SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
FORM 8-K/A
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) NOVEMBER 7, 1997
------------------------------
PREMIER PARKS INC.
- -------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 0-9789 73-613774
- -------------------------------------------------------------------------------
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
11501 NORTHEAST EXPRESSWAY, OKLAHOMA CITY, OKLAHOMA 63131
- -------------------------------------------------------------------------------
(Address of principal executive offices, including zip code)
Registrant's telephone number, including area code (405) 475-2500
---------------------------
- -------------------------------------------------------------------------------
(Former name or former address, if changed since last report)
Page 1
(Exhibit index is found on page 3)
ITEM 7. Financial Statements and Exhibits.
(a) Financial Statements of Kentucky Kingdom, Inc. at November 2, 1997 and
for the 52-week period then ended.
(b) Pro Forma Financial Statements of Premier Parks Inc. for the year
ended December 31, 1996 and as of and for the nine months ended
September 30, 1997.
(c) The following documents are filed herewith as exhibits to this Form
8-K/A:
*10(a) Stock Purchase Agreement dated as of September 26, 1997,
among the Registrant, Kentucky Kingdom, Inc., Hart-Lunsford
Enterprises, LLC, and Edward J. Hart (incorporated by
reference from Exhibit 10.1 to the Registrant's Quarterly
Report on Form 10-Q for the quarter ended September 30,
1997).
*10(b) Employment Agreement dated as of November 7, 1997, between
the Registrant and Edward J. Hart (incorporated by reference
from Exhibit 10.2 to the Registrant's Quarterly Report on
Form 10-Q for the quarter ended September 30, 1997).
23.1 Consent of Carpenter, Mountjoy & Bressler, PSC
- ---------
*Previously filed.
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.
Dated: July 14, 1998
PREMIER PARKS INC.
By: /S/ KIERAN E. BURKE
------------------------------
Kieran E. Burke
Chairman of the Board and
Chief Executive Officer
AUDITED FINANCIAL STATEMENTS
KENTUCKY KINGDOM, INC.
November 2, 1997
KENTUCKY KINGDOM, INC.
FINANCIAL STATEMENTS
November 2, 1997
Audited Financial Statements
Independent Auditor's Report.............................. 1
Financial Statements......................................
Balance Sheet........................................... 2
Statement of Income..................................... 3
Statement of Changes in Stockholders' Equity............ 4
Statement of Cash Flows................................. 5
Notes to Financial Statements........................... 6
INDEPENDENT AUDITOR'S REPORT
To the Stockholders
Kentucky Kingdom, Inc.
Louisville, Kentucky
We have audited the accompanying balance sheet of Kentucky Kingdom, Inc.
as of November 2, 1997, and the related statement of income, changes in
stockholders' equity and cash flows for the year then ended. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based
on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Kentucky Kingdom,
Inc. as of November 2, 1997, and the results of its operations and its cash
flows for the year then ended in conformity with generally accepted
accounting principles.
Louisville, Kentucky Carpenter, Mountjoy & Bressler PSC
December 12, 1997 (except for
Notes J and K which are as of
July 10, 1998)
KENTUCKY KINGDOM, INC.
BALANCE SHEET
November 2, 1997
ASSETS
Current Assets
Restricted cash......................................... $ 500,000
Accounts receivable--trade (net of allowance for
doubtful accounts $135,000)............................ 514,009
Accounts receivable--other.............................. 437,188
Inventory............................................... 402,181
Prepaid expenses and other current assets............... 527,636
-----------
Total current assets.................................. 2,381,014
Property and Equipment
Land.................................................... 2,673,025
Rides................................................... 43,940,625
Park improvements....................................... 11,091,909
Buildings............................................... 6,247,601
Equipment and fixtures.................................. 6,138,256
-----------
70,091,416
Less accumulated depreciation........................... (10,004,074)
-----------
60,087,342
Other
Loan and lease acquisition fees and
other intangible assets (net of
accumulated amortization of $985,000)................. 2,626,115
-----------
$65,094,471
-----------
-----------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Checks written in excess of cash....................... $ 999,049
Accounts payable....................................... 1,792,548
Accrued interest payable............................... 833,017
Accrued payroll and payroll taxes withheld............. 296,505
Accrued rent and other liabilities..................... 1,384,552
Dividends payable...................................... 184,380
Notes payable.......................................... 30,760,229
Current portion of capital lease obligations........... 21,414,891
-----------
Total current liabilities............................ 57,665,171
Long-Term Obligations
Capital lease obligations, less current portion........ 176,499
Deferred revenues...................................... 135,522
Total long-term obligations............................ 312,021
Other Commitments and Contingencies...................... --
-----------
Total liabilities.................................... 57,977,192
Stockholders' Equity
Preferred stock, no par value,
50,000 shares authorized, 30,073 shares
issued and outstanding............................... 3,073,000
Common stock, no par value,
200,000 shares authorized, 185,577 shares
issued and outstanding............................... 15,019,408
Accumulated deficit.................................... (10,975,129)
------------
7,117,279
-----------
$65,094,471
-----------
-----------
See accompanying notes to financial statements
2
KENTUCKY KINGDOM, INC.
STATEMENT OF INCOME
Year ended November 2, 1997
Revenues
Theme park admissions.................................. $11,561,897
Theme park food, merchandise and other................. 10,154,319
----------
21,716,216
Operating Expenses
Cost of products sold.................................. 2,684,399
Operating expense...................................... 5,984,176
Selling, general and administrative.................... 5,746,993
Depreciation and amortization.......................... 2,711,000
----------
17,126,568
----------
Income from operations............................... 4,589,648
Other Income (Expense)
Interest expense....................................... (4,758,944)
Royalty expense........................................ (174,052)
Interest income........................................ 50,587
Loss on sale of ride................................... (174,085)
Foreign currency exchange gain......................... 526,892
----------
(4,529,602)
----------
Income before income taxes........................... 60,046
Income Taxes
Current tax expense.................................... 600,000
Deferred tax (benefit)................................. (600,000)
----------
--
----------
Net Income........................................... $ 60,046
----------
----------
See accompanying notes to financial statements
3
KENTUCKY KINGDOM, INC.
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
For the year ended November 2, 1997
COMMON PREFERRED ACCUMULATED
STOCK STOCK (DEFICIT) TOTAL
------------- ------------ -------------- ------------
Balance at October 29, 1996.......................... $ 15,019,408 $ 1,500,000 $ (10,850,795) $ 5,668,613
Net income......................................... -- -- 60,046 60,046
Sale of preferred stock--
15,730 shares.................................... -- 1,573,000 -- 1,573,000
Preferred stock dividend........................... -- -- (184,380) (184,380)
------------- ------------ -------------- ------------
Balance at November 2, 1997.......................... $ 15,019,408 $ 3,073,000 $ (10,975,129) $ 7,117,279
------------- ------------ -------------- ------------
------------- ------------ -------------- ------------
See accompanying notes to financial statements
4
KENTUCKY KINGDOM, INC.
STATEMENT OF CASH FLOWS
Year ended November 2, 1997
Cash Flows From Operating Activities
Net income................................................................... $ 60,046
Adjustments to reconcile net income to net cash provided by operating
activities
Depreciation and amortization.............................................. 2,711,000
Loss on sale of rides...................................................... 174,085
Deferred income taxes...................................................... (600,000)
Changes in assets and liabilities
Inventories.............................................................. 23,052
Accounts receivable...................................................... 102,560
Prepaid expenses and other current assets................................ 18,461
Accounts payable......................................................... (716,812)
Accrued interest payable................................................. 515,175
Deferred revenue......................................................... (1,215,996)
Accrued expenses......................................................... (484,839)
Dividend payable......................................................... (74,635)
----------
Net cash provided by operating activities.................................... 512,097
----------
Cash Flows From Investing Activities
Proceeds from sale of rides.................................................. 4,125,000
Purchase of property and equipment........................................... (3,551,650)
Restricted cash.............................................................. (500,000)
Additions to intangible assets............................................... (12,826)
----------
Net cash provided by investing activities.................................... 60,524
----------
Cash Flows From Financing Activities
Checks written in excess of cash............................................. 817,944
Proceeds from debt obligations............................................... 8,201,439
Payments on debt obligations................................................. (3,048,795)
Payments on capital lease obligations........................................ (8,116,209)
Sale of preferred stock...................................................... 1,573,000
----------
Net cash used by financing activities........................................ (572,621)
----------
Increase (Decrease) in Cash.................................................... --
Cash and Cash Equivalents, Beginning of Year................................... --
----------
Cash and Cash Equivalents, End of Year......................................... $ --
----------
----------
Non-cash transactions
Capital lease acquisition.................................................... $15,720,000
----------
----------
See accompanying notes to financial statements
5
KENTUCKY KINGDOM, INC.
NOTES TO FINANCIAL STATEMENTS
November 2, 1997
NOTE A--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization: Kentucky Kingdom, Inc. (the Company) is a corporation that
owns and operates Kentucky Kingdom-The Thrill Park in Louisville, Kentucky.
Restricted Cash: As of November 2, 1997, this account consists of funds
which have been set aside in an escrow account to secure a letter of credit.
Inventory: Inventory consists of merchandise, games and food items, and is
valued at the lower of cost or market using the first-in, first-out method.
Statement of Cash Flows: For purposes of the statement of cash flows, the
Company considers all highly liquid debt instruments with a maturity of three
months or less to be cash equivalents and excludes restricted cash. Cash paid
for interest was approximately $4,200,000 for the year ended November 2, 1997.
Capitalized Interest on Construction Projects: Capitalized interest on
construction projects totaled approximately $99,000 for the year ended November
2, 1997.
Property and Equipment: Property and equipment are stated at cost.
Expenditures which add to the productive capacity or extend the useful life of
an asset are capitalized. Maintenance and repairs are expensed as incurred.
Depreciation is calculated over the estimated useful life of the individual
assets using the straight-line method. Estimated useful lives follow:
Major rides 20--50 years
Components of major rides 15 years
Family rides 15--20 years
Small rides 7--15 years
Park improvements 20 years
Buildings 10 or 30 years
Equipment and fixtures 5--7 years
Intangible Assets: Loan and lease origination fees include costs incurred in
connection with financing transactions and are amortized over the life of the
loans and leases. Goodwill is amortized over five years. As a result of the sale
discussed in Note I, these assets were written off at November 7, 1997.
Income Taxes: Income taxes are normally provided for the tax effects of
transactions reported in the financial statements and consist of taxes currently
payable plus deferred taxes related primarily to differences between the bases
of property and equipment for financial and income tax reporting. Due to the
sale transaction discussed in Note I substantially all timing differences have
reversed. Current expense consists of federal and local income tax (See Note H).
Revenue Recognition: Revenues from sponsors are generally recorded over the
period of the applicable agreement.
Continued
6
KENTUCKY KINGDOM, INC.
NOTES TO FINANCIAL STATEMENTS--CONTINUED
November 2, 1997
NOTE A--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES--CONTINUED
Foreign Currency Transactions: Gains and losses resulting from foreign
currency transactions (transactions denominated in a currency other then the
Company's functional currency) are included in net income.
The Company leases an amusement ride from a foreign supplier, under a
capital lease. The lease transaction is denominated in the currency of the
supplier. Changes in the exchange rates subsequent to the transaction dates
result in translation gains or losses that are accrued by the Company. For
income tax purposes, only gains and losses related to actual payments for these
transactions are included in the statement of operations.
Concentration of Credit Risk: The Company maintains cash escrow balances at
a local bank. The cash accounts are insured by FDIC up to $100,000. Amounts in
excess of insured limits were $893,570 at November 2, 1997.
Management Estimates: The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.
NOTE B--NOTES PAYABLE
Secured notes to stockholders:
Note payable to stockholder secured by food service equipment,
principal due in monthly installments of $2,083 plus interest
through April, 1998, remaining principal due May, 1998,
interest accrues at prime plus four percent, effective rate
of 12.50% at November 2, 1997.................................. $ 39,584
Convertible debenture payable to stockholder, secured by
wooden roller coaster, interest is payable monthly, at 10.5%,
principal is due September, 1999............................... 1,200,000
Note payable to stockholder, secured by wooden roller
coaster, interest at 12.5% is payable monthly, principal
is due on January 5, 1998...................................... 2,000,000
Convertible debenture payable to stockholder, secured by
wooden roller coaster, interest is payable monthly, at 12.5%,
principal is due November, 2000................................ 1,500,000
Continued
7
KENTUCKY KINGDOM, INC.
NOTES TO FINANCIAL STATEMENTS--CONTINUED
November 2, 1997
NOTE B--NOTES PAYABLE--CONTINUED
Note payable to stockholder, secured by wooden roller coaster,
interest at 14% is payable monthly, principal is due on
March, 1998................................................... $2,000,000
Note payable to stockholder, secured by food service equipment,
principal due in monthly installments of $10,000 through
May, 1998, remaining principal due June, 1998, interest is
payable monthly at prime plus four percent, effective
rate of 12.50% at November 2, 1997............................ 80,000
Total secured notes payable to stockholders.............. 6,819,584
Other secured notes:
Note payable secured by mortgage on land, interest accrues at
US dollar LIBOR rate plus 50 basis points, principal and
interest payable in semi-annual payments beginning
March, 1994 through March, 1999............................... 1,096,765
Note payable, secured by mortgage on land, interest accrues at
prime plus 1.5% (effective rate 10.00% at November 2, 1997)
principal payable due October and April through July, 2000
interest payable quarterly through November, 2000............. 5,500,000
Note payable secured by mortgage on land, principal and
interest payable in monthly installments through July, 1998,
interest accrues on outstanding balance at 6.2%............... 8,779
$2,000,000 revolving line of credit payable to bank secured
by accounts receivable, inventory and fixed assets of the
Company, interest accrues at bank's prime rate plus 1.5%,
effective rate of 10.0% at November 2, 1997, interest is
payable quarterly, principal is due December, 1997............ 1,388,946
Term note payable, guaranteed by US Government Small
Business Administration, interest accrues at 6.69%, principal
and interest payable in monthly installments of $8,615
beginning in August, 1992, due July, 2002..................... 411,733
Term note payable, secured by personal guarantees of majority
stockholders, interest accrues at 5%, principal and interest
payable in monthly installments of $2,652 beginning in
July, 1992, due June, 2002.................................... 132,195
Note payable, secured by bank letter of credit, which is
guaranteed by a stockholder of the Company, interest accrues
at US dollar LIBOR rate plus 50 basis points, principal and
interest payable in semi-annual payments beginning
March, 1992, due March, 1999.................................. 244,924
Continued
8
KENTUCKY KINGDOM, INC.
NOTES TO FINANCIAL STATEMENTS--CONTINUED
November 2, 1997
NOTE B--NOTES PAYABLE--CONTINUED
Other secured notes--continued:
Note payable to bank, secured by $500,000 certificate of deposit,
interest payable monthly at 10.25%; four principal payments due
on June 1, July 1, August 1 and September 1, with unpaid
principal and interest due December 31, 1998.................. $1,800,000
Note payable to bank, secured by personal guarantee of a
stockholder, interest payable monthly at the prime rate
(8.50% at November 2, 1997)................................... 1,000,000
Note payable to ride manufacturer, secured by ride equipment,
payable in four varying installments between September, 1996
and September, 1997 matures November 1, 1997, at a discounted
interest rate of 9.5%......................................... 556,216
Note payable, secured by mortgage on land, principal and
interest (at 7.35%) payable in monthly installments
through April, 2006........................................... 358,907
Notes payable, secured by equipment, principal and interest
(from 3.907% to 14.989%) payable in monthly installments
through July, 1999............................................ 12,610
Note payable to ride manufacturer, secured by ride equipment,
payable in varying installments between August, 1996 and
November, 1997, matures at November 2, 1997 at an interest
rate of 9.5%.................................................. 556,216
Various notes payable to Premier Parks, Inc., secured by
equipment and land, interest accrues at 8.0%, principal and
interest due at the Stock Purchase transaction closing date
(see Note I).................................................. 6,401,439
Various notes payable, secured by mortgages on land, principal
and interest payments payable in monthly installments
(interest rates at November 2, 1997 range from 8.5% to 11%)
with varying maturity dates from December, 1998 through
August, 2015.................................................. 783,298
-----------
Total secured notes payable................................... 20,252,028
CONTINUED
9
KENTUCKY KINGDOM, INC.
NOTES TO FINANCIAL STATEMENTS--CONTINUED
November 2, 1997
NOTE B--NOTES PAYABLE--CONTINUED
Unsecured notes:
Note payable to three individuals, two of
whom are stockholders, unsecured, interest
accrues at 13%; interest is payable
quarterly, principal due December, 1997. $ 400,000
Various notes payable to stockholders,
unsecured, interest accrues at prime rate as
reported by Wall Street Journal, effective
rate of 8.50% at November 2, 1997, interest
payable monthly, principal due April, 1999. 500,000
Convertible debentures payable to
stockholders in varying amounts, interest
payable monthly at 14%, principal and unpaid
interest due April, 2000. 2,788,617
-----------
Total unsecured notes payable to stockholders 3,688,617
-----------
Total notes payable $30,760,229
-----------
-----------
Subsequent to year end, the Company entered into an agreement with a
third-party (see Note I) to sell all of the Company's outstanding common and
preferred stock on November 7, 1997. Subsequent to the transaction, the Company
used proceeds from the sale to satisfy all notes payable listed above.
Consequently, all notes payable are classified as current liabilities.
At November 2, 1997, the Company had a line of credit of $2,000,000 at a
local bank with an interest rate of prime plus 1.5%, which expired December,
1997. At November 2, 1997, the Company had $667,000 available on the line of
credit.
There are certain affirmative and negative covenants on the above
obligations. All notes payable with covenants were paid off as previously
discussed.
NOTE C--CAPITAL LEASE OBLIGATIONS
The Company leases 32 rides under 9 capital leases. The Company also leases
maintenance and office equipment under various capital leases. The economic
substance of the leases is that the Company is financing the acquisition of the
assets through the leases, and accordingly, they are recorded in the Company's
assets and liabilities.
10
KENTUCKY KINGDOM, INC.
NOTES TO FINANCIAL STATEMENTS--CONTINUED
November 2, 1997
NOTE C--CAPITAL LEASE OBLIGATIONS (CONTINUED)
The following is an analysis of the assets under capital leases included in
property and equipment:
Rides.................................... $31,532,818
Maintenance equipment.................... 1,304,830
Office equipment......................... 3,550
----------
32,841,198
Less accumulated depreciation............ 4,039,589
----------
$28,801,609
----------
----------
All of the leases contain a bargain purchase option at the end of their
respective lease term.
The following is a schedule of future minimum payments required under the
leases together with their present value at November 2, 1997:
MAINTENANCE
FOR THE FISCAL AND OFFICE
YEAR ENDED RIDE EQUIPMENT TOTAL
- --------------------------------------- ------------- ------------ -------------
1998 $ 20,805,253 $ 609,638 $ 21,414,891
1999 -- 84,355 84,355
2000 -- 78,148 78,148
2001 -- 78,148 78,148
2002 and thereafter........... -- 49,831 49,831
------------- ---------- -------------
Total minimum lease payments 20,805,253 900,120 21,705,373
Less amounts representing interest........ -- 113,983 113,983
------------- ---------- -------------
Present value of minimum lease payments... 20,805,253 786,137 21,591,390
Current portion........................... 20,805,253 609,638 21,414,891
------------- ---------- -------------
Long-term portion......................... $ -- $ 176,499 $ f 176,499
------------- ---------- -------------
------------- ---------- -------------
All ride leases were paid off commensurate with the sale transaction;
therefore, the above minimum lease payments represent the full lease payoff and
there were no amounts representing interest.
11
KENTUCKY KINGDOM, INC.
NOTES TO FINANCIAL STATEMENTS--CONTINUED
November 2, 1997
NOTE D--OPERATING LEASE COMMITMENTS
The Company leases land and certain improvements on which part of the
amusement park is located under an operating lease expiring in 2019, with
three ten-year renewal options. The lease provides for annual lease payments
of approximately $990,000 in 1998, $1,010,000 in 1999, $877,000 in 2000, with
payments thereafter of previous year's rent plus 3% escalator.
The Company leases a warehouse from a related party under an operating lease
that expires in March, 2000. The lease provides for monthly payments of $3,043,
which are adjusted annually for cost of living increases.
Future minimum lease payments for all of the operating leases:
FOR THE FISCAL
YEAR ENDED TOTAL
--------------- ------------
1998 $ 1,054,875
1999 1,078,214
2000 939,760
2001 952,422
2002 965,463
------------
$ 4,990,734
NOTE E--CONTINGENCY
The Company is self-insured with respect to personal injury claims. Under
the terms of the self-insurance arrangement, the Company is responsible for the
first $25,000 due on each individual claim. The Company has insurance to cover
any expense over $25,000. During the year, the Company paid claims totaling
approximately $5,000 and no claim individually exceeded the company's liability
per claim of $25,000. At November 2, 1997, the Company provided $110,000 for
potential liabilities on various claims.
NOTE F--PENSION PLAN
Effective January 1, 1995 the Company established a defined contribution
profit sharing plan with a 401(k) feature. Employees must be at least 21 years
old and have worked one year to be eligible for participation in the plan. The
Company makes matching employer contributions equal to 50% of the employee
deferral, up to a maximum of 2% of employees' gross wages. The Company
contributed approximately $25,000 to the plan under the matching feature for
1997.
12
KENTUCKY KINGDOM, INC.
NOTES TO FINANCIAL STATEMENTS--CONTINUED
November 2, 1997
NOTE G--STOCKHOLDERS' EQUITY
Preferred Stock: In April, 1993, the Company issued 15,000 shares of
preferred stock Class A, $100 par value. The proceeds were used to fund the
Park's food service operation, which at that time was being taken over by the
park after contracting with an outside concessionaire. During 1997, the Company
issued 15,000 shares of preferred stock, $100 par value for the same purpose.
The Class A shares pay a 6% dividend annually and were callable at a premium
beginning December 31, 1994 by a majority vote of the stockholders. The call
provisions expire December 31, 2001. The call premiums range from $90 in 1994 to
$17 in 2001.
The Class B shares issued during 1997 pay a 10% dividend annually and were
callable at a premium beginning December 31, 1997 by a majority vote of the
stockholders. The call provisions expire December 31, 2001. The call premiums
range from $20 in 1997 to $0 in 2007.
The Class A preferred shareholders were also to receive a food and beverage
royalty based on the gross food and beverage sales for a ten year period
beginning in 1993. The royalty percentage per year is as follows:
1997 5.25%
1998 through 2002 4.00%
The Class B preferred shareholders were to receive a food and beverage
royalty on net food sales for a ten year period beginning in 1997. The royalty
percentage per year is stated at 10%.
Commensurate with the sale discussed in Note I, all preferred shareholders
were redeemed subsequent to year end. Amounts paid to preferred shareholders
totaled $4,903,880. This amount included the par value and all dividends and
royalties.
Holders of the convertible debentures may, at their option any time prior to
maturity, convert the debenture into fully paid shares of common stock, no par
value. The number of shares of common stock into which debentures may be
converted is determined by dividing the aggregate principal amount together with
unpaid interest to the date of conversion by the conversion price in effect at
the time of conversion. The initial conversion price was $190.
The conversion price may be adjusted upon the event of future sale, dividend
or other distribution of common stock. A formula stipulated in the debenture
adjusts the conversion price based on such factors as the total number of
outstanding shares and the consideration received on any new stock issued.
The Company issued $1,200,000 and $1,500,000 convertible debentures to a
major stockholder on October 27, 1996. The convertible debentures bear interest
at 10.5% and 12.5%, respectively. Interest only is due on the debentures
monthly. Principal and any unpaid interest are due in full in September, 1999
and on November 6, 2000, respectively. The conversion privileges, initial
conversion price, and subsequent adjustments to the conversion price are similar
to the terms of the subordinated debentures described above.
Continued
13
KENTUCKY KINGDOM, INC.
NOTES TO FINANCIAL STATEMENTS--CONTINUED
November 2, 1997
NOTE G--STOCKHOLDERS' EQUITY--CONTINUED
In February, 1996, the Company obtained from a stockholder/lender, a
$2,000,000 working capital loan that was scheduled to mature in September,
1996. In September, 1996, the maturity date for the loan was extended to
March 30, 1998. In connection with the extension, the Company granted
warrants to the stockholder/lender to purchase approximately 6,000 shares of
company stock. If any part of the debt is outstanding on either April 1, 1997
or October 1, 1997, the warrants increase to 7,704 and 9,293, respectively.
As of the balance sheet date no debenture holders exercised these conversion
privileges.
As a result of the sale discussed in Note I, all convertible debentures were
paid off subsequent to year end.
NOTE H--INCOME TAXES
For income tax purposes, as of November 2, 1997, the Company has
approximately $2,000,000 of net operating loss carryforwards which expire in the
years 2008 and 2012. At November 2, the Company has approximately $2,000,000 of
loss carryforwards under alternative minimum tax regulations during years with
no regular tax. Accordingly, the Company could incur alternative minimum tax. A
valuation allowance for the entire amount of the combined deferred tax asset
resulting from the net operating loss carryforward has been recorded at November
2, 1997, because it is management's opinion that it is more likely than not that
the deferred tax asset will not be recognized.
Income tax expense (benefit) for the fiscal year ended 1997 consists of the
following:
CURRENT DEFERRED TOTAL
---------- ----------- -----
US Federal...................... $ 200,000 $ (200,000) $ --
Local........................... 400,000 (400,000) --
---------- ----------- -----
$ 600,000 $ (600,000) $ --
---------- ----------- -----
---------- ----------- -----
The recorded current US Federal tax expense results from the alternative
minimum tax. The current local tax results from the fact that the net operating
loss carryforwards are not allowed for local income tax purposes. As stated in
Note A, as a result of the sale transaction discussed in Note I, substantially
all deferred timing differences have reversed.
14
KENTUCKY KINGDOM, INC.
NOTES TO FINANCIAL STATEMENTS--CONTINUED
November 2, 1997
NOTE I--SUBSEQUENT EVENT--SALE TRANSACTION
On September 26, 1997, Kentucky Kingdom--The Thrill Park (the Park) agreed
with the signing of a Stock Purchase Agreement to sell all of the membership
interests of KKI, LLC, which at the closing owned substantially all of the
assets used in the operation of the Park to Premier Parks, Inc. (PPI), a
publicly traded company which owns and operates multiple amusement park
facilities across the country. The closing of the transaction occurred on
November 7, 1997. As part of the Sale Transaction, Hart-Lunsford Enterprises,
LLC (H-L), a leasing entity operated by the majority stockholders of the Park,
agreed to an early termination of its lease agreements with the Park for a fee
of $2 million.
PPI agreed to pay $62 million for the membership interests, and paid
$2,000,000 in shares of PPI stock to H-L as an inducement fee. PPI will pay
additional amounts in shares of PPI stock to the Park over each of the next
three operating seasons if the Park achieves certain revenue targets. For the
1998 operating season, there are two revenue targets and two additional sums
to be paid if certain revenue targets are achieved. In 1999 and 2000, there
is one revenue target each year tied to an additional payment. The total
amount that could be earned under this earn-out provision is $7.5 million for
1998, $3 million for 1999 and $2 million for 2000.
For income tax purposes, PPI and KKI, LLC agreed for the sale of the
membership interests to be treated under Internal Revenue Code Section 338,
which allows the parties to treat the sale as if PPI and KKI, LLC were buying
and selling the underlying assets of the Park, respectively.
At closing, the Park used sales proceeds to retire or redeem all secured and
unsecured bank debt, convertible debentures, stockholder loans, preferred stock,
and other long-term financing totaling approximately $58,318,000. PPI also
assumed certain obligations of KKI, LLC, including $268,000 of capital leases
and approximately $740,000 of current liabilities. The balance of the proceeds,
or about $2.896 million, was paid to the Park in shares of PPI stock on November
7, 1997.
NOTE J--LEGAL MATTERS AND CONTINGENCIES
The Company has received notices from the Kentucky Revenue Cabinet stating
that the Company has been selected for a sales and use tax audit and a property
tax audit.
The sales and use tax audit period will be October 16, 1996 through February
28, 1997 with respect to leased attractions. All other transactions will be
audited for the period October 1, 1994 through February 28, 1998. In December
1996, the Company purchased various equipment used to construct a theater. The
Company has requested an accurate breakdown of the purchase price into its
taxable and non-taxable components. Once this breakdown is provided, the Company
will self assess and remit the applicable tax on the taxable portion of the
purchase. No provision has been made in the financial statements for this amount
since it cannot be presently determined. Once this amount is remitted management
believes the likelihood of any material assessment by the Cabinet is remote.
Continued
15
KENTUCKY KINGDOM, INC.
NOTES TO FINANCIAL STATEMENTS--CONTINUED
November 2, 1997
NOTE J--LEGAL MATTERS AND CONTINGENCIES--CONTINUED
The Company is presently being audited by the Kentucky Department of
Revenue for property tax compliance. The Company's business, its attractions,
and its lease from the State Fair Board combine to present a unique situation
under Kentucky's property tax law. During the fieldwork portion of the audit,
the state auditor verbally represented that the state would assert that all
rides would be considered personal tangible property. This assertion has not
been made in writing nor has the state quantified its impact. The Company
intends to vigorously challenge any assessment of Kentucky property tax as a
result of the audit. Consequently, no provision has been made in the
financial statements for the potential tax liability, if any, resulting from
the property tax audit.
The Company is involved in various other legal matters both as plaintiff and
defendant. The outcome is not known in these cases and management believes an
adequate provision has been made in these financial statements. However,
management believes that any additional losses from these claims, if any, would
not be material to the financial position or operating results of the Company.
NOTE K--(AS OF JULY 10, 1998)--CONTINGENT ASSET
A Jefferson County jury has awarded the Company nearly $4 million in
damages in its defamation lawsuit against WHAS Television.
Kentucky Kingdom sued WHAS following a series of reports about a 1994
accident involving the "StarChaser" rollercoaster.
The jury awarded $375,000 in damages for lost profits in 1996; $100,000
in damages for lost profits in 1994; $2.5 million in punitive damages; and $1
million for damage to the park's reputation. Attorneys for WHAS-TV have
appealed the verdict. Since the contingent asset is subject to appeal it
does not affect the November 2, 1997 financial statements as originally
presented.
16
Pro Forma Financial Statements of Premier Parks Inc. for the year ended
December 31, 1996 and as of and for the nine months ended September 30, 1997
UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS
The following unaudited pro forma combined financial statements (the
"Pro Forma Financial Statements") of the Company are based upon the
historical financial statements of Premier, Elitch Gardens Company, The Great
Escape (owned by Storytown), FRE and Concord (the owners of Waterworld),
Stuart Amusement Company (the owner of Riverside) and Kentucky Kingdom. The
financial statements of Kentucky Kingdom are included elsewhere in this Form
8-K/A. The Unaudited Pro Forma Combined Statement of Operations for the year
ended December 31, 1996 gives effect to (i) the June 1996 and January 1997
equity offerings relating to the acquisitions of the companies or assets
previously mentioned, the presumed issuance of the Exchangeable Preferred
Stock, the Elitch Gardens acquisition and the Waterworld acquisition as if
they had occurred on January 1, 1996; (ii) The Great Escape acquisition as if
it had occurred on November 1, 1995; (iii) the Riverside acquisition as if it
had occurred on October 1, 1995; and (iv) the acquisition of Kentucky Kingdom
as if it occurred on October 29, 1995. The Unaudited Pro Forma Combined
Statement of Operations for the nine months ended September 30, 1997 gives
effect to the acquisition of Kentucky Kingdom and the January 1997 equity
offering as if they had occurred on January 1, 1997.
The Unaudited Pro Forma Combined Balance Sheet is presented as if the
acquisition of Kentucky Kingdom occurred on September 30, 1997. The acquisition
has been accounted for using the purchase method of accounting. Allocations of
the purchase price have been determined based upon estimates of fair value.
The Pro Forma Financial Statements are for informational purposes only,
have been prepared based on estimates and assumptions deemed by the Company to
be appropriate and do not purport to be indicative of the financial position or
results of operations which would actually have been attained if the
acquisitions had occurred as presented in such statements or which may be
achieved in the future.
PREMIER PARKS INC.
UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1996
(In thousands, except for share and per share data)
HISTORICAL
COMBINED
PREMIER
HISTORICAL 1996 AND 1996 HISTORICAL COMBINED PRO FORMA COMPANY
PREMIER ACQUISITIONS(1) ACQUISITIONS KENTUCKY COMPANY ADJUSTMENTS PRO FORMA
---------- --------------- ------------ ---------- -------- ----------- ---------
Revenue:
Theme park admission............. $41,162 $34,580 $75,742 $9,282 $85,024 $ - $85,024
Theme park food, merchandise
and other...................... 52,285 31,615 83,900 6,000 89,900 300(2) 90,200
---------- --------------- ------------ ---------- -------- ----------- ---------
Total revenue............... 93,447 66,195 159,642 15,282 174,924 300 175,224
---------- --------------- ------------ ---------- -------- ----------- ---------
Operating costs and expenses:
Operating expense................ 42,425 25,245 67,670 5,430 73,100 (350)(3) 71,275
Selling, general and (1,475)(4)
administrative................. 16,927 19,980 36,907 6,544 36,907 (6,214)(5) 30,693
Costs of products sold........... 11,101 9,608 20,709 1,697 22,406 (180)(6) 22,226
Depreciation and amortization.... 8,533 14,160 22,693 2,375 25,068 (6,152)(7) 18,916
---------- --------------- ------------ ---------- -------- ----------- ---------
Total....................... 78,986 68,993 147,979 16,046 157,481 (14,371) 143,110
---------- --------------- ------------ ---------- -------- ----------- ---------
Income (loss) from operation..... 14,461 (2,798) 11,663 (764) 17,443 14,671 32,114
Other income (expense):
Interest expense, net............ (11,121) (5,222) (16,343) (4,100) (20,443) 9,322(8) (11,121)
Other income (expense)........... (78) (290) (368) (290) (78) (188)(9) (266)
---------- --------------- ------------ ---------- -------- ---------- ---------
Total............................ (11,199) (5,512) (16,711) (3,810) (20,521) 9,134 (11,387)
Income (loss) before income
taxes.......................... 3,262 (8,310) (5,048) (4,574) (3,078) 23,805 20,727
Income tax expense (benefit)..... 1,497 412 1,909 (1,600) 309 7,982(10) 8,291
---------- --------------- ------------ ---------- -------- ----------- ---------
Net income (loss)................ $1,765 $(8,722) $(6,957) $(2,974) $(3,383) $15,823 $12,436
---------- --------------- ------------ ---------- -------- ----------- ---------
---------- --------------- ------------ ---------- -------- ----------- ---------
Net income (loss) applicable
to common stock................ $1,162 $(8,722) $(6,957) $(2,974) $3,916 $16,352(11) $12,436
---------- --------------- ------------ ---------- -------- ----------- ---------
---------- --------------- ------------ ---------- -------- ----------- ---------
Net income (loss) per
common share................... $.13 (12) (12) (12) (12) 0.66
---------- ---------
---------- ---------
Weighted average shares.......... 8,972,000 (12) (12) (12) (12) (13) 18,798,000
---------- ---------
---------- ---------
2
PREMIER PARKS INC.
NOTES TO UNAUDITED PRO FORMA COMBINED STATEMENTS OF OPERATIONS
YEAR ENDED DECEMBER 31, 1996
BASIS OF PRESENTATION
The accompanying unaudited pro forma combined statement of operations for
the year ended December 31, 1996, has been prepared based upon certain pro forma
adjustments to historical financial information of the Company, Elitch Gardens,
The Great Escape, Waterworld, Riverside and Kentucky Kingdom. The Company's
acquisitions of the operating assets of Elitch Gardens, Waterworld and The Great
Escape occurred on October 31, 1996, November 19, 1996 and December 4, 1996,
respectively. The Company's acquisition of the capital stock of Stuart
Amusement Company, the owner of Riverside, and substantially all of the assets
of Kentucky Kingdom occurred on February 5, 1997 and November 7, 1997,
respectively.
The unaudited pro forma combined statement of operations for the year
ended December 31, 1996, has been prepared assuming the acquisitions of
Elitch Gardens, Waterworld, The Great Escape, Riverside and Kentucky Kingdom,
the related June 1996 and January 1997 equity financings and the presumed
issuance of the exchangeable preferred stock occurred on January 1, 1996.
The pro forma weighted average of shares used to calculate pro forma income
per share is based on the actual weighted average number of shares outstanding
during the year ended 1996, adjusted to give effect to shares of Common Stock
issued in the conversion of the Company's outstanding preferred stock in
June 1996, the issuance of 3,939,000 shares of Common Stock in June 1996 and of
6,900,000 shares of Common Stock in January 1997 pursuant to public offerings, a
portion of the proceeds of which were utilized to make the acquisitions, as well
as approximately 9,000 shares of Common Stock issued in The Great Escape
acquisition, approximately 33,000 shares of Common Stock issued as partial
consideration for the Riverside acquisition and approximately 121,000 shares of
Common Stock issued as partial consideration for the Kentucky Kingdom
acquisition.
PRO FORMA ADJUSTMENTS (ALL DOLLAR AMOUNTS IN THOUSANDS)
(1) The amounts for the 1996 Acquisitions are the combined amounts of revenues
and expenses of Elitch Gardens, The Great Escape, Waterworld and Riverside
(2) Adjustment reflects the change in concessionaire arrangements at Riverside
(3) Adjustment reflects the change in food concessionaire arrangements at
Elitch Gardens
(4) Adjustments reflect the reduction of Elitch Gardens operating expenses
related to park staffing levels ($1,000) and entertainment contracts ($375)
and the reduction of Kentucky Kingdom operating expenses related to
rent on canceled leases ($78) and repairs on rides not purchased ($22)
(5) Selling, general and administrative expense adjustments reflect the
following:
Elimination of duplicative corporate personnel costs and corporate
expenses at Elitch Gardens as follows:
Corporate and full-time personnel costs........ $1,520
Insurance expense.............................. 375
3
Professional fees............................. 466
Rental expense................................ 89
------
2,450
Elimination of duplicative corporate
personnel expenses at The Great Escape............. 1,300
Elimination of duplicative corporate
personnel costs and corporate expenses
at Waterworld...................................... 88
Elimination of duplicative corporate
personnel costs and corporate expenses
at Riverside as follows:
Corporate and full-time personnel costs............ 560
Insurance expense.................................. 385
Professional fees.................................. 241
Other.............................................. 190
------
1,376
Elimination of duplicative corporate
personnel costs and corporate expenses
at Kentucky Kingdom as follows:
Corporate and full-time personnel costs............ 550
Insurance ......................................... 125
Professional ...................................... 210
Other.............................................. 115
------
1,000
------
$6,214
------
------
(6) Adjustment reflects the elimination of certain concession arrangements
at Kentucky Kingdom.
(7) Adjustment reflects the effects of eliminating historical depreciation
($8,535) and impairment provision ($8,000) recognized by one of the
acquired parks, the pro forma depreciation of $9,346 on the property and
equipment of Elitch Gardens, The Great Escape, Waterworld, Riverside and
Kentucky Kingdom and the pro forma amortization of $1,037 on the costs in
excess of fair value. Depreciation is based on estimated lives of 15 to 25
years. Intangible assets are amortized over 25 years.
(8) Adjustment reflects the elimination of interest expense incurred by Elitch
Gardens, The Great Escape, Waterworld, Riverside and Kentucky Kingdom. The
funding of the acquisitions of Elitch Gardens, Waterworld, The Great
Escape, Riverside and Kentucky Kingdom is assumed to be from the proceeds
of the June 1996 public offering and January 1997 public offering.
(9) Adjustment reflects the elimination of food service management fee at
Elitch Gardens ($125) and other income of Kentucky Kingdom related to
debt not assumed by the Company.
(10) Adjustment reflects the application of income taxes at a rate of 40% to the
pro forma adjustments and to the acquired operations that were not
previously directly subject to income taxation and after consideration of
permanent differences.
(11) Adjustment reflects the aggregate pro forma adjustment to income (loss)
before extraordinary loss and the elimination of $603 of preferred stock
dividends as a result of the conversion in June 1996 of the Company's
outstanding preferred stock.
(12) Income (loss) per common share and weighted average share data are not
presented as the information is not meaningful.
(13) The calculation of pro forma weighted average shares outstanding for the
year ended December 31, 1996 is as follows:
Weighted average shares of common stock
outstanding................................... 8,972,000
4
Preferred stock conversion, as if issued and
converted on January 1, 1996...................... 1,215,000
Common stock issued in the June 1996 public
offering, a portion of the proceeds of which were
used to make the acquisitions, as if issued on
January 1, 1996.................................. 1,548,000
Common stock issued in the January 1997 public
offering, a portion of the proceeds of which were
used to make the acquisitions, as if issued
January 1, 1996................................. 6,900,000
Common stock issued as partial consideration
for The Great Escape acquisition................ 9,000
Common stock issued as partial consideration for
the Riverside acquisition....................... 33,000
Common stock issued as partial consideration for
the Kentucky Kingdom acquisition................ 121,000
-----------
$18,798,000
-----------
-----------
5
PREMIER PARKS INC.
UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS
NINE MONTHS ENDED SEPTEMBER 30, 1997
(IN THOUSANDS, EXCEPT FOR SHARE AND PER SHARE DATA)
HISTORICAL HISTORICAL COMBINED PRO FORMA COMPANY
PREMIER KENTUCKY COMPANY ADJUSTMENTS PRO FORMA
---------- ----------- ---------- ----------- ----------
REVENUE:
Theme park admission............... $91,080 $11,562 $102,642 $ - $102,642
Theme park food, merchandise
and other........................ 95,666 10,092 105,758 105,758
---------- ----------- ---------- ----------- ----------
Total.................... 186,746 21,654 208,400 - 208,400
---------- ----------- ---------- ----------- ----------
Operating costs and expenses:
Operating expense.................. 69,444 5,576 75,020 (101)(1) 74,919
Selling, general and
administrative................... 29,688 4,945 34,633 (771)(2) 33,862
Costs of products sold............. 22,072 2,684 24,756 (261)(3) 24,495
Depreciation and amortization...... 13,974 2,161 16,135 972(4) 17,107
---------- ----------- ---------- ----------- ----------
Total.................... 135,178 15,366 150,544 (161) 150,383
---------- ----------- ---------- ----------- ----------
Income (loss) from operations...... 51,568 6,288 57,856 161 58,017
OTHER INCOME (EXPENSE):
Interest expense, net.............. (12,869) (3,668) (16,537) (1,971)(5) (14,840)
3,668(6)
Other income (expense)............. (44) 287 243 (352)(7) (109)
---------- ----------- ---------- ----------- ----------
Total.................... (12,913) (3,381) (16,294) 1,345 (14,949)
Income (loss) before income
taxes............................ 38,655 2,907 41,562 1,506 43,068
Income tax expense................. 15,462 -- 15,462 1,765(8) 17,227
---------- ----------- ---------- ----------- ----------
Net income (loss).................. $23,193 $ 2,907 $26,100 (259) $25,841
---------- ----------- ---------- ----------- ----------
---------- ----------- ---------- ----------- ----------
Net income per common share........ $1.32 (9) (9) 1.40
---------- ----------
---------- ----------
Weighted average share............. 17,513,000 (9) (9) (10) 18,422,000
---------- ----------
---------- ----------
6
PREMIER PARKS INC.
NOTES TO UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS
NINE MONTHS ENDED SEPTEMBER 30, 1997
BASIS OF PRESENTATION
The accompanying pro forma combined statement of operations for the nine
months ended September 30, 1997 has been prepared based upon certain pro forma
adjustments to historical financial information of the Company, Elitch Gardens,
The Great Escape, Waterworld and Riverside. The Company's acquisition of the
capital stock of Stuart Amusement Company, the owner of Riverside, occurred on
February 5, 1997. The Company acquired the operating assets of Kentucky Kingdom
on November 7, 1997.
The unaudited pro forma combined statement of operations for the nine
months ended September 30, 1997 has been prepared assuming the acquisitions
of Riverside and Kentucky Kingdom occurred on January 1, 1997. The operations
of Elitch Gardens, the Waterworld Parks and The Great Escape are included in
the Company's operations for 1997 since the acquisitions occurred in 1996.
The pro forma weighted average number of common shares used to calculate
pro forma income per share is based on the actual weighted average number of
shares outstanding during the nine months ended September 30, 1997, adjusted to
give effect to the issuance of 6,900,000 shares of Common Stock on January 31,
1997, a portion of the proceeds of which were used to fund the acquisitions of
Riverside Park and Kentucky Kingdom.
PRO FORMA ADJUSTMENTS (ALL DOLLAR AMOUNTS IN THOUSANDS)
(1) Adjustment reflects the reduction of Kentucky Kingdom operating expenses
related to rent on canceled leases ($78) and repairs on rides not
purchased ($23).
(2) Adjustment reflects the reduction of selling, general and administrative
expenses as follows:
Corporate and full-time personnel costs................ $ 446
Insurance expense...................................... 94
Professional fees...................................... 150
Other.................................................. 81
-----
771
-----
-----
(3) Adjustment reflects the elimination of certain concession arrangements
at Kentucky Kingdom.
(4) Adjustment reflects the effects of eliminating historical depreciation
($2,161) and estimating the pro forma depreciation of $2,980 on the
property and equipment and pro forma amortization of $153 on the cost in
excess of fair value. Depreciation is based on estimated useful lives of
15 years, while intangible assets are amortized over 25 years.
(5) Adjustment reflects the elimination of the interest income earned by the
Company on the cash used in the purchase of Kentucky Kingdom as if the
Company had owned the assets for the entire nine-month period.
7
(6) Adjustment reflects the elimination of the interest expense incurred by
Kentucky Kingdom related to the indebtedness paid by the Company at the
closing of the transaction.
(7) Adjustment reflects the elimination of other income related to debt not
assumed by the Company.
(8) Adjustment reflects the application of income taxes at a rate of 40% to the
pro forma adjustments and to the acquired operations that were not
previously directly subject to income taxation and after consideration of
permanent differences.
(9) Income (loss) per common share and weighted average share data are not
presented as the information is not meaningful.
(10) The calculation of pro forma weighted average shares outstanding for the
nine months ended September 30, 1997 is as follows:
Weighted average shares of common stock outstanding . . . . . . 17,513,000
Common Stock issued in the January 1997
public offering, a portion of which was used to
make the recent acquisitions, as if issued
on January 1, 1997 . . . . . . . . . . . . . . . . . . . . . .784,000
Common Stock issued as partial consideration for
the Riverside acquisition, as if issued on
January 1, 1997. . . . . . . . . . . . . . . . . . . . . . . . .4,000
Common Stock issued as partial consideration for
the Kentucky Kingdom acquisition . . . . .. . . . . . . . . . .121,000
----------
18,422,000
----------
----------
8
PREMIER PARKS INC.
UNAUDITED PRO FORMA COMBINED BALANCE SHEET
SEPTEMBER 30, 1997
(IN THOUSANDS)
HISTORICAL HISTORICAL COMBINED PRO FORMA COMPANY
PREMIER KENTUCKY COMPANY ADJUSTMENTS PRO FORMA
---------- ----------- ---------- ----------- ----------
ASSETS:
Cash and cash equivalents........... $169,151 $ 500 $169,651 $(60,163)(1) $108,988
(500)(2)
Accounts receivable................. 15,960 951 16,911 (951)(2) 15,960
Inventories......................... 5,546 402 5,948 (147)(2) 5,801
Prepaid expenses.................... 3,652 529 4,181 (474)(2) 3,707
---------- ----------- ---------- ----------- ----------
Total current assets........... 194,309 2,382 196,691 (62,235) 134,456
Deferred charges.................... 10,594 2,626 13,220 (2,626)(2) 10,594
Deposits and other.................. 6,036 -- 6,036 6,036
---------- ----------- ---------- ----------- ----------
Other assets.............. 16,630 2,626 19,256 (2,626) 16,630
Property and equipment, net 360,017 60,087 420,104 2,543(1) 422,647
Intangible assets, net.............. 41,311 41,311 5,161(1) 46,472
---------- ----------- ---------- ----------- ----------
Total assets.............. $612,267 $65,095 $677,362 $(57,157) $620,205
---------- ----------- ---------- ----------- ----------
---------- ----------- ---------- ----------- ----------
LIABILITIES AND STOCKHOLDERS' EQUITY:
Accounts payable and accrued
expense............................ $17,291 $4,657 $21,948 $(4,255)(2) $17,693
Accrued interest payable............ 4,054 833 4,887 (833)(2) 4,054
Current maturities of long-term
debt and capital lease obligations.. 990 52,175 53,165 (52,083)(2) 1,082
---------- ----------- ---------- ----------- ----------
Total current liabilities. 22,335 57,665 80,000 (57,171) 22,829
Long-term debt and capital lease
obligation........................ 216,263 176 216,439 -- 216,439
Other long-term liabilities......... 3,967 136 4,103 2,232 (1) 6,335
Deferred income taxes............... 42,900 -- 42,900 -- 42,900
---------- ----------- ---------- ----------- ----------
Total Liabilities......... 285,465 57,977 343,442 (54,939) 288,503
Total Stockholders' equity.......... 326,802 7,118 333,920 4,900 (1) 331,702
(7,118)(2)
---------- ----------- ---------- ----------- ----------
Total liabilities and
stockholders' equity................ $612,267 $65,095 $677,362 $(57,157) $620,205
---------- ----------- ---------- ----------- ----------
---------- ----------- ---------- ----------- ----------
See accompanying notes.
9
PREMIER PARKS INC.
NOTES TO UNAUDITED PRO FORMA COMBINED BALANCE SHEET
SEPTEMBER 30, 1997
BASIS OF PRESENTATION
The accompanying unaudited pro forma combined balance sheet as of September
30, 1997 has been prepared based on certain pro forma adjustments to historical
financial information of the Company and Kentucky Kingdom. The Company's
acquisition of the operating assets of Kentucky Kingdom occurred on November 7,
1997. The unaudited pro forma combined balance sheet as of September 30, 1997
has been prepared assuming the acquisition of Kentucky Kingdom occurred on
September 30, 1997.
PRO FORMA ADJUSTMENTS (ALL DOLLAR AMOUNTS IN THOUSANDS)
(1) Adjustment reflects the purchase of Kentucky Kingdom for cash ($60,163)
and common stock ($4,900). The purchase price was funded from cash on
hand. The Company also recognized $2,232 of other long-term liabilities
associated with the transaction. The acquisition was accounted for using
the purchase price method of accounting. Allocation of the purchase
price was based upon estimated fair values for property and equipment.
(2) Adjustments reflect the elimination of deferred charges associated with
long-term debt of Kentucky Kingdom which was paid in full at the closing
and the elimination of assets not purchased ($2,072) and liabilities not
assumed ($57,171) by the Company.
10