Blue Ridge Real Estate (BRRE) 8-K/A Financial Statements and Exhibits

Exhibit 99.1

BLUE RIDGE REAL ESTATE COMPANY and SUBSIDIARIES
AND
BIG BOULDER CORPORATION and SUBSIDIARIES
COMBINED BALANCE SHEETS
“Pro Forma on Sale of Oxbridge Square Shopping Center”
UNAUDITED

						4/30/06
						Pro Forma
ASSETS	4/30/06		Adjustments			Results
Current Assets:
Cash and cash equivalents	$	312,630	($	381,741	)	($	69,111	)
Accounts receivable and mortgages receivable		355,120		(39,499	)		315,621
Accounts receivable — ski tenant		151,430		0			151,430
Prepaid expenses and other current assets		678,659		0			678,659
Deferred tax asset		123,000		(69,399	)		53,601
Net investment in direct financing leases		330,267		0			330,267
Total current assets		1,951,106		(490,639	)		1,460,467
Net investment in direct financing leases noncurrent		8,625,381		10,937,356			19,562,737
Mortgages receivable noncurrent		51,040		0			51,040
Land and land development costs (5,124 acres per land ledger)		20,560,287		0			20,560,287
Properties:
Land held for investment, principally unimproved (12,145 acres per land ledger)		6,511,887		(1,829,327	)		4,682,560
Land improvements, buildings and equipment — commercial		26,603,887		(7,966,225	)		18,637,662
Land improvements, buildings and equipment		3,249,697		0			3,249,697
		36,365,471		(9,795,553	)		26,569,918
Less accumulated depreciation and amortization		9,147,789		401,276			8,746,513
		27,217,682		(9,394,276	)		17,823,406
Assets held to be used		0		0			0
	$	58,405,496	$	1,052,440		$	59,457,936

						4/30/06
						Pro Forma
LIABILITIES AND SHAREHOLDERS’ EQUITY	4/30/06		Adjustments			Results
Current Liabilities:
Notes payable — line of credit	$	2,007,094	$	0		$	2,007,094
Current installments of long-term debt		1,114,731		0			1,114,731
Accounts payable		802,526		(110,911	)		691,615
Accrued claims		64,148		4,902			69,050
Deferred revenue		755,877		0			755,877

							4/30/06
							Pro Forma
LIABILITIES AND SHAREHOLDERS’ EQUITY	4/30/06			Adjustments			Results
Accrued pension expense		526,434			0			526,434
Amounts due to related parties		216,876			0			216,876
Accrued liabilities		623,119			0			623,119
Total current liabilities		6,110,805			(106,009	)		6,004,796
Long-term debt, less current installments		12,596,895			(3,733,470	)		8,863,425
Deferred income non-current		515,631			0			515,631
Other non-current liabilities		0			0			0
Accrued minimum pension liability		91,500			0			91,500
Deferred income taxes		4,907,274			2,067,360			6,974,634
Commitments and contingencies
Combined shareholders’ equity:
Capital stock, without par value, stated value $.30 per combined share, Blue Ridge and Big Boulder each authorized 3,000,000 shares, each issued 2,690,042		807,011			0			807,011
Capital in excess of stated value		19,038,671			0			19,038,671
Compensation recognized under employee stock plans					0			0
Accumulated other comprehensive loss		(54,500	)		0			(54,500	)
Earnings retained in the business		16,477,616			2,824,558			19,302,174
		36,268,798			2,824,558			39,093,356
Less cost of 282,018 shares of capital stock in treasury		2,085,407			0			2,085,407
		34,183,391			3,101,039			37,007,949
	$	58,405,496		$	1,328,921		$	59,457,936

BLUE RIDGE REAL ESTATE COMPANY and SUBSIDIARIES
AND
BIG BOULDER CORPORATION and SUBSIDIARIES
COMBINED STATEMENTS OF OPERATIONS AND EARNINGS RETAINED IN THE BUSINESS
“Pro Forma on Sale of Oxbridge Square Shopping Center”
UNAUDITED

								4/30/06
				Pro Forma				Pro Forma
	4/30/06			Adjustments				Results
Revenues:
Real estate management	$	2,433,284						$	2,433,284
Summer recreation operations		400							400
Land resource management		533,526							533,526
Rental income		1,392,110			(727,379	)	A		664,731
		4,359,320			(727,379	)			3,631,941
Costs and expenses:
Real estate management		2,616,366							2,616,366
Summer recreation operations		81,167							81,167
Land resource management		701,409							701,409
Rental income		940,004			(250,486	)	B		689,518
General and administration		924,089							924,089
Asset impairment loss		0							0
		5,263,035			(250,486	)			5,012,549
(Loss) income from continuing operations		(903,715	)		(476,894	)			(1,380,609	)
Other income (expense):
Interest and other income		(7,821	)		5,236,890		C		5,229,069
Interest expense		(433,217	)		131,921		D		(301,296	)
		(441,038	)		5,368,812				4,927,774
(Loss) income from continuing operations before income taxes		(1,344,753	)		4,891,918				3,547,165
(Benefit) provision for income taxes		(532,126	)		1,956,767		E		1,424,641
Net (loss) income before discontinued operations		(812,627	)		2,935,151				2,122,524
Discontinued operations		(279,938	)		0				(279,938	)
Provision (benefit) for income taxes on discontinued operations		(105,000	)		0				(105,000	)
Net income (loss) from discontinued operations		(174,938	)		0				(174,938	)

						4/30/06
				Pro Forma		Pro Forma
	4/30/06			Adjustments		Results
Net (loss) income	($	987,565	)	$	2,935,151	$	1,947,586
Basic (loss) earnings per weighted average combined share:
Net (loss) income before discontinued operations	($	0.34	)			$	0.89
Net (loss) income from discontinued operations	($	0.07	)			($	0.07	)
Net (loss) income	($	0.41	)			$	0.82
Diluted (loss) earnings per weighted average combined share:
Net (loss) income before discontinued operations	($	0.34	)			$	0.86
Net (loss) income from discontinued operations	($	0.07	)			($	0.07	)
Net (loss) income	($	0.41	)			$	0.79

Notes to unaudited pro forma combined statement of operations and earnings retained in the business:

(A) Entry represents reduction in revenue assuming Oxbridge Square sale occurred November 1, 2005.

(B) Entry represents reduction in expenses and expenses related to the sale assuming the transaction occurred November 1, 2005.

(C) Entry represents pretax gain on sale of asset.

(D) Entry represents reduction in interest expense assuming the sale occurred November 1, 2005.

(E) Entry represents the deferred tax provision calculated at the effective income tax rate of 40%.

COMBINED BALANCE SHEETS

“Pro Forma on Sale of Oxbridge Square Shopping Center”

UNAUDITED

						10/31/05
			Pro Forma			Pro Forma
	10/31/05		Adjustments			Results
ASSETS
Current Assets:
Cash and cash equivalents	$	1,833,704	($	719,772	)	$	1,113,932
Accounts receivable and mortgages receivable		545,751		(39,499	)		506,252
Accounts receivable — ski tenant		86,982					86,982
Prepaid expenses and other current assets		722,878		(69,399	)		653,479
Deferred tax asset		123,000					123,000
Total current assets		3,312,315		(828,670	)		2,483,645
Cash held in escrow		0		10,937,356			10,937,356
Mortgages receivable noncurrent		52,452		0			52,452
Land and land development costs (5,124 acres per land ledger)		17,050,335		0			17,050,335
Properties:
Land held for investment, principally unimproved (12,145 and 14,615, respectively, acres per land ledger)		6,511,879		(1,829,327	)		4,682,552
Land improvements, buildings and equipment — commercial		26,628,711		(7,966,225	)		18,662,486
Land improvements, buildings and equipment		3,119,017		0			3,119,017
		36,259,607		(9,795,553	)		26,464,054
Less accumulated depreciation and amortization		8,764,889		401,276			8,363,613
		27,494,718		(9,394,276	)		18,100,442
Assets held to be used		9,206,923		0			9,206,923
	$	57,116,743	$	714,409		$	57,831,152

						10/31/05
			Pro Forma			Pro Forma
	10/31/05		Adjustments			Results
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities:
Notes payable — line of credit	$	0	$	0		$	0
Current installments of long-term debt		348,962		(110,911	)		238,051
Accounts payable		1,875,513		4,902			1,880,415
Accrued claims		43,170		0			43,170
Deferred revenue		239,206		0			239,206
Accrued pension expense		467,109		0			467,109
Amounts due to related parties		120,836		0			120,836
Accrued liabilities		931,929		0			931,929
Total current liabilities		4,026,725		(106,009	)		3,920,716

							10/31/05
				Pro Forma			Pro Forma
	10/31/05			Adjustments			Results
Long-term debt, less current installments		12,800,780			(3,733,470	)		9,067,310
Deferred income non-current		515,631			0			515,631
Other non-current liabilities		493			0			493
Accrued minimum pension liability		91,500			0			91,500
Deferred income taxes		6,018,000			2,067,360			8,085,360
Commitments and contingencies
Combined shareholders’ equity:
Capital stock, without par value, stated value $.30 per combined share, Blue Ridge and Big Boulder each authorized 3,000,000 shares, each issued 2,667,042		800,111						800,111
Capital in excess of stated value		17,337,329						17,337,329
Compensation recognized under employee stock plans		200,900						200,900
Accumulated other comprehensive loss		(54,500	)					(54,500	)
Earnings retained in the business		17,465,181			2,486,527			19,951,708
		35,749,021			2,486,527			38,235,548
Less cost of 282,018 shares of capital stock in treasury		2,085,407						2,085,407
		33,663,614			2,486,527			36,150,141
	$	57,116,743		$	714,409		$	57,831,152

BLUE RIDGE REAL ESTATE COMPANY and SUBSIDIARIES

AND

BIG BOULDER CORPORATION and SUBSIDIARIES

COMBINED STATEMENTS OF OPERATIONS AND EARNINGS RETAINED IN THE BUSINESS

“Pro Forma on Sale of Oxbridge Square Shopping Center”

UNAUDITED

										10/31/05
					Pro Forma					Pro Forma
	10/31/05				Adjustments					Results
Revenues:
Real estate management	$	3,099,585			$	0				$	3,099,585
Summer recreation operations		774,288			$	0					774,288
Land resource management		6,498,729			$	0					6,498,729
Rental income		2,689,319		(	$	1,438,578	)	A			1,250,741
		13,061,921				(1,438,578	)				11,623,343
Costs and expenses:
Real estate management		3,330,173			$	0					3,330,173
Summer recreation operations		683,458			$	0					683,458
Land resource management		3,366,788			$	0					3,366,788
Rental income		1,277,841		(	$	473,998	)	B			803,843
General and administration		1,552,814			$	0					1,552,814
Asset impairment loss		149,798			$	0					149,798
		10,360,872				(473,998	)				9,886,874
Income (loss) from continuing operations		2,701,049				(964,580	)				1,736,469
Other income (expense) from continuing operations:
Interest and other income		139,738			$	5,236,890		C			5,376,628
Interest expense (net of capitalized interest of $102,929 in 2005)		(893,908	)		$	281,575		D			(612,333	)
		(754,170	)			5,518,465					4,764,295
Income (loss) from continuing operations before income taxes		1,946,879				4,553,886					6,500,765
Provision (credit) for income taxes:
Current		8,000				0					8,000
Deferred		443,000				1,821,554		E			2,264,554
		451,000				1,821,554					2,272,554
									��
Net income (loss) before discontinued operations and cumulative effect		1,495,879				2,732,332					4,228,211

					10/31/05
			Pro Forma		Pro Forma
	10/31/05		Adjustments		Results
Discontinued operations (including $12,026,867 gain on disposal in 2004)		576,121		0		576,121
Provision (credit) for income taxes on discontinued operations:
Current		0		0		0
Deferred		140,000		0		140,000
		140,000				140,000
Net income (loss) from discontinued operations		436,121		0		436,121
Net income (loss) before cumulative effect of change in accounting principle		1,932,000		2,732,332		4,664,332
Cumulative effect of change in accounting principle (net of tax effect of $1,004,000)
Net income (loss)	$	1,932,000	$	2,732,332	$	4,664,332
Basic earnings (loss) per weighted average combined share:
Net income (loss) before discontinued operations and cumulative effect	$	0.70			$	1.97
Income (loss) from discontinued operations, net of tax		0.20				0.20
Cumulative effect of change in accounting principle, net of tax		0.00				0.00
Net income (loss)	$	0.90			$	2.17
Diluted earnings (loss) per weighted average combined share:
Net income (loss) before discontinued operations and cumulative effect	$	0.67			$	1.91
Income (loss) from discontinued operations, net of tax		0.20				0.20
Cumulative effect of change in accounting principle, net of tax		0.00				0.00
Net income (loss)	$	0.87			$	2.11

Notes to unaudited pro forma combined statement of operations and earnings retained in the business:

(A)	Entry represents reduction in revenue assuming Oxbridge Square sale occurred November 1, 2004.
(B)	Entry represents reduction in expenses and expenses related to the sale assuming the transaction occurred November 1, 2004.
(C)	Entry represents pretax gain on sale of asset.
(D)	Entry represents reduction in interest expense assuming the sale occurred November 1, 2004.
(E)	Entry represents the deferred tax provision calculated at the effective income tax rate of 40%.