Adjustment to long-term debt.............................. 5,944
--------
Net............................................... $ 6,649
========
</TABLE>
(j) Reflects elimination of historical stockholders' equity of Loon
Mountain.
F-9
<PAGE> 13
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED JANUARY 30, 1998
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
THE COMPANY LOON MOUNTAIN PRO FORMA
HISTORICAL HISTORICAL ADJUSTMENTS PRO FORMA
----------- ------------- ----------- ---------
<S> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Revenue:
Resort Operations......................... $39,016 $6,757 $ -- $45,773
Real Estate and Other..................... -- -- -- --
------- ------ ----- -------
39,016 6,757 -- 45,773
OPERATING EXPENSES:
Resort Operations......................... 26,802 4,523 (100)(a) 31,225
Cost of Sales -- Real Estate and Other.... -- -- -- --
Depreciation and Amortization............. 3,593 853 (257)(b) 4,189
------- ------ ----- -------
Operating Income............................ 8,621 1,381 357 10,359
Interest Expense (Net)...................... 4,366 229 368(c) 4,963(e)
------- ------ ----- -------
Pre-tax Income.............................. 4,255 1,152 (11) 5,396
Income Taxes (Benefit)...................... -- 461 (461)(d) --
------- ------ ----- -------
Income Before Minority Interest............. 4,255 691 450 5,396
Minority Interest........................... 70 -- -- 70
------- ------ ----- -------
Net Income.................................. $ 4,185 $ 691 $ 450 $ 5,326
======= ====== ===== =======
OTHER DATA:
EBITDA...................................... $12,214 $2,234 $ 100 $14,548
Non-cash Cost of Real Estate and Other...... $ -- $ -- $ -- $ --
</TABLE>
(see footnotes on following page)
F-10
<PAGE> 14
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED JANUARY 30, 1998
(a) The following adjustments have been made to reduce historical operating
expenses:
<TABLE>
<CAPTION>
THREE MONTHS
ENDED
JANUARY 30, 1998
----------------
<S> <C>
THE LOON MOUNTAIN ACQUISITION
Replacement of executive management......................... $ 30
Removal of directors' fees.................................. 18
Removal of divestiture-related expenses..................... 52
----
$100
====
</TABLE>
Replacement of executive management represents elimination of non-recurring
executive management compensation and benefits paid to the former owners of
Loon Mountain. The responsibilities of these individuals will be absorbed
by existing Company management.
Removal of directors' fees represents elimination of directors' fees paid
to directors of Loon Mountain, which will not be incurred by the Company.
Removal of divestiture-related expenses represents elimination of
non-recurring legal and accounting fees that were incurred to facilitate
the sale of Loon Mountain.
(b) Historical depreciation for periods prior to the acquisition date has been
adjusted to reflect post-acquisition date assumptions. Pro forma
depreciation charges relate to the estimated fair value assigned using
purchase accounting. Land improvements and buildings have been assigned a 20
year life, and machinery and equipment 3 to 20 year lives. These charges are
estimates based on preliminary purchase price allocations which are subject
to final allocations pursuant to valuation efforts.
(c) Pro forma interest expense includes interest on $116.0 million of Series B
Notes at 12.5%, $17.5 million of Series C Notes at 12.5%, the Senior Credit
Facility at 9%, the ASC Seller Note at 12%, certain capital leases and other
debt at varying rates and amortization of approximately $8.0 million of
deferred financing costs (amortized generally over a 10 year period).
(d) Due to a lack of profitable history, no income tax benefit is expected to be
recorded in the fiscal 1998 annual Company financial statements to reflect
the operating losses generated in fiscal 1998. Accordingly, no provision is
recorded in the first quarter of 1998 as the effective income tax rate for
the year is expected to be zero.
(e) Pro forma cash interest expense would be approximately $4.7 million which
excludes $307,000 in amortization of deferred financing fees.
(f) EBITDA is not a measure of performance under United States generally
accepted accounting principles, and should not be considered in isolation or
as a substitute for net income, cash flows from operating activities and
other income or cash flow statement data prepared in accordance with
generally accepted accounting principles, or as a measure of profitability
or liquidity. Pro forma EBITDA does not reflect certain additional
adjustments which management believes are relevant in evaluating the future
operating performance of the Company. The following additional adjustments,
which eliminate the impact of certain nonrecurring charges and reflect the
estimated impact of management's business and operating strategy are based
on estimates and assumptions made and believed to be reasonable by the
Company and
F-11
<PAGE> 15
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS --
(CONTINUED)
are inherently uncertain and subject to change. The following calculation
should not be viewed as indicative of actual or future results. The
following table reflects the effects of these items:
<TABLE>
<CAPTION>
THREE MONTHS
ENDED
JANUARY 30, 1998
----------------
<S> <C>
Pro forma EBITDA............................................ $14,548
Additional adjustments:
Reduction in insurance premiums........................... 43
Reduction in Loon Mountain expenses....................... 117
-------
Total additional adjustments........................... 160
-------
Adjusted pro forma EBITDA................................... $14,708
=======
</TABLE>
Reduction of insurance premiums represents elimination of insurance
expenses as a result of incorporating Loon Mountain into the Company's
consolidated insurance package.
Reduction in Loon Mountain expenses represents the estimated labor,
marketing and purchasing efficiencies expected to be realized subsequent to
the acquisition by the Company.
F-12
<PAGE> 16
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED OCTOBER 31, 1997
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
CALIFORNIA
RESORTS
-----------
FIBREBOARD
RESORT NEW HAMPSHIRE THE GRAND
GROUP RESORTS SUMMIT TARGHEE
HISTORICAL ----------------------- HISTORICAL HISTORICAL
----------- WATERVILLE MT. ------------ -----------
FOR THE VALLEY CRANMORE FOR THE FOR THE
PERIOD FROM HISTORICAL HISTORICAL PERIOD FROM PERIOD FROM
NOVEMBER 1, ---------- ---------- NOVEMBER 1, NOVEMBER 1,
THE 1996 FOR THE PERIOD FROM 1996 1996
COMPANY THROUGH OCTOBER 28, 1996 THROUGH THROUGH
HISTORICAL DECEMBER 2, THROUGH JANUARY 15, MARCH 18,
(A) 1996 NOVEMBER 27, 1996 1997 1997
---------- ----------- ----------------------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Revenue:
Resort Operations............... $ 68,136 $ 1,395 $ 352 $ 45 $3,465 $4,706
Real Estate and Other........... 3,671 304 -- -- -- --
-------- ------- ----- ----- ------ ------
71,807 1,699 352 45 3,465 4,706
Operating Expenses:
Resort Operations............... 58,343 4,720 715 245 2,878 4,179
Cost of Sales -- Real Estate and
Other......................... 2,799 161 -- -- -- --
Depreciation, Depletion and
Amortization.................. 11,681 6 103 18 208 319
-------- ------- ----- ----- ------ ------
Operating Income (Loss).......... (1,016) (3,188) (466) (218) 379 208
Interest Expense (net)........... 14,912 206 12 15 79 24
-------- ------- ----- ----- ------ ------
Pre-tax Income (Loss)............ (15,928) (3,394) (478) (233) 300 184
Income Taxes (Benefit)........... (1,728) (1,358) -- -- -- 37
-------- ------- ----- ----- ------ ------
Income (Loss) Before Minority
Interest........................ (14,200) (2,036) (478) (233) 300 147
Minority Interest................ 229 -- -- -- -- --
-------- ------- ----- ----- ------ ------
Income (Loss) Before
Extraordinary Loss.............. (14,429) (2,036) (478) (233) 300 147
Extraordinary Loss............... 2,664 -- -- -- -- --
-------- ------- ----- ----- ------ ------
Net Income (Loss)................ $(17,093) $(2,036) $(478) $(233) $ 300 $ 147
======== ======= ===== ===== ====== ======
OTHER DATA:
EBITDA(m)........................ $ 12,902 $(3,049) $(363) $(200) $ 587 $ 527
Non-cash Cost of Real Estate and
Other........................... $ 2,237 $ 133 $ -- $ -- $ -- $ --
</TABLE>
<TABLE>
<CAPTION>
LOON
MOUNTAIN
HISTORICAL
-----------
YEAR
ENDED
PRO FORMA PRO OCTOBER 31, PRO FORMA PRO
ADJUSTMENTS FORMA 1997 ADJUSTMENTS FORMA
----------- -------- ----------- ----------- --------
<S> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Revenue:
Resort Operations............... $ -- $ 78,099 $15,751 $ -- $ 93,850
Real Estate and Other........... -- 3,975 -- -- 3,975
------- -------- ------- ------- --------
-- 82,074 15,751 -- 97,825
Operating Expenses:
Resort Operations............... (75)(b) 70,983 12,602 (586)(b) 82,999
(22)(c)
Cost of Sales -- Real Estate and
Other......................... -- 2,960 -- -- 2,960
Depreciation, Depletion and
Amortization.................. 1,078(d) 13,413 1,897 485(i) 15,795
------- -------- ------- ------- --------
Operating Income (Loss).......... (981) (5,282) 1,252 101 (3,929)
Interest Expense (net)........... 1,122(e) 16,370 893 1,496(j) 18,759(l)
------- -------- ------- ------- --------
Pre-tax Income (Loss)............ (2,103) (21,652) 359 (1,395) (22,688)
Income Taxes (Benefit)........... 1,321(f) (1,728) 147 (147)(k) (1,728)
------- -------- ------- ------- --------
Income (Loss) Before Minority
Interest........................ (3,424) (19,924) 212 (1,248) (20,960)
Minority Interest................ 52(g) 281 -- -- 281
------- -------- ------- ------- --------
Income (Loss) Before
Extraordinary Loss.............. (3,476) (20,205) 212 (1,248) (21,241)
Extraordinary Loss............... (2,664)(h) -- -- -- --
------- -------- ------- ------- --------
Net Income (Loss)................ $ (812) $(20,205) $ 212 $(1,248) $(21,241)
======= ======== ======= ======= ========
OTHER DATA:
EBITDA(m)........................ $ 97 $ 10,501 $ 3,149 $ 586 $ 14,236(m)
Non-cash Cost of Real Estate and
Other........................... $ -- $ 2,370 $ -- $ -- $ 2,370
</TABLE>
(see footnotes on following pages)
F-13
<PAGE> 17
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED OCTOBER 31, 1997
(a) The Company's historical consolidated statement of operations for the year
ended October 31, 1997 includes the results of operations for the following
acquisitions since the effective dates of such acquisitions:
<TABLE>
<S> <C>
New Hampshire Resorts.................................... November 27, 1996
California Resorts....................................... December 3, 1996
The Summit............................................... January 15, 1997
Grand Targhee............................................ March 18, 1997
</TABLE>
(b) The following adjustments have been made to reduce historical operating
expenses:
<TABLE>
<CAPTION>
YEAR ENDED
OCTOBER 31, 1997
----------------------
(DOLLARS IN THOUSANDS)
<S> <C>
THE ACQUISITIONS (EXCLUDING THE LOON MOUNTAIN ACQUISITION)
Replacement of executive management....................... $ 52
Lease modification........................................ 23
----
$ 75
====
THE LOON MOUNTAIN ACQUISITION
Replacement of executive management....................... $120
Removal of directors' fees................................ 70
Removal of divestiture-related expenses................... 396
----
$586
====
</TABLE>
Replacement of executive management represents elimination of non-recurring
executive management compensation and benefits paid to (i) former owners of
Ski Lifts, Inc. and Grand Targhee Incorporated and (ii) the former owners of
Loon Mountain. The responsibilities of these individuals will be absorbed by
existing Company management.
Lease modification represents elimination of lease expenses for the Teewinot
Lodge, which was acquired by the Company in the Grand Targhee Acquisition.
Removal of directors' fees represents elimination of directors' fees paid to
directors of Loon Mountain, which will not be incurred by the Company.
Removal of divestiture-related expenses represents elimination of
non-recurring legal and accounting fees that were incurred to facilitate the
sale of Loon Mountain.
(c) Represents corporate management fee allocations from Fibreboard Corporation
($70,000) for the period from November 1, 1996 through December 2, 1996 and
American Skiing Company and S-K-I Limited for Waterville Valley ($10,000)
for the period from October 28, 1996 through November 27, 1996 net of (i)
the management fees that would have been paid to Booth Creek, Inc. pursuant
to the Management Agreement ($29,000) and (ii) the estimated amounts for
certain corporate expenses if the Company had operated on a stand-alone
basis ($29,000).
(d) Historical depreciation and amortization for periods prior to the respective
resort acquisition dates has been adjusted to reflect post-acquisition date
assumptions. Pro forma depreciation and amortization charges relate to the
estimated fair value assigned using purchase accounting. Land improvements
and buildings have been assigned a 20 year life, machinery and equipment 3
to 15 year lives, and goodwill a 15 year life.
(e) Pro forma interest expense includes interest on $116.0 million of Series B
Notes at 12.5%, the Senior Credit Facility at 9%, the ASC Seller Note at
12%, certain capital leases and other debt at varying rates and amortization
of approximately $7.0 million of deferred financing fees (amortized
generally over a 10 year period).
F-14
<PAGE> 18
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF
OPERATIONS -- (CONTINUED)
(f) Adjusts income tax provision to reflect the benefit of operating losses to
the extent of recorded deferred tax liabilities.
(g) Reflects cumulative preferred stock dividend of 9% on the Ski Lifts
Preferred Stock.
(h) Eliminates historical extraordinary loss on early retirement of debt.
(i) Historical depreciation and amortization for periods prior to the
acquisition date has been adjusted to reflect post-acquisition date
assumptions. Pro forma depreciation and amortization charges relate to the
estimated fair value assigned using purchase accounting. Land improvements
and buildings have been assigned a 20 year life, machinery and equipment 3
to 20 year lives, and goodwill a 15 year life. These charges are estimates
based on preliminary purchase price allocations which are subject to final
allocations pursuant to valuation efforts.
(j) Pro forma interest expense includes interest on $116.0 million of Series B
Notes at 12.5%, $17.5 million of Series C Notes at 12.5%, the Senior Credit
Facility at 9%, the ASC Seller Note at 12%, certain capital leases and other
debt at varying rates and amortization of approximately $8.0 million of
deferred financing costs (amortized generally over a 10 year period).
(k) Eliminates the historical income tax provision of Loon Mountain, as the
expected effective income tax rate for the Company in fiscal 1998 is zero.
In the offering memorandum for the 1998 Offering and in the Form 8-K filed
by the Company on March 9, 1998, the Company reflected a net deferred tax
benefit of $3,776,000 relating to the deferred tax liabilities established
in purchase accounting for the Loon Mountain Acquisition. After further
review and analysis, the Company has changed the purchase accounting
assumptions related to the Loon Mountain Acquisition to offset the Loon
Mountain deferred tax liabilities established against the Booth Creek
deferred tax assets at such date. Accordingly, no net deferred taxes have
been recorded in purchase accounting and the values assigned to goodwill and
property and equipment have been reduced accordingly. The net non-cash
impact was to increase the net loss from $17,769,000 to $21,241,000 for the
pro forma year ended October 31, 1997; EBITDA for the period was not
affected.
(l) Pro forma cash interest expense would be approximately $17.8 million which
excludes $971,000 in amortization of deferred financing fees.
(m) EBITDA is not a measure of performance under United States generally
accepted accounting principles, and should not be considered in isolation or
as a substitute for net income, cash flows from operating activities and
other income or cash flow statement data prepared in accordance with
generally accepted accounting principles, or as a measure of profitability
or liquidity. Pro forma EBITDA does not reflect certain additional
adjustments which management believes are relevant in evaluating the future
operating performance of the Company. The following additional adjustments,
which eliminate the impact of certain nonrecurring charges and reflect the
estimated impact of management's business and operating strategy are based
on estimates and assumptions made and believed to be reasonable by the
Company and
F-15
<PAGE> 19
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF
OPERATIONS -- (CONTINUED)
are inherently uncertain and subject to change. The following calculation
should not be viewed as indicative of actual or future results. The
following table reflects the effects of these items:
<TABLE>
<CAPTION>
YEAR ENDED
OCTOBER 31, 1997
----------------
(DOLLARS IN THOUSANDS)
<S> <C>
Pro forma EBITDA........................................... $14,236
Additional adjustments:
Reduction in insurance premiums....................... 242
In-house operation of certain ski related services.... 435
One-time charges at Grand Targhee..................... 54
Reduction in Loon Mountain expenses................... 293
-------
Total additional adjustments..................... 1,024
-------
Adjusted pro forma EBITDA.................................. $15,260
=======
</TABLE>
Reduction of insurance premiums represents elimination of insurance
expenses as a result of a new insurance package entered into by the
Company, which has reduced insurance premiums as a result of the
consolidation of the Company's resorts.
In-house operation of certain ski-related services represents the increase
in revenues and elimination of expenses related to services performed by
outside vendors at the Summit that will be performed by the Company and
which are performed by the Company at its other resorts.
One-time charges at Grand Targhee represents elimination of the cost
associated with abandoning a land exchange project.
Reduction in Loon Mountain expenses represents the estimated labor,
marketing and purchasing efficiencies expected to be realized subsequent to
the acquisition by the Company.
F-16
