Project Raven Discussion Materials Goldman Sachs & Co. LLC August 21, 2019 Goldman Sachs does not provide accounting, tax, or legal advice. Notwithstanding anything in this document to the contrary, and except as required to enable compliance with applicable securities law, you (and each of your employees, representatives, and other agents) may disclose t o any and all persons the US federal income and state tax treatment and tax structure of the transaction and all materials of any kind (including tax opinions and other tax analyses) that are provided to you relating to such tax treatment and tax structure, without Goldman Sachs imposing any limitation of any kind . STRICTLY CONFIDENTIAL, PRELIMINARY DRAFT AND SUBJECT TO CHANGE
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Situation Update On August 14th, Diamond filed a Schedule 13D/A related to ongoing discussions between special committees at Vail and Raven regarding a potential acquisition transaction of Raven with the following key parameters: Vail will acquire each of the outstanding shares of Raven’s Class A common stock for $15.00 per share in cash — Represents a 80.7% premium to Raven’s unaffected price (as of August 14, 2019) and at par with Raven’s IPO price of $15.00 per share Vested equity to be cashed out based on the “spread value” Unvested equity with a strike price <$15 to rollover into Vail securities based on $15 offer price Vail expects to grant $165mm of retention grants as part of the transaction — — — Diamond will exchange each of its shares of Raven’s Class B common stock for 0.055 of a share of Vail Class B common stock — — Implied Raven’s Class A common stock at $7.94 per share1 Represents a 1.4% premium to the unaffected Raven-Vail exchange ratio (as of August 14, 2019) and a 0.6% discount to the unaffected 30-day VWAP Raven-Vail exchange ratio (as of August 14, 2019) Values Diamond’s stake in Raven’s Class B common stock at $1,043mm2 The contemplated transaction would increase Diamond’s common stock ownership in Vail by 33bps to 81.1% and decrease Diamond’s fully-diluted ownership by 41bps to 77.0%3 — — Since Cisco reported Q4 earnings on and provided lower than expected guidance on August 14th, the stock has traded down ~9% and put pressure on other enterprise stocks, including Vail which is down ~9% over the same period Source: Bloomberg as of 20-Aug-2019 1 Raven price per share implied from exchange ratio of 0.055x and Vail share price of $144.42 as of 20-Aug-2019. 2 Illustrative calculation of value of Vail shares issued to Diamond assumes Vail share price of $144.42 as of 20-Aug-2019. Assumes 131.3m Raven shares held by Diamond. 3 Assumes 131.3m Raven Class B shares held by Diamond, 330.7m Vail shares held by Diamond (300.0m Class B, 30.7m Class A) and 409.2m total Vail shares outstanding. PF FDSO calculation assumes 15.2m unvested Raven RSUs roll into Vail RSUs, $165m of new retention grants to Raven employees and $192m of new retention awards to Calistoga employees. For more detail see page 10. 3 STRICTLY CONFIDENTIAL, PRELIMINARY DRAFT AND SUBJECT TO CHANGE
Historical Trading Performance Since Raven IPO Since FY2020 Q1 Earnings 200% 140.0 % 30D 20.9)% (9.4)% (9.3)% 180% 130.0 % 25.7 % 160% 120.0 % 140% 110.0 % 26.7 % 120% 8.7 % 8.6 % 2.6 % 100.0 % 100% (8.7)% 90.0 % 80% (12.5)% (15.2)% 80.0 % 60% (23.7%) 40% 70.0 % Apr-18 Aug-18 Dec-18 Apr-19 Aug-19 Jun-19 Jun-19 Jul-19 Jul-19 Aug-19 Cisco Raven Vail Cisco S&P 500 Raven Vail S&P 500 Source: Bloomberg as of 20-Aug-2019 1 Represents percentage change from closing share price as of unaffected date of 14-Aug-2019. Appendix 4 Indexed Price Indexed Price Pe rform ance (%)1 5D 10D 15D Rave n (3.8)% (12.4)% (16.0)% ( Vail (1.7)% (12.3)% (15.2)% Cis co (3.3)% (8.6)% (11.6)% 14-Aug-2019: Diamond 13D/A filed Unaffected 14-Aug-2019: Diamond 13D/A filed Unaffected (44.7%) STRICTLY CONFIDENTIAL, PRELIMINARY DRAFT AND SUBJECT TO CHANGE
Illustrative Analysis at Various ($ in millions, except per share values) Prices Value to Shareholders @ 0.055x eRatio Vail @ Unaffected Vail @ Spot @ $15.00 / Share Offer (x) Vail Stock Price 0.055 x $ 153.09 0.055 x $ 144.42 Implied Premium / (Discount) Metric $ 8.30 8.46 Unaffected 5-Day VWAP to Unaffected 1.4 % (0.5) (4.3)% (6.1) 80.7 % 77.3 10-Day VWAP to Unaffected 8.78 (4.1) (9.5) 70.8 30-Day VWAP to Unaffected 9.30 (9.5) (14.6) 61.2 52-Week High 29.15 (71.1) (72.8) (48.5) 52-Week Low 8.03 4.9 (1.1) 86.8 (-) Net Debt $(809) $(809) $(809) Implied Multiples Metric $ 889 915 FY'21E Revenue - Street¹ FY'21E Revenue - Raven Standalone² 1.9 x 1.8 1.7 x 1.7 4.3 x 4.1 Source: Per Raven Management (received 20-Aug-2019) and Vail Management (received 16-Aug-2019). Note: Assumes all options (vested or unvested) with an exercise price at or above $15.00 per share are cancelled. 1 Based on the mean of the combined estimates of analyst coverage per Thomson One. 2 Per Raven management (received 16-Aug-2019). 5 Implied Enterprise Value$ 1,662$ 1,516$ 3,790 Implied Equity Value$ 2,471$ 2,325$ 4,599 Contemplated transaction will increase Diamond common ownership in Vail to 81.14% (+33bps) Vail can issue net 5.9mm additional common shares (vesting, new share issuance, etc.) with Diamond ownership >80% Fully diluted Diamond ownership in Vail decreases to 77.00% (-41bps) Value per Share$ 8.42$ 7.94$ 15.00 STRICTLY CONFIDENTIAL, PRELIMINARY DRAFT AND SUBJECT TO CHANGE
Appendix
Historical Exchange Ratio Analysis ($ in millions, except per share values) | As of 20-Aug-2019 | Raven Unaffected Implied Diamond PF Common Economic Ownership Implied Diamond PF FD Economic Ownership Implied Exchange Ratio Implied Value to Raven Price Per Share Vail Price Per Share Implied Value to Offer Price 1 1 2 in Vail in Vail Diamond 1-Day 8.30 144.42 0.057 35 bps (39) bps 1,090 $ 47 5-Day VWAP 8.46 146.37 0.058 35 bps (39) bps 1,096 53 15-Day VWAP 9.09 154.26 0.059 36 bps (38) bps 1,117 74 30-Day VWAP 9.30 162.25 0.057 35 bps (39) bps 1,087 44 60-Day VWAP 11.21 168.23 0.067 40 bps (33) bps 1,263 220 52-Week High (Spot) 29.15 206.80 0.141 83 bps 17 bps 2,673 1,630 Source: Bloomberg as of 20-Aug-2019, Capitalization information Per Raven Management (received 20-Aug-2019) and Vail Management (received 16-Aug-2019) Note: Ownership calculations assume all options (vested or unvested) with an exercise price at or above $15.00 per share are cancelled 1 Assumes 131.3m Raven Class B shares held by Diamond, 330.7m Vail shares held by Diamond (300.0m Class B, 30.7m Class A) and 409.2m total Vail shares outstanding. PF FDSO calculation assumes 15.2m unvested Raven RSUs roll into Vail RSUs, $165m of new retention grants to Raven employees and $192m of new retention awards to Calistoga employees. For more detail see page 10. 2 Illustrative calculation of value of Vail shares issued to Diamond assumes Vail share price of $144.42 as of 20-Aug-2019. 3 Offer given as a fixed exchange ratio (received 13-Aug-2019); Raven price per share implied from exchange ratio of 0.055x and Vail share price of $144.42 as of 20-Aug-2019. 7 Appendix 52-Week Low (Spot) 8.03 129.33 0.062 37 bps (36) bps 1,177 134 Since FYQ1'20 Earnings VWAP 10.54 165.76 0.064 38 bps (35) bps 1,206 163 45-Day VWAP 10.30 164.86 0.062 38 bps (36) bps 1,184 142 20-Day VWAP 9.38 157.42 0.060 36 bps (38) bps 1,130 88 10-Day VWAP 8.78 149.03 0.059 36 bps (38) bps 1,117 74 3-Day VWAP 8.39 143.92 0.058 35 bps (39) bps 1,105 62 Class B Offer3 $ 7.94 $ 144.42 0.055 x 33 bps (41) bps $ 1,043 NA STRICTLY CONFIDENTIAL, PRELIMINARY DRAFT AND SUBJECT TO CHANGE
Historical Exchange Ratio Analysis ($ in millions, except per share values) | As of 14-Aug-2019 | Vail & Raven Unaffected Implied Diamond PF Common Economic Ownership Implied Diamond PF FD Economic Ownership Implied Exchange Ratio Implied Value to Raven Price Per Share Vail Price Per Share Implied Value to Offer Price 1 1 2 in Vail in Vail Diamond 1-Day 8.30 153.09 0.054 33 bps (42) bps 1,090 $(16) 5-Day VWAP 8.46 156.91 0.054 33 bps (42) bps 1,084 (22) 15-Day VWAP 9.09 163.79 0.055 34 bps (41) bps 1,115 10 30-Day VWAP 9.30 168.11 0.055 33 bps (41) bps 1,113 7 60-Day VWAP 11.21 172.59 0.065 39 bps (35) bps 1,305 200 52-Week High (Spot) 29.15 206.80 0.141 83 bps 16 bps 2,833 1,728 Source: Bloomberg as of 14-Aug-2019, Capitalization information Per Raven Management (received 20-Aug-2019) and Vail Management (received 16-Aug-2019) Note: Ownership calculations assume all options (vested or unvested) with an exercise price at or above $15.00 per share are cancelled 1 Assumes 131.3m Raven Class B shares held by Diamond, 330.7m Vail shares held by Diamond (300.0m Class B, 30.7m Class A) and 409.2m total Vail shares outstanding. PF FDSO calculation assumes 15.2m unvested Raven RSUs roll into Vail RSUs, $165m of new retention grants to Raven employees and $192m of new retention awards to Calistoga employees. For more detail see page 10. 2 Illustrative calculation of value of Vail shares issued to Diamond assumes Vail share price of $153.09 as of 14-Aug-2019. 3 Offer given as a fixed exchange ratio (received 13-Aug-2019); Raven price per share implied from exchange ratio of 0.055x and Vail share price of $153.09 as of 14-Aug-2019. 8 Appendix 52-Week Low (Spot) 8.03 129.33 0.062 37 bps (37) bps 1,248 143 Since FYQ1'20 Earnings VWAP 10.54 169.46 0.062 38 bps (37) bps 1,250 144 45-Day VWAP 10.30 169.31 0.061 37 bps (38) bps 1,223 117 20-Day VWAP 9.38 167.93 0.056 34 bps (41) bps 1,123 18 10-Day VWAP 8.78 160.12 0.055 33 bps (42) bps 1,102 (3) 3-Day VWAP 8.39 156.50 0.054 32 bps (43) bps 1,077 (28) Class B Offer3 $ 8.42 $ 153.09 0.055 x 33 bps (42) bps $ 1,106 NA STRICTLY CONFIDENTIAL, PRELIMINARY DRAFT AND SUBJECT TO CHANGE
Raven / Vail Exchange Ratio Analysis Since Raven IPO2 Since FY2020 Q1 Earnings2 0.075x 0.250 x nce Q1'20 rnings 2.8)% 1.6)% 0.070x 0.200 x 0.065x 0.150 x 0.064 x 34 x 0.060x 0.059 x 0.059 x 0.100 x 0.058 x 0.057 x 0.057 x 57 x 0.055x 0.055 x 0.050 x 0.050x Jun-19 Jun-19 Raven / Vail 10 Day VWAP 30 Day VWAP Class B Offer Jul-19 Jul-19 5 Day VWAP 15 Day VWAP Aug-19 0.0 x Apr-18 Aug-18 Dec-18 Apr-19 IPO Avg Aug-19 Since Q1'20 Earnings Raven / Vail Source: Bloomberg as of 20-Aug-2019 1 Representative exchange ratio premia calculations based on respective volume-weighted average prices for Raven and Vail. 14-Aug-2019 unaffected exchange ratio of 0.054x. 2 Raven share price held constant at unaffected price of $8.30 for exchange ratios calculated from 14-Aug-2019 onwards. Appendix 9 Exchange Ratio Exchange Ratio 0.1 0.0 14-Aug-2019: Diamond 13D/A filed Unaffected 0.054x Si E-Ratio Premia 5D 10D 15D 30D Ea Raven / Vail1 0.5 % (1.1)% (2.3)% (2.0)% (1 Class B Offer 2.0 % 0.3 % (0.9)% (0.6)% (1 STRICTLY CONFIDENTIAL, PRELIMINARY DRAFT AND SUBJECT TO CHANGE
Pro Forma Vail Capitalization Illustrative Max Dilution from Future Vesting Events Pro Forma Transaction Adjustments incremental e dilution $192m of Calistoga equity wards 5,105,683 (4,055,508) Note: Assumes all options (vested or unvested) with an exercise price at or above $15.00 per share are cancelled ¹ Illustration assumes that all outstanding RSUs and Options (with an exercise price below $15.00) are treated as vested / accelerated without TSM treatment of options. Illustratively includes $357mm of awards ($192m for both Calistoga and $165m Raven employees) granted by the Vail share price of $144.42 as of 20-Aug-2019. ² Pro Forma Vail shares issued calculated by taking Raven shares of 131.3mm and multiplying by an exchange ratio of 0.055x. ³ New Vail RSUs converted calculated by taking outstanding Raven RSUs of 15.2mm and multiplying by an exchange ratio of 0.104x (assumes unvested RSUs roll into Vail RSUs). New Vail RSUs granted (retention pool) calculated by dividing $357mm of awards granted by the Vail share price of $144.42 as of 20-Aug-2019. The 0.104x exchange ratio is based on Vail’s share price of $144.42 as of 20-Aug-2019 and Raven’s Class A offer price of $15.00. 4 New Vail options converted calculated by taking 10.1mm unvested options outstanding (with an exercise price below $15.00) and multiplying by an exchange ratio of 0.104x. Assumes vested options (with an exercise price below $15.00) cashed out at spread value and unvested options roll into Vail options. The new WAEP is calculated by dividing the unvested option WAEP of $9.70 (for all unvested options with an exercise price below $15.00) by an exchange ratio of 0.104x. The 0.104x exchange ratio is based on Vail’s share price of $144.42 as of 20-Aug-2019 and Raven Class A offer price of $15.00. 10 Appendix Class A Common Stock109,209,870-Class B Common Stock²300,000,0007,221,836 Total Common Stock409,209,8707,221,836 Restricted Stock / PSU³16,517,0004,055,508 Options Outstanding41,969,0001,050,175 WAEP4$ 36.50$ 93.35 Net Options (TSM)41,471,365371,374 Total Fully-Converted Shares Outstanding427,695,87012,327,519 Total Fully-Diluted Shares Outstanding427,198,23511,648,718 109,209,870 307,221,836Inc 5,105,683 ludes-114,315,553 307,221,836 421,537,389 16,517,000 1,969,000 $ 36.50 1,471,365 440,023,389 439,525,753 416,431,706futur from 20,572,508a 3,019,175 $ 56.27 (1,050,175) - 1,842,738 440,023,389 438,846,952 (371,374) - 678,801 Vail Shares Held by Diamond330,678,605337,900,441 % Common Ownership % Fully-Diluted Ownership % Fully-Converted Ownership77.32%76.79% Source: Per Raven Management (received 20-Aug-2019) and Vail Management (received 16-Aug-2019) 337,900,441 76.79% 80.16% 76.88% 80.81% 77.41% 81.14% 77.00% Pro Forma Full Acceleration¹ Pro Forma Adjustments Current STRICTLY CONFIDENTIAL, PRELIMINARY DRAFT AND SUBJECT TO CHANGE
