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. 1 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 ======== ======== ======== ======== 2 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 ======== ======== ======= ======== 3 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) ======== 4 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 5 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 6