<PAGE>   1




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


                                   FORM 10-Q

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


                FOR THE QUARTERLY PERIOD ENDED JANUARY 30, 1998


                                       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 NO.)


         HIGHWAY 267 AND NORTHSTAR DRIVE
                TRUCKEE, CALIFORNIA                       96160
         (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)      (ZIP CODE)



                               (530) 562-1010
            (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 February 27, 1998, 1,000 shares of the registrant's common stock
were issued and outstanding.


<PAGE>   2




                               TABLE OF CONTENTS


PART I - FINANCIAL INFORMATION


ITEM 1.  Financial Statements...............................  1
ITEM 2.  Management's Discussion and Analysis of 
         Financial Condition and Results of Operations......  11

PART II - OTHER INFORMATION

ITEM 1.  Legal Proceedings..................................  20
ITEM 2.  Changes in Securities..............................  23
ITEM 6.  Exhibits and Reports on Form 8-K...................  23


         SIGNATURES.........................................  24



<PAGE>   3

PART I.  FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS.



                         Booth Creek Ski Holdings, Inc.

                          Consolidated Balance Sheets

               (In thousands, except share and per share amounts)


<TABLE>
<CAPTION>
                                                          JANUARY 30,      OCTOBER 31,
                                                              1998            1997
                                                          ---------------------------
<S>                                                       <C>               <C>
                                                          (Unaudited)
ASSETS
Current assets:
 Cash                                                          $     1,511     $    462
 Accounts receivable, net of allowances of $37 and $35,        
  respectively                                                       1,638        1,528
 Inventories                                                         3,965        3,059
 Prepaid expenses and other current assets                           3,064        1,396
                                                               ------------------------
Total current assets                                                10,178        6,445

Property and equipment, net                                        127,125      123,154
Real estate held for development and sale                           11,335       11,335
Deferred financing costs, net of accumulated
 amortization of $1,061 and $782, respectively                       5,950        6,229
Timber rights and other assets                                       6,963        7,402
Goodwill, net of accumulated amortization of $2,517 and
 $1,953, respectively                                               31,287       31,851
                                                               ------------------------
Total assets                                                   $   192,838     $186,416
                                                               ========================
LIABILITIES AND SHAREHOLDER'S EQUITY
Current liabilities:
 Senior credit facility                                           $  6,500     $ 15,000
 Current portion of long-term debt                                   1,924          947
 Accounts payable and accrued liabilities                           27,034       17,132
                                                               ------------------------
Total current liabilities                                           35,458       33,079

Long-term debt                                                     120,249      120,380
Other long-term liabilities                                            251          196
Commitments and contingencies
Preferred stock of subsidiary; 28,000 shares authorized,
 24,000 shares issued and outstanding at January 30,
 1998 (25,000 shares at October 31, 1997); liquidation
 preference and redemption value of $3,288 at January 30, 1998       3,288        3,354
Shareholder's equity:
 Common stock, $.01 par value; 1,000 shares authorized,
  issued and outstanding                                                 -            -
 Additional paid-in capital                                         46,500       46,500
 Accumulated deficit                                               (12,908)     (17,093)
                                                               ------------------------
Total shareholder's equity                                          33,592       29,407
                                                               ------------------------
Total liabilities and shareholder's equity                     $   192,838     $186,416
                                                               ========================
</TABLE>

See accompanying notes.

                                      1
<PAGE>   4




                         Booth Creek Ski Holdings, Inc.

                     Consolidated Statements of Operations

                                 (In thousands)



<TABLE>
<CAPTION>
                                                             (UNAUDITED)
                                                          THREE MONTHS ENDED
                                                    JANUARY 30,         JANUARY 31, 
                                                       1998                 1997
                                                  ----------------  ----------------
<S>                                               <C>               <C>
Revenue:
 Resort operations                                     $    39,016       $    23,784
 Real estate and other                                           -               140
                                                       -----------------------------
Total revenue                                               39,016            23,924
Operating expenses:
 Cost of sales - resort operations                          22,853            15,370
 Cost of sales - real estate and other                           -               123
 Depreciation and depletion                                  3,029             1,503
 Amortization of goodwill                                      564               268
 Selling, general and administrative expense                 3,437             2,227
 Management fees and corporate expenses                        512               306
                                                       -----------------------------
Total operating expenses                                    30,395            19,797
                                                       -----------------------------
Operating income                                             8,621             4,127
Other income (expense):
 Interest expense                                           (4,087)           (1,961)
 Amortization of deferred financing costs                     (279)             (602)
 Interest and other income                                       -                14
                                                       -----------------------------
 Other income (expense), net                                (4,366)           (2,549)
                                                       -----------------------------
Income before income taxes and minority interest             4,255             1,578
Income tax expense                                               -              (474)
                                                       -----------------------------
Income before minority interest                              4,255             1,104
Minority interest                                              (70)              (15)
                                                       -----------------------------
Net income                                             $     4,185       $     1,089
                                                       =============================
</TABLE>

See accompanying notes.

                                      2
<PAGE>   5




                         Booth Creek Ski Holdings, Inc.

                 Consolidated Statement of Shareholder's Equity

                Three months ended January 30, 1998 (Unaudited)
                      and the year ended October 31, 1997

                                 (In thousands)



<TABLE>
<CAPTION>
                                              
                                              
                               COMMON STOCK                  NOTE                
                              --------------  ADDITIONAL  RECEIVABLE             
                              SHARES  AMOUNT   PAID-IN       FROM      ACCUMULATED    
                                               CAPITAL    SHAREHOLDER    DEFICIT     TOTAL  
                              ---------------------------------------------------------------
<S>                           <C>     <C>     <C>         <C>          <C>          <C>
Initial capitalization and
  balance at October 31, 1996  1,000      $-     $     2         $(2)     $     -   $      -
Payment received on
  shareholder note receivable      -       -           -           2            -          2
Capital contributions              -       -      46,498           -            -     46,498
Net loss                           -       -           -           -      (17,093)   (17,093)
                              ---------------------------------------------------------------
Balance at October 31, 1997    1,000       -      46,500           -      (17,093)    29,407
Net income                         -       -           -           -        4,185      4,185
                              ---------------------------------------------------------------
Balance at January 30, 1998    1,000      $-     $46,500         $ -     $(12,908)  $ 33,592
                              ==============================================================
</TABLE>

See accompanying notes.

                                      3

<PAGE>   6




                         Booth Creek Ski Holdings, Inc.

                     Consolidated Statements of Cash Flows

                                 (In thousands)


<TABLE>
<CAPTION>
                                                                    (UNAUDITED)
                                                                  THREE MONTHS ENDED
                                                           JANUARY 30,           JANUARY 31, 
                                                             1998                    1997
                                                         ------------------------------------
<S>                                                   <C>                          <C>      
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income                                             $        4,185              $        1,089    
Adjustment to reconcile net income to net cash           
  provided by operating activities:                      
   Depreciation and depletion                                   3,029                       1,503  
   Amortization of goodwill                                       564                         268  
   Noncash cost of real estate sales                                -                          99  
   Amortization of deferred financing costs                       279                         602  
   Deferred income tax expense                                      -                         474  
   Minority interest                                               70                          15  
                                                       ------------------------------------------   
   Changes in operating assets and liabilities:                                                    
     Accounts receivable                                         (110)                       (823) 
     Inventories                                                 (906)                       (290) 
     Prepaid expenses and other current assets                 (1,668)                       (634) 
     Accounts payable and accrued liabilities                   9,902                       4,230  
     Other long-term liabilities                                   55                           -  
                                                       ------------------------------------------  
Net cash provided by operating activities                      15,400                       6,533  

CASH FLOWS FROM INVESTING ACTIVITIES:                  
Acquisition of ski resorts, net of cash acquired                    -                    (133,498)  
Capital expenditures for property and equipment                (4,473)                       (211)  
Other assets                                                      439                        (772)  
                                                       ------------------------------------------   
Net cash used in investing activities                          (4,034)                   (134,481)  

CASH FLOWS FROM FINANCING ACTIVITIES:                                                               
Repayments of senior credit facility                           (8,500)                          -   
Proceeds of long-term debt                                          -                     100,000   
Principal payments of long-term debt                           (1,681)                       (950)  
Deferred financing costs                                            -                      (5,106)  
Purchase of preferred stock of subsidiary and                                                       
   payment of dividends                                          (136)                          -   
Payment received on shareholder note receivable                     -                           2   
Capital contributions                                               -                      39,998   
                                                       ------------------------------------------   
Net cash (used in) provided by financing activities           (10,317)                    133,944   
                                                       ------------------------------------------   
Increase in cash                                                1,049                       5,996   
Cash at beginning of period                                       462                           -   
                                                       ------------------------------------------   
Cash at end of period                                  $        1,511                      $5,996   
                                                       ==========================================   
</TABLE>                                                
                                                        

See accompanying notes.


                                      4
<PAGE>   7







                         Booth Creek Ski Holdings, Inc.

                   Notes to Consolidated Financial Statements

                                January 30, 1998





1.   ORGANIZATION, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING
     POLICIES

Booth Creek Ski Holdings, Inc. ("Booth Creek") was organized on October 8, 1996
in the State of Delaware for the purpose of acquiring and operating various ski
resorts, including Northstar-at-Tahoe ("Northstar"), Sierra-at-Tahoe
("Sierra"), Bear Mountain, Waterville Valley, Mt. Cranmore, the Summit at
Snoqualmie Pass (the "Summit" - formerly Snoqualmie Pass) and Grand Targhee.

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 except for Ski Lifts, Inc. (the owner and operator of the Summit),
which has shares of preferred stock owned by a third party. 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 January 30, 1998 and
for the three month periods ended January 30, 1998 and January 31, 1997 are
unaudited, but include all adjustments (consisting only of normal, recurring
adjustments) which, in the opinion of management of the Company, are considered
necessary for a fair presentation of the Company's financial position at
January 30, 1998, and its operating results and cash flows for the three month
periods ended January 30, 1998 and January 31, 1997. Due to the highly seasonal
nature of the Company's business and the effect of acquisitions (Note 2), 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.

REPORTING PERIODS

The Company's reporting periods end on the Friday closest to the end of each
month.

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 results.

                                      5
<PAGE>   8

                         Booth Creek Ski Holdings, Inc.

             Notes to Consolidated Financial Statements (continued)




2.   ACQUISITIONS

HISTORICAL ACQUISITIONS

During the year ended October 31, 1997, the Company made the following
acquisitions (the "Historical Acquisitions"), which have been included in the
accompanying statements of operations since the effective dates of such
acquisitions, and accounted for using the purchase method.


    Resort                                  Acquisition Date
    ------                                  -----------------
Waterville Valley                           November 27, 1996
Mt. Cranmore                                November 27, 1996
Northstar                                   December 3, 1996
Sierra                                      December 3, 1996
Bear Mountain                               December 3, 1996
The Summit                                  January 15, 1997
Grand Targhee                               March 18, 1997

LOON MOUNTAIN ACQUISITION

On February 26, 1998, the Company acquired Loon Mountain Recreation Corporation
("LMRC"), the owner and operator of the Loon Mountain ski resort located in New
Hampshire. The acquisition of LMRC (the "Loon Mountain Acquisition") was
effected pursuant to an Agreement and Plan of Merger, dated September 18, 1997,
as amended as of December 22, 1997, by and among the Company, as assignee of
Parent, LMRC Acquisition Corp. and LMRC.

The aggregate net purchase price for the Loon Mountain Acquisition,
determined through negotiations between the Company and LMRC, was approximately
$29.0 million (including the assumption of debt which was repaid in connection
with the acquisition).  The Loon Mountain Acquisition was financed through (i)
proceeds from the offering at par of $17,500,000 aggregate principal amount of
the Company's 12.5% Series C Senior Notes due 2007 (See Note 4), issued under
the Indenture, dated as of March 18, 1997, as amended and supplemented, among
the Company, the Guarantors named therein, and the trustee, (ii) a capital
contribution of $10.5 million to the Company by Parent (the "Equity
Financing"), and (iii) available cash on hand and borrowings under the
Company's Amended and Restated Credit Agreement dated March 18, 1997 as amended
(the "Senior Credit Facility"). 


                                      6

<PAGE>   9

                         Booth Creek Ski Holdings, Inc.

             Notes to Consolidated Financial Statements (continued)






2. ACQUISITIONS (CONTINUED)

PRO FORMA FINANCIAL INFORMATION

The following table represents unaudited pro forma financial information which
presents the Company's consolidated results of operations for the three month
periods ended January 30, 1998 and January 31, 1997 as if the Historical
Acquisitions, Loon Mountain Acquisition and related financing transactions
occurred on November 1, 1996.



<TABLE>
<CAPTION>
                                                   THREE MONTHS ENDED
                                             JANUARY 30,          JANUARY 31, 
                                                1998                1997
                                           ------------------  ----------------
                                                      (In thousands)
<S>                                          <C>               <C>    
Statement of operations data:
  Revenue                                     $  45,773        $         38,086
  Operating income                            $  10,359        $            833
  Net income (loss)                           $   5,326        $         (3,285)
Other data:                                                    
  EBITDA                                      $  14,548        $          4,875
  Noncash cost of real estate and other       $       -        $            232
</TABLE>

EBITDA represents income from operations before depreciation, depletion and
amortization expense and the noncash cost of real estate sales.

The pro forma information does not purport to be indicative of results that
actually would have occurred had the acquisitions been made on the dates
indicated or of results which may occur in the future.


                                      7

<PAGE>   10

                         Booth Creek Ski Holdings, Inc.

             Notes to Consolidated Financial Statements (continued)






3. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

Accounts payable and accrued liabilities consist of the following at January
30, 1998 and October 31, 1997:


                                           JANUARY 30,    OCTOBER 31,     
                                               1998             1987        
                                       ----------------------------------
                                                  (In thousands)

Accounts payable                        $11,832                    $7,618
Accrued compensation and benefits         2,548                     1,575
Taxes other than income                   1,614                       545
Unearned income and deposits              4,803                     3,341
Interest                                  5,536                     2,027
Other                                       701                     2,026
                                       ----------------------------------
                                        $27,034                   $17,132
                                       ==================================

4. FINANCING ARRANGEMENTS

SENIOR CREDIT FACILITY

Effective February 26, 1998, the borrowing availability under the Senior Credit
Facility was increased to $25 million (the "Senior Credit Facility Amendment").
The Senior Credit Facility requires that the Company not have borrowings
thereunder in excess of $6.0 million between February 15 and two business days
preceding March 15 of each year, have no borrowings on the business day
preceding March 15 of each year and cannot have borrowings in excess of $6.0
million between March 15 and April 15 of each year ($7.5 million between March
15, 1998 and April 15, 1998). Total borrowings outstanding under the Senior
Credit Facility at January 30, 1998 were $6.5 million, which bore interest at
9%. 

LONG-TERM DEBT

At January 30, 1998, $116 million of the Company's 12.5% Series B Senior Notes
due 2007 (the "Series B Notes") were outstanding. The Series B Notes mature on
March 15, 2007, and bear interest at 12.5% payable semiannually on each March
15 and September 15.

                                      8
<PAGE>   11

                         Booth Creek Ski Holdings, Inc.

             Notes to Consolidated Financial Statements (continued)






4. FINANCING ARRANGEMENTS (CONTINUED)

LONG-TERM DEBT (CONTINUED)



On February 26, 1998, the Company consummated an offering (the "Offering") of 
$17.5 million of its 12.5% Series C Senior Notes (the "Series C Notes" and
together with the Series B Notes, the "Notes"). The net proceeds of the
Offering, the $10.5 million Equity Financing, and  available cash on hand and
borrowings under the Senior Credit Facility, were  used to finance the Loon
Mountain Acquisition (Note 2). The Series B Notes and Series C Notes are
identical in all respects other than issue dates and the date from which
interest accrues and except that the Notes will be subject to certain transfer
restrictions.




The 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 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 the Real Estate LLC. Each Guarantee is effectively subordinated to all
secured indebtedness of such Guarantor. The 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 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 Notes are structurally subordinated to any
indebtedness of the Company's subsidiaries that are not Guarantors. The
Guarantors are wholly-owned subsidiaries of Booth Creek and have fully and
unconditionally guaranteed the Notes on a joint and several basis. Booth Creek
is a holding company and has no operations, assets or cash flows separate from
its investments in its subsidiaries. In addition, the assets, equity, income
and cash flow of the Real Estate LLC, Booth Creek's only non-guarantor
subsidiary, are inconsequential and the common stock of the Real Estate LLC is
entirely owned by 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.

Prior to the consummation of the Loon Mountain Acquisition, the Company
solicited consents from the holders of its Series B Notes to, among other 
things, (i) permit the Offering, (ii) permit the consummation of the Senior 
Credit Facility Amendment, (iii) modify the definitions of "Change of Control"
and "Restricted Subsidiary" in the Indenture, and (iv) make minor 
modifications to certain other Indenture provisions.  On February 20, 1998, the

                                      9
<PAGE>   12

                         Booth Creek Ski Holdings, Inc.

             Notes to Consolidated Financial Statements (continued)





4. FINANCING ARRANGEMENTS (CONTINUED)

LONG-TERM DEBT (CONTINUED)

Company received sufficient consents to effect such actions and entered into a
supplemental indenture modifying the Indenture, which became effective on
February 26, 1998, upon the consummation of the Loon Mountain Acquisition and
Equity Financing.

For the three months ended January 30, 1998 the Company entered into long-term
debt and capital lease obligations of approximately $2.5 million for the
purchase of equipment.

5. INCOME TAXES

During the year ended October 31, 1997, the Company recorded tax benefits for
current operating losses to the extent of recorded deferred tax liabilities.
Due to the Company's lack of profitable history, the tax benefits of excess
operating losses were fully offset by a valuation reserve. Similarly, no
federal income tax provision is expected for the year ended October 30, 1998
due to continued operating losses. Accordingly, during the quarter ended
January 30, 1998, no federal income tax provision has been provided.

Based on preliminary purchase price allocations for the Historical Acquisitions
as described in Note 2, deferred tax liabilities of approximately $4.4 million
were recorded in the preliminary opening balance sheets. This resulted in an
expected effective income tax rate of approximately 25%, which was used by the
Company in preparing its consolidated financial statements for the three months
ended January 31, 1997. Final purchase price allocations, primarily for the
Summit acquisition, resulted in less value being assigned to property and
equipment, more to goodwill and a corresponding reduction in the original
deferred tax liabilities. Accordingly, the actual income tax rate for the year
ended October 31, 1997 was 10.8%, and was adjusted for in the fourth quarter of
1997 on a catch-up basis as a change in estimate.


                                      10
<PAGE>   13

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

     The discussion and analysis below relates to the historical financial
statements and historical and pro forma results of operations of the Company
and the liquidity and capital resources of the Company. The following
discussion should be read in conjunction with the consolidated financial
statements and related notes thereto included elsewhere in this report.  The
results of Loon Mountain Recreation Corporation, which was acquired by the
Company on February 26, 1998, are not included in the Company's consolidated
historical results of operations for the periods covered by this report.

     Except for historical matters, the matters discussed in Part I, Item 2.
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" are forward-looking statements that involve risks and
uncertainties. Forward-looking statements are based on management's current
views and assumptions and involve risks and uncertainties that could
significantly affect expected results. The Company wishes to caution the reader
that certain factors 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: regional and national
economic conditions, the successful or unsuccessful integration of acquired
businesses, weather conditions, natural disasters (such as earthquakes),
industry competition and governmental regulation and risks associated with
expansion, leased property and property used pursuant to the United States
Forest Service permits.

GENERAL

     The Company's ski operations are highly sensitive to regional 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 the Company's 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 and drought conditions, which
can have a significant effect on the operating revenues and profitability at
any one of the Company's resorts.

     The Company's three most weather-sensitive resorts, Bear Mountain,
Waterville Valley 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 112, 159, and 103 days, respectively, during each of
the last six ski seasons. The Company's Northstar, Sierra, Summit and Grand
Targhee resorts are less weather-sensitive based on their historical natural
snowfall, averaging approximately 286, 470, 379, and 528 inches of snowfall,
respectively, per year since 1991 through the 1996/97 ski season. As a result
of their historic natural snowfall, their snowmaking capabilities are
considerably less extensive than at Bear Mountain, Waterville Valley or Mt.
Cranmore.

     The Company's results of operations are also highly dependent on its
ability to compete in each of the large regional ski markets in which it
operates. At Northstar and Sierra, more than 80% of the 1996/97 ski season
total skier days were attributable to residents of the San Francisco,
Sacramento and Central California Valley regions. At Bear Mountain, more than
95% 

                                      11

<PAGE>   14


of the 1996/97 ski season total skier days were attributable to residents of the
Los Angeles and San Diego metropolitan regions. At Waterville Valley and Mt.
Cranmore, more than 79% of the 1996/97 ski season total skier days were
attributable to residents of the Boston metropolitan area and southern New
Hampshire. At the Summit, the Company estimates that more than 95% of the
1996/97 ski season total skier days were attributable to residents of the
Seattle/Tacoma metropolitan region. The Company's Grand Targhee resort attracts
approximately 62% of its skiers from outside its local skiing population.

     In addition to revenue generated from skiing operations, the Company's
resorts generate significant revenue from non-ski operations, including
lodging, conference center services, health and tennis clubs and summer
activities such as mountain biking rentals and golf course fees.

     A significant 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 other seasonal factors. With the exception of certain
management, marketing and maintenance personnel, all of the Company's employees
are compensated on an hourly basis.

RESULTS OF OPERATIONS OF THE COMPANY

      Historical Three Months Ended January 30, 1998 as Compared to the
      Historical Three Months Ended January 31, 1997

     The Company was formed October 8, 1996. During the year ended October 31,
1997, the Company made the following acquisitions which are included in the
results of operations of the Company from the respective purchase dates and
were accounted for using the purchase method:


     RESORT                                        ACQUISITION DATE
-----------------------------------------------------------------------
Waterville Valley                                  November 27, 1996
Mt. Cranmore                                       November 27, 1996
Northstar                                          December 3, 1996
Sierra                                             December 3, 1996
Bear Mountain                                      December 3, 1996
The Summit                                         January 15, 1997
Grand Targhee                                      March 18, 1997

     Total revenue for the three months ended January 30, 1998 was
$39,016,000, an increase of $15,092,000, or 63.1%, over the Company's revenues
for the three months ended January 31, 1997. Due to the timing of the
acquisitions, the 1997 period does not reflect a full quarter of operating
revenues for the resorts, which accounts for a significant part of the
increase. The increase in revenue is also due to more typical weather
conditions in the Lake Tahoe region in the current period than during the
comparable period in the 1996/97 ski season. During the 1996/97 ski season,
revenue was negatively impacted by a mudslide which shut down the highway which
provides primary access to Sierra and poor weather conditions during the
holiday period at many of the Company's other resorts.


                                      12
<PAGE>   15




     Total operating expenses for the three months ended January 30, 1998 were
$30,395,000, an increase of $10,598,000, or 53.5%, over the Company's total
operating expenses for the three months ended January 31, 1997. Due to the
timing of the acquisitions in the 1997 period, the 1997 period does not reflect
a full quarter of operating expenses for the resorts, which accounts for a
significant part of the increase. During the 1998 quarter, the Company was
able to achieve savings in payroll and other expenses using its management
information systems.

     Interest expense for the three months ended January 30, 1998 totaled
$4,087,000, an increase of $2,126,000 over the Company's interest expense for
the three months ended January 31, 1997, reflecting generally higher levels of
borrowings and higher interest rates in the 1998 period. Interest expense for
the three months ended January 30, 1998 is primarily comprised of interest on
$116 million aggregate principal amount of the Company's 12.5% Senior Notes due
2007, and interest on the Senior Credit Facility at approximately 9%. For the
three months ended January 31, 1997, interest expense is primarily comprised of
interest on $90 million in bridge notes and $10 million in intercompany notes
to the Company's parent (together, the "Bridge Financing"), which bore interest
at approximately 11% per annum. The Bridge Financing was initially incurred in
connection with the resort acquisitions which occurred on November 27, 1996 and
December 3, 1996, respectively.

     During the year ended October 31, 1997, the Company recorded tax benefits
for current operating losses to the extent of recorded deferred tax
liabilities. Due to the Company's lack of profitable history, the tax benefits
of excess operating losses were fully offset by a valuation reserve. Similarly,
no federal income tax provision is expected for the year ended October 30, 1998
due to continued operating losses. Accordingly, during the quarter ended
January 30, 1998, no federal income tax provision has been provided.

     For the quarter ended January 31, 1997, income taxes were based on
preliminary purchase price allocations for the Company's acquisitions of the
resorts. Deferred tax liabilities of approximately $4.4 million were recorded
in the preliminary opening balance sheets. This resulted in an expected income
tax benefit rate of approximately 25%, which was used by the Company in
preparing its financial statements through the third quarter of 1997. Final
purchase allocations, primarily for the Summit acquisition, resulted in less
value being assigned to fixed assets, more to goodwill and a corresponding
reduction in the original deferred tax liabilities. Accordingly, the actual
income tax benefit rate for the year ended October 31, 1997 was 10.8%, and was
adjusted for in the fourth quarter on a catch-up basis as a change in estimate.

      Pro Forma Three Months Ended January 30, 1998 as Compared to the Pro
      Forma Three Months Ended January 31, 1998

     The following unaudited pro forma results of operations of the Company for
the three months ended January 30, 1998 and January 31, 1997 assume that all
the resort acquisitions (including the Loon Mountain Acquisition) and related
financings had occurred on November 1, 1996. These unaudited pro forma results
of operations are not necessarily indicative of the actual results of
operations that would have been achieved nor are they necessarily indicative of
future results of operations.



                                       13


<PAGE>   16

<TABLE>
<CAPTION>
                                             PRO FORMA THREE             PRO FORMA THREE
                                               MONTHS ENDED                 MONTHS ENDED
                                             JANUARY 30, 1998             JANUARY 31, 1997
                                          --------------------------------------------------
<S>                                       <C>                           <C>
                                                            (In thousands)
STATEMENT OF OPERATIONS DATA:
Revenue:
  Resort operations                        $        45,773              $             37,642
  Real estate and other                                  -                               444
                                          --------------------------------------------------
                                                    45,773                            38,086
Operating expenses:
  Resort operations                                 31,225                            33,159
  Cost of sales - real estate and other                  -                               284
Depreciation, depletion and amortization             4,189                             3,810
                                          --------------------------------------------------
Operating income                                    10,359                               833
Interest expense (net)                               4,963                             4,437
                                          --------------------------------------------------
Pre-tax income (loss)                                5,396                           (3,604)
Income tax benefit                                       -                             (389)
                                          --------------------------------------------------
Income (loss) before minority interest               5,396                           (3,215)
Minority interest                                       70                                70
                                          --------------------------------------------------
Net income (loss)                          $        5,326               $             (3,285)
                                          ==================================================
OTHER DATA:
EBITDA                                     $        14,548              $              4,875
Noncash cost of real estate sales          $             -              $                232
</TABLE>

     Total pro forma revenues for the three months ended January 30, 1998 would
have been $45,773,000, an increase of $7,687,000, or 20.2%, over the comparable
period in 1997.  Northstar, Sierra, Grand Targhee, Loon Mountain and Waterville
Valley generated increased revenues in the 1998 period of 40%, 108%, 29%, 21%,
and 9%, respectively, due primarily to paid skier day increases, and improved
yields at Grand Targhee and Loon Mountain.  The increase in revenue is
primarily due to more typical weather conditions in the Lake Tahoe region in
the current period than during the comparable period in the 1996/97 ski season.
Paid skier visits would have increased 14%, or approximately 107,000, in the
1998 quarter as compared to the 1997 quarter primarily due to improved weather
conditions during the holiday period which allowed travelers to reach the
Company's resorts.  During the first quarter of fiscal 1997, revenues were 
negatively impacted by a mudslide which shut down the highway which provides 
primary access to Sierra as well as  poor weather conditions during the 
holiday period at many of the 

                                      14

<PAGE>   17



Company's other resorts.  The Company's increased revenues and paid skier visits
in the  current quarter were partially offset by decreases in revenue during the
1998 period at the Summit and Bear Mountain of 2% and 8%, respectively, due poor
weather conditions which delayed the resorts season opening and resulted in
decreases in paid skier visits.  The Company had no sales of real estate during
the three months ended January 30, 1998 as compared to $444,000 in the
comparable 1997 pro forma period.

     Pro forma resort operating expenses, excluding depreciation, depletion and
amortization for the three month period ended January 30, 1998 would have been
$31,225,000, a decrease of $1,934,000, or 5.8%, over the comparable period in 
1997.  Pro forma operating expenses for the three months ended January 30, 1998
at most of the Company's resorts were generally consistent with the comparable
1997 pro forma period except for Bear Mountain which experienced a reduction in
operating expenses of approximately $1.9 million. The late 1997/98 ski season
opening along with a reduction in snowmaking costs resulted in lower operating
expenses at Bear Mountain when compared to the comparable 1997 period.  

     Pro forma depreciation, depletion and amortization for the pro forma three
month period ended January 30, 1998 was $4,189,000.  The increase of $379,000
or 9.9% over the 1997 period was due to higher average asset balances in the
1998 period.

     Net interest expense for the pro forma three month period ended January
30, 1998 would have totaled $4,963,000, an increase of $526,000 from the
comparable in period 1997.  The increase was due to interest expense on
borrowings under the Senior Credit Facility used to fund capital expenditures,
maintenance activities and normal seasonal working capital requirements in the
off-season period of 1997.

     The income tax benefit for the pro forma three months ended January 31,
1997 of $389,000 reflects the benefit of operating losses to the extent of net
deferred tax liabilities recorded in purchase accounting assuming that all the
resort acquisitions were made on November 1, 1996.  As it was assumed that all
of the income tax benefit during the pro forma year ended October 31, 1997
reduced deferred taxes to zero, no additional income tax benefit was recorded
during the pro forma three month period ended January 30, 1998 as it was
assumed that valuation allowances will fully offset the benefit of net
operating losses given assumed lack of profitability of the Company for the pro
forma year ended October 30, 1998.


                                       15

<PAGE>   18




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 flow from operations and
borrowings under the Senior Credit Facility. 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. The Senior Credit Facility currently provides for
borrowing availability of up to $25 million. The Senior Credit Facility
requires that the Company not have borrowings thereunder in excess of $6.0
million between February 15 and two business days preceding March 15 of each
year, have no borrowings on the business day preceding March 15 of each year
and not have borrowings in excess of $6.0 million between March 15 and April 15
of each year ($7.5 million between March 15, 1998 and April 15, 1998). The
Company intends to use borrowings under the Senior Credit Facility to meet
seasonal fluctuations in working capital requirements, primarily related to
off-season operations and maintenance activities during the months of May
through October, to fund capital expenditures for lifts, trail work, grooming
equipment and other on-mountain equipment and facilities and to build retail
and other inventories prior to the start of the skiing season and for other
cash requirements.

     The Company's capital expenditures for the three months ended January 30,
1998 were approximately $4.5 million. Management anticipates that annual capital
expenditures in each of fiscal 1998 and 1999 will be approximately $7.0
million. Future capital expenditures include approximately $4.0 million in each
of the next two years for resort maintenance and safety and $3.0 million for
resort upgrades that management deems appropriate. The Company plans to fund
these capital expenditures from available operating cash flows, vendor
financing to the extent permitted under the Senior Credit Facility and the
Indenture and borrowings under the Senior Credit Facility.

     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 will enhance ski-related
revenues and will contribute independently to earnings. In addition, with
respect to significant development projects, the Company anticipates entering
into joint venture 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 these 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.


                                      16

<PAGE>   19




     The Company's liquidity will 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.

     Management believes that the Company's cash flow from operations and
borrowings available under the Senior Credit Facility will be sufficient to
enable the Company to meet all of its cash operating and debt service
requirements over the next twelve months.

     The Company is currently in the process of evaluating its software and
hardware for Year 2000 compliance. Although a final assessment has not been
completed, the Company believes that the costs to be incurred will not be
material to the overall presentation of the consolidated financial statements.

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. 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,
expansion and capital improvement in preparation for the ensuing ski season.

REGULATION AND LEGISLATION

     The Company's operations are dependent upon its ownership or control over
the real estate constituting each resort.  The real property presently used at
the Northstar and Mt. Cranmore resorts is owned by the Company.  The Company
has the right to use a substantial portion of the real property associated with
the Bear Mountain, Sierra, the Summit, Grand Targhee and Waterville Valley
resorts under the terms of special use permits issued by the United States
Forest Service (the "Forest Service" or the "USFS").  The special use permits
for the Bear Mountain, Sierra, Waterville Valley, the Summit and Grand Targhee
resorts were reissued at the time of the Company's acquisition of such resorts,
with the Bear Mountain permit expiring in 2020, the Sierra permit expiring in
2008, the Waterville Valley permit expiring in 2034, the Summit permit expiring
in 2032 and the Grand Targhee permit expiring in 2034.

     A substantial portion of the real property associated with the Loon
Mountain resort is likewise used under Forest Service permits.  In 1993, the
Forest Service authorized various lift, trail and snowmaking improvements on
Loon Mountain and an expansion onto South Mountain.



                                       17

<PAGE>   20



In 1996, the United States Court of Appeals for the First Circuit overturned
this authorization on the ground that the Forest Service had failed to properly
address certain environmental issues under the National Environmental Policy Act
("NEPA").  Certain improvements 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 entered a stipulated order which
authorizes existing improvements to remain in place and existing operations to
continue but generally prohibits future construction, restricts use of a major
snowmaking water source, and requires certain water discharge permits to be
pursued, pending Forest Service reconsideration of the projects under NEPA.  See
Part II - Item 1 for a more detailed discussion.

     Existing use of Loon Mountain is authorized under a term permit, which
covers facilities and expires in 2006, and a supplemental permit, which covers
the balance of Loon Mountain; existing, non-skiing, use of South Mountain is
authorized under an annual permit which expires in February 1999, but is 
expected to be reissued.  After the Forest Service reconsiders the 
improvements and expansion under NEPA, it will need to render a new decision 
and, if appropriate, issue a new permit.  At that time, the District Court 
order will terminate.  Based upon the existing administrative record, and 
certain proposed modifications to the resort's snowmaking operations which are 
intended to better protect water resources, the Company expects that the 
improvements and expansion will be approved by the Forest Service. However, no 
assurance can be given regarding the timing or outcome of this process.

     In August 1997, the Forest Service authorized the Loon Mountain resort to
construct a new snowmaking pipeline across permitted land.  The Forest Service
found that such construction is consistent with the District Court order and
will enable the resort to modify its snowmaking operations to better protect
water resources and replace snowmaking capacity lost under the order.  Although
the pipeline has been completed, its use has been challenged by private parties
who assert that the Forest Service violated NEPA.  On January 20, 1998, the
United States District Court for the District of New Hampshire issued a
decision finding that the 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.  The Company expects the pipeline to be
reapproved upon its reconsideration under NEPA by the Forest Service.  However,
no assurances can be given regarding the timing or outcome of this process.
See Part II - Item I for a more detailed discussion.

     The Forest Service has the right to approve the location, design and
construction of improvements in the permit area and many operational matters.
Under its Forest Service permits, the Company is required to pay fees to the 
Forest Service.  Under recently enacted legislation, retroactively effect to 
the 1995/96 ski season, the fees range from 1.5% to approximately 4.0% of 
certain revenues, with the rate generally rising with increased revenues.  
However, through fiscal 1998, the Company is required to pay the greater of 
(i) the fees due under the new legislation and (ii) the fees actually paid for
the 1994/95 ski season, unless gross revenue in a ski season falls more than 
10% below that of the 1994/95 ski season, in which case the fees due are 
calculated solely under the new legislation. The calculation of gross revenues
includes, among other things, lift tickets, ski school lessons, food and 
beverages, rental equipment and retail merchandise revenues.  Total fees paid 
to the Forest Service by the Company during the year ended October

                                       18

<PAGE>   21



31, 1997 were approximately $665,000.  The new legislation is not expected to
have a material effect on fees payable in future periods.

     The Company believes that its relations with the Forest Service are good,
and, to the best of its knowledge, no special use permit for any major ski
resort has ever been terminated by the Forest Service.  Prior to permit
termination, the USFS 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.

REGULATORY MATTERS

     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. 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 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 adversely affect
operations.

     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. However,
at Grand Targhee, the Wyoming Department of Environmental Quality (the "DEQ")
has issued a Notice of Violation of state water pollution requirements based on
alleged discharge from a wastewater lagoon without a permit. The Company has
entered into a negotiated compliance order with the DEQ requiring construction
and operation of a new wastewater facility by November 1998 at a cost of
approximately $1.0 million. In November 1997, the concrete construction of the
footings, walls and treatment tanks of such facility was completed.

     Pursuant to the air emissions reduction program currently in effect in the
area regulated by the South Coast Air Quality Management District, where Bear
Mountain is located, Bear Mountain will be required to "bank" emission credits
from other facilities which have already implemented NOx emission reductions.
The Company may purchase "banked" emission credits in a one-time transaction at
the current market rate of approximately $700,000 or over time up to the year
2010 at prevailing market rates.

     The operations at the Company's resorts require permits and approvals from 
certain federal, state and local authorities. In addition, the Company's 
operations are heavily dependent upon 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

                                      19

<PAGE>   22



the Company, or that material permits, licenses or agreements will not be
canceled, non-renewed, or renewed on terms materially less favorable to the
Company. Major expansions of any one or more resorts could require, among other
things, the filing of an environmental impact statement or other documentation
with the Forest Service and state or local governments NEPA and certain state
or local 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.

     Pursuant to the First Circuit's decision and the District Court order,
each discussed under Part II - Item 1, LMRC has applied to the Environmental
Protection Agency ("EPA") for 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 Court's reserved power to modify such approval to
address any resulting environmental issues.  The Company expects the EPA to
issue a permit addressing future discharges prior to the 1998/99 ski season.
LMRC does not expect this permit to involve costs or restrictions that have a
material adverse effect on the resort's operations, but no assurances may be
given as to the outcome or timing of this process.

     Certain regulatory approvals associated with the new snowmaking pipeline
at Loon Mountain impose minimum stream flow requirements on LMRC.  These
requirements will compel LMRC to construct water storage facilities within the
next ten years, and such construction will require further regulatory approvals
and environmental documentation under the NEPA.

     In addition, LMRC was notified in September 1997 that it had allegedly
filled certain wetlands at the resort in violation of the CWA.  In response,
LMRC worked with the EPA to remove the alleged fill and implement certain
erosion control measures.  On January 15, 1998, an individual notified the EPA,
LMRC, and certain other persons that he intends to instigate a lawsuit under
the CWA regarding the alleged wetland violation.  On February 2, 1998, the EPA
wrote such individual that the alleged fill had been removed and that it does
not believe there is a continuing violation at the site.


PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

Each of the Company's resorts has pending and is regularly subject to
litigation with respect to personal injury claims relating principally to
skiing activities at its resorts. The Company and each of its resorts maintain
extensive liability insurance that the Company considers adequate to insure
claims related to usual and customary risks associated with the operation of
ski resorts. The Company does not believe that it or any of its resorts are
involved in any litigation that will, individually or in the aggregate, have a
material adverse effect on its financial condition or future results of
operations.


                                       20

<PAGE>   23




On March 25, 1997, Killington West, Ltd., a California corporation formerly
known as Bear Mountain, Ltd. ("Killington"), filed a breach of contract lawsuit
in the Superior Court of the State of California (County of San Bernardino)
against Fibreboard Corporation ("Fibreboard") and Bear Mountain, Inc. alleging
that Fibreboard and Bear Mountain, Inc. breached the asset purchase agreement
dated October 6, 1995 (the "Original Bear Mountain Agreement") among
Killington, Fibreboard and Bear Mountain, Inc., pursuant to which Bear
Mountain, Inc. acquired the Bear Mountain ski resort from Killington.
Killington's lawsuit concerns 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, and further, required that $1.0 million
of the purchase price be held in escrow pending the outcome of any potential
disputes with Killington. Fibreboard has acknowledged its obligation to
indemnify Bear Mountain, Inc. with respect to the Killington lawsuit and has
commenced the defense of such lawsuit on behalf of Fibreboard and Bear
Mountain, Inc. However, no assurances can be given regarding the outcome of
this litigation.

In connection with the Loon Mountain Acquisition, certain shareholders of 
LMRC filed a lawsuit in New Hampshire state court against LMRC and its
directors alleging breach of fiduciary duty and against the Company alleging
that the Company failed to comply with the New Hampshire Security Takeover
Disclosure Act (the "Takeover Statute").  Prior to the filing of the lawsuit
against the Company, the Company had sought and received a "no action" letter
from the Bureau of Securities Regulation, New Hampshire Department of State
(the "Bureau") finding that the Takeover Statute was inapplicable to the
proposed merger with LMRC.  Following a request by the plaintiffs in the
lawsuit to  reconsider the "no action" order, the Bureau reaffirmed its
decision.  The two lawsuits have been combined and are currently pending in the
Superior Court in Grafton County, New Hampshire.  The plaintiffs' initial
request for a preliminary injunction prohibiting the Company (or its
affiliates) form proceeding with the Loon Mountain Acquisition was denied on
October 28, 1997.  Before the litigation proceeded further, both parties
amended the merger agreement.  The Company then sought and obtained an
additional order by the Bureau that the Takeover Statue did not apply.  On
January 30, 1998, the Company filed its answer to the plaintiffs' petition and
plans on filing a motion to dismiss the entire action based on procedural and
substantive grounds.  If ultimately successful, the plaintiffs could seek money
damages or a rescission of the Loon Mountain Acquisition.  While management of
the Company believes that its position will prevail, no assurance can be given
regarding the outcome of this litigation.

In 1995, an individual sued the Forest Service in the United States District
Court for the District of New Hampshire alleging that the Forest Service had
violated NEPA, the CWA, and an executive order in 1993 approving improvements
to facilities on Loon Mountain and an expansion of the Loon Mountain resort
onto South Mountain.  LMRC and an environmental group intervened.  The District
Court entered summary judgment for the Forest Service on all claims and the
plaintiffs appealed.  In December 1996, the United States Court of Appeals for
the First Circuit reversed the District Court 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.  On May 5, 1997, the District Court 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

                                       21

<PAGE>   24



snowmaking operations and requires LMRC to apply for a CWA discharge permit for
discharges of water and any associated 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 1993 Forest Service decision
to their preexisting condition if not ultimately approved by the Forest
Service.  This order will remain in effect until the supplemental NEPA process
is completed and the Forest Service issues a new special use permit.  The
Company has applied for requisite permits under the CWA for its snowmaking
system and expects them to be issued upon acceptable terms.  However, no
assurance can be provided on the timing or terms of the permit process.

Following the First Circuit's decision, the plaintiffs filed a motion with the
District Court asking it to impose a civil penalty under the CWA of $5,550,125
and attorney fees and costs against LMRC for unpermitted discharges into Loon
Pond without a discharge permit during its snowmaking operations in the 1996/97
ski season and preceding years.  The discharge at issue involve water transfers
from the East Branch of the Pemigewasset River and drain back from the
snowmaking system into the Pond.  In connection with the Loon Mountain
Acquisition, the Company has obtained environmental pollution insurance for 
$4,500,000 of coverage above a $1.2 million deductible to cover any penalties, 
fees, and costs that the Court assesses against LMRC.  LMRC has asserted 
various defenses to the merits and amount of penalty sought.  However, no 
assurances can be given regarding the outcome of this litigation.

On August 29, 1997, the plaintiffs filed a second lawsuit against the Forest
Service in the United States District Court for the District of New Hampshire
alleging that the Forest Service violated NEPA in authorizing LMRC to construct
and operate a snowmaking pipeline across permitted land.  Another party
intervened as plaintiff, and LMRC intervened as defendant.  The Forest Service
and LMRC asserted various defenses.  On January 20, 1998, the District Court
held that the pipeline may be analyzed and approved by the Forest Service
separately from the South Mountain expansion, but that the Forest Service
violated NEPA by failing to consider the potential environmental effects of the
resulting increase in snowmaking capacity. In response, the Forest Service will
prepare additional NEPA documents which will be subject to challenge. Following
the preparation of this documentation and consideration of any resulting
challenge, the Court will determine whether to issue an injunction restricting
the use or requiring removal of the pipeline. The Company would expect the
pipeline to be reapproved following the further Forest Service proceeding.
However, no assurances can be given regarding the outcome or timing of this
proceeding or the litigation itself. 

On August 1, 1997, two plaintiffs filed a lawsuit against the Town of Lincoln
Planning Board and LMRC in the Grafton County Superior Court in the State of
New Hampshire alleging that the Planning Board had improperly approved various
facilities associated with the snowmaking pipeline.  On September 30, 1997,
LMRC moved to dismiss the claims against it, but sought to remain in the case
as in intervenor.  Also on September 30, 1997, the Planning Board answered the
complaint, denying most of the allegations and raising various defenses.  In
the event that the plaintiffs are successful, the Planning Board would be
requested to reconsider the facilities and issue a new decision.  However, no
assurance can be given regarding the outcome or timing of this litigation or
any resulting Planning Board review.


                                      22

<PAGE>   25





ITEM 2. CHANGES IN SECURITIES.

Prior to the consummation of the Loon Mountain Acquisition, the Company
solicited consents from the holders of its Series B Notes to, among other 
things, (i) permit the Offering, (ii) permit the consummation of the Senior 
Credit Facility Amendment, (iii) modify the definitions of "Change of Control"
and "Restricted Subsidiary" in the Indenture, and (iv) make minor modifications 
to certain other Indenture provisions.  On February 20, 1998, the Company 
received sufficient consents to effect such actions and entered into a 
supplemental indenture modifying the Indenture, which became effective on 
February 26, 1998, upon the consummation of the Loon Mountain Acquisition and 
Equity Financing.


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

 a. Exhibits


<TABLE>
<CAPTION>
 Exhibit No.  Description of Exhibit
 -----------  ----------------------
<S>           <C>
    3.1       Amended and Restated Articles of Incorporation of Loon Mountain Recreation Corporation
    3.2       Amended and Restated Bylaws of Loon Mountain Recreation Corporation
    3.3       Amended and Restated Articles of Incorporation of Loon Realty Corp.
    3.4       Amended and Restated Bylaws of Loon Realty Corp.
    3.5       Articles of Incorporation of LMRC Holding Corp.
    3.6       Bylaws of LMRC Holding Corp.
    10        Form of Employment Agreement, by and between Booth Creek Ski Holdings, Inc. and Timothy H. Beck.
    27        Financial Data Schedule

</TABLE>

b. Reports on Form 8-K

   No reports on Form 8-K were filed during the three months ended
January 30, 1998.  The Company filed a report on Form 8-K on March 9,
1998 in connection with the Loon Mountain Acquisition which includes
certain financial statements of Loon Mountain Recreation Corporation
and Unaudited Pro Forma Financial Information of Booth Creek Ski
Holdings, Inc.

                                      23

<PAGE>   26




                                   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)



March 13, 1998                      /s/ NANCI N. NORTHWAY
--------------                      ---------------------
Date                                Nanci N. Northway
                                    Vice President and Chief Financial Officer
                                    (Principal financial and accounting officer)


                                      24





<PAGE>   27
                              INDEX TO EXHIBITS


Exhibit No.             Description of Exhibit
-----------             ----------------------

   3.1                  Amended and Restated Articles of Incorporation 
                         of Loon Mountain Recreation Corporation
   3.2                  Amended and Restated Bylaws of Loon Mountain 
                         Recreation Corporation
   3.3                  Amended and Restated Articles of Incorporation 
                         of Loon Realty Corp.
   3.4                  Amended and Restated Bylaws of Loon Realty Corp.
   3.5                  Articles of Incorporation of LMRC Holding Corp.
   3.6                  Bylaws of LMRC Holding Corp.
   10                   Form of Employment Agreement, by and Between Booth
                         Creek Ski Holdings, Inc. and Timothy H. Beck.
   27                   Financial Data Schedule