<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities and Exchange Act of 1934
Date of Report (Date of earliest event reported): June 30, 1997
Western Pacific Airlines, Inc.
(Exact name of registrant as specified in its charter)
Delaware 0-27238 86-0758778
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File number) Identification No.)
2864 South Circle Drive
Colorado Springs, CO 80906
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (719) 579-7737
_____________________________________________________
Former name or former address, if changed since last report
<PAGE>
Item 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(b) Pro Forma Financial Information
The following Pro Forma Combined Condensed Balance Sheet as of June 30,
1997 and the Pro Forma Combined Condensed Statements of Operations for the
year ended December 31, 1996 and for the six months ended June 30, 1997 give
effect to the merger (the "Merger") of Western Pacific Airlines, Inc.
("Western Pacific") and Frontier Airlines, Inc. ("Frontier"), pursuant to the
Agreement and Plan of Merger, dated as of June 30, 1997, based upon the
assumptions set forth in the notes to such statements. The Merger will be
accounted for using the purchase method of accounting in accordance with
Accounting Principles Board Opinion No. 16 (APB No. 16). For financial
reporting purposes, Western Pacific will be considered the acquiror in the
Merger and, therefore, the assets and liabilities of Frontier will be
adjusted to estimated fair values as of the effective time of the Merger (the
"Effective Time").
Upon consummation of the Merger, studies, in accordance with APB No. 16,
will be undertaken, including outside appraisals, if required, to establish
the fair value of the assets acquired and liabilities assumed. Although the
results of the fair value studies cannot be predicted with certainty at this
time, it is expected that the value of Frontier's property will not be in
excess of its historical book value. The final adjustments will be based
upon the aggregate value of Western Pacific outstanding common stock, $0.001
par value per share (the "Western Pacific Common Stock") and other
consideration to be issued in connection with the Merger.
The excess of the total cost of the Merger over the aggregate fair value
of Frontier's assets (subject to the aforementioned fair value studies) will
be allocated in accordance with purchase accounting as prescribed in APB No.
16.
These Combined Condensed Pro Forma Financial Statements are based upon
the respective historical Consolidated Financial Statements of Western
Pacific and Frontier as previously filed with the Securities and Exchange
Commission ("SEC") and should be read in conjunction with those financial
statements and the related notes. The financial results of Frontier will
only be included in Western Pacific's Consolidated Financial Statements after
the Effective Time for periods subsequent to the Effective Time.
The Combined Condensed Pro Forma Financial Statements have been included
as required by the rules of the SEC and are provided for comparative purposes
only. The pro forma statements do not purport to be indicative of the
results which would actually have been obtained if the Merger had been
effected on the date or dates indicated or which may be obtained in the
future.
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PRO FORMA COMBINED CONDENSED BALANCE SHEET
The following Pro Forma Combined Condensed Balance Sheet presents the
combined financial position of Western Pacific and Frontier as of June 30,
1997. This pro forma information gives effect to the Merger using the
purchase method of accounting after giving effect to the pro forma
adjustments described in the accompanying notes. The Pro Forma Combined
Condensed Balance Sheet should be read in conjunction with the Pro Forma
Combined Condensed Statements of Operations, Notes to the Pro Forma Combined
Condensed Financial Information and the Consolidated Financial Statements and
the notes thereto of Western Pacific and Frontier as previously filed with
the SEC.
<TABLE>
<CAPTION>
WESTERN PACIFIC AIRLINES, INC.
UNAUDITED PRO FORMA COMBINED CONDENSED BALANCE SHEET
AS OF JUNE 30, 1997
(IN THOUSANDS)
WESTERN PACIFIC FRONTIER PRO FORMA PRO FORMA
HISTORICAL HISTORICAL ADJUSTMENTS COMBINED
--------------- ---------- ----------- ---------
<S> <C> <C> <C> <C>
Current assets $ 45,179 $ 31,013 $ 4,432 (1) $ 80,624
Property and equipment, net $ 42,001 4,634 46,635
Prepaid maintenance 16,744 - 2,703 (1) 19,447
Aircraft and engine deposits 23,219 7,079 30,298
Other assets 1,692 1,682 25,143 (2) 28,517
--------- --------- -------- ---------
$ 128,834 $ 44,409 $ 32,278 $ 205,521
========= ========= ======== =========
Cost in excess of net assets acquired
Accounts Payable and Accrued Expenses $ 36,280 $ 11,212 $ 4,675 (3) $ 52,167
Air Traffic Liability 27,218 13,390 40,608
Other current liabilities 10,084 10,293 (10,104) (1) 10,273
--------- --------- -------- ---------
Total current liabilities 73,583 34,895 (5,429) 103,048
--------- --------- -------- ---------
Long term debt 14,902 47 14,949
Other liabilities and minority interests 1,372 1,670 (1,670) 1,372
Preferred stock 23,400 - 23,400
Stockholder's equity 15,578 7,797 39,377 (4) 62,752
--------- --------- -------- ---------
$ 128,834 $ 44,409 $ 32,278 $ 205,521
========= ========= ======== =========
</TABLE>
See notes to pro forma combined condensed balance sheet and statements of
operations.
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PRO FORMA COMBINED CONDENSED STATEMENTS OF OPERATIONS
The following Pro Forma Combined Condensed Statements of Operations give
affect to the Merger using the purchase method of accounting for the year
ended December 31, 1996 and for the six months ended June 30, 1997, as if the
Merger occurred on January 1 of each respective period. These Pro Forma
Combined Condensed Statements of Operations should be read in conjunction
with the Notes to Pro Forma Combined Condensed Financial Information and the
separate Consolidated Financial Statements and notes thereto of Western
Pacific and Frontier as previously filed with the SEC. These Pro Forma
Combined Condensed Statements of Operations may not be indicative of results
to be expected in the future if the Merger is consummated.
<TABLE>
<CAPTION>
WESTERN PACIFIC AIRLINES, INC.
UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
YEAR ENDED DECEMBER 31, 1996 SIX MONTHS ENDED JUNE 30, 1997
----------------------------------------------- ----------------------------------------------
WESTERN
PACIFIC FRONTIER PRO FORMA PRO FORMA FRONTIER PRO FORMA PRO FORMA
HISTORICAL HISTORICAL(5) ADJUSTMENTS COMBINED HISTORICAL HISTORICAL(5) ADJUSTMENTS COMBINED
---------- ---------- ----------- --------- ---------- --------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Operating revenues:
Passenger $151,237 $107,630 $258,887 $ 76,773 $66,130 $142,903
Other 4,522 1,788 6,310 2,982 1,451 4,433
-------- -------- -------- -------- -------- ------- ------- --------
Total operating revenues 155,759 109,418 265,177 79,755 67,581 $147,336
-------- -------- -------- -------- -------- ------- ------- --------
OPERATING EXPENSES:
Salaries, wages and benefits 30,348 17,162 (1,800)(6) 45,710 19,855 10,959 (900)(6) 29,914
Aircraft lease 38,363 13,754 52,117 20,647 10,718 31,365
Aircraft fuel and oil 30,374 19,984 50,338 17,424 11,250 28,674
Other rentals, landing and
ground handling fees 17,252 20,091 37,343 10,722 10,313 21,035
Advertising 9,934 2,167 12,101 6,278 1,904 8,182
Insurance 5,901 3,047 8,948 2,827 1,574 4,401
Maintenance materials and repairs 11,438 17,438 (6,927)(1) 21,949 13,047 12,078 (4,191)(1) 20,934
Agency commissions 5,264 6,735 11,999 4,076 4,053 8,129
Depreciation and amortization 4,633 1,094 1,250(7) 6,977 2,906 536 626 (7) 4,068
Other operating 20,899 16,998 37,897 18,752 9,899 28,651
Restructuring expenses 7,663 - 7,633 - - -
------- -------- ------- -------- -------- ------- ------- --------
Total operating and
preoperating expenses 182,069 118,450 (7,477) 293,042 116,534 73,284 (4,465) 185,353
-------- -------- ------- -------- -------- ------- ------- --------
Operating income (loss) (26,310) (9,032) 7,477 (27,865) (36,779) (5,703) 4,465 (38,017)
Interest income (expense), net 1,178 952 2,130 (1,059) 324 (735)
Minority interest 1,413 1,413 2,355 - 2,355
-------- -------- ------- -------- -------- ------- ------- --------
Net income (loss) $(23,719) $(8,080) 7,477 $(24,322) $(35,483) $(5,379) $ 4,465 $(36,397)
======== ======== ======= ======== ======== ======= ======= ========
Net income (loss) attributable
to common stockholders $(23,719) $(24,322) $(38,961) $(39,875)
======== ======== ======== ========
Loss per common share and
common share equivalent
attributable to common
stockholders $ (1.78) $ (1.21) $ (2.91) $ (1.97)
======== ======== ======== ========
Weighted average number of
common shares and common
share equivalents outstanding 13,310 6,775 (8) 20,085 13,438 6,775 (8) 20,213
</TABLE>
See notes to pro forma combined condensed balance sheet and statements of
operations.
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NOTES TO PRO FORMA COMBINED CONDENSED BALANCE SHEET
AND STATEMENTS OF OPERATIONS
(1) To adjust maintenance expense and related maintenance reserves to reflect
Frontier's maintenance cost for airframe "C" maintenance checks and engine
overhauls using the deferral method of accounting.
(2) To record excess of cost over fair value of net assets acquired.
(3) To record accrual for severence to be paid to certain officers,
directors, managers and supervisors to be terminated upon consummation of
the merger, as well as costs related to the acquisition.
(4) To adjust the pro forma combined condensed balance sheet to reflect the
fair value of the purchased assets and assumed liabilities as of June 30,
1997 and the issuance of common stock to acquire Frontier.
(5) To include the results of operations of Frontier as if the Merger
occurred as of the beginning of each respective period.
(6) To adjust salaries, wages and benefits to reflect amounts paid to certain
officers, directors, managers and supervisors of Frontier and Western
Pacific that will be terminated upon consummation of the merger.
(7) To adjust depreciation and amortization to reflect the amortization of
the cost in excess of the fair value of net assets acquired of
approximately $25 million over a 20 year period.
(8) To adjust weighted average number of common shares and common share
equivalents as if the common stock issued in connection with the acquisition
of Frontier had been outstanding since January 1 of each respective period.
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SIGNATURE
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 thereunto duly authorized.
Dated: September 12, 1997 WESTERN PACIFIC AIRLINES, INC.
By: /s/Robert A. Peiser
-----------------------------------
Name: Robert A. Peiser
Title: President, Chief Executive Officer and
Director
