EXHIBIT 2.6
PRO FORMA FINANCIAL DATA
The following unaudited pro forma financial data (the "Pro Forma Financial
Data") is derived from the historical consolidated financial statements of the
Company and Ralston Resorts, Inc. The unaudited pro forma statement of
operations data for the year ended September 30, 1996 give effect to the
Acquisition as if it had occurred on October 1, 1995. The unaudited pro forma
balance sheet data as of September 30, 1996 give effect to the Acquisition as if
it had occurred on such date. The Pro Forma Financial Data is not intended to be
indicative of either future results of operations or results that might have
been achieved had the Acquisition actually occurred on the dates specified. In
the opinion of the Company's management, all adjustments necessary to present
fairly such unaudited pro forma combined financial data have been made based
upon the proposed terms of the Acquisition. No estimates of future cost savings
related to administrative consolidations and other efficiencies or economies of
scale related to the Acquisition have been reflected in the pro forma statement
of operations data. The following information includes the results of the
Arapahoe Basin mountain resort, which will be divested pursuant to the Consent
Decree.
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VAIL RESORTS, INC.
UNAUDITED PRO FORMA COMBINED BALANCE SHEET DATA
AS OF SEPTEMBER 30, 1996
RALSTON ACQUISITION PRO FORMA
THE COMPANY RESORTS ADJUSTMENTS COMBINED
----------- -------- ----------- ---------
(IN THOUSANDS)
Cash and cash equivalents.. $ 12,712 $ 1,274 $ $ 13,986
Receivables................ 5,741 6,325 12,066
Inventories................ 4,639 3,820 8,459
Deferred income taxes...... 17,200 111 17,311
Other current assets....... 5,490 680 6,170
-------- -------- -------- --------
Total current assets...... 45,782 12,210 57,992
Property and equipment,
net....................... 192,669 131,000 323,669
Real estate held for sale.. 88,665 28,788 117,453
Investment in joint ven-
ture...................... -- 22,564 6,485 29,049
Deferred charges and other
assets.................... 10,440 271 10,711
Intangible assets.......... 85,056 36,177 124,253 245,486
-------- -------- -------- --------
Total assets.............. $422,612 $231,010 $130,738 $784,360
======== ======== ======== ========
Accounts payable and
accrued expenses.......... $ 48,096 $ 17,447 $ (1,079) $ 64,464
Income taxes payable....... 325 -- 325
Payable under Rights....... 50,513 -- 50,513
Long term debt due within
one year.................. 63 141,806 (140,032) 1,837
-------- -------- -------- --------
Total current liabili-
ties..................... 98,997 159,253 (141,111) 117,139
Long term debt............. 144,687 26,522 151,704 322,913
Other long term liabili-
ties...................... 15,521 1,998 17,519
Deferred income taxes...... 39,500 12,294 51,974
-------- -------- -------- --------
Total liabilities......... 298,705 200,067 10,593 509,365
Stockholders' equity....... 123,907 30,943 120,145 274,995
-------- -------- -------- --------
Total liabilities and
stockholders' equity...... $422,612 $231,010 $130,738 $784,360
======== ======== ======== ========
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VAIL RESORTS, INC.
UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS DATA
FOR THE YEAR ENDED SEPTEMBER 30, 1996
HISTORICAL
--------------------
RALSTON ACQUISITION PRO FORMA
THE COMPANY RESORTS ADJUSTMENTS COMBINED
----------- -------- ----------- ---------
(IN THOUSANDS)
Revenues:
Resort.......................... $140,288 $135,750 $ $276,038
Real estate..................... 48,655 914 49,569
-------- -------- ------- --------
Total revenues................ 188,943 136,664 325,607
-------- -------- ------- --------
Operating expenses:
Resort.......................... 89,890 97,988 187,878
Real estate..................... 40,801 -- 40,801
Corporate expense............... 12,698 -- 12,698
Depreciation and amortization... 18,148 15,780 3,550 37,478
-------- -------- ------- --------
161,537 113,768 3,550 278,855
-------- -------- ------- --------
Operating income.................. 27,406 22,876 (3,550) 46,752
Investment income................. 586 -- 586
Interest expense.................. (14,904) (9,200) (2,640) (26,744)
Gain (loss) on the disposal of
fixed assets..................... (2,630) -- (2,630)
Other............................. (1,500) -- (1,500)
-------- -------- ------- --------
Income (loss) from operations
before income taxes............. 8,958 13,696 (6,190) 16,464
(Provision) benefit for income
taxes............................ (4,223) (5,824) 1,010 (9,037)
-------- -------- ------- --------
Net income........................ $ 4,735 $ 7,872 $(5,180) $ 7,427
======== ======== ======= ========
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VAIL RESORTS, INC.
UNAUDITED PRO FORMA COMBINED FINANCIAL DATA
SUMMARY OF PRO FORMA ADJUSTMENTS--BALANCE SHEET DATA
SEPTEMBER 30,
BALANCE SHEET ACCOUNT NOTE ADJUSTMENT 1996
--------------------- ---- ---------- -------------
(IN THOUSANDS)
ACQUISITION ADJUSTMENTS
Investment in joint venture.... (d) Loan to Keystone JV by
Foods 6,485
--------
Intangible assets.............. (a) Allocation of purchase
price 124,253
--------
Effect on total assets........ 130,738
========
Accounts payable and accrued
expenses...................... Ralston Resorts' pension
liability which was not
assumed in the
Acquisition (1,079)
--------
Long-term debt due within one
year.......................... Refinancing of Ralston
Resorts' line of credit
borrowings under the
New Credit Facilities (140,032)
--------
Long-term debt................. Refinancing of Ralston
Resorts' line of credit
borrowings under the
New Credit Facilities 140,032
Ralston Resorts' debt in
excess of that assumed
in the Acquisition (3,328)
(b) Transaction costs
related to the
Acquisition 15,000
--------
151,704
--------
Effect on total liabilities... 10,593
========
Stockholders' equity........... Elimination of Ralston
Resorts stockholder's
equity (30,943)
Issuance of shares of
Common Stock to Foods 151,088
--------
120,145
========
SUMMARY OF PRO FORMA ADJUSTMENTS--STATEMENT OF OPERATIONS DATA
YEAR
ENDED
SEPTEMBER 30,
STATEMENT OF OPERATIONS ITEM NOTE ADJUSTMENT 1996
---------------------------- ---- ---------- -------------
ACQUISITION ADJUSTMENTS
-----------------------
Depreciation and amortization.. (a) Amortization of $ (3,550)
goodwill................
Interest expense............... (c) Interest expense on debt
assumed in the
Acquisition............ (2,640)
Provision for income taxes..... (e) Tax effect of pro forma
adjustments............ 1,010
--------
Effect on net income.......... $ (5,180)
========
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VAIL RESORTS, INC.
NOTES TO THE PRO FORMA COMBINED FINANCIAL DATA
(a) The Acquisition of Ralston Resorts by the Company will result in the
assets of Ralston Resorts being written up to reflect the purchase price
of the transaction. The purchase price of Ralston Resorts will be
calculated as the sum of (i) the fair value of the Company's Common Stock
that will be issued to Foods, the sole stockholder of Ralston Resorts,
(ii) the fair value of any liabilities of Ralston Resorts assumed, and
(iii) the transaction costs incurred by the Company. Under the purchase
accounting method, the acquisition cost is allocated to the assets and
liabilities acquired based on their relative fair values. The Company has
not yet received the results of appraisals and other valuation studies,
nor has it made a final determination of the useful lives of the assets
acquired. The Company's preliminary allocation of acquisition cost
resulted in an excess of purchase price over the historical basis of net
assets acquired of approximately $124.3 million. For purposes of the pro
forma combined financial data, this excess has been allocated to various
intangible assets, including goodwill. Amortization expense in the pro
forma financial statements has been calculated assuming an amortization
period of 35 years.
When the final purchase price is computed as of the closing date and an
actual allocation of the purchase price to the underlying assets acquired
is completed, some portion of the excess of purchase price over the
historical basis of the net assets acquired may be allocated to specific
tangible and intangible assets. Only after the final purchase price has
been allocated and the estimated remaining useful lives of the tangible and
intangible assets are determined by management will the actual amortization
charge associated with the acquired assets of Ralston Resorts become
available. The actual allocation of purchase cost and the resulting effect
on operating income may differ significantly from the pro forma amounts
included herein.
The following table summarizes the preliminary purchase price allocation:
Stock to be issued.......................................... $151,088,100
Debt assumed................................................ 165,000,000
Transaction costs........................................... 15,000,000
------------
Total purchase price........................................ $331,088,100
============
Purchase price allocation:
Historical cost basis of acquired net assets................ $206,835,000
Purchase price in excess of historical cost basis........... 124,253,100
------------
$331,088,100
============
(b) The Company incurred various direct costs and professional fees in
connection with the Acquisition which will be paid from borrowings under
the New Credit Facilities.
(c) The average rate of interest under the New Credit Facilities is assumed to
be 6.5%.
(d) As of September 30, 1996, Foods had made loans to the Keystone JV in the
aggregate amount of $6 million. Under the terms of the Acquisition, these
loans and an accrued interest receivable of $485,000 as of September 30,
1996, were assigned to Ralston Resorts upon the closing of the
Acquisition.
(e) All adjustments to the unaudited Pro Forma Combined Statement of
Operations Data have been tax-effected using the expected statutory rate.
(f) The pro forma financial data set forth above includes the results of the
Arapahoe Basin mountain resort, which the Company will divest pursuant to
the Consent Decree. The following table summarizes certain financial and
operating data for Arapahoe Basin for fiscal 1996. This presentation is
not intended to be indicative of the operations or financial position of
Arapahoe Basin on a stand alone basis, but rather to isolate its impact on
the combined pro forma financial data of the Company after giving effect
to the
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Acquisition. Resort Cash Flow for Arapahoe Basin includes $300,000 of
certain operating expenses of Ralston Resorts which have been allocated to
Arapahoe Basin.
ARAPAHOE BASIN
------------------
FISCAL YEAR ENDED
SEPTEMBER 30, 1996
------------------
Revenues............................................... $6,554,000
Resort cash flow....................................... 3,004,000
Total assets .......................................... 5,060,000
Property & equipment, net ............................. 4,910,000
Skier days ............................................ 241,435
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