================================================================================

                                 UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                             ----------------------

                                   FORM 10-Q

 (Mark One)
    [X]         QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934
                For the quarterly period ended May 3, 2002

                                       OR

    [ ]         TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                       Commission File Number: 333-26091

                         BOOTH CREEK SKI HOLDINGS, INC.
             (Exact name of registrant as specified in its charter)

                   Delaware                         84-1359604
         (State or Other Jurisdiction            (I.R.S. Employer
       of Incorporation or Organization)      Identification Number)

       1000 South Frontage Road West,                  81657
                  Suite 100                         (Zip Code)
               Vail, Colorado
       (Address of Principal Executive
                   Offices)

                                 (970) 476-1311
              (Registrant's Telephone Number, Including Area Code)


     Indicate by check mark  whether the  registrant  (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange Act of
1934  during the  preceding  12 months  (or for such  shorter  period  that the
registrant was required to file such reports), and (2) has been subject to such
filing  requirements  for the past 90 days.  Yes[X] No[ ]

     As of  May 31,  2002,  the  number  of  shares  outstanding  of  the
registrant's  Common  Stock,  par  value  $.01 per  share,  was  1,000  shares.

===============================================================================
<PAGE>

                              TABLE OF CONTENTS



Item                                                                Page Number
----                                                                -----------
                       PART I - FINANCIAL INFORMATION

 1.  Financial Statements..............................................    1

 2.  Management's Discussion and Analysis of Financial Condition
     and Results of Operations.........................................   10

 3.  Quantitative and Qualitative Disclosures about Market Risk........   26

                         PART II - OTHER INFORMATION

 1.  Legal Proceedings.................................................   27

 6.  Exhibits and Reports on Form 8-K..................................   29

     Signatures........................................................   30
<PAGE>


                          PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

                         BOOTH CREEK SKI HOLDINGS, INC.

                           CONSOLIDATED BALANCE SHEETS
               (In thousands, except share and per share amounts)

                                           May 3,      November 2,     April 27,
                                            2002          2001          2001
                                        ------------  -----------   ------------
                  ASSETS                 (Unaudited)                 (Unaudited)

Current assets:
 Cash and cash equivalents..............  $   7,227    $     458     $    8,119
 Accounts receivable, net of allowance
  of $71, $39 and $58, respectively.....      1,800        1,937          1,877
 Insurance proceeds receivable..........        800        1,500          1,500
 Inventories ...........................      1,793        2,486          1,636
 Prepaid expenses and other current
  assets ...............................      1,252        1,616            898
                                        ------------  -----------   ------------
Total current assets ...................     12,872        7,997         14,030

Property and equipment, net ............    135,871      139,347        144,071
Real estate held for development
 and sale ..............................      6,694        8,220          6,981
Deferred financing costs, net of
 accumulated amortization of $3,993,
 $5,128 and $4,649, respectively .......      4,701        4,087          4,566
Timber rights and other assets .........      6,057        6,429          6,014
Goodwill................................     22,938       23,138         24,310
                                        ------------  -----------   ------------
Total assets ...........................  $ 189,133    $ 189,218     $  199,972
                                        ============  ===========   ============

   LIABILITIES AND SHAREHOLDER'S EQUITY

Current liabilities:
 Revolving credit facility .............  $       -    $  17,628     $        -
 Current portion of long-term debt .....      3,561        1,748          2,758
 Accounts payable and accrued
  liabilities ..........................     25,318       34,842         25,632
                                        ------------  -----------   ------------
Total current liabilities ..............     28,879       54,218         28,390

Long-term debt .........................    121,986      128,664        128,732

Other long-term liabilities ............        767          767            760

Commitments and contingencies

Preferred stock of subsidiary...........          -        1,136          1,387

Shareholder's equity:
 Common stock, $.01 par value; 1,000
  shares authorized, issued and
  outstanding ..........................          -            -              -
 Additional paid-in capital ............     72,000       72,000         72,000
 Accumulated deficit ...................    (34,499)     (67,567)       (31,297)
                                        ------------  -----------   ------------
Total shareholder's equity .............     37,501        4,433         40,703
                                        ------------  -----------   ------------
Total liabilities and shareholder's
 equity ................................  $ 189,133    $ 189,218     $  199,972
                                        ============  ===========   ============

                            See accompanying notes.
                                       1
<PAGE>



                         BOOTH CREEK SKI HOLDINGS, INC.

                     CONSOLIDATED STATEMENTS OF OPERATIONS
                                 (In thousands)


                                Three Months Ended          Six Months Ended
                               ---------------------      ---------------------
                                 May 3,    April 27,        May 3,    April 27,
                                  2002        2001           2002       2001
                               ---------   ---------      ---------   ---------
                                                  (Unaudited)
Revenue:
  Resort operations..........  $  57,924   $  63,559       $114,768    $112,522
  Real estate and other
   (including $5,600 and
   $8,900, respectively, in
   revenues with related
   parties for the three and
   six month periods ended
   May 3, 2002 - Note 5).....      5,615           -          8,915           -
                               ---------   ---------      ---------   ---------
Total revenue................     63,539      63,559        123,683     112,522

Operating expenses:
  Cost of sales - resort
   operations................     27,776      28,498         57,993      56,671
  Cost of sales - real estate
   and other.................      1,502           -          2,173           -
  Depreciation ..............      4,672       5,549          9,422      10,836
  Amortization of goodwill
   and other intangible
   assets....................          -         595              -       1,190
  Selling, general and
   administrative expense....      6,710       6,778         14,984      14,176
                               ---------   ---------      ---------   ---------
Total operating expenses.....     40,660      41,420         84,572      82,873
                               ---------   ---------      ---------   ---------

Operating income.............     22,879      22,139         39,111      29,649


Other income (expense):
  Interest expense...........     (3,834)     (4,067)        (8,117)     (8,463)
  Amortization of deferred
   financing costs...........       (271)       (240)          (510)       (487)
  Other income ..............         24          67             38         123
                               ---------   ---------      ---------   ---------
  Other income
  (expense),net..............     (4,081)     (4,240)        (8,589)     (8,827)
                               ---------   ---------      ---------   ---------

Income before minority
  interest, extraordinary
  item and change in
  accounting principle.......     18,798      17,899         30,522      20,822

Minority interest............          -         (33)           (15)        (69)
                               ---------   ---------      ---------   ---------
Income before extraordinary
  item and change in
  accounting principle.......     18,798      17,866         30,507      20,753

Extraordinary gain on early
  retirement of debt.........      2,761         747          2,761       1,723

Change in accounting
  principle for goodwill.....          -           -           (200)          -
                               ---------   ---------      ---------   ---------
Net income...................  $  21,559   $  18,613      $  33,068   $  22,476
                               =========   =========      =========   =========

                            See accompanying notes.

                                        2
<PAGE>


                         BOOTH CREEK SKI HOLDINGS, INC.

                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (In thousands)


                                                        Six Months Ended
                                                -------------------------------
                                                   May 3,             April 27,
                                                    2002                2001
                                                -------------     -------------
                                                          (Unaudited)

Cash flows from operating activities:
Net income.....................................   $  33,068         $   22,476
Adjustments to reconcile net income to
  net cash provided by operating activities:
   Depreciation................................       9,422             10,836
   Amortization of goodwill and other
    intangible assets .........................           -              1,190
   Noncash cost of real estate sales ..........       2,129                  -
   Amortization of deferred financing costs ...         510                487
   Minority interest ..........................          15                 69
   Extraordinary gain on early retirement
    of debt....................................      (2,761)            (1,723)
   Change in accounting principle for goodwill.         200                  -
   Changes in operating assets and liabilities:
    Accounts receivable .......................         137                 52
    Insurance proceeds receivable..............         700              2,570
    Inventories ...............................         693                470
    Prepaid expenses and other current assets..         364                296
    Accounts payable and accrued liabilities...      (9,524)            (8,283)
    Other long-term liabilities ...............           -                (25)
                                                -------------     -------------
Net cash provided by operating activities......      34,953             28,415

Cash flows from investing activities:
Capital expenditures for property and
 equipment ....................................      (4,302)            (5,885)
Capital expenditures for real estate
 held for development and sale ................        (603)              (415)
Other assets ..................................         372                (96)
                                                -------------     -------------
Net cash used in investing activities .........      (4,533)            (6,396)

Cash flows from financing activities:
Borrowings under revolving credit facility ....       8,115             12,888
Repayments under revolving credit facility ...      (25,743)           (19,240)
Proceeds of long-term debt.....................      25,000                  -
Principal payments of long-term debt ..........     (27,872)            (7,923)
Deferred financing costs ......................      (2,000)                (1)
Purchase of preferred stock of subsidiary
 and payment of dividends .....................      (1,151)              (320)
                                                -------------     -------------
Net cash used in financing activities .........     (23,651)           (14,596)
                                                -------------     -------------
Increase in cash and cash equivalents..........       6,769              7,423

Cash and cash equivalents
  at beginning of period ......................         458                696
                                                -------------     -------------
Cash and cash equivalents
  at end of period ............................ $     7,227        $     8,119
                                                =============     =============

                            See accompanying notes.

                                        3
<PAGE>


                         BOOTH CREEK SKI HOLDINGS, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   May 3, 2002


1.   Organization, Basis of Presentation and Summary of Significant Accounting
     Policies

     Booth Creek Ski Holdings, Inc. ("Booth Creek") owns and operates various
ski resorts, including Northstar-at-Tahoe ("Northstar"), Sierra-at-Tahoe
("Sierra"), Bear Mountain, Waterville Valley, Mt. Cranmore, Loon Mountain and
the Summit at Snoqualmie (the "Summit"). Booth Creek also conducts certain real
estate development activities, primarily at Northstar.

     The consolidated financial statements include the accounts of Booth Creek
and its subsidiaries (collectively referred to as the "Company"), all of which
are wholly-owned. All significant intercompany transactions and balances have
been eliminated.

     Booth Creek is a wholly-owned subsidiary of Booth Creek Ski Group, Inc.
     ("Parent").

     The accompanying consolidated financial statements as of May 3, 2002 and
April 27, 2001 and for the three and six month periods then ended are unaudited,
but include all adjustments (consisting only of normal, recurring adjustments
and adjustments to recognize the change in accounting principle for goodwill
during the six months ended May 3, 2002 and the extraordinary gains on early
retirement of debt during the six month periods ended May 3, 2002 and April 27,
2001) which, in the opinion of management of the Company, are considered
necessary for a fair presentation of the Company's financial position at May 3,
2002 and April 27, 2001, and its operating results and cash flows for the three
and six month periods then ended. Due to the highly seasonal nature of the
Company's business, the results for the interim periods are not necessarily
indicative of results for the entire year. Certain information and footnote
disclosures normally included in annual financial statements prepared in
accordance with generally accepted accounting principles have been omitted
pursuant to generally accepted accounting principles applicable for interim
periods. Management believes that the disclosures made are adequate to make the
information presented not misleading. The unaudited consolidated financial
statements should be read in conjunction with the following notes and the
Company's consolidated financial statements and accompanying notes included in
the Company's Annual Report on Form 10-K for the fiscal year ended November 2,
2001.

Cash and Cash Equivalents

     The Company considers all highly liquid investments purchased with an
original maturity of three months or less to be cash equivalents. As of May 3,
2002, cash equivalents consisted of government securities money market funds.

     Included in cash at May 3, 2002 is restricted cash of $166,000, relating to
advance deposits and rental fees due to property owners for lodging and property
rentals.

Recently Adopted and Pending Accounting Pronouncements

     In June 2001, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards No. 142, "Goodwill and Other
Intangible Assets" ("SFAS No. 142"). The Company adopted SFAS No. 142 effective
as of November 3, 2001. Under the new rules, goodwill will no longer be
amortized but will be subject to annual impairment tests in accordance with the
pronouncement. The Company's operating results for the three and six month
periods ended April 27, 2001 reflected goodwill amortization of $586,000 and
$1,171,000, respectively. Adjusted net income for the three and six months ended
April 27, 2001 would have been $19,199,000 and $23,647,000, respectively,
excluding such goodwill amortization. In connection with the adoption of SFAS
No. 142, the Company performed a transitional impairment test for recorded
goodwill as of November 3, 2001 for each resort. Based on the results of the
transitional impairment test, the Company wrote down goodwill by $200,000 for
one resort, which has been reflected as the cumulative effect of a change in
accounting principle in the accompanying statement of operations for the six
months ended May 3, 2002.

     In June 2001, the FASB issued Statement of Financial Accounting Standards
No. 143, "Accounting for Asset Retirement Obligations" ("SFAS No. 143"), which
addresses financial accounting and reporting for obligations associated with the
retirement of tangible long-lived assets and associated asset retirement costs.
The new rules apply to legal obligations associated with the retirement of
long-lived assets that result from the acquisition, construction, development
and (or) normal operation of a long-lived asset. SFAS No. 143 is effective for
the Company at the beginning of fiscal 2003. The Company believes the adoption
of SFAS No. 143 will not have a material impact on its consolidated financial
position or results of operations.

                                       4
<PAGE>

                     BOOTH CREEK SKI HOLDINGS, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Use of Estimates

     The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.

2.   Paid Skier Visit Insurance Programs

     For the 2000/01 season, the Company arranged for four separate paid skier
visit insurance policies covering Bear Mountain, Loon Mountain, Waterville
Valley and the Summit. The policies had a deductible for the initial decline
from targeted paid skier visit and revenue levels and stated maximum coverage
levels. In addition, the policies required the insured to experience monthly or
annual snowfall amounts below certain agreed upon levels before a claim could be
filed for the decline in paid skier visits. For the three and six month periods
ended April 27, 2001, the Company recorded resort operations revenues of
$800,000 and $1,500,000, respectively, for claims attributable to lower than
agreed upon paid skier visits and snowfall levels under the Summit and
Waterville Valley policies. The Company's claims were determined based on a
specified formula under the paid skier visit insurance policies and snowfall
information verified by an independent third party. The Company believes that it
has fully complied with its obligations under the policies, and has properly
reported and made claims in accordance with the policies for losses aggregating
in excess of $1,500,000. As a result of the underwriters' failure to properly
process the Company's claims, in November 2001, the Company filed a lawsuit
against the underwriters seeking recovery for breach of contract, breach of
covenant of good faith and unfair and deceptive business practices. In April
2002, the underwriters made a partial offer of settlement of $700,000, which the
Company accepted with a reservation of all rights and remedies under the terms
of the policies and applicable law with respect to its remaining claims. The
Company intends to vigorously pursue collection of its remaining claims. The
parties to the lawsuit are currently conducting discovery in the matter. Based
on an evaluation of information to date and the advice of counsel, the Company
believes that realization of its recorded claims is probable. However, no
assurance can be given regarding the timing of the resolution of this matter.

     For the 1999/00 ski season, the Company arranged for four separate paid
skier visit insurance policies covering its Lake Tahoe resorts (Northstar and
Sierra), its New Hampshire resorts (Waterville Valley, Mt. Cranmore and Loon
Mountain), Bear Mountain and the Summit. For the six months ended April 27,
2001, resort operations revenues included $254,000 for additional claim
recoveries received upon the final settlement of the 1999/00 paid skier visit
insurance policies in excess of the amounts recognized in fiscal 2000 of
$6,600,000.

3.   Accounts Payable and Accrued Liabilities

     Accounts payable and accrued liabilities consist of the following:

                                            May 3,     November 2,     April 27,
                                             2002          2001          2001
                                         -----------   -----------   -----------
                                                        (In thousands)

     Accounts payable....................  $   3,022     $   7,836     $   2,341
     Accrued compensation and benefits...      4,017         4,159         4,049
     Taxes other than income taxes.......        637         1,131         1,254
     Unearned revenue and deposits-
      resort operations..................      3,855        11,601         3,915
     Unearned deposits-
      real estate operations (Note 5)....      5,610         6,000         6,000
     Interest............................      1,715         2,063         1,902
     Other...............................      6,462         2,052         6,171
                                         -----------   -----------   -----------
                                           $  25,318     $  34,842     $  25,632
                                         ===========   ===========   ===========



                                       5
<PAGE>


                     BOOTH CREEK SKI HOLDINGS, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

4.   Financing Arrangements


Senior Credit Facility

     Effective March 15, 2002, the Company and its subsidiaries entered into an
Amended and Restated Credit Agreement (the "Senior Credit Facility") with Fleet
National Bank, as administrative agent ("Agent"), and certain lenders. The
following is a summary of certain provisions of the Senior Credit Facility.

         General - The Senior Credit Facility provides for a revolving credit
     facility (the "Revolving Credit Facility") with borrowing availability of
     up to $25,000,000, and a term loan facility (the "Term Facility") with
     borrowing availability of up to $25,000,000. Borrowings under the Senior
     Credit Facility are collectively referred to herein as "Loans."

         Interest - For purposes of calculating interest, Loans can be, at the
     election of the Company, Base Rate Loans or LIBOR Rate Loans or a
     combination thereof. Base Rate Loans bear interest at the sum of (a) the
     higher of (i) Agent's prime rate or (ii) the federal funds rate plus .5%
     plus (b) a margin of 1.5%. LIBOR Rate Loans bear interest at the LIBOR rate
     plus a margin of 4%. Interest on Loans outstanding is payable quarterly.
     The Senior Credit Facility also requires commitment fees of .5% based on
     the unused borrowing availability of the Revolving Credit Facility.
     Borrowings outstanding under the Term Facility as of May 3, 2002 bore
     interest at an annual rate of 6.8% pursuant to the LIBOR rate option.

         Repayment - Subject to the provisions of the Senior Credit Facility,
     the Company may, from time to time, borrow, repay and reborrow under the
     Revolving Credit Facility. The Senior Credit Facility requires that the
     Company not have any borrowings under the Revolving Credit Facility for a
     period of 30 consecutive days commencing sometime between January 15 and
     February 28 of each year. The Term Facility provides for quarterly
     commitment reductions of $1,000,000 on the last day of January, April, July
     and October of each year beginning in 2003 through October 31, 2005, the
     maturity date of the Senior Credit Facility. The Company is required to
     repay amounts outstanding under the Term Facility on such dates by an
     amount equal to the greater of (i) the amount by which outstanding Term
     Facility borrowings exceed the then-applicable term loan commitment and
     (ii) the Excess Cash Proceeds (as defined in the Senior Credit Facility)
     derived from specified asset sales determined on a cumulative basis. No
     amount of the Term Facility which is repaid may be reborrowed. The entire
     unpaid balance under the Senior Credit Facility is due and payable on
     October 31, 2005.

         Security - Borrowings under the Senior Credit Facility are secured by
     (a) a pledge to the Agent for the ratable benefit of the financial
     institutions party to the Senior Credit Facility of all of the capital
     stock of Booth Creek's principal subsidiaries and (b) a grant of a security
     interest in substantially all of the consolidated assets of Booth Creek and
     its subsidiaries.

         Covenants - The Senior Credit Facility contains financial covenants
     relating to the maintenance of (a) minimum consolidated resort EBITDA (as
     defined in the Senior Credit Facility) measured quarterly on a rolling four
     quarter basis, (b) the ratio of consolidated EBITDA (as defined in the
     Senior Credit Facility) to consolidated debt service, and (c) levels of
     adjusted consolidated leverage. The Senior Credit Facility also contains
     restrictive covenants pertaining to the management and operation of Booth
     Creek and its subsidiaries. The covenants include, among others,
     significant limitations on indebtedness, guarantees, letters of credit,
     liens, investments, distributions, capital expenditures, mergers,
     acquisitions, asset sales, fundamental corporate changes, transactions with
     affiliates, optional payments and modification of debt instruments and
     issuances of stock.

         Use of Proceeds - Borrowings under the Revolving Credit Facility may be
     used for working capital and other general corporate purposes. Borrowings
     under the Term Facility may be used to repurchase the Company's 12.5%
     senior notes due 2007 (the "Senior Notes") or repay certain other
     indebtedness, together with accrued and unpaid interest thereon. During the
     three months ended May 3, 2002, the Company repurchased $29,325,000
     aggregate principal amount of Senior Notes in privately-negotiated
     transactions through borrowings under the Term Facility and available cash
     resources. As of May 3, 2002, outstanding borrowings under the Term
     Facility were $25,000,000.

                                       6
<PAGE>

                     BOOTH CREEK SKI HOLDINGS, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

     As of May 3, 2002, the Company had entered into two interest rate cap
agreements for an aggregate notional amount of $15,000,000 through July 31,
2005, declining to $14,000,000 through October 31, 2005. In exchange for upfront
payments of $179,000, the Company will receive floating rate payments from the
counterparties to the interest rate cap agreements during those periods in which
the three month LIBOR rate exceeds 6%. These agreements will be accounted for at
their fair value, with fluctuations recorded through the statement of
operations.

Senior Notes

     As of May 3, 2002, the Company had outstanding $96,175,000 aggregate
principal amount of its Senior Notes. The Senior Notes mature on March 15, 2007,
and bear interest at 12.5% per annum, payable semi-annually on March 15 and
September 15. The Senior Notes are redeemable at the option of the Company, in
whole or in part, at any time after March 15, 2002, with an initial redemption
price of 106.25% declining through maturity, plus accrued and unpaid interest to
the redemption date. The Senior Notes are general senior unsecured obligations
of the Company ranking equally in right of payment with all other existing and
future senior indebtedness of the Company and senior in right of payment to any
subordinated indebtedness of the Company.

     The Senior Notes are unconditionally guaranteed, on an unsecured senior
basis, as to the payment of principal, premium, if any, and interest, jointly
and severally (the "Guarantees"), by all Restricted Subsidiaries of the Company,
as defined in the indenture for the Senior Notes (the "Indenture"), having
either assets or shareholders' equity in excess of $20,000 (the "Guarantors").
All of the Company's direct and indirect subsidiaries are Restricted
Subsidiaries, except DRE, L.L.C.

     The Senior Notes are effectively subordinated in right of payment to all
secured indebtedness of the Company and the Guarantors, including indebtedness
under the Senior Credit Facility. In addition, the Senior Notes are structurally
subordinated to any indebtedness of the Company's subsidiaries that are not
Guarantors. The Indenture contains covenants for the benefit of the holders of
the Senior Notes that, among other things, limit the ability of the Company and
any Restricted Subsidiaries to: (i) incur additional indebtedness; (ii) pay
dividends and make other distributions; (iii) issue stock of subsidiaries; (iv)
make certain investments; (v) repurchase stock; (vi) create liens; (vii) enter
into transactions with affiliates, (viii) enter into sale and leaseback
transactions, (ix) create dividend or other payment restrictions affecting
Restricted Subsidiaries; (x) merge or consolidate the Company or any Guarantors;
and (xi) sell assets.

     The Guarantors are wholly-owned subsidiaries of Booth Creek and have fully
and unconditionally guaranteed the Senior Notes on a joint and several basis.
Booth Creek is a holding company and has no significant operations, assets or
cash flows separate from its investments in its subsidiaries. In addition, the
assets, equity, revenues, income and cash flow of DRE, L.L.C., Booth Creek's
only non-guarantor subsidiary, are minor and the membership interests in DRE,
L.L.C. are entirely owned by Booth Creek. There are no significant restrictions
on the ability of the Guarantors to pay dividends or otherwise transfer funds to
Booth Creek. Accordingly, Booth Creek has not presented separate financial
statements and other disclosures concerning the Guarantors or its non-guarantor
subsidiary because management has determined that such information is not
material to investors.

     During the three months ended May 3, 2002, the Company repurchased
$29,325,000 aggregate principal amount of Senior Notes for $25,588,000. After
giving effect to the write-off of related deferred financing and other costs of
$976,000, the Company recognized an extraordinary gain of $2,761,000.

     During the six months ended April 27, 2001, the Company repurchased
$8,000,000 aggregate principal amount of Senior Notes for $5,990,000. After
giving effect to the write-off of related deferred financing costs of $287,000,
the Company recognized an extraordinary gain of $1,723,000.



                                       7
<PAGE>

                     BOOTH CREEK SKI HOLDINGS, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)


Other Debt

     During the six month periods ended May 3, 2002 and April 27, 2001, the
Company entered into long-term debt and capital lease obligations of $1,644,000
and $3,276,000, respectively, for the purchase of equipment.

5. Real Estate Transactions with Related Parties

Unit 7 and 7A Development

     On November 17, 1999, Trimont Land Company ("TLC"), the owner and operator
of Northstar and a wholly-owned subsidiary of the Company, consummated the sale
to Trimont Land Holdings, Inc. ("TLH"), a wholly-owned subsidiary of Parent and
an affiliate of the Company, of certain single family development property
underlying a portion of the Unit 7 and 7A developments at Northstar for an
aggregate sales price of $7,050,000, subject to adjustment as described below.
The consideration paid to TLC consisted of $6,000,000 in cash and a promissory
note (the "TLH Note") for $l,050,000, subject to adjustment. The Company
obtained a fairness opinion for the transaction from an independent firm
qualified in the subject matter of the transaction. In connection with the sale
of development real estate on September 22, 2000 as described below, TLH's
interests in the Unit 7A lots were transferred back to TLC on September 22,
2000.

     Under the terms of the TLH Note, TLC will receive the greater of (a)
$1,050,000 plus accrued interest at 7% per annum, or (b) the Net Cash Proceeds
(as defined) derived from the resale of TLH's lots within Unit 7. Pursuant to
the terms of the sale, TLC retained the obligation to complete the scheduled
construction of the Unit 7 development, which was substantially completed in
November 2001. The Company will recognize revenue and related costs of sales for
this real estate transaction upon the close of escrow for lot sales between TLH
and third party buyers, and had reflected the $6,000,000 in cash received as a
deposit liability as of November 2, 2001.

     During the six months ended May 3, 2002, TLH consummated the sale of twenty
Unit 7 lots for net proceeds of approximately $8,900,000. As the net proceeds of
the twenty lot sales were more than the $6,000,000 in cash initially paid by TLH
for the underlying real estate, additional cash proceeds of $2,900,000 were
distributed to TLC during the six months ended May 3, 2002. In addition, the
Company relieved the existing $6,000,000 deposit liability during the six months
ended May 3, 2002. TLH intends to market and sell the remaining six Unit 7 lots
during 2002.

Development Real Estate

     On September 22, 2000, TLC and TLH entered into an Agreement for Purchase
and Sale of Real Property (the "Northstar Real Estate Agreement") pursuant to
which TLC agreed to sell to TLH certain development real estate consisting of
approximately 550 acres of land located at Northstar (the "Development Real
Estate") for a total purchase price of $27,600,000, of which 85% is payable in
cash and 15% is payable in the form of convertible secured subordinated
promissory notes. The purchase price was based on an appraisal obtained from an
independent third party appraiser. Concurrently therewith, TLC and TLH
consummated the sale of the initial land parcels contemplated by the Northstar
Real Estate Agreement, and TLC transferred the bulk of the Development Real
Estate to TLH for a total purchase price of $21,000,000, of which $17,850,000,
or 85%, was paid in cash and $3,150,000, or 15%, was paid in the form of a
convertible secured subordinated promissory note. During the six months ended
May 3, 2002, TLH transferred cash of $5,610,000 to TLC, which represents the
cash portion of the purchase price for the remaining Development Real Estate.
The $5,610,000 payment has been deferred as a deposit liability pending the sale
of the remaining Development Real Estate under the Northstar Real Estate
Agreement, which is subject to certain subdivision requirements to effect the
transfer of such property and other normal and customary closing conditions, and
is expected to be consummated in 2002.


                                       8
<PAGE>
                     BOOTH CREEK SKI HOLDINGS, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

6.   Income Taxes

     As of November 2, 2001, the Company had estimated net operating loss
carryforwards of approximately $84,700,000 for federal income tax reporting
purposes, which expire between 2012 and 2021. The tax benefits of such net
operating losses are fully offset by a valuation reserve. Based on the Company's
current tax attributes, no income tax provision or benefit is expected for the
year ending November 1, 2002. Accordingly, during the six months ended May 3,
2002, no income tax provision has been provided.

7.   Business Segments

     The Company currently operates in two business segments, resort operations
and real estate and other. Data by segment is as follows:

                               Three Months Ended          Six Months Ended
                            -----------------------    -----------------------
                              May 3,     April 27,        May 3,    April 27,
                               2002        2001            2002       2001
                            ----------  -----------    -----------  ----------
                                             (In thousands)
   Revenue:
    Resort operations....    $  57,924   $  63,559      $  114,768   $  112,522
    Real  estate  and
      other..............        5,615           -           8,915            -
                            ----------  -----------    -----------  -----------
                             $  63,539   $  63,559      $  123,683   $  112,522
                            ==========  ===========    ===========  ===========

   Operating income (loss):
    Resort operations....    $  19,070   $  22,395      $   32,864   $   30,047
    Real  estate  and
      other.............         3,809        (256)          6,247         (398)
                            ----------  -----------    -----------  -----------
                             $  22,879   $  22,139      $   39,111   $   29,649
                            ==========  ===========    ===========  ===========


                                                  May 3,        November 2,
                                                   2002           2001
                                               -------------  -------------
                                                      (In thousands)
   Segment assets:
    Resort operations..................         $ 163,257       $ 169,919
    Real estate and other..............            10,819          12,345
    Corporate and other
      nonidentifiable assets...........            15,057           6,954
                                               -------------  -------------
                                                $ 189,133       $ 189,218
                                               =============  =============

     A reconciliation  of combined  operating income for resort  operations and
real estate and other to  consolidated  income before  minority  interest,
extraordinary item and change in accounting principle is as follows:

                                 Three Months Ended        Six Months Ended
                               ----------------------   --------------------
                                May 3,      April 27,    May 3,    April 27,
                                 2002         2001        2002       2001
                               ---------    ---------   ---------  ---------
                                               (In thousands)

   Operating income for
    reportable segments.......  $ 22,879     $ 22,139    $ 39,111   $ 29,649
   Interest expense...........    (3,834)      (4,067)     (8,117)    (8,463)
   Amortization of deferred
    financing costs...........      (271)        (240)       (510)      (487)
   Other income ..............        24           67          38        123
                               ---------    ---------   ---------  ---------
   Income before
    minority interest,
    extraordinary item and
    change in accounting
    principle.................  $ 18,798     $ 17,899    $ 30,522   $ 20,822
                               =========    =========   =========  =========

                                       9
<PAGE>


ITEM 2.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
           RESULTS OF OPERATIONS

     The following discussion should be read in conjunction with the
consolidated financial statements and related notes thereto included elsewhere
in this Report. The following discussion contains certain forward-looking
statements that involve risks and uncertainties. The Company's actual results
could differ materially from those discussed herein. Factors that could cause or
contribute to the differences are discussed in "Forward-Looking Statements" and
elsewhere in this Report.

General

     The Company's ski operations are highly sensitive to weather conditions and
the overall strength of the regional economies in the areas in which the Company
operates. The Company believes that the geographic diversity of its resorts and
the use of extensive snowmaking technology coupled with advanced trail grooming
equipment, which together can provide consistent skiing conditions, can
partially mitigate the risk of both economic downturns and adverse weather
conditions in any given region. However, the Company remains vulnerable to warm
weather, heavy rains, high winds, drought and other types of severe or unusual
weather conditions, which can have a significant effect on the operating
revenues and profitability at any one of the Company's resorts.

     The Company's four most weather-sensitive resorts, Bear Mountain,
Waterville Valley, Loon Mountain and Mt. Cranmore, have invested heavily in
snowmaking capabilities to provide coverage on virtually all of their trails and
have been open for skiing at least 138, 136, 139 and 99 days, respectively,
during each of the last five ski seasons, including the 2001/02 ski season.
However, the efficiency and effectiveness of snowmaking operations can be
negatively impacted by numerous factors, including temperature variability,
reliability of water sources, availability and cost of adequate energy supplies
and unfavorable weather events such as heavy rains.

     Sierra and the Summit generally experience higher natural snowfall levels,
averaging approximately 484 and 450 inches of snowfall, respectively, per year
for the past five ski seasons. As a result of their historic natural snowfall,
their snowmaking capabilities in terms of trail coverage are considerably less
extensive than at Bear Mountain, Waterville Valley, Loon Mountain or Mt.
Cranmore. However, such resorts are dependent upon early season snowfall to
provide necessary terrain for the important Christmas holiday period, and
therefore, the timing and extent of natural snowfall can significantly impact
operating conditions.

     Northstar has averaged approximately 285 inches of snowfall per year for
the past five ski seasons. The resort has snowmaking capabilities to provide
coverage on approximately 50% of its trails. Although the resort's operations
depend significantly on natural snowfall, particularly in the early part of the
ski season, in recent years the Company has invested in additional snowmaking
facilities to improve Northstar's snowmaking production capacity.

     The Company's results of operations are also highly dependent on the
Company's ability to compete in each of the large regional ski markets in which
it operates. Management estimates that at Northstar and Sierra approximately 70%
of the 2001/02 ski season total skier days were attributable to residents of the
San Francisco/San Jose, Sacramento, Central California Valley and Lake Tahoe
regions. At Bear Mountain, more than 90% of the 2001/02 ski season total skier
days were attributable to residents of the Los Angeles, Orange County and San
Diego metropolitan regions. At Waterville Valley, Loon Mountain and Mt.
Cranmore, more than 75% of the 2001/02 ski season total skier days were
attributable to residents of Massachusetts and New Hampshire, with a large
percentage of such visitors coming from the Boston metropolitan area. At the
Summit, the Company estimates that more than 90% of the 2001/02 ski season total
skier days were attributable to residents of the Seattle/Tacoma metropolitan
region.

     A meaningful portion of total operating costs at the Company's resorts are
variable, consisting primarily of retail and food service cost of sales,
utilities and labor expense. These variable costs can fluctuate significantly
based upon skier days and seasonal factors. With the exception of certain
management, administrative and maintenance personnel, substantially all of the
Company's employees are compensated on an hourly basis. Management believes a
key element to maximizing profitability during the winter season is to closely
monitor staffing requirements and to adjust staffing levels when skier volumes
or seasonal needs dictate.

                                       10
<PAGE>


     The Company's resorts utilize significant energy resources in their
operations, including power for operating lifts and snowmaking facilities.
Volatility in the availability and cost of energy resources at the Company's
resorts could have an adverse effect on the Company's results of operations in
future periods. In this regard, in August 2001, Bear Mountain was informed by
its local electrical utility of new proposed electrical rates that if adopted
would result in an increase of approximately $1,100,000 to $1,200,000 in annual
electricity costs from the level incurred in 2001. Bear Mountain, along with
other parties, intervened in the electrical utility's rate application
proceeding before the Public Utilities Commission of the State of California
(the "PUC"). On February 8, 2002, Bear Mountain, the electrical utility and
other parties to the proceeding entered into a settlement agreement which, among
other things, would serve to reduce Bear Mountain's increased annual costs to a
range of approximately $400,000 to $500,000 over 2001 levels. The settlement
agreement is subject to the review and approval of the PUC and other
administrative requirements.

     Each of the Company's resorts is subject to the threat of personal injury
claims relating principally to snow sports activities as well as premises and
vehicular operations and worker's compensation matters. The Company maintains
various forms of insurance covering claims related to its properties and usual
and customary risks associated with the operation of four-season recreation
resorts. As a result of the terrorist attacks on September 11th, the insurance
industry has experienced significant losses and a substantial reduction in
underwriting capacity, which has generally resulted in significantly higher
renewal premiums for companies seeking insurance. In connection with its annual
renewal of insurance coverage for 2002, the Company experienced an increase in
insurance premium costs of approximately $650,000 over the level of such costs
in 2001. Offsetting this increase was the effect of the elimination of paid
skier visit insurance coverage, for which premiums were approximately $1,100,000
in 2001.

Results of Operations of the Company

     Overview

     The opening and closing dates for the Company's resorts for the 2001/02 and
2000/01 ski seasons were as follows:

                                              Opening Dates
                            ----------------------------------------------------
                                  2001/02 Season                 2000/01 Season
                            ----------------------------------------------------
     Northstar.............     November 29, 2001              November 18, 2000
     Sierra................     November 25, 2001              November 3, 2000
     Bear Mountain.........     November 27, 2001              November 9, 2000
     Waterville Valley*....     November 16, 2001              November 19, 2000
     Mt. Cranmore..........     December 15, 2001              November 25, 2000
     Loon Mountain*........     November 16, 2001              November 22, 2000
     The Summit............     November 30, 2001              December 1, 2000


                                              Closing Dates
                            ----------------------------------------------------
                                  2001/02 Season                 2000/01 Season
                            ----------------------------------------------------

     Northstar.............     April 21, 2002                 April 22, 2001
     Sierra................     April 15, 2002                 April 23, 2001
     Bear Mountain.........     April 14, 2002                 April 22, 2001
     Waterville Valley.....     April 7, 2002                  April 15, 2001
     Mt. Cranmore..........     March 24, 2002                 April 1, 2001
     Loon Mountain.........     April 14, 2002                 April 29, 2001
     The Summit............     May 5, 2002                    April 22, 2001

     *  Following their openings, Waterville Valley and Loon Mountain ceased
     operations in December 2001 for 6 and 10 days, respectively, due to eroding
     conditions as a result of warm weather.


     Due to warm temperatures and the lack of natural snowfall in the Lake Tahoe
region for most of November 2001, Northstar and Sierra did not open for the
2001/02 season until after Thanksgiving Day, whereas for the 2000/01 season,
Northstar opened on schedule and Sierra experienced an unusually early opening.
In the first half of December 2001, the Lake Tahoe region received significantly
above average snowfall, which allowed Northstar and Sierra to open 100% of their
terrain earlier than usual, and provided favorable conditions going into the
Christmas holiday period and the first half of January 2002. However, snowfall
levels in the Lake Tahoe region in January and February 2002 were below
historical levels, and several weekends in March 2002 were negatively impacted
by disruptive storms. In addition, the early timing of the Easter holiday period
and softening conditions in April 2002 negatively impacted late season business.
For the 2000/01 season as a whole, snowfall levels in the Lake Tahoe region were
below historical levels.

                                       11
<PAGE>

     For the 2001/02 season, Bear Mountain opened later than scheduled due to
warm weather in Southern California, which negatively impacted early season
skier volumes at Bear Mountain as compared to the 2000/01 ski season. However,
Bear Mountain experienced favorable snowmaking conditions and adequate snowfall
in December 2001, which allowed for increased trail availability over the
Christmas holiday. As a result, the resort experienced a strong Christmas
holiday period during the 2001/02 season, which partially offset the effects of
the delayed opening. Bear Mountain experienced below average snowfall from
January 2002 through the end of the season, compared to generally adequate
levels of snowfall during the same period in the 2000/01 ski season.

     For the 2001/02 season, the Northeast experienced drought conditions and
one of the warmest winters on record. While Waterville Valley and Loon Mountain
opened for the 2001/02 season as scheduled, the resorts were forced to close for
six and ten days, respectively, in early December 2001 due to eroding conditions
as a result of warm weather. Mt. Cranmore was unable to open for the 2001/02
season until December 15, 2001. In addition to difficult early season conditions
and below average snowfall, the Company's New Hampshire resorts experienced an
above average number of negative weather events during the 2001/02 season,
including periods of warm weather and rain. By comparison, weather conditions
for the Company's New Hampshire resorts for the 2000/01 season were generally
favorable, with cold temperatures and above average snowfall.

     The Summit received above average snowfall and experienced generally
favorable conditions during the 2001/02 season, whereas the 2000/01 season was
marked by significantly below average snowfall.

     Three Months Ended May 3, 2002 Compared to the Three Months Ended April 27,
     2001

     Total revenue for the three months ended May 3, 2002 was $63,539,000, a
decrease of $20,000 from the Company's revenues for the three months ended April
27, 2001. Revenues from resort operations for the 2002 period were $57,924,000,
a decrease of $5,635,000, or 9%, as compared to the 2001 period. Revenues from
real estate operations for the three months ended May 3, 2002 were $5,600,000,
which were due to the close of escrow on thirteen lots within the Unit 7
development at Northstar. Timber operations contributed revenues of $15,000 in
the 2002 period. There were no revenues generated by the real estate and other
segment for the three months ended April 27, 2001.

     The following table summarizes the sources of the Company's revenues from
resort operations for the three months ended May 3, 2002 and April 27, 2001:


                                 Three Months Ended
                               ----------------------             Percentage
                                May 3,      April 27,   Increase   Increase
                                 2002         2001     (Decrease) (Decrease)
                               ---------    ---------  ---------   ---------
                                        (In thousands)


   Lift Tickets...............  $ 23,786     $ 27,568    $ (3,782)       (14)%
   Season Passes..............     8,273        7,217       1,056         15
   Snow School................     5,122        5,159         (37)        (1)
   Equipment Rental...........     5,523        6,044        (521)        (9)
   Retail.....................     2,192        2,611        (419)       (16)
   Food and Beverage..........     8,567        9,611      (1,044)       (11)
   Other......................     4,461        4,549         (88)        (2)
                               ---------    ---------   ---------
   Revenues from Resort
     Operations before Paid
     Skier Visit Insurance....    57,924       62,759      (4,835)        (8)
   Paid Skier Visit Insurance.         -          800        (800)      (100)
                               ---------    ---------   ---------
   Total Resort Operations
     Revenues.................  $ 57,924     $ 63,559    $ (5,635)        (9)
                               =========    =========   =========



                                       12
<PAGE>



     Total skier visits generated by each of the Company's resorts for the three
months ended May 3, 2002 and April 27, 2001 were as follows:

                                 Three Months Ended
                               ----------------------             Percentage
                                May 3,      April 27,   Increase   Increase
                                 2002         2001     (Decrease) (Decrease)
                               ---------    ---------  ---------   ---------
                                        (In thousands)


   Northstar..................       284          305         (21)        (7)%
   Sierra.....................       209          220         (11)        (5)
   Bear Mountain..............       152          180         (28)       (16)
   Waterville Valley..........       110          137         (27)       (20)
   Mt. Cranmore...............        55           81         (26)       (32)
   Loon Mountain..............       164          251         (87)       (35)
   The Summit.................       281          264          17          6
                                  -------      -------     -------
                                   1,255        1,438        (183)       (13)
                                  =======      =======     =======

     Due to the effect of a 53rd week in the Company's 2001 fiscal year, the
second fiscal quarter of 2002 commenced on February 2, 2002 and ended on May 3,
2002. The 2001 period commenced on January 27, 2001 and ended on April 27, 2001.
For the Company, the period from January 27 to February 1 of each year is part
of its core earnings period, and the shift in timing of the 2002 and 2001 fiscal
quarters had a significant effect on the comparability of operating results for
such periods. The Company's resorts generated approximately 106,000 skier visits
for the period from January 27, 2002 through February 1, 2002. Using proration
methods based on skier visits and other factors, the Company estimates that
resort operations revenues for the six day period from January 27, 2002 to
February 1, 2002 were approximately $4,800,000.

     For the 2000/01 season, the Company arranged for four separate paid skier
visit insurance policies covering Bear Mountain, Loon Mountain, Waterville
Valley and the Summit. The policies had a deductible for the initial decline
from targeted paid skier visit and revenue levels and stated maximum coverage
levels. In addition, the policies required the insured to experience monthly or
annual snowfall amounts below certain agreed upon levels before a claim could be
filed for the decline in paid skier visits. For the three and six month periods
ended April 27, 2001, the Company recorded resort operations revenues of
$800,000 and $1,500,000, respectively, for claims attributable to lower than
agreed upon paid skier visits and snowfall levels under the Summit and
Waterville Valley policies. The Company's claims were determined based on a
specified formula under the paid skier visit insurance policies and snowfall
information verified by an independent third party. The Company believes that it
has fully complied with its obligations under the policies, and has properly
reported and made claims in accordance with the policies for losses aggregating
in excess of $1,500,000. As a result of the underwriters' failure to properly
process the Company's claims, in November 2001, the Company filed a lawsuit
against the underwriters seeking recovery for breach of contract, breach of
covenant of good faith and unfair and deceptive business practices. In April
2002, the underwriters made a partial offer of settlement of $700,000, which the
Company accepted with a reservation of all rights and remedies under the terms
of the policies and applicable law with respect to its remaining claims. The
Company intends to vigorously pursue collection of its remaining claims. The
parties to the lawsuit are currently conducting discovery in the matter. Based
on an evaluation of information to date and the advice of counsel, the Company
believes that realization of its recorded claims is probable. However, no
assurance can be given regarding the timing of the resolution of this matter.

     Resort operations revenues, excluding the effect of paid skier visit
insurance, were $57,924,000 for the three months ended May 3, 2002, a decrease
of $4,835,000, or 8%, from the 2001 period. Revenues for Northstar decreased by
$572,000, which was primarily due to lower skier visits, partially offset by
increases in per skier revenue yields. Revenues for Sierra decreased by $332,000
due to lower skier visits partially offset by higher season pass revenues and
modestly improved per skier revenue yields. Revenues for Bear Mountain decreased
by $1,521,000 due to lower skier visits. Revenues for Waterville Valley, Mt.
Cranmore and Loon Mountain decreased by $724,000, $554,000 and $1,522,000,
respectively, due to reduced skier visits partially offset by increases in per
skier revenue yields. The Summit's revenues increased by $390,000 due primarily
to increased skier visits, as well as higher season pass revenues.

                                       13
<PAGE>

     Cost of sales for resort operations for the three months ended May 3, 2002
were $27,776,000, a decrease of $722,000, or 3%, as compared to the 2001 period.
The decrease was the result of the combined effects of the following items: (1)
a decrease in resort operations labor and benefits of $926,000 due to decreased
skier visits, and the reduced number of operating days in the 2002 period due to
the shift in timing of the start of the quarter as previously discussed and the
generally earlier closing dates in 2002 due to the timing of the Easter holiday
and relatively poor late season conditions, (2) decreased direct cost of sales
of $531,000 primarily related to decreased sales of retail and food and beverage
products, (3) increased snowmaking costs at Bear Mountain and the New Hampshire
resorts as a result of the lack of natural snowfall in 2002, (4) a decrease in
insurance expense primarily as a result of the absence of paid skier visit
insurance coverage in 2002, (5) a decrease in variable operating costs due to
the reduction in skier visits and operating days, and (6) increased workers'
compensation provisions of approximately $1,000,000 for unfavorable trends in
workers' compensation exposures at the Company's California and Washington
resorts.

     Selling, general and administrative expenses for the three months ended May
3, 2002 were $6,710,000, a decrease of $68,000, or 1%, as compared to the 2001
period. Selling, general and administrative expenses for the 2002 and 2001
periods include $304,000 and $256,000, respectively, relating to the Company's
real estate segment.

     Cost of sales for real estate and timber operations for the three months
ended May 3, 2002 was $1,502,000, including noncash cost of real estate sales of
$1,464,000, as a result of the close of escrow on thirteen lots within the Unit
7 development at Northstar. There were no real estate or timber sales during the
three months ended April 27, 2001.

     Operating income for the three months ended May 3, 2002 was $22,879,000, an
increase of $740,000, over the operating income generated for the 2001 period,
as a result of the factors discussed above.

     Interest expense for the three months ended May 3, 2002 totaled $3,834,000,
a decrease of $233,000, or 6%, from the Company's interest expense for the three
months ended April 27, 2001, due to reduced borrowings and lower average
interest rates.

     As of November 2, 2001, the Company had estimated net operating loss
carryforwards of approximately $84,700,000 for federal income tax reporting
purposes, which expire between 2012 and 2021. The tax benefits of such net
operating losses are fully offset by a valuation reserve. Based on the Company's
current tax attributes, no income tax provision or benefit is expected for the
year ending November 1, 2002. Accordingly, during the three months ended May 3,
2002, no income tax provision has been provided.

     The Company recognized extraordinary gains on the early retirement of debt
of $2,761,000 and $747,000 for the three months ended May 3, 2002 and April 27,
2001, respectively.

     In June 2001, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards No. 142, "Goodwill and Other
Intangible Assets" ("SFAS No. 142"). The Company adopted SFAS No. 142 effective
as of November 3, 2001. Under the new rules, goodwill will no longer be
amortized but will be subject to annual impairment tests in accordance with the
pronouncement. The Company's operating results for the three months ended April
27, 2001 reflected goodwill amortization of $586,000. Adjusted net income for
the three months ended April 27, 2001 would have been $19,199,000 excluding such
goodwill amortization.

     The Company's net income for the three months ended May 3, 2002 was
$21,559,000, an improvement of $2,946,000 from the net income of $18,613,000
generated for the three months ended April 27, 2001, as a result of the factors
discussed above.

     The financial information presented below includes information on "Total
EBITDA," "Noncash Cost of Real Estate Sales" and "Total EBITDA Excluding Noncash
Cost of Real Estate Sales." "Total EBITDA" represents income from operations
before depreciation and amortization expense. "Noncash Cost of Real Estate
Sales" represents the allocated portion of real estate development expenditures
previously capitalized (including acquisition costs allocated to real estate
development) which relate to current real estate sales. Although EBITDA is not a
measure of performance under accounting principles generally accepted in the
United States ("GAAP"), the information is presented because management believes
it provides useful information regarding a company's ability to incur and
service debt. Further, Total EBITDA Excluding Noncash Cost of Real Estate Sales
is calculated essentially in the manner that "EBITDA" is calculated under the
indenture governing the Company's 12.5% senior notes due 2007 (the "Senior
Notes"), and therefore, management believes this measure is meaningful to
holders of the Senior Notes. EBITDA should not be considered in isolation or as
a substitute for net income, cash flows from operating activities and other
income or cash flow statement data prepared in accordance with GAAP, or as a
measure of profitability or liquidity. In addition, the EBITDA measures as
determined by the Company may not be comparable to related or similar measures
as reported by other companies and do not represent funds available for
discretionary use.

                                       14
<PAGE>


                                   Three Months Ended
                                 ---------------------              Percentage
                                  May 3,      April 27,  Increase    Increase
                                   2002         2001    (Decrease)  (Decrease)
                                 --------     --------   --------    --------
                                         (In thousands)

     Total EBITDA............  $  27,551     $  28,283    $  (732)        (3)%
     Noncash Cost of Real
      Estate Sales...........  $   1,464     $       -    $ 1,464        100
     Total EBITDA Excluding
      Noncash Cost of Real
      Estate Sales...........  $  29,015     $  28,283    $   732          3


     Six Months Ended May 3, 2002 Compared to the Six Months Ended April 27,
     2001

     Total revenue for the six months ended May 3, 2002 was $123,683,000, an
increase of $11,161,000, or 10%, over the Company's revenues for the six months
ended April 27, 2001. Revenues from resort operations for the 2002 period were
$114,768,000, an increase of $2,246,000, or 2%, as compared to the 2001 period.
Revenues from real estate operations for the six months ended May 3, 2002 were
$8,900,000, which were due to the close of escrow on twenty lots within the Unit
7 development at Northstar. Timber operations contributed revenues of $15,000 in
the 2002 period. There were no revenues generated by the real estate and other
segment for the six months ended April 27, 2001.

     The following table summarizes the sources of the Company's revenues from
resort operations for the six months ended May 3, 2002 and April 27, 2001:

                                  Six Months Ended
                               ----------------------             Percentage
                                May 3,      April 27,   Increase   Increase
                                 2002         2001     (Decrease) (Decrease)
                               ---------    ---------  ---------   ---------
                                        (In thousands)


   Lift Tickets...............  $ 49,109     $ 49,128    $    (19)         -%
   Season Passes..............    16,124       12,838       3,286         26
   Snow School................     9,591        8,958         633          7
   Equipment Rental...........    10,362       10,320          42          -
   Retail.....................     4,717        4,809         (92)        (2)
   Food and Beverage..........    16,513       16,476          37          -
   Other......................     8,352        8,239         113          1
                               ---------    ---------   ---------
   Revenues from Resort
     Operations before Paid
     Skier Visit Insurance....   114,768      110,768       4,000          4
   Paid Skier Visit Insurance.         -        1,754      (1,754)      (100)
                               ---------    ---------   ---------
   Total Resort Operations
     Revenues.................  $114,768     $112,522    $  2,246          2
                               =========    =========   =========



<
                                       15
<PAGE>



     Total skier visits generated by each of the Company's resorts for the six
months ended May 3, 2002 and April 27, 2001 were as follows:

                                  Six Months Ended
                               ----------------------             Percentage
                                May 3,      April 27,   Increase   Increase
                                 2002         2001     (Decrease) (Decrease)
                               ---------    ---------  ---------   ---------
                                        (In thousands)


   Northstar..................       521          519           2          -%
   Sierra.....................       419          391          28          7
   Bear Mountain..............       303          333         (30)        (9)
   Waterville Valley..........       205          235         (30)       (13)
   Mt. Cranmore...............        96          129         (33)       (26)
   Loon Mountain..............       301          385         (84)       (22)
   The Summit.................       612          508         104         20
                                  -------      -------     -------
                                   2,457        2,500         (43)        (2)
                                  =======      =======     =======

     As previously discussed, for the six months ended April 27, 2001, the
Company recorded resort operations revenues of $1,500,000 for paid skier visit
insurance claims attributable to lower than agreed upon paid skier visits and
snowfall levels under the Summit and Waterville Valley policies for the 2000/01
ski season. In addition, resort operations revenues for the 2001 period included
$254,000 for additional claim recoveries received upon the final settlement of
the 1999/00 paid skier visit insurance policies in excess of the amounts
previously recognized in fiscal 2000.

     Resort operations revenues, excluding the effect of paid skier visit
insurance, were $114,768,000 for the six months ended May 3, 2002, an increase
of $4,000,000, or 4%, from the 2001 period. Revenues for Northstar increased by
$1,321,000 primarily due to higher per skier revenue yields. Revenues for Sierra
increased by $1,538,000 due to higher skier visits and increased season pass
sales, as well as moderate increases in per skier revenue yields. Revenues for
Bear Mountain decreased by $444,000 primarily due to lower skier visits,
partially offset by improved per skier revenue yields. Revenues for Waterville
Valley, Mt. Cranmore and Loon Mountain decreased by $525,000, $689,000 and
$978,000, respectively, primarily due to lower skier visits, partially offset by
improved per skier revenue yields. The Summit's revenues increased by $3,777,000
due primarily to a significant increase in skier visits, as well as higher
season pass revenues and yield improvements. The improvement in per skier
revenue yields at the Company's resorts was primarily due to price increases,
and to a lesser extent, sales of additional services and products to the
Company's guests.

     Cost of sales for resort operations for the six months ended May 3, 2002
were $57,993,000, an increase of $1,322,000, or 2%, as compared to the 2001
period. The increase was the result of the combined effects of the following
items: (1) increased workers' compensation provisions of approximately
$1,300,000 for unfavorable trends in workers' compensation exposures at the
Company's California and Washington resorts, (2) increased credit card costs,
United States Forest Service permit fees and other variable operating costs
related to increased revenues, (3) costs associated with the Company's
involvement in electrical rate proceedings and other regulatory matters
involving Bear Mountain, (4) normal inflationary factors, and (5) a decrease in
insurance expense, primarily as a result of the absence of paid skier visit
insurance coverage in 2002.

     Selling, general and administrative expenses for the six months ended May
3, 2002 were $14,984,000, an increase of $808,000, or 6%, as compared to the
2001 period. Selling, general and administrative expenses for the 2002 and 2001
periods include $495,000 and $398,000, respectively, relating to the Company's
real estate segment. The increase in total selling, general and administrative
expenses between the 2002 and 2001 periods was principally due to the following
factors: (1) an increase in legal and professional costs for Loon Mountain due
to significant activity during the 2002 period on various legal matters, (2) an
increase in payroll due to the addition of certain resort and corporate
management and administrative positions, as well as increased commission costs
due to higher commissionable sales, and (3) normal inflationary factors.

     Cost of sales for real estate and timber operations for the six months
ended May 3, 2002 was $2,173,000, including noncash cost of real estate sales of
$2,129,000, primarily as a result of the close of escrow on twenty lots within
the Unit 7 development at Northstar. There were no real estate sales or timber
operations during the six months ended April 27, 2001.

                                       16
<PAGE>

     Operating income for the six months ended May 3, 2002 was $39,111,000, an
increase of $9,462,000 over the operating income generated for the 2001 period,
as a result of the factors discussed above.

     Interest expense for the six months ended May 3, 2002 totaled $8,117,000, a
decrease of $346,000, or 4%, from the Company's interest expense for the six
months ended April 27, 2001, as a result of reduced borrowings and lower average
interest rates.

     As of November 2, 2001, the Company had estimated net operating loss
carryforwards of approximately $84,700,000 for federal income tax reporting
purposes, which expire between 2012 and 2021. The tax benefits of such net
operating losses are fully offset by a valuation reserve. Based on the Company's
current tax attributes, no income tax provision or benefit is expected for the
year ending November 1, 2002. Accordingly, during the six months ended May 3,
2002, no income tax provision has been provided.

     The Company recognized extraordinary gains on the early retirement of debt
of $2,761,000 and $1,723,000 for the six months ended May 3, 2002 and April 27,
2001, respectively.

     In June 2001, the FASB issued SFAS No. 142, "Goodwill and Other Intangible
Assets." The Company adopted SFAS No. 142 effective as of November 3, 2001.
Under the new rules, goodwill will no longer be amortized but will be subject to
annual impairment tests in accordance with the pronouncement. The Company's
operating results for the six months ended April 27, 2001 reflected goodwill
amortization of $1,171,000. Adjusted net income for the six months ended April
27, 2001 would have been $23,647,000 excluding such goodwill amortization. In
connection with the adoption of SFAS No. 142, the Company performed a
transitional impairment test for recorded goodwill as of November 3, 2001 for
each resort. Based on the results of the transitional impairment test, the
Company wrote down goodwill by $200,000 for one resort, which has been reflected
as the cumulative effect of a change in accounting principle in the accompanying
statement of operations for the six months ended May 3, 2002.

     The Company's net income for the six months ended May 3, 2002 was
$33,068,000, an improvement of $10,592,000 from the net income of $22,476,000
generated for the six months ended April 27, 2001, as a result of the factors
discussed above.

     The financial information presented below includes information on "Total
EBITDA," "Noncash Cost of Real Estate Sales" and "Total EBITDA Excluding Noncash
Cost of Real Estate Sales." "Total EBITDA" represents income from operations
before depreciation and amortization expense. "Noncash Cost of Real Estate
Sales" represents the allocated portion of real estate development expenditures
previously capitalized (including acquisition costs allocated to real estate
development) which relate to current real estate sales.

                                    Six Months Ended
                                 ---------------------              Percentage
                                  May 3,      April 27,  Increase    Increase
                                   2002         2001    (Decrease)  (Decrease)
                                 --------     --------   --------    --------
                                         (In thousands)

     Total EBITDA............  $  48,533     $  41,675    $ 6,858         16%
     Noncash Cost of Real
      Estate Sales...........  $   2,129     $       -    $ 2,129        100
     Total EBITDA Excluding
      Noncash Cost of Real
      Estate Sales...........  $  50,662     $  41,675    $ 8,987         22


Liquidity and Capital Resources

     The Company's primary liquidity needs are to fund capital expenditures,
service indebtedness and support seasonal working capital requirements. The
Company's primary sources of liquidity are cash and cash equivalents, cash flow
from operations and borrowings under the Senior Credit Facility (as defined
below). Virtually all of the Company's operating income is generated by its
subsidiaries. As a result, the Company is dependent on the earnings and cash
flow of, and dividends and distributions or advances from, its subsidiaries to
provide the funds necessary to meet its debt service obligations.

                                       17
<PAGE>

     Effective March 15, 2002, the Company and its subsidiaries entered into an
Amended and Restated Credit Agreement (the "Senior Credit Facility") with Fleet
National Bank, as administrative agent ("Agent"), and certain lenders. The
following summary of the terms of the Senior Credit Facility is qualified by
reference to the complete agreement governing the Senior Credit Facility, which
was filed as an exhibit to the Company's Form 10-Q for its fiscal quarter ended
February 1, 2002.

     The Senior Credit Facility provides a revolving credit facility (the
"Revolving Credit Facility") with borrowing availability of up to $25,000,000,
and a term loan facility (the "Term Facility") with borrowing availability of up
to $25,000,000. The Senior Credit Facility requires that the Company not have
any borrowings under the Revolving Credit Facility for a period of 30
consecutive days commencing sometime between January 15 and February 28 of each
year. The Term Facility provides for quarterly commitment reductions of
$1,000,000 on the last day of January, April, July and October of each year
beginning in 2003 through October 31, 2005, the maturity date of the Senior
Credit Facility. The Company is required to repay amounts outstanding under the
Term Facility on such dates by an amount equal to the greater of (i) the amount
by which outstanding Term Facility borrowings exceed the then-applicable term
loan commitment and (ii) the Excess Cash Proceeds (as defined in the Senior
Credit Facility) derived from specified asset sales determined on a cumulative
basis. No amount of the Term Facility which is repaid may be reborrowed. The
entire unpaid balance under the Senior Credit Facility is due and payable on
October 31, 2005. Borrowings under the Senior Credit Facility are secured by (a)
a pledge to the Agent for the ratable benefit of the financial institutions
party to the Senior Credit Facility of all of the capital stock of Booth Creek's
principal subsidiaries and (b) a grant of a security interest in substantially
all of the consolidated assets of Booth Creek and its subsidiaries.

     The Senior Credit Facility contains financial covenants relating to the
maintenance of (a) minimum consolidated resort EBITDA (as defined in the Senior
Credit Facility) measured quarterly on a rolling four quarter basis, (b) the
ratio of consolidated EBITDA (as defined in the Senior Credit Facility) to
consolidated debt service, and (c) levels of adjusted consolidated leverage. The
Senior Credit Facility also contains restrictive covenants pertaining to the
management and operation of Booth Creek and its subsidiaries. The covenants
include, among others, significant limitations on indebtedness, guarantees,
letters of credit, liens, investments, distributions, capital expenditures,
mergers, acquisitions, asset sales, fundamental corporate changes, transactions
with affiliates, optional payments and modification of debt instruments and
issuances of stock.

     For purposes of calculating interest, loans under the Senior Credit
Facility can be, at the election of the Company, Base Rate Loans or LIBOR Rate
Loans or a combination thereof. Base Rate Loans bear interest at the sum of (a)
the higher of (i) Agent's prime rate or (ii) the federal funds rate plus .5%
plus (b) a margin of 1.5%. LIBOR Rate Loans bear interest at the LIBOR rate plus
a margin of 4%. Interest on loans outstanding is payable quarterly. The Senior
Credit Facility also requires commitment fees of .5% based on the unused
borrowing availability of the Revolving Credit Facility. Borrowings outstanding
under the Term Facility as of May 3, 2002 bore interest at an annual rate of
6.8% pursuant to the LIBOR rate option.

     Borrowings under the Revolving Credit Facility may be used for working
capital and general corporate purposes. Borrowings under the Term Facility may
be used to repurchase the Company's Senior Notes or repay certain other
indebtedness, together with accrued and unpaid interest thereon. During the
three months ended May 3, 2002, the Company repurchased $29,325,000 aggregate
principal amount of Senior Notes in privately-negotiated transactions through
borrowings under the Term Facility and available cash resources. As of May 3,
2002, outstanding borrowings under the Term Facility were $25,000,000.

     The Company had a net working capital deficit of $6,542,000 as of May 3,
2002 (excluding $9,465,000 of unearned revenue and deposits from resort and real
estate operations, which will not require cash spending to settle such
liabilities), which will negatively affect liquidity during the remainder of
2002.

     The Company generated cash from operating activities of $34,953,000 for the
six months ended May 3, 2002 as compared to $28,415,000 for the six months ended
April 27, 2001. The increase in operating cash flows for the 2002 period was
primarily due to the improved operating results for such period.

     Cash used in investing activities totaled $4,533,000 and $6,396,000 for the
six months ended May 3, 2002 and April 27, 2001, respectively. The results for
the 2002 and 2001 periods primarily reflect capital expenditures for the
purchase of property and equipment.

                                       18
<PAGE>

     Cash used in financing activities totaled $23,651,000 and $14,596,000 for
the six months ended May 3, 2002 and April 27, 2001, respectively. The results
for the 2002 and 2001 periods reflect net repayments on the Revolving Credit
Facility and scheduled payments of long-term debt and preferred stock. In the
2002 period, the Company borrowed $25,000,000 under the Term Facility, which
together with available cash resources, were used to repurchase $29,325,000
aggregate principal amount of Senior Notes for $25,588,000. In the 2001 period,
the Company utilized available cash resources of $5,990,000 to repurchase
$8,000,000 aggregate principal amount of Senior Notes. The Company may consider
repurchasing additional Senior Notes in the future if it could do so on
favorable terms subject to financing and other liquidity constraints.

     On November 17, 1999, Trimont Land Company ("TLC"), the owner and operator
of Northstar and a wholly-owned subsidiary of the Company, consummated the sale
to Trimont Land Holdings, Inc. ("TLH"), a wholly-owned subsidiary of Parent and
an affiliate of the Company, of certain single family development property
underlying a portion of the Unit 7 and 7A developments at Northstar for an
aggregate sales price of $7,050,000, subject to adjustment as described below.
The consideration paid to TLC consisted of $6,000,000 in cash and a promissory
note (the "TLH Note") for $1,050,000, subject to adjustment. The Company
obtained a fairness opinion for the transaction from an independent firm
qualified in the subject matter of the transaction. In connection with the sale
of development real estate on September 22, 2000 as described below, TLH's
interests in the Unit 7A lots were transferred back to TLC on September 22,
2000.

     Under the terms of the TLH Note, TLC will receive the greater of (a)
$1,050,000 plus accrued interest at 7% per annum, or (b) the Net Cash Proceeds
(as defined) derived from the resale of TLH's lots within Unit 7. Pursuant to
the terms of the sale, TLC retained the obligation to complete the scheduled
construction of the Unit 7 development, which was substantially completed in
November 2001. The Company will recognize revenue and related costs of sales for
this real estate transaction upon the close of escrow for lot sales between TLH
and third party buyers, and had reflected the $6,000,000 cash received as a
deposit liability as of November 2, 2001.

     During the six months ended May 3, 2002, TLH consummated the sale of twenty
Unit 7 lots for net proceeds of approximately $8,900,000. As the net proceeds of
the twenty lot sales were more than the $6,000,000 in cash initially paid by TLH
for the underlying real estate, additional cash proceeds of $2,900,000 were
distributed to TLC during the six months ended May 3, 2002. In addition, the
Company relieved the existing $6,000,000 deposit liability during the six months
ended May 3, 2002. TLH intends to market and sell the remaining Unit 7 lots
during 2002.

     On September 22, 2000, TLC and TLH entered into an Agreement for Purchase
and Sale of Real Property (the "Northstar Real Estate Agreement") pursuant to
which TLC agreed to sell to TLH certain development real estate consisting of
approximately 550 acres of land located at Northstar (the "Development Real
Estate") for a total purchase price of $27,600,000, of which 85% is payable in
cash and 15% is payable in the form of convertible secured subordinated
promissory notes. The purchase price was based on an appraisal obtained from an
independent third party appraiser. Concurrently therewith, TLC and TLH
consummated the sale of the initial land parcels contemplated by the Northstar
Real Estate Agreement, and TLC transferred the bulk of the Development Real
Estate to TLH for a total purchase price of $21,000,000, of which $17,850,000,
or 85%, was paid in cash and $3,150,000, or 15%, was paid in the form of a
convertible secured subordinated promissory note. During the six months ended
May 3, 2002, TLH transferred cash of $5,610,000 to TLC, which represents the
cash portion of the purchase price for the remaining Development Real Estate.
The $5,610,000 payment has been deferred as a deposit liability pending the sale
of the remaining Development Real Estate under the Northstar Real Estate
Agreement, which is subject to certain subdivision requirements to effect the
transfer of such property and other normal and customary closing conditions, and
is expected to be consummated in 2002.

     The transactions described above between TLC and TLH have facilitated the
sale and development of real estate in and around Northstar while at the same
time minimizing development risk to the Company and providing the Company with
immediate liquidity. Management believes that the terms of the transactions have
been at least as favorable as would be available from unrelated parties. As
noted above, the Company has obtained fairness opinions and/or appraisals from
independent third parties to support this belief. Neither the Company nor any of
its subsidiaries, including TLC, has provided credit support to TLH or has any
commitment or obligation to provide funds to TLH in the future.

                                       19
<PAGE>

     The Company's capital expenditures for property and equipment during the
six months ended May 3, 2002 were $5,946,000 (including $1,644,000 of equipment
acquired through capital leases), and consisted primarily of the remaining
portion of the Company's 2001 capital programs and acquisitions of grooming
equipment. Management anticipates that maintenance capital expenditures for its
fiscal 2002 and 2003 capital programs will range from $5,000,000 to $6,000,000
per year. The Company's 2002 expansion capital program contemplates capital
expenditures of approximately $5,000,000 to $5,500,000 for various projects
including (1) project planning and approvals at Northstar, Loon Mountain and the
Summit, (2) snowmaking infrastructure at Bear Mountain to replace planned
reductions in existing diesel-powered snowmaking operations to meet certain
environmental requirements, (3) a new rental facility at the Summit, and (4)
continued enhancements to customer business applications. Depending upon the
timing of certain approvals, expenditures for real estate held for development
and sale are anticipated to range from $3,700,000 to $4,600,000 in fiscal 2002.
The Company plans to fund these capital expenditures from available cash flow,
vendor financing to the extent permitted under the Senior Credit Facility and
the Indenture for the Company's Senior Notes and borrowings under the Senior
Credit Facility. Commitments for future capital expenditures were approximately
$4,000,000 at May 3, 2002.

     Management believes that there is a considerable degree of flexibility in
the timing (and, to a lesser degree, the scope) of its capital expenditure
program, and even greater flexibility as to its real estate development
objectives. While the capital expenditure program described above is regarded by
management as important, both as to timing and scope, discretionary capital
spending above maintenance levels can be deferred, in some instances for
substantial periods of time, in order to address cash flow or other constraints.

     With respect to the Company's potential real estate development
opportunities, management believes that such efforts would enhance ski-related
revenues and contribute independently to earnings. In addition, with respect to
significant development projects, the Company expects to continue to pursue
arrangements that would reduce infrastructure and other development costs.
Nonetheless, existing lodging facilities in the vicinity of each resort are
believed to be adequate to support current skier volumes and a deferral or
curtailment of development efforts is not regarded by management as likely to
adversely affect skier days and ski-related revenues or profitability. The
Company also believes that its current infrastructure is sufficient, and that
development of real estate opportunities is not presently necessary to support
its existing operations.

     The Company's significant contractual obligations include long-term debt
(including capital lease obligations) and operating leases. As of May 3, 2002,
the Company's scheduled maturities of long-term debt and operating lease
commitments for the periods indicated were as follows (in thousands):

          Six Months
           Ending              Year Ending October
           October ----------------------------------------------------
            2002    2003    2004      2005   2006     2007   Thereafter    Total
           ------  ------  ------   ------  ------   ------  ----------   ------
Long-term
 Debt    $   31  $ 5,557 $ 6,103  $ 17,506  $ 125  $ 96,225  $    -     $125,547
         ======= ======= ======== ========  ====== ========= =========  ========
Operating
 Leases  $  237  $ 1,186 $   889  $    606  $ 227  $    104  $  2,069   $  5,318
         ======= ======= ======== ========  ====== ========= =========  ========

     The Company's liquidity has been and will continue to be significantly
affected by its high leverage. As a result of its leveraged position, the
Company will have significant cash requirements to service debt and funds
available for working capital, capital expenditures, acquisitions and general
corporate purposes are limited. In addition, the Company's high level of debt
may increase its vulnerability to competitive pressures and the seasonality of
the skiing and recreational industries. Any decline in the Company's expected
operating performance could have a material adverse effect on the Company's
liquidity and on its ability to service its debt and make required capital
expenditures.

     In addition, the Senior Credit Facility and the Indenture governing the
Company's Senior Notes each contains covenants that, among other things,
significantly limit the Company's ability to obtain additional sources of
capital and may affect the Company's liquidity. These covenants restrict the
ability of the Company and its Restricted Subsidiaries to, among other things,
incur additional indebtedness, create liens, make investments, consummate
certain asset sales, create subsidiaries, issue subsidiary stock, consolidate or
merge with any other person, or transfer all or substantially all of the assets
of the Company. Further, upon the occurrence of a Change of Control (as defined
in the Indenture), the Company may be required to repurchase the Senior Notes at
101% of the principal amount thereof, plus accrued and unpaid interest. The
occurrence of a Change of Control may also constitute a default under the Senior
Credit Facility. No assurance can be given that the Company would be able to
finance a Change of Control repurchase offer. The Senior Credit Facility also
requires the Company to maintain specified consolidated financial ratios and
satisfy certain consolidated financial tests. The Company's ability to meet
these financial covenants may be affected by events beyond its control, and
there can be no assurance that the Company will meet those covenants.

                                       20
<PAGE>

     As of May 3, 2002, the Company had $125,547,000 of total long-term debt.
The Company expects that existing cash and cash equivalents, cash generated from
operations and cash proceeds of planned real estate sales at Northstar, together
with borrowing availability, will be adequate to fund the Company's debt service
and other cash operating requirements over the next twelve months. In order to
focus the Company's resources on attractive investment opportunities at certain
of its resorts and to satisfy short-term and long-term liquidity requirements,
the Company may in the future consider divestitures of non-strategic assets,
including resorts, if such transactions can be completed on favorable terms.

     Any decline in the Company's expected operating performance or the
inability of management to successfully implement the Company's business
strategy, could have a material adverse effect on the Company's financial
position and liquidity. In such case, the Company could be required to attempt
to refinance all or a portion of its existing debt, sell other assets or obtain
additional financing. No assurance can be given of the Company's ability to do
so or the terms of any such transaction. In addition, the Company would require
additional financing for expansion of its existing properties or for future
acquisitions, if any. No assurances can be given that any such financing would
be available on commercially reasonable terms. See "Forward-Looking Statements"
herein.

     The Company believes that inflation has had little effect on its results of
operations and any impact on costs has been largely offset by increased pricing.

Significant Accounting Policies

     The Company's significant accounting policies are more fully described in
Note 1 to the Company's consolidated financial statements accompanying its
Annual Report on Form 10-K for the year ended November 2, 2001. Certain of the
Company's accounting policies require the application of judgment by management
in selecting the appropriate assumptions for calculating financial estimates. By
their nature, these judgments are subject to an inherent degree of uncertainty.
These judgments are based on historical experience, terms of existing contracts
and customer arrangements and information available from other sources, as
appropriate. The Company's significant accounting policies include:

     Revenue Recognition for Resort Operations - Revenues from resort operations
are generated from a wide variety of sources, including lift ticket sales, snow
school lessons, equipment rentals, retail product sales, food and beverage
operations, lodging and property management services and other recreational
activities, and are recognized as services are provided and products are sold.
Sales of season passes are initially deferred in unearned revenue and recognized
ratably over the season. Revenues relating to paid skier visit insurance
arrangements in prior years were recognized based on an evaluation of the policy
arrangements, actual and forecasted skier visits, actual snowfall amounts and
other relevant factors. The Company also periodically evaluates the
collectibility of all of its receivables, and, if necessary, provides for an
adequate allowance for doubtful accounts.

     Revenue Recognition for Real Estate Sales - Sales and profits on real
estate sales are recognized using the full accrual method at the point that the
Company's receivables from land sales are deemed collectible and the Company has
no significant remaining obligations for construction or development, which
typically occurs upon transfer of title. If such conditions are not met, the
recognition of all or part of the sales and profit is postponed. The Company
thoroughly evaluates contractual agreements and the underlying facts and
circumstances relating to its real estate transactions to determine the
appropriate revenue recognition treatment of such transactions in accordance
with Statement of Financial Accounting Standards No. 66, "Accounting for Sales
of Real Estate," and related pronouncements.

     Valuation of Long-Lived Assets and Goodwill - The Company periodically
evaluates whether there are facts and circumstances that indicate potential
impairment of its long-lived assets. If impairment indicators are present, the
Company reviews the carrying value of its long-lived assets for continued
appropriateness. The Company also performs periodic impairment tests for
recorded goodwill. The impairment evaluations for long-lived assets and goodwill
are based upon projections of future cash flows, estimated purchase multiples
and other relevant factors. While the Company believes its estimates are
reasonable, different assumptions could materially affect these evaluations.

                                       21
<PAGE>

     Evaluation of Contingencies - The Company's operations are affected by
various contingencies, including commercial litigation, personal injury claims
relating principally to snow sports activities and workers' compensation
matters. The Company performs periodic evaluations of these contingencies and,
based on the advice of counsel, information provided by third-party claims
administrators and other pertinent information, provides reserves for its best
estimate of the eventual outcome of these matters. While the Company believes
its estimates are reasonable, different assumptions could materially affect
these evaluations.

Pending Accounting Pronouncement

     In June 2001, the FASB issued Statement of Financial Accounting Standards
No. 143, "Accounting for Asset Retirement Obligations" ("SFAS No. 143"), which
addresses financial accounting and reporting for obligations associated with the
retirement of tangible long-lived assets and associated asset retirement costs.
The new rules apply to legal obligations associated with the retirement of
long-lived assets that result from the acquisition, construction, development
and (or) normal operation of a long-lived asset. SFAS No. 143 is effective for
the Company at the beginning of fiscal 2003. The Company believes the adoption
of SFAS No. 143 will not have a material impact on its consolidated financial
position or results of operations.

Seasonality

     The business of the Company is highly seasonal, with the vast majority of
its annual revenues expected to be generated between November and April of each
fiscal year. Management considers it essential to achieve optimal operating
results during key holidays and weekends during this period. The Company's
results of operations are, in turn, significantly dependent on favorable weather
conditions and other factors beyond the Company's control. In prior years, the
Company sought to partially mitigate the downside risk of its seasonal business
by purchasing paid skier visit insurance policies. The Company did not obtain
paid skier visit insurance coverage for its resorts for the 2001/02 ski season
as effective policies were not available on commercially viable terms.

     During the off-season months of May through October, the Company's resorts
typically experience a substantial reduction in labor and utility expense due to
the absence of ski operations, but make significant expenditures for maintenance
and capital improvements in preparation for the ensuing ski season.

Regulation and Legislation

     The Company's operations are dependent upon its ownership or control over
the real property used in its ski operations at each resort. The real property
presently used at the Northstar and Mt. Cranmore resorts is owned by the
Company, leased from third parties or controlled by easements. The Company has
the right to use a substantial portion of the real property associated with the
Bear Mountain, Sierra, Summit and Waterville Valley resorts under the terms of
Term Special Use Permits issued by the United States Forest Service. The Bear
Mountain permit expires in 2020, the Sierra permit expires in 2039, the
Waterville Valley permit expires in 2034 and the Summit permit expires in 2032.

     A substantial portion of the real property associated with the Loon
Mountain resort is likewise used under United States Forest Service permits. In
1993, the United States Forest Service authorized various lift, trail and
snowmaking improvements on Loon Mountain and an expansion onto South Mountain.
In 1996, the United States Court of Appeals for the First Circuit (the "First
Circuit") overturned this authorization on the ground that the United States
Forest Service had failed to properly address certain environmental issues under
the National Environmental Policy Act ("NEPA"). Certain improvements, including
a snowmaking pipeline and part of the expansion, had been constructed before the
First Circuit ruled. On May 5, 1997, the United States District Court for the
District of New Hampshire (the "District Court") entered a stipulated order
which authorized existing improvements to remain in place and existing
operations to continue but generally prohibited future construction, restricted
use of a major snowmaking water source, and required certain water discharge
permits to be pursued, pending United States Forest Service reconsideration of
the projects under NEPA. These authorizations and limitations were incorporated
into the final order issued by the District Court on December 11, 1998, and will
remain in effect until the United States Forest Service completes its NEPA
review and issues a new decision. On February 12, 1999, the District Court
agreed that the United States Forest Service may combine this NEPA review with
its evaluation and analysis of the existing snowmaking pipeline.

                                       22
<PAGE>

     In August 1997, the United States Forest Service authorized the Loon
Mountain resort to construct a new snowmaking pipeline across permitted land.
The United States Forest Service found that such construction was consistent
with the District Court order and enabled the resort to modify its snowmaking
operations to better protect water resources and replace snowmaking capacity
lost under the order. Although the pipeline was completed, its use was
challenged by private parties who asserted that the United States Forest Service
violated NEPA. On January 20, 1998, the District Court issued a decision finding
that the United States Forest Service violated NEPA in failing to address the
potential for the new pipeline to increase the amount of snow made and any
associated environmental effects. On March 10, 1998, the District Court issued a
series of further orders which, among other things, directed the United States
Forest Service to re-evaluate the pipeline and enjoined Loon Mountain from using
the pipeline pending further action by the court. On July 2, 1998, the United
States Forest Service issued a new decision approving the pipeline, which was
challenged by several private parties, who again asserted that it violated NEPA.
The United States Forest Service subsequently withdrew its decision authorizing
the pipeline to conduct further review and the District Court consolidated the
lawsuits concerning the pipeline. On November 19, 1998, the District Court
modified the injunction, allowing Loon Mountain to use the pipeline to withdraw
and convert 159.7 million gallons of water per ski season into snow while the
United States Forest Service further reviewed the pipeline under NEPA. On
February 12, 1999, the District Court issued a final order, which dismissed the
consolidated lawsuit concerning the pipeline in light of the United States
Forest Service's decision to conduct further review of the pipeline, and
specified that the limitation on pipeline usage will continue until that review
is completed and a new decision is issued.

     Existing use of Loon Mountain is authorized under a Term Special Use Permit
and a Special Use Permit which cover facilities and expire in 2006; existing
non-skiing use of Loon Mountain's South Mountain area is authorized under an
annual permit issued by the United States Forest Service that is subject to
reissuance each year.

     On February 26, 2002, the United States Forest Service issued its Record of
Decision ("ROD") approving the Loon Mountain Final Environmental Impact
Statement ("Final EIS"). In general, the ROD and Final EIS collectively:

     o        Authorize Loon Mountain's addition of new ski terrain,
              construction of ski trails, installation and upgrades of lifts,
              expansion of new on-mountain facilities and installation of
              snowmaking infrastructure to serve all ski terrain.
     o        Authorize the current location and operation of the 16-inch
              snowmaking water pipeline at levels restricted only by water
              withdrawal limitations and pumping capacities originating on
              private land.
     o        Authorize the issuance of a new Special Use Permit for a term of
              40 years to replace the three existing Special Use Permits that
              currently authorize Loon Mountain to occupy and use United States
              Forest Service lands, including the South Mountain area, to
              operate the ski resort.
     o        Confirm that the activities and developments contemplated by the
              Final EIS are consistent with the 1986 White Mountain National
              Forest Forest Plan and authorize the amendment of such Forest Plan
              to accommodate the expansion onto South Mountain.
     o        Document all mitigation measures and monitoring required to
              adequately avoid or minimize potential environmental harm
              associated with the activities and developments contemplated by
              the Final EIS.

     Two written administrative appeals to the ROD were filed with the United
States Forest Service, in response to which Loon Mountain filed a response. One
of the two appellants withdrew his appeal after reaching a settlement with Loon
Mountain. The United States Forest Service denied the other appeal and upheld
the ROD in a letter dated June 7, 2002. With these actions, the United States
Forest Service has concluded its administrative appeal process. The decision by
the United States Forest Service in its June 7, 2002 letter is subject to
judicial review in federal court under the Administrative Procedure Act.
Elements of the expansion and development activities addressed in the Final EIS
that occur on private lands will be subject to separate federal, state and local
permitting processes. While the Company believes that it will successfully
navigate these remaining steps to undertaking the activities outlined in the
Final EIS, it can give no assurance regarding the timing or outcome of such
processes.

                                       23
<PAGE>

     The United States Forest Service has the right to approve the location,
design and construction of improvements in permit areas and many operational
matters at resorts with permits. Under the Term Special Use Permits, the Company
is required to pay fees to the United States Forest Service. The fees range from
1.5% to approximately 4.0% of certain revenues, with the rate generally rising
with increased revenues. The calculation of gross revenues includes, among other
things, revenue from lift ticket, season pass, ski school lesson, food and
beverage, rental equipment and retail merchandise sales. Total fees paid to the
United States Forest Service by the Company during the year ended November 2,
2001 were $1,215,000.

     The Company believes that its relations with the United States Forest
Service are good, and, to the best of its knowledge, no Term Special Use Permit
for any major ski resort has ever been terminated by the United States Forest
Service. The United States Secretary of Agriculture has the right to terminate
any Term Special Use Permit upon 180-days notice if, in planning for the uses of
the national forest, the public interest requires termination. Term Special Use
Permits may also be terminated or suspended because of non-compliance by the
permitee; however, the United States Forest Service would be required to notify
the Company of the grounds for such action and to provide it with reasonable
time to correct any curable non-compliance.

     The Company's resorts are subject to a wide variety of federal, state and
local laws and regulations relating to land use, water resources, discharge,
storage, treatment and disposal of various materials and other environmental
matters. Except as described in this section, management believes that the
Company's resorts are presently in compliance with all land use and
environmental laws, except where non-compliance is not expected to result in a
material adverse effect on its financial condition. The Company also believes
that the cost of complying with known requirements, as well as anticipated
investigation and remediation activities, will not have a material adverse
effect on its financial condition or future results of operations. However,
failure to comply with such laws could result in the imposition of severe
penalties and other costs or restrictions on operations by government agencies
or courts that could materially adversely affect operations.

     The operations at the resorts require numerous permits and approvals from
federal, state and local authorities including permits relating to land use, ski
lifts and the sale of alcoholic beverages. In addition, the Company's operations
are heavily dependent on its continued ability, under applicable laws,
regulations, policies, permits, licenses or contractual arrangements, to have
access to adequate supplies of water with which to make snow and service the
other needs of its facilities, and otherwise to conduct its operations. There
can be no assurance that new applications of existing laws, regulations and
policies, or changes in such laws, regulations and policies will not occur in a
manner that could have a detrimental effect on the Company, or that material
permits, licenses or agreements will not be canceled, not renewed, or renewed on
terms materially less favorable to the Company. Major expansions of any one or
more of the Company's resorts could require, among other things, the filing of
an environmental impact statement or other documentation with the United States
Forest Service and state or local governments under NEPA and certain state or
local NEPA counterparts if it is determined that the expansion may have a
significant impact upon the environment. Although the Company has no reason to
believe that it will not be successful in implementing its operations and
development plans, no assurance can be given that necessary permits and
approvals will be obtained or renewed.

     Bear Mountain operates in an area subject to an air emissions reduction
program and regulated by the South Coast Air Quality Management District
("SCAQMD") in California. Prior to mid 2000, the Company anticipated that Bear
Mountain would eventually be required to participate in an emission credit
program whereby Bear Mountain would be permitted to operate its diesel-fueled
snowmaking compressor engines if it acquired "banked" emission credits from
SCAQMD-regulated facilities which had already implemented nitrogen oxide
emission reduction programs. However, in August 2000 the Company was notified
that SCAQMD will not allow Bear Mountain to participate in the emission credits
program and, further, that Bear Mountain's applications to operate the engines
were denied because they were not equipped with the "Best Available Control
Technology," thus violating SCAQMD rules. Recognizing the importance of the
current compressor engines to Bear Mountain's operations, SCAQMD and Bear
Mountain agreed to a Stipulated Order of Abatement whereby Bear Mountain is
subject to certain requirements including investigating and implementing a
remedial alternative according to a particular timeline through 2002, record
keeping and reporting to SCAQMD, payment of certain usage fees, and particular
interim operational dictates concerning the engines. Pursuant to the Stipulated
Order of Abatement, Bear Mountain is required to implement a remedial
alternative by October 15, 2002. Depending on the alternative selected and the
manner in which it is implemented, the resolution of this matter may require
capital expenditures of approximately $1 million for new equipment. However, no
assurance can be made regarding the outcome or timing of resolution of this
matter.

                                       24
<PAGE>

     Pursuant to the previously described decision of the First Circuit and the
order of the District Court, Loon Mountain applied for and was issued, by the
Environmental Protection Agency ("EPA"), a Clean Water Act (the "CWA") discharge
permit covering discharges associated with its snowmaking operations. Certain
ongoing discharges are authorized by the District Court order pending final
action on the permit and subject to the District Court's reserved power to
modify such approval to address any resulting environmental issues.

     Certain regulatory approvals associated with the new snowmaking pipeline at
Loon Mountain, as well as certain contractual obligations, impose minimum stream
flow requirements on Loon Mountain. These requirements will compel Loon Mountain
to construct water storage facilities within approximately five years, and such
construction may require further regulatory approvals and environmental
documentation under NEPA. No assurances can be given that such regulatory
approvals will be obtained or that the Company will have the financial resources
to complete such construction.

     In addition, Loon Mountain was notified in September 1997 that it had
allegedly filled certain wetlands at the resort in violation of the CWA. In
response, Loon Mountain worked with the EPA to remove the alleged fill and
implement certain erosion control measures. On January 15, 1998, an individual
notified the EPA, Loon Mountain, and certain other persons that he intended to
initiate a lawsuit under the CWA regarding the alleged wetland violation. On
February 2, 1998, the EPA wrote to such individual stating that the alleged fill
had been removed and that the EPA does not believe there is a continuing
violation at the site. On January 18, 2000, in papers filed in connection with
the District Court's modification of the final order in the pipeline litigation,
the same individual again alleged that Loon Mountain had previously filled
wetlands in violation of the CWA. The same individual has orally advised the
Company that he still intends to initiate a lawsuit under the CWA regarding the
alleged wetland fill.

     Except for certain permitting and environmental compliance matters relating
to the Loon Mountain and Bear Mountain resorts described above and in Part II,
Item 1. "Legal Proceedings," the Company has not received any notice of material
non-compliance with permits, licenses or approvals necessary for the operation
of its properties or of any material liability under any environmental law or
regulation.

Forward-Looking Statements

     Except for historical matters, the matters discussed in Part I, Item 2.
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and elsewhere in this Report are forward-looking statements that
involve risks and uncertainties. The forward-looking statements are made
pursuant to the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995. The reader can identify these statements by forward-looking
words such as "may," "will," "expect," "plan," "intend," "anticipate,"
"believe," "estimate," and "continue" or similar words. Forward-looking
statements are based on management's current views and assumptions and involve
risks and uncertainties that could significantly affect the Company's business
and expected operating results. The Company wishes to caution the reader that
certain factors, including those described below, could significantly and
materially affect the Company's actual results, causing results to differ
materially from those in any forward-looking statement. These factors include,
but are not limited to:

     o    Uncertainty as to future financial results,
     o    The substantial leverage and liquidity constraints of the Company,
     o    Significant operating restrictions under the Company's debt
          agreements,
     o    The capital intensive nature of development of the Company's ski
          resorts,
     o    Uncertainties associated with obtaining financing for future real
          estate projects and to undertake future capital improvements,
     o    Uncertainties regarding the timing and success of our real estate
          development projects and their ultimate impact on our operating
          results,
     o    Demand for and costs associated with real estate development,
     o    The discretionary nature of consumers' spending for skiing and resort
          real estate,
     o    Regional and national economic conditions,
     o    Weather conditions,
     o    Negative demand for our services and products resulting from recent
          and potential terrorism threats (including the effect of the September
          11th attacks),
     o    Availability of commercial air service,
     o    Natural disasters (such as earthquakes and floods),
     o    Competition and pricing pressures,
     o    Governmental regulation and litigation and other risks associated with
          expansion and development,
     o    The adequacy of the water supplies at each of the Company's resorts,
     o    Availability of adequate energy supplies for the operation of the
          Company's resorts, including snowmaking operations, and volatility in
          the prices charged for energy and fuel, and
     o    The occupancy of leased property and property used pursuant to the
          United States Forest Service permits.

                                       25
<PAGE>

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     The Company's market risk sensitive instruments do not subject the Company
to material market risk exposures, except for risks related to interest rate
fluctuations. As of May 3, 2002, the Company had debt outstanding with a
carrying value of $125,547,000, and an estimated fair value of approximately
$114,000,000.

     Fixed interest rate debt outstanding as of May 3, 2002, which excludes
borrowings under the Senior Credit Facility, was $100,547,000, carried an
average interest rate of approximately 12%, and matures as follows (in
thousands):


          Six Months
           Ending              Year Ending October
           October ------------------------------------------
            2002    2003     2004      2005   2006     2007       Total
           ------  ------   ------   ------  ------   ------     ------
Senior
 Notes   $    -  $     -  $     -   $     -  $   -  $ 96,175  $  96,175

Other
 Debt    $   31  $ 1,557  $ 2,103   $   506  $ 125  $     50  $   4,372
         ======= =======  ========  ======= =======  ========  ========

         $   31  $ 1,557  $ 2,103   $   506  $ 125  $ 96,225  $ 100.547
         ======= =======  ========  ======= =======  ========  ========


     There were no borrowings outstanding under the Revolving Credit Facility as
of May 3, 2002. The amount of borrowings under the Term Facility as of May 3,
2002 were $25,000,000. For purposes of calculating interest, borrowings under
the Senior Credit Facility can be, at the election of the Company, Base Rate
Loans or LIBOR Rate Loans or a combination thereof. Base Rate Loans bear
interest at the sum of (a) the higher of (i) Agent's prime rate or (ii) the
federal funds rate plus .5% plus (b) a margin of 1.5%. LIBOR Rate Loans bear
interest at the LIBOR rate plus a margin of 4%. Borrowings outstanding under the
Term Facility as of May 3, 2002 bore interest at an annual rate of 6.8% pursuant
to the LIBOR rate option. A 10% increase or decrease in interest rates would
have an immaterial effect on the Company's future pretax earnings and cash
flows.

                                       26
<PAGE>

                           PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

     Each of the Company's resorts has pending and is regularly subject to
litigation, and the threat thereof, with respect to personal injury claims
relating principally to snow sports activities at its resorts as well as to
premises and vehicular operations and workers' compensation matters. The Company
maintains liability insurance that the Company considers adequate to insure
claims related to such usual and customary risks associated with the operation
of four-season recreation resorts.

     In connection with the merger with Loon Mountain Recreation Corporation
("LMRC"), certain shareholders of LMRC (the "LMRC Shareholder Plaintiffs") filed
a lawsuit against LMRC and its former directors alleging breach of fiduciary
duty and against the Company alleging that the Company aided and abetted the
former directors' breach of fiduciary duty and failed to comply with the New
Hampshire Security Takeover Disclosure Act (the "Takeover Statute") in
connection with the transaction. The two lawsuits were consolidated in the
Superior Court of Grafton County, New Hampshire. The Company answered the LMRC
Shareholder Plaintiffs' petition and filed a motion to dismiss the LMRC
Shareholder Plaintiffs' action against the Company asserting that the Takeover
Statute did not apply to the transaction as a matter of law. The court initially
denied the Company's motion to dismiss but granted the motion to dismiss upon
reconsideration. The LMRC Shareholder Plaintiffs appealed the dismissal to the
New Hampshire Supreme Court. The New Hampshire Supreme Court upheld the Superior
Court's dismissal of the plaintiffs' claim under the Takeover Statute in a
ruling issued on November 20, 2001.

     The LMRC Shareholder Plaintiffs amended their breach of fiduciary duty
claims to seek money damages against the Company, LMRC and its former directors.
The trial on the LMRC Shareholder Plaintiffs' breach of fiduciary duty claims,
which was consolidated with the Corporation Act case described below, was held
between December 11, 2001 and January 16, 2002. On April 8, 2002, the
Hillsborough County, New Hampshire Superior Court issued an Opinion and Order
(the "Opinion and Order") announcing its decision in the case. The Court held in
favor of the defendants on all counts, finding no breach of fiduciary duty by
the former LMRC directors and no aiding and abetting breach of fiduciary duty by
the Company. In addition, the Court found that the LMRC Shareholder Plaintiffs
lacked a good faith basis for pursuing certain of their claims against the
former LMRC directors and the Company and ordered further proceedings to
determine sanctions against the LMRC Shareholder Plaintiffs. The Opinion and
Order remains subject to appeal by the LMRC Shareholder Plaintiffs, who have not
indicated their intentions in this regard.

     On February 22, 2001, certain additional former shareholders of LMRC who
are family members of one of the LMRC Shareholder Plaintiffs commenced an action
which remains pending in the Superior Court of Hillsborough County, New
Hampshire seeking damages for breach of fiduciary duty against the former LMRC
directors, breach of contract against the former LMRC directors and the Company
and violations of the New Hampshire Consumer Protection Statute. The plaintiffs
formerly held 4,375 shares of LMRC common stock. The Company and the former LMRC
directors have filed a motion which remains pending to dismiss the claims on the
grounds that they fail to state a valid cause of action and are barred by the
statute of limitations. In light of the Court's findings in the Opinion and
Order, the plaintiffs in this action have agreed with the Company to dismiss
this action with prejudice.

     Also in connection with the merger with LMRC, the LMRC Shareholder
Plaintiffs exercised dissenters' rights under the New Hampshire Business
Corporation Act (the "Corporation Act"). Under the statutory procedure for
settling the LMRC Shareholder Plaintiffs' dissenters' rights, LMRC offered to
pay the plaintiffs an aggregate of $34,436, or $30.61 per share, as its estimate
of the fair value of their 1,125 shares. The LMRC Shareholder Plaintiffs
demanded additional payments necessary to compensate them for the $91.90 per
share price, plus interest, which they asserted as the fair value of their
shares. Pursuant to the Corporation Act, LMRC commenced a proceeding in the
Superior Court of Grafton County, New Hampshire seeking a judicial appraisal of
the value of the LMRC Shareholder Plaintiffs' shares in LMRC. The matter was
consolidated for trial with the fiduciary duty case described above. In the
April 8, 2002 Opinion and Order described above, the Hillsborough County, New
Hampshire Superior Court found that the LMRC Shareholder Plaintiffs were
entitled to be paid $21.17 per share as the fair value of their shares.
Accordingly, the Company will be required to pay the LMRC Shareholder Plaintiffs
the aggregate sum of $23,816 plus interest for their 1,125 shares.

     On January 3, 2002, an adjacent property owner ("Plaintiff") affiliated
with the LMRC Shareholder Plaintiffs, filed suit against LMRC and Loon Realty
Corp. in the Grafton County, New Hampshire Superior Court. LMRC and Loon Realty
Corp. are the beneficiaries of certain easements across Plaintiff's land, and
Plaintiff seeks to vacate such easements and recover damages relating to the use
thereof. This action was the refiling of a suit raising identical claims that
was ultimately dismissed by the New Hampshire Supreme Court. On June 5, 2002,
the Grafton County, New Hampshire Superior Court dismissed this suit and, based
on its determination that the Plaintiff brought this action in bad faith, ruled
that LMRC and Loon Realty are entitled to recovery of attorney's fees and costs.

                                       27
<PAGE>

     In 1995, an individual sued the United States Forest Service (the "Forest
Service") in the United States District Court for the District of New Hampshire
(the "District Court") alleging that the Forest Service had violated the
National Environmental Policy Act ("NEPA"), the Clean Water Act ("CWA"), and an
executive order in approving improvements to facilities on Loon Mountain and an
expansion of the Loon Mountain resort on to South Mountain. LMRC and an
environmental group intervened in the lawsuit. The District Court entered
summary judgment for the Forest Service on all claims and the original
plaintiff, along with the intervening environmental group (collectively or
individually, the "Environmental Plaintiffs"), appealed. In December 1996, the
United States Court of Appeals for the First Circuit (the "First Circuit")
reversed the District Court decision and ruled that the Forest Service must
reconsider certain environmental issues under NEPA and that LMRC must obtain a
discharge permit under the CWA for certain discharges from its snowmaking
system. The District Court then entered a stipulated order that: enjoins LMRC
from any further construction implementing the project with certain limited
exceptions; imposes various restrictions on LMRC's existing snowmaking
operations and requires LMRC to apply for a CWA discharge permit for discharges
of water and any pollutants associated with its snowmaking; allows existing
construction to remain in place and existing uses to continue; requires LMRC to
undertake certain erosion control and monitoring measures; requires the Forest
Service to prepare supplemental NEPA documentation on the improvements and
expansion; and reserves the right to require restoration of areas developed
under the original Forest Service approval to their preexisting condition if not
ultimately re-approved by the Forest Service. This order remains in effect until
the supplemental NEPA process is completed. As described in Part I, Item 2.
"Management's Discussion and Analysis of Financial Condition and Results of
Operations - Regulation and Legislation", on February 26, 2002, the Forest
Service issued its Record of Decision approving the Loon Mountain Final
Environmental Impact Statement. The Forest Service's denial of an administrative
appeal to the ROD pursuant to its June 7, 2002 letter is subject to judicial
review in federal court. The Company can give no assurance regarding whether
such a judicial appeal will be filed or the timing or outcome of such process.

     The Environmental Plaintiffs also filed a motion asking the District Court
to impose against LMRC a CWA civil penalty of $5,550,125 and attorney's fees and
costs in connection with LMRC's discharges into Loon Pond during its snowmaking
operations for the 1996/97 ski season and prior years. The District Court
dismissed the claim for civil penalties and attorney's fees under the CWA, and
one of the Environmental Plaintiffs appealed to the First Circuit. The appeal
was stayed to permit settlement negotiations, and these negotiations concluded
with the execution of a settlement agreement between the appellant, LMRC and
Loon Realty Corp. effective as of February 22, 2001. In accordance with the
terms of the agreement, the appellant's claims against LMRC were dismissed on
March 14, 2001.

     In 1997, the Environmental Plaintiffs filed a second lawsuit against the
Forest Service in the District Court alleging that the Forest Service violated
NEPA in authorizing LMRC to construct and operate a snowmaking pipeline across
permitted land. LMRC intervened in the lawsuit. The District Court held that the
Forest Service had violated NEPA by failing to consider the potential effects of
an increase in snowmaking capacity. The District Court then enjoined Loon
Mountain from using the pipeline but later modified the injunction to permit
LMRC to use the pipeline provided that, among other things, it does not make
snow in excess of the historic production level utilizing 159.7 million gallons
per ski season. On February 12, 1999, the District Court dismissed the pipeline
litigation and allowed the Forest Service to combine its NEPA analysis of the
pipeline with the pending NEPA analysis of the South Mountain expansion. The
injunction authorizing LMRC to use the pipeline to supply water for making
historical levels of snow remains in place until the additional NEPA
documentation is completed and the Forest Service issues a new decision on the
pipeline. As described in Part I, Item 2. "Management's Discussion and Analysis
of Financial Condition and Results of Operations - Regulation and Legislation",
on February 26, 2002, the Forest Service issued its Record of Decision approving
the Loon Mountain Final Environmental Impact Statement. The Forest Service's
denial of an administrative appeal to the ROD pursuant to its June 7, 2002
letter is subject to judicial review in federal court. The Company can give no
assurance regarding whether such a judicial appeal will be filed or the timing
or outcome of such process.

     Effective February 22, 2001, both Environmental Plaintiffs entered into
settlement agreements with LMRC, which resolve all issues among them relating to
LMRC's prior operations and current proposal for near term expansion and
upgrading of the Loon Mountain resort. Among other things, these agreements
impose certain restrictions on the operation of the resort and the future
development of certain private land at the resort.

                                       28
<PAGE>

     Killington West, Ltd., formerly known as Bear Mountain, Ltd., ("Killington
West "), filed a breach of contract lawsuit in the Superior Court of the State
of California, San Bernardino County, against Fibreboard Corporation
("Fibreboard") and Bear Mountain, Inc., a wholly-owned subsidiary of the
Company, alleging that Fibreboard and Bear Mountain, Inc. breached the asset
purchase agreement dated October 6, 1995 (the "Original Bear Mountain
Agreement") among Killington West, Fibreboard and Bear Mountain, Inc. pursuant
to which Bear Mountain, Inc. acquired the Bear Mountain ski resort from
Killington West. Killington West's lawsuit concerned an alleged breach by
Fibreboard and Bear Mountain, Inc. of a change of control provision in the
Original Bear Mountain Agreement. In connection with the Company's acquisition
of Bear Mountain, Inc. in December 1996, the Company obtained from Fibreboard
indemnification for any claim that might be made by Killington West, and
further, required that $1 million of the purchase price be held in escrow
pending the outcome of any potential disputes with Killington West. Fibreboard
acknowledged its obligation to indemnify Bear Mountain, Inc. with respect to the
Killington West lawsuit and is defending such lawsuit on behalf of Fibreboard
and Bear Mountain, Inc.

     On November 13, 2001, the Company filed a lawsuit against ASU International
LLC, Essex Insurance Company and Certain Underwriters, Lloyd's London
(collectively, the "Insurers") in Superior Court in Massachusetts. The Company
had placed with the Insurers weather/income stabilization coverage for the
2000/01 ski season for certain of its resorts. During the applicable period of
the policies, the Company incurred losses at two of its resorts which the
Company believes were covered under the terms of such policies. The Company
believes that it has complied with its obligations under the policies and has
properly reported and made claims in accordance with the policies for losses
aggregating in excess of $1.5 million. In response to the Insurers' failure to
properly process the Company's claims, the Company seeks recovery for breach of
contract, breach of covenant of good faith and unfair and deceptive business
practices. The Company's complaint seeks recovery for the full amount of its
claims as well as multiple damages and attorneys' fees based on its assertion of
unfair and deceptive claims practices by the Insurers.

     An informal settlement conference between the Company and the Insurers
occurred on January 31, 2002, and no progress was made toward an amicable
resolution of the matter. Following such settlement conference, partial
resolution of the claims was reached and a payment of $700,000 was made by the
Insurers. This payment was made and accepted without prejudice to the remainder
of the Company's claims. The Company has recently received the Insurers' answers
to interrogatories and discovery requests, and depositions of relevant
representatives of the Insurers have been noticed. Additionally, written
discovery has been propounded on the Company, and the Company is currently
preparing its response. While the Company believes that it will prevail with
respect to its remaining claims, no assurances can be made regarding the timing
of resolution of this litigation.

ITEM 6. EXHIBITS AND REPORTS ON FORM-8-K

a.   Exhibits

     None

b.   Reports on Form 8-K

     No reports on Form 8-K were filed during the quarterly period ended May 3,
     2002.



                                       29
<PAGE>



                                   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, thereunto duly authorized.


                             BOOTH CREEK SKI HOLDINGS, INC.
                                     (Registrant)


              By:               /s/ ELIZABETH J. COLE
              -------------------------------------------------
                                    Elizabeth J. Cole
                               Executive Vice President and
                                  Chief Financial Officer
                               (Principal Financial Officer)


              By:                 /s/ BRIAN J. POPE
              -------------------------------------------------
                                      Brian J. Pope
                       Vice President of Accounting and Finance
                            (Principal Accounting Officer)



June 13, 2002

                                        30