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

                                 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 April 30, 1999

                                       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) 476-4030
              (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 28, 1999, 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..................................    8

 3.   Quantitative and Qualitative Disclosures about Market Risk.   19


                          PART II - OTHER INFORMATION

 1.   Legal Proceedings..........................................   20

 3.   Defaults Upon Senior Securities............................   21

 6.   Exhibits and Reports on Form 8-K...........................   22

Signatures.......................................................   23

<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)


                                                     April 30,      October 30,
                                                        1999           1998
                                                 --------------- ---------------
                  ASSETS                           (Unaudited)

Current assets:
  Cash ......................................   $           798 $           625
  Accounts receivable, net of allowance
   of $57 and $54, respectively .............             1,992           1,573
  Inventories ...............................             2,642           4,370
  Prepaid expenses and other current
   assets ...................................             1,128           1,377
                                                --------------- ---------------
Total current assets ........................             6,560           7,945

Property and equipment, net .................           157,605         156,469
Real estate held for development and sale ...            10,602          10,155
Deferred financing costs, net of
  accumulated amortization of $2,621 and
  $1,985, respectively ......................             6,445           6,649
Timber rights and other assets ..............             8,659           7,428
Goodwill, net of accumulated amortization
  of $5,380 and $4,190, respectively ........            29,230          29,900
                                                --------------- ---------------
Total assets ................................   $       219,101 $       218,546
                                                =============== ===============

   LIABILITIES AND SHAREHOLDER'S EQUITY

Current liabilities:
  Senior credit facility ....................   $        12,783 $        17,143
  Current portion of long-term debt .........             1,257           1,785
  Accounts payable and accrued liabilities ..            20,386          22,110
                                                --------------- ---------------
Total current liabilities ...................            34,426          41,038

Long-term debt ..............................           136,306         137,352

Other long-term liabilities .................                58             145

Commitments and contingencies

Preferred stock of subsidiary; 28,000
  shares authorized, 19,000 shares issued
  and outstanding at April 30, 1999
  (21,000 shares at October 30, 1998);
  liquidation preference and redemption
  value of $2,383 at April 30, 1999 .........             2,383           2,634

Shareholder's equity:
  Common stock, $.01 par value; 1,000
   shares authorized, issued and
   outstanding ..............................              --              --
  Additional paid-in capital ................            72,000          72,000
  Accumulated deficit .......................           (26,072)        (34,623)
                                                --------------- ---------------
Total shareholder's equity ..................            45,928          37,377
                                                --------------- ---------------
Total liabilities and shareholder's
  equity ....................................   $       219,101 $       218,546
                                                =============== ===============

                             See accompanying notes.

<PAGE>

                         BOOTH CREEK SKI HOLDINGS, INC.

                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                 (In thousands)


                                        Three Months Ended   Six Months Ended
                                        ------------------  ------------------
                                        April 30,   May 1,  April 30,   May 1,
                                          1999      1998      1999      1998
                                        --------- --------  --------- --------
                                                     (Unaudited)

Revenue:
  Resort operations ...............     $ 56,791  $ 48,832  $103,090  $ 87,848

Operating expenses:
  Cost of sales - resort
   operations .....................       29,978    25,718    59,267    48,571
  Depreciation ....................        5,396     3,613     9,603     6,642
  Amortization of goodwill ........          596       552     1,190     1,116
  Selling, general and
   administrative expense .........        6,795     6,305    13,866    10,254
                                        --------  --------  --------  --------
Total operating expenses ..........       42,765    36,188    83,926    66,583
                                        --------  --------  --------  --------

Operating income...................       14,026    12,644    19,164    21,265

Other income (expense):
  Interest expense ................       (4,720)   (4,260)   (9,688)   (8,347)
  Amortization of deferred
  financing costs .................         (307)     (332)     (636)     (611)
  Other income (expense) ..........         (179)        7      (175)        7
                                        --------  --------  --------  --------
  Other income (expense), net .....       (5,206)   (4,585)  (10,499)   (8,951)
                                        --------  --------  --------  --------
Income before minority interest ...        8,820     8,059     8,665    12,314

Minority interest .................          (55)      (68)     (114)     (138)
                                        --------  --------  --------  --------
Net income ........................     $  8,765  $  7,991  $  8,551  $ 12,176
                                        ========  ========  ========  ========

                             See accompanying notes.

<PAGE>

                         BOOTH CREEK SKI HOLDINGS, INC.

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (In thousands)


                                                      Six Months Ended
                                                 -------------------------
                                                  April 30,         May 1,
                                                    1999            1998
                                                 ----------     ----------
                                                        (Unaudited)

Cash flows from operating activities:
Net income ..................................    $    8,551     $   12,176
Adjustment to reconcile net income to
  net cash provided by operating
  activities:
   Depreciation .............................         9,603          6,642
   Amortization of goodwill .................         1,190          1,116
   Amortization of deferred financing
    costs ...................................           636            611
   Minority interest ........................           114            138
   Changes in operating assets and
    liabilities:
    Accounts receivable .....................          (419)           335
    Inventories .............................         1,728          1,146
    Prepaid expenses and other current
      assets ................................           249            176
    Accounts payable and accrued
      liabilities ...........................        (1,724)            56
    Other long-term liabilities .............           (87)           (12)
                                                 ----------     ----------
Net cash provided by operating
  activities ................................        19,841         22,384

Cash flows from investing activities:
Capital expenditures for property and
  equipment .................................       (10,717)        (6,438)
Acquisition of businesses ...................          (661)       (29,944)
Capital expenditures for real estate
  held for development and sale .............          (447)          (107)
Other assets ................................        (1,112)           679
                                                 ----------     ----------
Net cash used in investing activities .......       (12,937)       (35,810)

Cash flows from financing activities:
Net repayments of senior credit
  facility ..................................        (4,360)        (8,581)
Proceeds of long-term debt ..................          --           17,500
Principal payments of long-term debt ........        (1,574)        (2,185)
Deferred financing costs ....................          (432)        (1,416)
Purchase of preferred stock of
  subsidiary and payment of dividends .......          (365)          (603)
Capital contributions .......................          --           10,500
                                                 ----------     ----------
Net cash (used in) provided by
  financing activities ......................        (6,731)        15,215
                                                 ----------     ----------
Increase in cash ............................           173          1,789

Cash at beginning of period .................           625            462
                                                 ----------     ----------
Cash at end of period .......................    $      798     $    2,251
                                                 ==========     ==========

                             See accompanying notes.

<PAGE>

                         BOOTH CREEK SKI HOLDINGS, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 April 30, 1999

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"), Grand Targhee and Loon Mountain.

   The consolidated  financial  statements  include the accounts of Booth Creek
and its subsidiaries  (collectively referred to as the "Company").  Booth Creek
owns all of the common stock of its  subsidiaries.  Ski Lifts,  Inc. (the owner
and  operator  of the  Summit)  has shares of  preferred  stock  owned by third
parties.  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 April 30, 1999 and
for the three and six month  periods  ended  April 30, 1999 and May 1, 1998 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 April 30, 1999,  and its  operating  results and cash flows for the
three and six month  periods  ended April 30, 1999 and May 1, 1998.  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.  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 year ended October 30, 1998.

Reporting Periods

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

Costs of Computer Software Developed or Obtained for Internal Use

   In  March  1998,  the  Accounting   Standards   Executive  Committee  issued
Statement  of  Position  ("SOP")  98-1,  "Accounting  for the Costs of Computer
Software  Developed  or Obtained for  Internal  Use." SOP 98-1,  which has been
adopted  prospectively  by the Company as of October  31,  1998,  requires  the
capitalization  of certain  costs  incurred in  connection  with  developing or
obtaining  internal  use  software.  Prior to the  adoption  of SOP  98-1,  the
Company  expensed  development,  production and  maintenance  costs  associated
with computer  software  developed for internal use. The effect of adopting SOP
98-1 was to  increase  net income for the six months  ended  April 30,  1999 by
approximately $173,000.

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.

<PAGE>

                         BOOTH CREEK SKI HOLDINGS, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)


2. Acquisitions

Pro Forma Financial Information

   The Company  acquired  Loon  Mountain on February 26,  1998,  which has been
included  in  the   Company's   results  of   operations   since  the  date  of
acquisition.  The following  table  represents  unaudited  pro forma  financial
information  which  presents the Company's  consolidated  results of operations
for the six months ended May 1, 1998 as if the Loon  Mountain  acquisition  and
related financing transactions occurred on November 1, 1997.

                                                                Six Months
                                                                   Ended
                                                                May 1, 1998
                                                              --------------
                                                              (In thousands)
    Statement of operations data:
     Revenue ..............................................     $   98,487
     Operating income .....................................     $   24,917
     Net income ...........................................     $   15,023
    Other data:
     EBITDA ...............................................     $   33,469

   EBITDA represents income from operations before depreciation,  depletion and
amortization  expense and the noncash cost of real estate sales.  EBITDA is not
intended to  represent  cash flow from  operations  or net income as defined by
generally  accepted  accounting  principles  and should not be  considered as a
measure of liquidity or an alternative to, or more meaningful  than,  operating
income or  operating  cash flow as an  indication  of the  Company's  operating
performance.

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

Proposed Seven Springs Acquisition

   On August 28,  1998,  the  Company,  Booth Creek Ski  Acquisition,  Inc.,  a
wholly-owned  subsidiary of Booth Creek ("Acquisition  Sub"), and Seven Springs
Farm,  Inc.  ("Seven  Springs"),  the owner and  operator of the Seven  Springs
Mountain  Resort, a ski resort and conference  center in Pennsylvania,  entered
into an  Agreement of Merger (the  "Merger  Agreement"),  pursuant to which the
Company would acquire Seven Springs  through the merger of Acquisition Sub with
and into Seven Springs. The aggregate merger consideration and related payments
will be approximately  $83 million plus certain deferred  payments,  subject to
certain price  adjustments.  The proposed  acquisition  is  conditioned  on the
receipt of a judicial  determination that the terms of a certain  shareholders'
agreement  among  Seven  Springs  and  its  shareholders  (the  "Seven  Springs
Shareholder Agreement") does not apply to the transactions  contemplated by the
Merger Agreement,  as well as customary closing conditions.  In connection with
the proposed acquisition, certain shareholders of Seven Springs filed a lawsuit
in the Court of Common  Pleas of  Somerset  County,  Pennsylvania  against  the
Company,  Acquisition  Sub,  and Seven  Springs and  certain of its  directors,
seeking  a  declaratory  judgment,   along  with  other  relief  including  the
rescission  of the Merger  Agreement.  Plaintiffs  allege that the terms of the
Seven  Springs  Shareholder  Agreement  ban the  consummation  of the  proposed
acquisition.  On October 29, 1998, the Court entered a final  judgment  denying
Plaintiff's  motion and has  permitted  the  consummation  of the  transactions
contemplated  by the Merger  Agreement.  On December 28, 1998, the  Plaintiff's
filed an amended notice of appeal and a hearing was held on April 20, 1999, but
a ruling  has not yet been  entered.  While the  Company  believes  that  Seven
Springs  will  prevail with its  position  that the Seven  Springs  Shareholder
Agreement  does  not  apply  to the  transactions  contemplated  by the  Merger
Agreement,  no assurance  can be made  regarding  the timing or outcome of this
litigation.

<PAGE>

                         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:

                                                       April 30,  October 30,
                                                         1999        1998
                                                      ----------  ----------
                                                          (In thousands)


     Accounts payable ............................    $    9,190  $   10,652
     Accrued compensation and benefits ...........         2,535       3,164
     Taxes other than income .....................         1,098         973
     Unearned income and deposits ................         1,313       4,017
     Interest ....................................         2,288       2,349
     Other .......................................         3,962         955
                                                      ----------  ----------
                                                      $   20,386  $   22,110
                                                      ==========  ==========

4. Financing Arrangements

Senior Credit Facility

   The borrowing  availability  under the  provisions of the Company's  Amended
and Restated  Credit  Agreement (the "Senior Credit  Facility") is $25 million.
On May 18, 1999,  the final  maturity  date of the Senior  Credit  Facility was
extended  from  November  15,  1999  to  March  31,  2002.  The  Senior  Credit
Facility  requires  that the Company not have  borrowings  thereunder in excess
of $8 million in  addition  to certain  amounts  maintained  by the  Company in
certain  depository  accounts  with  BankBoston,  N.A.,  for  a  period  of  60
consecutive  days each year commencing  between February 1 and February 28. The
Company has  obtained  waivers  from the lender that reduced the period of time
during  which  borrowings  may not  exceed $8 million  to 20  consecutive  days
commencing  between  February 1 and February 28, 1999, and waived certain other
covenant  violations at April 30, 1999. Total borrowings  outstanding under the
Senior  Credit  Facility at April 30, 1999 were  approximately  $12.8  million,
which bore interest at 7.75%.

Long-Term Debt

   As of April 30, 1999, the Company had outstanding  $133.5 million  aggregate
amount of its senior debt  securities  (the "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  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)  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 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.

<PAGE>

                         BOOTH CREEK SKI HOLDINGS, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)


4.    Financing Arrangements - (Continued)

Long-Term Debt - (Continued)

   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 for the Senior Notes (the
"Indenture")  contains  covenants  for the benefit of the holders of the Senior
Notes that,  among other  things,  restrict  the ability of the Company and any
Restricted  Subsidiaries  to:  (i)  incur  additional  indebtedness;  (ii)  pay
dividends  and make  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) transfer and 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  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 membership interest 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.

5.    Income Taxes

   Due to the  Company's  lack  of  profitable  history,  the tax  benefits  of
operating  losses  are  fully  offset by a  valuation  reserve.  Similarly,  no
federal  income tax  provision is expected for the year ended  October 29, 1999
due to continued  operating  losses.  Accordingly,  during the six months ended
April 30, 1999, no federal income tax provision has been provided.

<PAGE>

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
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 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  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  123,  143,  142,  and 103  days,
respectively,  during each of the last five ski seasons,  including the 1998/99
ski season. The Company's Northstar,  Sierra,  Summit and Grand Targhee resorts
are  less  weather-sensitive   based  on  their  historical  natural  snowfall,
averaging   approximately   367,   546,   493,  and  544  inches  of  snowfall,
respectively,  per year for the past  five ski  seasons.  As a result  of their
historic  natural  snowfall,  their  snowmaking  capabilities  are considerably
less extensive than at Bear Mountain,  Waterville Valley,  Loon Mountain 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 70% of the 1997/98 ski season
total  skier  days  were  attributable  to  residents  of  the  San  Francisco,
Sacramento,   Central  California  Valley  and  Lake  Tahoe  regions.  At  Bear
Mountain,  more  than 90% of the  1997/98  ski  season  total  skier  days were
attributable  to  residents  of the  Los  Angeles  and San  Diego  metropolitan
regions.  At Waterville Valley,  Loon Mountain and Mt. Cranmore,  approximately
80% of the 1997/98 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 1997/98  ski season  total skier days were
attributable  to  residents  of the  Seattle/Tacoma  metropolitan  region.  The
Company's  Grand Targhee resort attracts  approximately  50% 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

   Overview

   The Company's  results of operations are  significantly  impacted by weather
conditions.   Northstar  and  Sierra  experienced   generally   favorable  snow
conditions  during the 1998/99 ski season.  While Bear  Mountain  enjoyed  cold
temperatures  in early November which  facilitated an early opening on man-made
snow, the resort suffered from a

<PAGE>

lack of natural snowfall  throughout the season.  Snowfall at Bear Mountain for
the 1998/99 ski season was 30% of its five year average for the five preceeding
ski seasons.  The East experienced mild  temperatures  through mid December and
rainfall on most weekends during January.  These conditions negatively impacted
snow conditions,  terrain availability and skier days at Waterville Valley, Mt.
Cranmore  and  Loon  Mountain   during  the  Company's  first  fiscal  quarter.
Conditions and momentum for the Eastern resorts improved in February and March,
although the resorts closed earlier than  anticipated  due to declining  demand
and Spring-like  conditions in April. The Summit experienced a prolonged period
of  continual  snowfall,  which  resulted in  increased  snow removal and other
operating costs.  While Grand Targhee enjoyed  favorable snow  conditions,  its
operations were negatively impacted by unusually high winds on a number of days
during December through February.

   The Company's  results of operations for the historical  three and six month
periods  ended April 30,  1999  includes  the  results of all of the  Company's
resorts for the entire  period.  The results of operations  for the  historical
three and six month  periods  ended May 1, 1998  includes  the  results of Loon
Mountain since February 26, 1998, the date it was acquired by the Company.

   Historical  Three Months Ended April 30, 1999 as Compared to the  Historical
Three Months Ended May 1, 1998

   Total revenue for the three months ended April 30, 1999 was $56,791,000,  an
increase of  $7,959,000,  or 16%,  over the  Company's  revenues  for the three
months ended May 1, 1998.  The  increase is  principally  due to the  inclusion
of Loon Mountain for the entire 1999 period,  which  resulted in an increase of
$4,523,000  in revenues  for the three  months ended April 30, 1999 as compared
to the 1998  period.  In addition,  Northstar  and Sierra  generated  increased
revenues of  $593,000  and  $987,000,  respectively,  due to  improved  yields.
Bear  Mountain's  revenues  declined by $423,000 due to lower skier visits as a
result of the lack of natural  snowfall,  partially  offset by improved yields.
Revenues for Waterville  Valley  increased by $186,000 due to improved  yields.
Revenues for Mt.  Cranmore  increased  by $598,000  due to improved  yields and
higher  skier  visits  as a  result  of  new  pricing  strategies.  The  Summit
generated  $1,184,000 in additional revenues due to an extended season,  higher
skier  days and  improved  yields in its food and  beverage,  snow  school  and
retail  businesses.  Revenues  for Grand  Targhee  increased by $311,000 due to
slightly higher skier visits and improved yields.

Total  operating  expenses  for the three  months  ended  April  30,  1999 were
$42,765,000,  an increase  of  $6,577,000,  or 18%,  over the  Company's  total
operating  expenses for the three months  ended May 1, 1998.  The  inclusion of
Loon Mountain for the entire 1999 period  resulted in an increase of $2,022,000
in  operating  expenses  as  compared to the 1998  period.  Increased  costs of
operations  at the  Summit of  $2,215,000  and  higher  corporate  expenses  of
$655,000 for nonrecurring corporate  initiatives,  process improvements and new
management personnel as discussed below were the principal contributions to the
increase. Increased depreciation expense, lease costs in the amount of $247,000
for three new lifts at the Summit  and Bear  Mountain  and normal  inflationary
impacts also contributed to the increase.

   Interest  expense  for  the  three  months  ended  April  30,  1999  totaled
$4,720,000,  an increase of $460,000  over the Company's  interest  expense for
the three  months  ended May 1, 1998,  reflecting  generally  higher  levels of
borrowings in the 1999 period.

   Due to the  Company's  lack  of  profitable  history,  the tax  benefits  of
operating  losses  are  fully  offset by a  valuation  reserve.  Similarly,  no
federal  income tax  provision is expected for the year ended  October 29, 1999
due to continued operating losses.  Accordingly,  during the three months ended
April 30, 1999, no federal income tax provision has been provided.

   EBITDA  for  the   historical   three   months  ended  April  30,  1999  was
$20,018,000,  an increase of $3,209,000 or 19% over EBITDA of  $16,809,000  for
the historical three months ended May 1, 1998.

   Historical  Six Months  Ended April 30,  1999 as Compared to the  Historical
Six Months Ended May 1, 1998

   Total revenue for the six months ended April 30, 1999 was  $103,090,000,  an
increase  of  $15,242,000,  or 17%,  over  the  Company's  revenue  for the six
months ended May 1, 1998.  The  increase is  principally  due to the  inclusion
of Loon Mountain for the entire 1999 period,  which  resulted in an increase of
$9,930,000  in revenues  for the six months ended April 30, 1999 as compared to
the  1998  period.  In  addition,  Northstar  and  Sierra  generated  increased

<PAGE>

revenues of $1,123,000 and $1,183,000,  respectively,  due to improved  yields.
Bear  Mountain's  revenues  declined  slightly  due to lower skier  visits as a
result of the lack of natural  snowfall,  partially  offset by improved yields.
Revenues  for  Waterville  Valley were  slightly  lower due to poor weather and
snow  conditions in the first  quarter,  partially  offset by improved  yields.
Revenues  for Mt.  Cranmore  increased  $469,000 or 14% due to improved  yields
and  higher  skier  visits as a result of new  pricing  strategies.  The Summit
generated  $2,687,000 or 26% in additional  revenues due to an earlier opening,
extended  season,  higher  skier  days  and  improved  yields  in its  food and
beverage,  snow  school  and  retail  businesses.  Revenues  for Grand  Targhee
increased by $343,000 or 5% due to slightly higher skier visits.

   Total  operating  expenses  for the six  months  ended  April 30,  1999 were
$83,926,000,  an increase of  $17,343,000  over the Company's  total  operating
expenses  for the six months  ended May 1, 1998.  The  principal  causes of the
increase are as follows:

                                                      (In thousands)

   Total operating expenses - six months ended             $66,583
    May 1, 1998..................................
   Acquisition of Loon Mountain:
    Cost of sales - resort operations............            5,065
    Selling, general and administrative..........              755
    Depreciation and amortization................              826
                                                        ----------
                                                             6,646
   Nonrecurring maintenance, operations, snow
    removal and severance costs, and costs
    associated with an earlier opening,
    extended season and revenue penetration
    efforts and new operations at the Summit.....            4,197
   Costs of nonrecurring corporate initiatives
    and process improvements and costs
    associated with new management personnel and
    functional expertise.........................            1,891
   Increased depreciation due to higher average
    asset balances...............................            2,135
   Increased snowmaking costs at Bear Mountain
    due to the lack of natural snowfall..........              480
   Lease costs for three new lifts at the
    Summit and Bear Mountain.....................              494
   Labor associated with earlier openings at
    Northstar, Sierra and
    Bear Mountain................................              197
   Inflation, consistent accrual practices
    among resorts and other changes, net.........            1,303
                                                        ----------
   Total operating expenses - six months ended
    April 30, 1999...............................          $83,926
                                                        ==========

   As  reflected  above,  the  inclusion  of Loon  Mountain for the entire 1999
period  resulted  in  an  increase  of  $6,646,000  in  operating  expenses  as
compared to the 1998 period.

   At the Summit,  the Company incurred  significant  nonrecurring costs during
the six months ended April 30, 1999 to  appropriately  prepare its  facilities,
vehicle and snow grooming fleet,  communications  infrastructure  and processes
and systems for the  operation  of the resort.  In addition,  record  levels of
snowfall  severely  hampered  operating  efforts and  resulted  in  significant
increases in snow removal,  grounds  maintenance and related costs. The Company
also accrued  severance costs associated with certain  personnel changes at the
Summit.  Management believes that approximately $2,500,000 to $3,000,000 of the
cost  increases  at the  Summit are of a  nonrecurring  nature and would not be
incurred in a typical year of operation.  Further,  the resort opened  thirteen
days  earlier for the 1998/99 ski season as compared to the prior  season,  and
operated  for an  additional  six days in April 1999 as compared to April 1998.
Also, the resort implemented various revenue penetration efforts and operated a
new ski school  business that was previously  operated by a third party,  which
contributed to the cost increases at the Summit. The earlier opening,  extended
season, revenue penetration efforts and new ski school generated an increase in
revenues of  $2,687,000  for the six months ended April 30, 1999 as compared to
the 1998 period.

   The Company has been executing numerous  nonrecurring efforts to improve its
marketing  collateral and database,  establish strategic  marketing  alliances,
introduce   new  service   offerings,   evaluate   potential   revenue   growth
opportunities  and strategies,  install public  relations  channels,  implement
enhanced   guest  service   training  for  employees,   institute   performance
management  systems and evaluate  technology  related tools and  methodologies.

<PAGE>

Further,  the Company has been  conducting  system and process  improvements in
substantially  all  key   administrative   and  operations  areas.   Management
believes that  approximately  $600,000 of the increased  corporate  spending is
of a  nonrecurring  nature.  The Company has also added  certain key  corporate
personnel and functional  expertise to enhance its management team.  Management
believes  that  the   nonrecurring   initiatives,   process   improvements  and
personnel  additions  have begun to favorably  impact the Company's  operations
through  improved  yields and higher  guest  service  survey  scores,  and will
positively impact the Company's financial performance in future periods.

   Interest expense for the six months ended April 30, 1999 totaled $9,688,000,
an increase  of  $1,341,000  over the  Company's  interest  expense for the six
months ended May 1, 1998,  reflecting  generally higher levels of borrowings in
the 1999 period due  principally  to debt incurred to finance the Loon Mountain
acquisition.

   Due to the  Company's  lack  of  profitable  history,  the tax  benefits  of
operating  losses  are  fully  offset by a  valuation  reserve.  Similarly,  no
federal  income tax  provision is expected for the year ended  October 29, 1999
due to continued  operating  losses.  Accordingly,  during the six months ended
April 30, 1999, no federal income tax provision has been provided.

   EBITDA for the historical  six months ended April 30, 1999 was  $29,957,000,
an increase of $934,000 or 3% over  historical  EBITDA of  $29,023,000  for the
six months ended May 1, 1998.

   Historical  Three  Months  Ended April 30, 1999 as Compared to the Pro Forma
Three Months Ended May 1, 1998

   The  following  unaudited pro forma results of operations of the Company for
the three  months ended May 1, 1998 assume that the Loon  Mountain  acquisition
and related  financing  had occurred on November 1, 1997.  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.

                                      Historical three  Pro forma three
                                        months ended      months ended
                                       April 30, 1999     May 1, 1998
                                       --------------    -------------
                                               (In thousands)

    Statement of Operations Data:
     Revenue:
       Resort operations ...........   $      56,791    $      52,714

     Operating expenses:
       Resort operations ...........          36,773           33,793
       Depreciation and amortization           5,992            4,363
                                       -------------    -------------
     Operating income ..............          14,026           14,558
     Interest expense and other, net           5,206            4,793
                                       -------------    -------------
     Income before minority interest           8,820            9,765
     Minority interest .............              55               68
                                       -------------    -------------
     Net income ....................   $       8,765    $       9,697
                                       =============    =============
    Other Data:
     EBITDA ........................   $      20,018    $      18,921

   Total revenue for the three months ended April 30, 1999 was $56,791,000,  an
increase of  $4,077,000,  or 8%, over the Company's  revenues for the pro forma
three  months  ended May 1, 1998.  Total skier days for the three  months ended
April 30, 1999 were  1,387,000,  an increase  of 82,000  days,  or 6%, over the
comparable  pro forma  period in 1998.  The  increase  in total  skier  days is
principally due to  significantly  higher skier days at the Summit and a larger
number of skier  visits  attributable  to  season  pass  sales and  promotional
offerings,  partially offset by lower skier visits at Bear Mountain.  Northstar
and Sierra generated increased revenues of $593,000 and $987,000, respectively,
due to improved yields.  Bear Mountain's  revenues  declined by $423,000 due to
lower  skier  visits as a result  of the lack of  natural  snowfall,  partially
offset by improved yields. Revenues for Waterville Valley increased

<PAGE>

by $186,000 due to improved  yields.  Revenues for Mount Cranmore  increased by
$598,000  due to  improved  yields and higher  skier  visits as a result of new
pricing  strategies.  Revenues for Loon  Mountain  increased by $641,000 due to
improved  yields  and  slightly  higher  skier  visits.  The  Summit  generated
$1,184,000 in additional revenues due to an extended season,  higher skier days
and improved  yields.  Revenues for Grand Targhee  increased by $311,000 due to
slightly higher skier visits and improved yields.

   Historical   resort   operating   expenses,   excluding   depreciation   and
amortization,  for the three months ended April 30, 1999 were  $36,773,000,  an
increase of  $2,980,000,  or 9%, over the  comparable pro forma period in 1998.
Increased   costs  of  operations  at  the  Summit  of  $2,215,000  and  higher
corporate  expenses  of  $655,000  for  nonrecurring   corporate   initiatives,
process  improvements  and new  management  personnel as  previously  discussed
were the principal  contributors to the increase.  Increased lease costs in the
amount of  $247,000  for three new lifts at the  Summit and Bear  Mountain  and
normal inflationary impacts also contributed to the increase.

   Historical  depreciation  and  amortization for the three months ended April
30, 1999 was  $5,992,000.  The increase of  $1,629,000  over the 1998 pro forma
period was due to higher average asset balances in the 1999 period.

   Net interest  expense for the  historical  three months ended April 30, 1999
totaled  $5,206,000,  an increase of  $413,000  or 9% from the  comparable  pro
forma period in 1998. The increase was principally  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  prior to the start of the 1998/99 ski
season.

   EBITDA  for  the   historical   three   months  ended  April  30,  1999  was
$20,018,000,  an increase of  $1,097,000 or 6% over EBITDA of  $18,921,000  for
the pro forma three months ended May 1, 1998.

   Historical  Six Months Ended April 30, 1999 as Compared to the Pro Forma Six
Months Ended May 1, 1998

   The  following  unaudited pro forma results of operations of the Company for
the six months ended May 1, 1998 assume that the Loon Mountain  acquisition and
related  financing had occurred on November 1, 1997.  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.

                                       Historical six    Pro forma six
                                        months ended      months ended
                                       April 30, 1999     May 1, 1998
                                       --------------    -------------
                                               (In thousands)

    Statement of Operations Data:
     Revenue:
       Resort operations ...........   $     103,090    $      98,487

     Operating expenses:
       Resort operations ...........          73,133           65,018
       Depreciation and amortization          10,793            8,552
                                       -------------    -------------
     Operating income ..............          19,164           24,917
     Interest expense and other, net          10,499            9,756
                                       -------------    -------------
     Income before minority interest           8,665           15,161
     Minority interest .............             114              138
                                       -------------    -------------
     Net income ....................   $       8,551    $      15,023
                                       =============    =============
    Other Data:
     EBITDA ........................   $      29,957    $      33,469

   Total  historical  revenues  for the six months  ended  April 30,  1999 were
$103,090,000,  an increase of $4,603,000,  or 5%, over the comparable pro forma
period in 1998. Total

<PAGE>

skier days for the six months ended April 30, 1999 were 2,433,000,  an increase
of 47,000 days,  or 2%, over the  comparable  pro forma  period in 1998.  Total
skier days increased due to significantly higher skier days at the Summit and a
larger number of skier visits attributable to season pass sales and promotional
offerings.  Northstar and Sierra generated increased revenues of $1,123,000 and
$1,183,000,  respectively,  due to improved  yields.  Bear Mountain's  revenues
declined  slightly due to lower skier visits as a result of the lack of natural
snowfall,  partially offset by improved yields.  Revenues for Waterville Valley
and Loon Mountain declined by $218,000 and $702,000,  respectively, due to poor
weather and snow conditions in the first quarter,  partially offset by improved
yields.  Revenues for Mt.  Cranmore  increased  $469,000 or 14% due to improved
yields and  higher  skier  visits as a result of new  pricing  strategies.  The
Summit generated  $2,687,000 in additional  revenues due to an earlier opening,
extended  season,  higher  skier days and improved  yields.  Revenues for Grand
Targhee increased by $343,000 or 5% due to slightly higher skier visits.

   Historical   resort   operating   expenses,   excluding   depreciation   and
amortization,  for the six months  ended  April 30, 1999 were  $73,133,000,  an
increase of  $8,115,000,  or 12%, over the comparable pro forma period in 1998.
Increased   costs  of  operations  at  the  Summit  of  $4,197,000  and  higher
corporate  expenses  of  $1,891,000  for  nonrecurring  corporate  initiatives,
process  improvements  and new  management  personnel as  previously  discussed
were the principal  contributors to the increase.  Increased  snowmaking  costs
at Bear Mountain of $480,000 due to the lack of natural  snowfall,  lease costs
in the  amount  of  $494,000  for  three  new  lifts  at the  Summit  and  Bear
Mountain,   $197,000  of  incremental   labor  costs  associated  with  earlier
openings  at  Northstar,  Sierra  and Bear  Mountain  and  normal  inflationary
impacts also contributed to the increase.

   Historical  depreciation and amortization for the six months ended April 30,
1999 was  $10,793,000.  The  increase  of  $2,241,000  over the 1998 pro  forma
period was due to higher average asset balances in the 1999 period.

   Net  interest  expense for the  historical  six months  ended April 30, 1999
totaled  $10,499,000,  an increase of  $743,000 or 8% from the  comparable  pro
forma period in 1998. The increase was principally  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  prior to the start of the 1998/99 ski
season.

   EBITDA for the historical six months ended April 30, 1999 was $29,957,000,
a decrease of $3,512,000 or 10% from the pro forma six months ended May 1,
1998.

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 during the
term  of such  facility.  On May  18,  1999,  the  final  maturity  date of the
Senior  Credit  Facility  was  extended  from  November  15,  1999 to March 31,
2002.  The  Senior  Credit   Facility   requires  that  the  Company  not  have
borrowings  thereunder  in  excess  of  $8  million,  in  addition  to  amounts
maintained  by the  Company in certain  depository  accounts  with  BankBoston,
N.A.,  for a  period  of 60  consecutive  days  each  year  commencing  between
February 1 and February  28. The Company has  obtained  waivers from the lender
that  reduced  the period of time  during  which  borrowings  may not exceed $8
million to 20 consecutive  days commencing  between February 1 and February 28,
1999,  and waived  certain other  covenant  violations  at April 30, 1999.  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  November,   to  fund  capital  expenditures  for  lifts,  trail  work,
grooming  equipment and other  on-mountain  equipment and facilities,  to build
retail  and  other  inventories  prior to the start of the ski  season  and for
other cash  requirements.  As of April 30, 1999,  outstanding  borrowings under
the Senior Credit Facility totaled approximately $12.8 million.

   The Company had a working  capital  deficit of $27.9 million as of April 30,
1999 which will negatively affect liquidity during the remainder of 1999.

<PAGE>

   The Company  generated cash from  operating  activities of $19.8 million for
the six months  ended April 30,  1999 as compared to $22.4  million for the six
months  ended May 1, 1998.  This  decrease  is  principally  due to the reduced
earnings for the period ended April 30, 1999 as compared to the 1998 period.

   Cash used in investing  activities  totaled  $12.9 million and $35.8 million
for the six months  ended  April 30,  1999 and May 1, 1998,  respectively.  The
results for the 1999 period  primarily  reflect  capital  expenditures  for the
purchase of  property  and  equipment,  whereas the results for the 1998 period
also reflect the acquisition of Loon Mountain.

   Cash used in  financing  activities  totaled $6.7 million for the six months
ended April 30, 1999,  primarily  reflecting  repayments  on the Senior  Credit
Facility and  long-term  debt.  Cash provided by financing  activities  totaled
$15.2  million  for the six  months  ended May 1,  1998,  primarily  reflecting
borrowings  and additional  capital  contributions  to fund the  acquisition of
Loon Mountains.

   The Company's  capital  expenditures  for property and equipment for the six
months  ended  April 30,  1999 were  approximately  $10.7  million.  Management
anticipates that remaining  capital  expenditures for property and equipment in
fiscal 1999 and fiscal 2000 will be approximately $14 million in the aggregate,
including  approximately  $4 million in resort  maintenance  for each year. 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 and borrowings under the Senior Credit Facility.  Commitments for
future capital  expenditures  totaled  approximately  $4.1 million at April 30,
1999.

   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 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  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  each contain
covenants that  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 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 Company  currently  has $133.5  million  aggregate  principal  amount of
Senior  Notes   outstanding,   which  will  result  in  annual  cash   interest
requirements  of  approximately  $16.7 million.  The Company  expects that cash
generated  from  operations,  cash  proceeds of planned  real  estate  sales at
Northstar and planned divestitures of other

<PAGE>

real estate and  non-strategic  assets,  together with borrowing  availability,
will be adequate to fund the interest  requirements on the Senior Notes and the
Company's  other cash  operating  and debt service  requirements  over the next
twelve  months.  However,  any  decline  in the  Company's  expected  operating
performance  or the  failure to sell  scheduled  real  estate at  Northstar  or
achieve planned divestitures of other real estate and non-strategic  assets, in
each case on the terms anticipated, 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 significant expansion of its
existng  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.

Impact of the Year 2000 Issue

   The year 2000 issue is the result of computer  programs  being written using
two  digits  rather  than  four  to  define  the  applicable  year.  Any of the
Company's computer programs that have  date-sensitive  software may recognize a
date using "00" as the year 1900 rather than the year 2000.  This could  result
in a system  failure or  miscalculations  causing  disruptions  of  operations,
including,  among other things, a temporary  inability to process  transactions
or engage in normal business activities.

   The  Company  has   conducted  an   assessment   of  its   information   and
telecommunications  technology ("IT") assets and systems.  Substantially all of
the Company's IT systems,  except for a portion of the Company's  ticketing and
sales systems,  operate using  software  developed and supported by third party
vendors.  The Company is in the process of implementing  its planned program to
remedy  such  third  party   developed   systems,   which  will  entail  either
modifications  to or  replacement of certain  existing IT systems.  The cost of
modifications  will  be  expensed  as  incurred  and  is  not  expected  to  be
significant.  The cost of purchased  replacements  will be  capitalized  and is
expected  to range  from  $600,000  to  $700,000,  of which  $425,000  has been
incurred through April 30, 1999.

   The Company has  substantially  completed  an  assessment  of the  necessary
efforts to make its primary ticketing and sales system year 2000 compliant. The
cost of necessary  modifications  to the ticketing  and sales  software will be
expensed as incurred and will be performed  using primarily  existing  internal
resources.  Purchases of replacement hardware will be capitalized. The expected
cost of software  modifications is expected to range from $120,000 to $150,000.
Depending upon the results of hardware testing, necessary hardware replacements
could require capital spending of up to $200,000.

   The Company has commenced a program to ensure that  significant  vendors and
service  providers  with which it does  business  are year 2000  compliant.  In
addition,  the Company is conducting  an assessment of its operating  assets to
determine  whether there will be any  significant  financial  impacts to ensure
year 2000 compliance for such assets.

   The Company  intends to complete its year 2000  assessments  and remediation
program by the third calendar quarter of 1999.  However,  if the Company or its
vendors  are unable to resolve the year 2000 issue in a timely  manner,  or the
Company's  assessment  of the  extent of year 2000  issues  surrounding  its IT
systems,  operating  assets or  significant  vendors or service  providers  are
incorrect,  the year 2000 issue could have a material  impact on the operations
of the Company.  The Company does not presently have a contingency  plan in the
event its year 2000  compliance  program is  unsuccessful or not completed on a
timely basis.

   The cost of the project  and the date on which the Company  believes it will
complete the year 2000  modifications are based on management's best estimates,
which were derived utilizing numerous  assumptions of future events,  including
the continued availability of certain resources, third party modification plans
and other factors. However, there can be no guarantee that these estimates will
be achieved and actual results could differ materially from those  anticipated.
Specific factors that might cause such material  differences  include,  but are
not limited to, the  availability  and cost of personnel  trained in this area,
the  ability to locate and  correct  all  relevant  computer  codes and similar
uncertainties. See "Forward-Looking Statements" herein.

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

<PAGE>

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 property  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,  Summit,  Grand  Targhee,  Loon
Mountain and  Waterville  Valley resorts under the terms of Special Use Permits
issued by the United  States  Forest  Service.  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 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. In a December 4, 1998 filing, the United States Forest
Service  targeted  the  Fall of 1999  for  issuance  of a draft  NEPA  document
regarding  the  improvements  and the  proposed  expansion  and stated  that it
intended to combine  such NEPA review  with review of the  existing  snowmaking
pipeline.  The  District  Court  entered a final  order on  December  11,  1998
specifying  that the  conditions  imposed on operations at Loon Mountain in the
May 5, 1997 order 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 its
evaluation  and  analysis of the  existing  snowmaking  pipeline  with its NEPA
review of the improvements and proposed expansion.

   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,
direct the United  States Forest  Service to  re-evaluate  the pipeline,  allow
such  re-evaluation  to proceed  separate  from and prior to the United  States
Forest Service's  reconsideration of the larger expansion,  and enjoin the Loon
Mountain  Resort 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 and  addressing  its potential to increase the amount of
snow made.  This  decision  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  precluding  use of the pipeline to permit Loon  Mountain  Resort 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  reviews
the pipeline  under NEPA. On February 12, 1999,  the District  Court  dismissed
the  consolidated  lawsuit  concerning  the  pipeline  in light  of the  United
States  Forest   Service's   decision  to  combine  review  of  the  pipeline's
construction  and  operation  with  its NEPA  review  of the  improvements  and
proposed expansion.

<PAGE>

   Existing  use of  Loon  Mountain  is  authorized  under a Term  Special  Use
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  issued by the  United
States  Forest  Service  that is expected to be reissued  each year.  After the
United  States  Forest  Service  reconsiders  the  pipeline   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
pipeline  improvements  and  expansion  will be approved  by the United  States
Forest  Service.  However,  no assurance  can be given  regarding the timing or
outcome of this process.

   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  permits,  the Company is required
to pay  fees to the  United  States  Forest  Service.  Under  recently  enacted
legislation,  retroactively  effective  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.  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,  revenue from lift
ticket,  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  October  30,  1998 were  $1,014,000.  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 United  States  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 United States Forest
Service.   The  United  States  Secretary  of  Agriculture  has  the  right  to
terminate any Special Use Permit upon  180-days  notice if, in planning for the
uses  of  the  national  forest,  the  public  interest  requires  termination.
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.  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
adversely affect operations.

   The  operations at the resorts  require  permits and approvals  from certain
federal,  state and local authorities.  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 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.

   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,  following the Wyoming  Department of  Environmental  Quality
(the "DEQ") issuing a

<PAGE>

Notice of  Violation  of state water  pollution  requirements  based on alleged
discharge from a wastewater  lagoon without a permit,  the Company entered into
an  negotiated  compliance  order  with  the  DEQ  requiring  construction  and
operation of a new wastewater  facility at a cost of  approximately $1 million.
The Company has completed the  construction of the new wastewater  facility and
final certification by appropriate governmental agencies is pending.

   Pursuant to the air emissions  reduction  program currently in effect in the
area  regulated  by  the  South  Coast  Air  Quality  Management   District  in
California  where  Bear  Mountain  is  located,  depending  on Bear  Mountain's
operations  and  emissions,  Bear Mountain may be required to acquire  emission
credits from other  facilities  which have already  implemented  nitrogen oxide
emission  reductions.   When  necessary,  the  Company  may  purchase  "banked"
emission credits at prevailing market rates.

   Bear  Mountain has a water supply  contract for 500  acre-feet per year with
Big Bear  Municipal  Water  District  executed  January  8, 1988,  the  initial
fifteen-year  term of which  expires on January  7,  2003.  Big Bear  Municipal
Water  District's  primary  source of water is from a  portion  of the water in
Big Bear Lake shared with Bear Valley  Mutual Water  Company,  the senior water
rights  holder.  The water supply  contract  provides for water  primarily  for
snow  making  and  slope  irrigation  purposes.  The  obligation  of  Big  Bear
Municipal  Water  District to supply  water is excused only if the level of Big
Bear Lake  recedes  below  6,735.2 feet above sea level or eight feet below the
top of Big Bear Lake Dam.  Bear Valley Mutual Water  Company  recently  claimed
that its  rights  in the  lake are not  subject  to Big  Bear  Municipal  Water
District's  obligation  to  supply  water  to  Bear  Mountain.  This  claim  is
vigorously  contested by all interested  parties  including Bear Mountain and a
two-year  moratorium  agreement  between Bear Valley  Mutual Water  Company and
Big Bear  Municipal  Water  District  was  executed  in  November  1998,  which
withdraws  Bear  Valley's  claim for two years  while the issues  between  Bear
Valley and Big Bear  Municipal  are worked out. This allows  continued  service
to Bear Mountain on an  uncontested  basis during the  moratorium  period.  The
Company  expects that the issue will be resolved  favorable to the interests of
Bear Mountain  because of its  contribution to the local economy,  the strength
of its  contract  rights  with  Big  Bear  Municipal  Water  District  and  the
alternate  sources of water supply that are  available.  It should be noted the
foregoing  is  premised  on normal  conditions  prevailing  and the  absence of
droughts,  earthquakes,  dam failure or other types of similar  calamities that
impact  the  ability  to obtain  or  supply  water.  No  assurance  can be made
regarding the outcome of this situation or the timing  negotiations  during the
next two years.

   Pursuant to the decision of the First  Circuit and the order of the District
Court the Loon  Mountain  Resort 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 District  Court's  reserved  power to modify such
approval  to  address  any  resulting  environmental  issues.  The EPA issued a
discharge permit prior to the 1998/99 ski season.

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

   In addition,  the Loon Mountain  Resort was notified in September  1997 that
it had  allegedly  filled  certain  wetlands at the resort in  violation of the
CWA. In response,  the Loon  Mountain  Resort worked with the EPA to remove the
alleged fill and implement  certain  erosion control  measures.  On January 15,
1998, an individual  notified the EPA, the Loon  Mountain  Resort,  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.  The Company
does not have any further  notice of a threatened  action  since the  September
1997 notice.  While the Company  believes that such  position  would prevail in
any lawsuit, no assurance can be given regarding any outcome.

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"   are   forward-looking   statements   that   involve   risks   and
uncertainties.  The  forward-looking  statements  are made pursuant to the safe
harbor provisions of the Private

<PAGE>

Securities Litigation Reform Act of 1995.  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,
but are not limited to: uncertainty as to future financial results, substantial
leverage of the Company,  the capital  intensive  nature of  development of the
Company's ski resorts,  uncertainties  associated with obtaining  financing for
future real estate  projects  and to  undertake  future  capital  improvements,
demand for and costs associated with real estate development, the discretionary
nature of  consumers'  spending for skiing and resort real estate, regional and
national  economic  conditions,  the successful or unsuccessful  integration of
acquired businesses, weather conditions, natural disasters (such as earthquakes
and floods),  industry  competition,  governmental  regulation  and other risks
associated with expansion and development, the occupancy of leased property and
property used pursuant to the United States  Forest  Service  permits,  and the
ability of the Company to make its  information  technology  assets and systems
year  2000  compliant  and the  costs of any  modifications  necessary  in this
regard.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

   There have been no material  changes in information  relating to market risk
since the Company's  disclosure  in Item 7a. of the Company's  Annual Report on
Form 10-K for the year ended  October  30,  1998 as filed  with the  Securities
and Exchange Commission.

<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 skiing  activities at its resorts but also relating to
premises and  vehicular  operations  and  worker's  compensation  matters.  The
Company  maintains  extensive  liability  insurance that the Company  considers
adequate  to  monetarily  insure  claims  related to such  usual and  customary
risks associated with the operation of four-season recreation resorts.

   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.  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
defended  such  lawsuit on behalf of  Fibreboard  and Bear  Mountain,  Inc. The
lawsuit   was  settled  in   February   1999  and  the  Company  is   currently
investigating  whether  Bear  Mountain,  Inc.  has any further  interest in the
matter.

   In  connection  with the merger with Loon  Mountain  Recreation  Corporation
("LMRC"),  certain shareholders of LMRC (the "Shareholder  Plaintiffs") filed a
lawsuit  against  LMRC and its former  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").
The two lawsuits were  consolidated  in the Superior  Court of Grafton  County,
New  Hampshire.  Prior to the filing of the lawsuit  against the  Company,  the
Company   received  a  "no  action"   order  from  the  Bureau  of   Securities
Regulation,  New Hampshire  Department of State (the "Bureau") finding that the
Takeover  Statute was  inapplicable  to the proposed  merger.  The  Shareholder
Plaintiffs'  initial  request  for a  preliminary  injunction  prohibiting  the
Company (or its  affiliates)  from  proceeding  with the LMRC merger was denied
by the  court;  before  the  litigation  proceeded  further,  and  prior to the
merger,  the  parties to the  merger  agreement  amended  such  agreement.  The
Company  then  obtained an  additional  order by the Bureau  that the  Takeover
Statute  did not apply to the merger  transaction.  The  Company  answered  the
Shareholder   Plaintiffs'   petition   and  filed  a  motion  to  dismiss   the
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;  Shareholder  Plaintiffs  have  appealed the
dismissal  to the New  Hampshire  Supreme  Court and such  court has  agreed to
review  the case.  Shareholder  Plaintiffs'  breach of  fiduciary  duty  action
against LMRC and its former  directors  remains  pending and limited  discovery
has been  conducted but a trial date has not been set.  Shareholder  Plaintiffs
were given leave by the court to amend their  complaint  to seek money  damages
against the Company, LMRC and its former directors.

   Also in  connection  with  the  merger  with  LMRC,  Shareholder  Plaintiffs
exercised  dissenters' rights under the New Hampshire Business  Corporation Act
(the  "Corporation  Act").  Under the  statutory  procedure  for  settling  the
Shareholder  Plaintiffs'  dissenters' rights, LMRC paid Plaintiffs an aggregate
of  $34,436,  or $30.61 per share,  as its  estimate of the fair value of their
1,125 shares.  Shareholder  Plaintiffs  demanded  additional payments necessary
to compensate  them for the $71.38 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   Shareholder
Plaintiffs'  shares  in LMRC.  Discovery  in the  case is  pending.  While  the
Company  believes  that  the  amount  paid  to  the  Plaintiff's  prior  to the
commencement  of the appraisal  proceeding  represents  the fair value of their
shares,  there  can  be no  assurance  as to  the  value  which  the  appraisal
proceeding will assign to the Plaintiffs 1,125 shares.

   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

<PAGE>

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 Appeal for the First  Circuit  (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.  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  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 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; the Forest Service currently expects to
issue  draft  NEPA  documentation  in  the  Fall  of  1999.  The  Environmental
Plaintiffs also filed 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  discharge  at issue  involves  water
transfers  from the East Branch of the  Pemigewasset  River and drain back from
the snowmaking  system into Loon Pond.  The District Court  dismissed the claim
for  civil   penalties  and  attorney  fees  under  the  CWA  and  one  of  the
Environmental  Plaintiffs  appealed to the First Circuit.  The appeal is stayed
pending a decision  of the United  States  Supreme  Court in a  different  case
involving  the CWA.  In  connection  with the  merger  with LMRC,  the  Company
obtained a specific  insurance policy providing $4.5 million of coverage (above
a $1.2 million  deductible) to cover any civil  penalties,  fees and costs that
the District Court may assess against LMRC.

      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.  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.

   In  connection  with  the  proposed  Seven  Springs   acquisition,   certain
shareholders  of Seven  Springs filed a lawsuit in the Court of Common Pleas of
Somerset County,  Pennsylvania against the Company,  Acquisition Sub, and Seven
Springs and certain of its  directors,  seeking a declaratory  judgment,  along
with  other  relief   including  the   rescission  of  the  Merger   Agreement.
Plaintiffs  allege that the terms of the Seven  Springs  Shareholder  Agreement
ban the  consummation  of the proposed  acquisition.  On October 29, 1998,  the
Court entered a final  judgment  denying  Plaintiff's  motion and has permitted
the consummation of the transactions  contemplated by the Merger Agreement.  On
December  28, 1998,  the  Plaintiff's  filed an amended  notice of appeal and a
hearing  was held on April 20,  1999,  but a ruling  has not yet been  entered.
While the Company  believes  that Seven  Springs will prevail with its position
that  the  Seven  Springs   Shareholders   Agreement  does  not  apply  to  the
transactions  contemplated  by the Merger  Agreement,  no assurance can be made
regarding the timing or outcome of this litigation.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

   There has been no  material  default  with  respect to any of the  Company's
senior securities which has not been waived or cured.

<PAGE>

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

   a. Exhibits

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

      10.1                     First  Amendment  dated May 18, 1999, to Amended
                               and  Restated  Credit   Agreement  dated  as  of
                               October   30,   1998  among   Booth   Creek  Ski
                               Holdings,  Inc.,  Booth  Creek  Ski  Acquisition
                               Corp.,  Trimont Land  Company,  Sierra-at-Tahoe,
                               Inc.,  Bear Mountain,  Inc.,  Waterville  Valley
                               Ski Resort,  Inc.,  Mount  Cranmore  Ski Resort,
                               Inc.,   Ski   Lifts,    Inc.,    Grand   Targhee
                               Incorporated,  LMRC Holding Corp., Loon Mountain
                               Recreation  Corporation,  Loon Realty Corp.  and
                               BankBoston, N.A.

      10.2                     Waiver   Agreement   dated  June  14,  1999,  to
                               Amended and Restated  Credit  Agreement dated as
                               of  October  30,  1998  among  Booth  Creek  Ski
                               Holdings,  Inc.,  Booth  Creek  Ski  Acquisition
                               Corp.,  Trimont Land  Company,  Sierra-at-Tahoe,
                               Inc.,  Bear Mountain,  Inc.,  Waterville  Valley
                               Ski Resort,  Inc.,  Mount  Cranmore  Ski Resort,
                               Inc.,   Ski   Lifts,    Inc.,    Grand   Targhee
                               Incorporated,  LMRC Holding Corp., Loon Mountain
                               Recreation  Corporation,  Loon Realty Corp.  and
                               BankBoston, N.A.

      27.1                     Financial Data Schedule

   b. Reports on Form 8-K

   No reports on Form 8-K were filed  during the  quarterly  period ended April
30, 1999.

<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
                                           (Duly Authorized Officer)


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



June 14, 1999