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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549



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FORM 10-Q



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(Mark One)

|x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ---------------------------------------------------------------------------------------



For the quarterly period ended January 28, 2005



OR



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



Commission File Number: 333-26091



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BOOTH CREEK SKI HOLDINGS, INC.

(Exact name of registrant as specified in its charter)



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|                                                               |  |                                        
|-------------------------------------------------------------- |  | ---------------------------------------
|Delaware                                                       |  | 84-1359604                             
|(State or Other Jurisdiction of Incorporation or Organization) |  | (I.R.S. Employer Identification Number)
|                                                               | 
|1000 South Frontage Road West, Suite 100 Vail, Colorado        |  | 81657                                  
|(Address of Principal Executive Offices)                       |  | (Zip Code)                             



(970) 476-1311

(Registrants Telephone Number, Including Area Code)



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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 ̈



Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Securities Exchange Act of 1934).    Yes ̈No  x



As of February 28, 2005, the number of shares outstanding of the registrants Common Stock, par value $.01 per share, was 1,000 shares.



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##### Table of Contents

TABLE OF CONTENTS



|                               |  |                                                                                       |  |           
|------------------------------ |  | ------------------------------------------------------------------------------------- |  | ----------
|Item                           |  |                                                                                       |  | PageNumber
|PART I  FINANCIAL INFORMATION |  |                                                                                      
|                               |  |                                                                                      
|1.                             |  | Financial Statements                                                                  |  | 1         
|                               |  |                                                                                      
|2.                             |  | Managements Discussion and Analysis of Financial Condition and Results of Operations |  | 12        
|                               |  |                                                                                      
|3.                             |  | Quantitative and Qualitative Disclosures about Market Risk                            |  | 24        
|                               |  |                                                                                      
|4.                             |  | Controls and Procedures                                                               |  | 24        
|                               | 
|PART II  OTHER INFORMATION    |  |                                                                                      
|                               |  |                                                                                      
|1.                             |  | Legal Proceedings                                                                     |  | 26        
|                               |  |                                                                                      
|3.                             |  | Defaults Upon Senior Securities                                                       |  | 27        
|                               |  |                                                                                      
|6.                             |  | Exhibits                                                                              |  | 27        
|                               |  |                                                                                      
|                               |  | Signatures                                                                            |  | 29        



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##### Table of Contents

PART I. FINANCIAL INFORMATION



ITEM 1. FINANCIAL STATEMENTS

BOOTH CREEK SKI HOLDINGS, INC.



CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share amounts)



(Unaudited)



|                                                                                                     |  |                  |         |   |                 |   |         |                  |  |   |         |  
|---------------------------------------------------------------------------------------------------- |  | ---------------- | ------- | - | --------------- | - | ------- | ---------------- |  | - | ------- | -
|                                                                                                     |  | January 28, 2005 |         |   | October 29,2004 |   |         | January 30, 2004 | 
|ASSETS                                                                                               |  |                  |         |   |                 |   |         |                  |  |   |         |  
|Current assets:                                                                                      |  |                  |         |   |                 |   |         |                  |  |   |         |  
|Cash and cash equivalents                                                                            |  | $                | 1,052   |   |                 | $ | 846     |                  |  | $ | 3,526   |  
|Accounts receivable, net of allowance of $61, $39 and $56, respectively                              |  |                  | 3,495   |   |                 |   | 1,951   |                  |  |   | 2,885   |  
|Inventories                                                                                          |  |                  | 3,081   |   |                 |   | 2,560   |                  |  |   | 2,995   |  
|Prepaid expenses and other current assets                                                            |  |                  | 3,413   |   |                 |   | 1,550   |                  |  |   | 3,225   |  
|                                                                                                     |  |                  |         |   |                 |   |         |                  |  |   |         |  
|Total current assets                                                                                 |  |                  | 11,041  |   |                 |   | 6,907   |                  |  |   | 12,631  |  
|                                                                                                     |  |                  |        
|Property and equipment, net                                                                          |  |                  | 109,407 |   |                 |   | 111,219 |                  |  |   | 109,921 |  
|Real estate held for development and sale                                                            |  |                  | 6,549   |   |                 |   | 6,089   |                  |  |   | 5,583   |  
|Deferred financing costs, net of accumulated amortization of $6,897, $6,430 and $5,515, respectively |  |                  | 2,061   |   |                 |   | 2,510   |                  |  |   | 2,489   |  
|Timber rights and other assets                                                                       |  |                  | 5,727   |   |                 |   | 5,802   |                  |  |   | 5,404   |  
|Goodwill                                                                                             |  |                  | 22,938  |   |                 |   | 22,938  |                  |  |   | 22,938  |  
|                                                                                                     |  |                  |         |   |                 |   |         |                  |  |   |         |  
|Total assets                                                                                         |  | $                | 157,723 |   |                 | $ | 155,465 |                  |  | $ | 158,966 |  
|                                                                                                     |  |                  |         |   |                 |   |         |                  |  |   |         |  
|LIABILITIES AND SHAREHOLDERS EQUITY (DEFICIT)                                                       |  |                  |         |   |                 |   |         |                  |  |   |         |  
|Current liabilities:                                                                                 |  |                  |         |   |                 |   |         |                  |  |   |         |  
|Revolving credit facility                                                                            |  | $                | 5,600   |   |                 | $ | 17,250  |                  |  | $ |        |  
|Current portion of long-term debt                                                                    |  |                  | 25,764  |   |                 |   | 28,233  |                  |  |   | 6,641   |  
|Accounts payable and accrued liabilities                                                             |  |                  | 27,065  |   |                 |   | 18,050  |                  |  |   | 25,110  |  
|Unearned revenue and deposits - resort operations                                                    |  |                  | 19,093  |   |                 |   | 14,602  |                  |  |   | 16,904  |  
|                                                                                                     |  |                  |         |   |                 |   |         |                  |  |   |         |  
|Total current liabilities                                                                            |  |                  | 77,522  |   |                 |   | 78,135  |                  |  |   | 48,655  |  
|                                                                                                     |  |                  |        
|Long-term debt                                                                                       |  |                  | 82,801  |   |                 |   | 81,085  |                  |  |   | 98,731  |  
|                                                                                                     |  |                  |        
|Other long-term liabilities                                                                          |  |                  | 874     |   |                 |   | 874     |                  |  |   | 741     |  
|                                                                                                     |  |                  |        
|Commitments and contingencies                                                                        |  |                  |         |   |                 |   |         |                  |  |   |         |  
|                                                                                                     |  |                  |        
|Shareholders equity (deficit):                                                                      |  |                  |         |   |                 |   |         |                  |  |   |         |  
|Common stock, $.01 par value; 1,000 shares authorized, issued and outstanding                        |  |                  |        |   |                 |   |        |                  |  |   |        |  
|Additional paid-in capital                                                                           |  |                  | 72,000  |   |                 |   | 72,000  |                  |  |   | 72,000  |  
|Accumulated deficit                                                                                  |  |                  | (75,474 | ) |                 |   | (76,629 | )                |  |   | (61,161 | )
|                                                                                                     |  |                  |         |   |                 |   |         |                  |  |   |         |  
|Total shareholders equity (deficit)                                                                 |  |                  | (3,474  | ) |                 |   | (4,629  | )                |  |   | 10,839  |  
|                                                                                                     |  |                  |         |   |                 |   |         |                  |  |   |         |  
|Total liabilities and shareholders equity (deficit)                                                 |  | $                | 157,723 |   |                 | $ | 155,465 |                  |  | $ | 158,966 |  
|                                                                                                     |  |                  |         |   |                 |   |         |                  |  |   |         |  



See accompanying notes.



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##### Table of Contents

BOOTH CREEK SKI HOLDINGS, INC.



CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands)



(Unaudited)



|                                                                                  |  |                    |        |   |                 |   |        |  
|--------------------------------------------------------------------------------- |  | ------------------ | ------ | - | --------------- | - | ------ | -
|                                                                                  |  | Three Months Ended |       
|                                                                                  |  | January 28,2005    |        |   | January 30,2004 |  
|Revenue:                                                                          |  |                    |        |   |                 |   |        |  
|Resort operations                                                                 |  | $                  | 42,777 |   |                 | $ | 47,315 |  
|Real estate and other (including $5,610 in revenues with a related party in 2004) |  |                    |       |   |                 |   | 8,498  |  
|                                                                                  |  |                    |        |   |                 |   |        |  
|Total revenue                                                                     |  |                    | 42,777 |   |                 |   | 55,813 |  
|                                                                                  |  |                   
|Operating expenses:                                                               |  |                    |        |   |                 |   |        |  
|Cost of sales - resort operations                                                 |  |                    | 26,646 |   |                 |   | 26,273 |  
|Cost of sales - real estate and other                                             |  |                    | 7      |   |                 |   | 1,791  |  
|Depreciation                                                                      |  |                    | 3,267  |   |                 |   | 3,603  |  
|Selling, general and administrative expense                                       |  |                    | 7,969  |   |                 |   | 7,257  |  
|                                                                                  |  |                    |        |   |                 |   |        |  
|Total operating expenses                                                          |  |                    | 37,889 |   |                 |   | 38,924 |  
|                                                                                  |  |                    |        |   |                 |   |        |  
|Operating income                                                                  |  |                    | 4,888  |   |                 |   | 16,889 |  
|                                                                                  |  |                   
|Other income (expense):                                                           |  |                    |        |   |                 |   |        |  
|Interest expense                                                                  |  |                    | (3,267 | ) |                 |   | (3,056 | )
|Amortization of deferred financing costs                                          |  |                    | (467   | ) |                 |   | (280   | )
|Other income                                                                      |  |                    | 1      |   |                 |   | 84     |  
|                                                                                  |  |                    |        |   |                 |   |        |  
|Other income (expense), net                                                       |  |                    | (3,733 | ) |                 |   | (3,252 | )
|                                                                                  |  |                    |        |   |                 |   |        |  
|Net income                                                                        |  | $                  | 1,155  |   |                 | $ | 13,637 |  
|                                                                                  |  |                    |        |   |                 |   |        |  



See accompanying notes.



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BOOTH CREEK SKI HOLDINGS, INC.



CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)



(Unaudited)



|                                                                                  |  |                    |         |   |                 |   |         |  
|--------------------------------------------------------------------------------- |  | ------------------ | ------- | - | --------------- | - | ------- | -
|                                                                                  |  | Three Months Ended |        
|                                                                                  |  | January 28,2005    |         |   | January 30,2004 |  
|Cash flows from operating activities:                                             |  |                    |         |   |                 |   |         |  
|Net income                                                                        |  | $                  | 1,155   |   |                 | $ | 13,637  |  
|Adjustments to reconcile net income to net cash provided by operating activities: |  |                    |         |   |                 |   |         |  
|Depreciation                                                                      |  |                    | 3,267   |   |                 |   | 3,603   |  
|Noncash cost of real estate sales                                                 |  |                    |        |   |                 |   | 1,590   |  
|Amortization of deferred financing costs                                          |  |                    | 467     |   |                 |   | 280     |  
|Changes in operating assets and liabilities:                                      |  |                    |         |   |                 |   |         |  
|Accounts receivable                                                               |  |                    | (1,544  | ) |                 |   | (1,058  | )
|Inventories                                                                       |  |                    | (521    | ) |                 |   | (605    | )
|Prepaid expenses and other current assets                                         |  |                    | (1,863  | ) |                 |   | (1,943  | )
|Accounts payable and accrued liabilities                                          |  |                    | 9,015   |   |                 |   | 5,487   |  
|Unearned revenue and deposits - resort operations                                 |  |                    | 4,491   |   |                 |   | 2,165   |  
|                                                                                  |  |                    |         |   |                 |   |         |  
|Net cash provided by operating activities                                         |  |                    | 14,467  |   |                 |   | 23,156  |  
|                                                                                  |  |                   
|Cash flows from investing activities:                                             |  |                    |         |   |                 |   |         |  
|Capital expenditures for property and equipment                                   |  |                    | (96     | ) |                 |   | (1,625  | )
|Capital expenditures for real estate held for development and sale                |  |                    | (460    | ) |                 |   | (546    | )
|Other assets                                                                      |  |                    | 75      |   |                 |   | 137     |  
|                                                                                  |  |                    |         |   |                 |   |         |  
|Net cash used in investing activities                                             |  |                    | (481    | ) |                 |   | (2,034  | )
|                                                                                  |  |                   
|Cash flows from financing activities:                                             |  |                    |         |   |                 |   |         |  
|Borrowings under revolving credit facility                                        |  |                    | 12,850  |   |                 |   | 6,150   |  
|Repayments under revolving credit facility                                        |  |                    | (24,500 | ) |                 |   | (23,900 | )
|Principal payments of long-term debt                                              |  |                    | (2,112  | ) |                 |   | (655    | )
|Deferred financing costs                                                          |  |                    | (18     | ) |                 |   |        |  
|                                                                                  |  |                    |         |   |                 |   |         |  
|Net cash used in financing activities                                             |  |                    | (13,780 | ) |                 |   | (18,405 | )
|                                                                                  |  |                    |         |   |                 |   |         |  
|Increase in cash and cash equivalents                                             |  |                    | 206     |   |                 |   | 2,717   |  
|                                                                                  |  |                   
|Cash and cash equivalents at beginning of period                                  |  |                    | 846     |   |                 |   | 809     |  
|                                                                                  |  |                    |         |   |                 |   |         |  
|Cash and cash equivalents at end of period                                        |  | $                  | 1,052   |   |                 | $ | 3,526   |  
|                                                                                  |  |                    |         |   |                 |   |         |  



See accompanying notes.



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BOOTH CREEK SKI HOLDINGS, INC.



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)



January 28, 2005



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



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



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



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



The accompanying consolidated financial statements as of January 28, 2005 and
January 30, 2004 and for the three month periods then ended are unaudited, but include all adjustments (consisting only of normal and recurring adjustments) which, in the opinion of management of the Company, are considered necessary for a fair
presentation of the Companys financial position at January 28, 2005 and January 30, 2004, and its operating results and cash flows for the three month periods then ended. Due to the highly seasonal nature of the Companys business, the
results for the interim periods are not indicative of results for the entire year. Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in
the United States have been omitted pursuant to generally accepted accounting principles applicable for interim periods. Management believes that the disclosures made are adequate to make the information presented not misleading. The unaudited
consolidated financial statements should be read in conjunction with the following notes and the Companys consolidated financial statements and accompanying notes included in the Companys Annual Report on Form 10-K for the fiscal year
ended October 29, 2004.



The Company is currently undertaking a
proposed refinancing of its Senior Credit Facility (as defined herein), which matures on May 31, 2005, as well as the outstanding indebtedness relating to its Senior Notes (as defined herein). See further discussion at Note 3.



Cash and Cash Equivalents



The Company considers all highly liquid investments purchased with an
original maturity of three months or less to be cash equivalents. As of January 30, 2004, cash equivalents consisted of money market funds (none at January 28, 2005 and October 29, 2004).



Included in cash at January 28, 2005 is restricted cash of $460,000 relating to advance deposits and rental fees due to
property owners for lodging and property rentals.



Inventories



Inventories are valued at the lower of cost (first-in,
first-out method) or market. The components of inventories were as follows:



|                  |  |                  |       |                  |   |                  |  |   |      
|----------------- |  | ---------------- | ----- | ---------------- | - | ---------------- |  | - | -----
|                  |  | January 28, 2005 |       | October 29, 2004 |   | January 30, 2004
|                  |  | (In thousands)  
|Retail products   |  | $                | 1,796 |                  | $ | 1,776            |  | $ | 1,644
|Supplies          |  |                  | 650   |                  |   | 580              |  |   | 681  
|Food and beverage |  |                  | 635   |                  |   | 204              |  |   | 670  
|                  |  |                  |       |                  |   |                  |  |   |      
|                  |  | $                | 3,081 |                  | $ | 2,560            |  | $ | 2,995
|                  |  |                  |       |                  |   |                  |  |   |      



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BOOTH CREEK SKI HOLDINGS, INC.



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)

(UNAUDITED)



1.
Organization, Basis of Presentation and Summary of Significant Accounting Policies - (Continued)



Revenue Recognition



Revenues from resort operations are generated from a wide variety of sources, including lift ticket sales, snow school lessons, equipment rentals, retail product sales, food and beverage operations, lodging and property management services
and other recreational activities. Revenues from resort operations are recognized in accordance with Staff Accounting Bulletin No. 104 (SAB No. 104). The requirements of SAB No. 104 are generally met as services are provided and products
are sold and collectibility is assured. Sales of season passes are initially deferred in unearned revenue and recognized ratably over the expected ski season.



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



Contingencies and Related Accrual Estimates



The Companys operations are affected by various contingencies, including commercial litigation, personal injury claims relating principally to
snow sports activities, self-insured workers compensation matters and self-insured employee health and welfare arrangements. The Company performs periodic evaluations of these contingencies, and based on information provided by third-party
claims administrators and other pertinent information, provides accruals for its best estimate of the eventual outcome of these matters in accordance with Statement of Financial Accounting Standards No. 5, Accounting for Contingencies.
These estimated liabilities are reviewed and appropriately adjusted as the facts and circumstances related to these contingencies change.



Use of Estimates



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



2. Accounts Payable and Accrued Liabilities



Accounts payable and accrued liabilities consist of the following:



|                                  |  |                 |        |                 |   |                 |  |   |       
|--------------------------------- |  | --------------- | ------ | --------------- | - | --------------- |  | - | ------
|                                  |  | January 28,2005 |        | October 29,2004 |   | January 30,2004
|                                  |  | (In thousands) 
|Accounts payable                  |  | $               | 9,376  |                 | $ | 7,226           |  | $ | 8,172 
|Accrued compensation and benefits |  |                 | 4,408  |                 |   | 3,279           |  |   | 3,974 
|Taxes other than income taxes     |  |                 | 1,552  |                 |   | 966             |  |   | 1,443 
|Interest                          |  |                 | 4,166  |                 |   | 1,514           |  |   | 3,856 
|Other                             |  |                 | 7,563  |                 |   | 5,065           |  |   | 7,665 
|                                  |  |                 |        |                 |   |                 |  |   |       
|                                  |  | $               | 27,065 |                 | $ | 18,050          |  | $ | 25,110
|                                  |  |                 |        |                 |   |                 |  |   |       



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BOOTH CREEK SKI HOLDINGS, INC.



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)

(UNAUDITED)



3.
Financing Arrangements



Senior Credit Facility



Effective March 15, 2002, the Company and its subsidiaries entered into an
Amended and Restated Credit Agreement (as amended, the Senior Credit Facility). U.S. Bank National Association is the sole lender and administrative agent (Agent) under the Senior Credit Facility.



Due to extraordinary weather challenges experienced at the Companys
Summit resort during the first half of the 2004/05 season, the Company did not achieve the Minimum Resort EBITDA and Leverage Ratio covenants (as defined herein) under the Senior Credit Facility for the four quarter period ended January 28, 2005.
Additionally, as a result of such weather challenges, the Company did not satisfy the Designated Cleanup Period (as defined herein) and certain related matters for 2005. On March 18, 2005, the Company obtained a waiver (the Sixth
Amendment) from the lender and Agent under the Senior Credit Facility of any default or event of default arising as a result of these compliance matters. Further, in anticipation of the closing of the Proposed Facilities (as defined herein),
the Company and the Agent have agreed to amend the Senior Credit Facility to (i) change the maturity date of the Senior Credit Facility from October 31, 2005 to May 31, 2005, (ii) reduce permitted borrowing availability under the revolving credit
facility (the Revolving Credit Facility) from $25,000,000 to $18,000,000, (iii) limit capital spending from the date of the Sixth Amendment to the maturity date of the Senior Credit Facility to $3,000,000, and (iv) make certain other
modifications to the definitions, terms and conditions of the Senior Credit Facility.



The following is a summary of certain provisions of the Senior Credit Facility, as amended to date.



General  The Senior Credit Facility provides for a Revolving Credit Facility with borrowing availability of up to $18,000,000
(of which $5,600,000 was outstanding as of January 28, 2005), and a term loan facility (the Term Facility) with outstanding borrowings as of January 28, 2005 of $24,583,000. Borrowings under the Senior Credit Facility are collectively
referred to herein as Loans.



Interest  For purposes of calculating interest, Loans can be, at the election of the Company, base rate loans or LIBOR rate loans or a combination thereof. Base rate loans bear interest at the sum of (a) the higher of (i)
Agents prime rate or (ii) the federal funds rate plus .5% plus (b) a margin of 1.5%. LIBOR rate loans bear interest at the LIBOR rate plus a margin of 4%. Interest on Loans outstanding is payable quarterly or at the end of the Interest Period
(as defined in the Senior Credit Facility) for Loans subject to LIBOR rate options. The Senior Credit Facility also requires commitment fees of .5% based on the unused borrowing availability of the Revolving Credit Facility. Borrowings outstanding
under the Revolving Credit Facility and Term Facility as of January 28, 2005 bore interest at an annual rate of 6.75% pursuant to elections under the base rate option.



Repayment  Subject to the provisions of the Senior Credit Facility, the Company may, from time
to time, borrow, repay and reborrow under the Revolving Credit Facility. The Senior Credit Facility requires that the Company not have any borrowings under the Revolving Credit Facility for a period of 30 consecutive days commencing sometime between
January 15 and February 28 of each year (the Designated Cleanup Period). The Term Facility provides for quarterly commitment reductions of $417,000 on January 31, 2005 and April 30, 2005. In addition, the Company is required to repay
amounts outstanding under the Term Facility on such dates by an amount equal to the Excess Cash Proceeds (as defined in the Senior Credit Facility) derived from specified real estate asset sales determined on a cumulative basis from October 2, 2004.
No amount of the Term Facility which is repaid may be reborrowed. The entire unpaid balance under the Senior Credit Facility is due and payable on May 31, 2005, the maturity date of the Senior Credit Facility. Additionally, the Companys 12.5%
senior notes (the Senior Notes) mature on March 15, 2007. The Company has commenced the process of obtaining new financing facilities to address the pending maturities of these obligations. The Company has selected a leading financial
institution to act as the lead arranger for certain replacement facilities (the Proposed Facilities). The Company is in the process of negotiating the terms and conditions of the Proposed



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##### Table of Contents

BOOTH CREEK SKI HOLDINGS, INC.



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)

(UNAUDITED)



3.
Financing Arrangements - (Continued)



Facilities and has
commenced discussions with potential lenders for participation in the Proposed Facilities. The proceeds of the Proposed Facilities would be used to refinance outstanding indebtedness under the Senior Credit Facility and Senior Notes and for other
general corporate purposes, as well as to pay fees and expenses related to the transaction. The closing of the Proposed Facilities is subject to satisfactory documentation and other customary conditions for transactions of this nature. Although the
Company intends to aggressively pursue the closing of the Proposed Facilities, no assurances can be given that the Proposed Facilities or any other replacement facilities will be entered into or that the Proposed Facilities or any such other
replacement financing would be available or on commercially reasonable terms.



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



Use of Proceeds  Borrowings under the Revolving Credit Facility can be used for working capital
and other general corporate purposes including, with the consent of the lenders, the repurchase of the Companys Senior Notes.



Covenants  The Senior Credit Facility contains financial covenants relating to the maintenance of (a) minimum consolidated
resort EBITDA (resort earnings before interest, taxes, depreciation and amortization, adjusted for certain items specified in the Senior Credit Facility) measured quarterly on a rolling four quarter basis (Minimum Resort EBITDA), (b) a
minimum ratio of (y) consolidated EBITDA (earnings before interest, taxes, depreciation, depletion, amortization and noncash cost of real estate sales, adjusted for certain items specified in the Senior Credit Facility), less $4,000,000, less cash
income taxes actually paid during the period to (z) consolidated debt service (the sum of interest, cash payments of principal made in respect of capitalized lease obligations and mandatory reductions under the Term Facility, adjusted for certain
items specified in the Senior Credit Facility) measured quarterly on a rolling four quarter basis (the Leverage Ratio), and (c) a maximum adjusted consolidated leverage ratio (the ratio of secured indebtedness of the Company and its
subsidiaries (with certain exceptions specified in the Senior Credit Facility) to the sum of the Companys consolidated net worth, as adjusted pursuant to the Senior Credit Facility, and the aggregate principal amount of outstanding Senior
Notes (Adjusted Leverage Ratio)).



The Company is required to have a Minimum Resort EBITDA of $19,500,000 during each rolling four quarter period through April 29, 2005. It is also required to maintain (a) a minimum Leverage Ratio of 1.1 to 1 from October 30, 2004 through
the term of the facility, and (b) a maximum Adjusted Leverage Ratio of .65 to 1.



The Senior Credit Facility also contains restrictive covenants pertaining to the management and operation of Booth Creek and its
subsidiaries. The covenants include, among others, significant limitations on indebtedness, guarantees, letters of credit, liens, investments, distributions, capital expenditures, mergers, acquisitions, asset sales, fundamental corporate changes,
transactions with affiliates, optional payments and modification of debt instruments and issuances of stock.



The Company has entered into two interest rate cap agreements for an aggregate notional amount of $15,000,000 through July 31, 2005, declining to
$14,000,000 through October 31, 2005. These interest rate cap agreements are designed to limit the Companys exposure to the effects of rising interest rates with respect to borrowings outstanding under the Term Facility. The Company is
entitled to receive floating rate payments from the



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BOOTH CREEK SKI HOLDINGS, INC.



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)

(UNAUDITED)



3.
Financing Arrangements - (Continued)



counterparties to the interest rate
cap agreements during those periods in which the three month LIBOR rate exceeds 6%. These agreements are accounted for at their fair value, with fluctuations recorded through the statement of operations. As of January 28, 2005, the fair value of
these agreements was not significant.



Senior Notes



As of January 28, 2005, the Company had outstanding $80,175,000 aggregate
principal amount of its Senior Notes. The Senior Notes mature on March 15, 2007, and bear interest at 12.5% per annum, payable semi-annually on March 15 and September 15. The Senior Notes are redeemable at the option of the Company, in whole or in
part, at a current redemption price (expressed as a percentage of the principal amount redeemed) of 100%, plus accrued and unpaid interest to the redemption date. The Senior Notes are general senior unsecured obligations of the Company ranking
equally in right of payment with all other existing and future senior indebtedness of the Company and senior in right of payment to any subordinated indebtedness of the Company.



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



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



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



Other Debt and Commitments



During the year ended October 29, 2004, the Company entered into purchase commitments for the construction of detachable quad chairlifts at Northstar and
Loon Mountain for a total cost of $7,109,000. The Company also obtained a commitment to finance the lifts under operating lease arrangements. During the year ended October 29, 2004 and the three months ended January 28, 2005, lift construction
progress payments of $1,689,000 and $5,420,000, respectively, were funded by the leasing company pursuant to interim financing arrangements entered into in contemplation of the intended operating lease financing. Under generally accepted accounting
principles, the



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##### Table of Contents

BOOTH CREEK SKI HOLDINGS, INC.



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)

(UNAUDITED)



3.
Financing Arrangements - (Continued)



interim fundings were initially
reflected as a component of property and equipment and current portion of long-term debt in the Companys consolidated balance sheets. In December 2004, the capital expenditures and debt associated with the interim fundings were removed from
the Companys consolidated balance sheet in conjunction with the origination of the permanent operating lease financing transactions for the two lifts.



During the three months ended January 28, 2005 and January 30, 2004, the Company entered into capital lease obligations of $3,048,000 and $1,216,000,
respectively, for the purchase of equipment.



Commitments for
future capital expenditures for property and equipment and real estate development were approximately $8,200,000 at January 28, 2005, which included a commitment of $5,750,000 for the purchase of certain commercial and skier services space at
Northstar.



As of January 28, 2005, the maturities of long-term
debt, including capital lease obligations, were as follows:



|                                |  |                |        
|------------------------------- |  | -------------- | -------
|                                |  | (In thousands)
|Nine months ending October 2005 |  | $              | 25,513 
|Year ending October 2006        |  |                | 1,192  
|Year ending October 2007        |  |                | 81,205 
|Year ending October 2008        |  |                | 655    
|                                |  |                |        
|Total long-term debt            |  |                | 108,565
|                                | 
|Less current portion            |  |                | 25,764 
|                                |  |                |        
|Long-term debt                  |  | $              | 82,801 
|                                |  |                |        



4. Income Taxes



At October 29, 2004 and October 31, 2003, the Company had estimated net
operating loss carryforwards of approximately $119,000,000 and $100,000,000, respectively, for federal income tax reporting purposes, which expire between 2012 and 2024. The tax benefits of such net operating losses are fully offset by a valuation
reserve. Based on the Companys current tax attributes, no income tax provision or benefit is expected for the year ending October 28, 2005. Accordingly, during the three months ended January 28, 2005 and January 30, 2004, no income tax
provision has been provided.



5. Real Estate Transactions



Sale of Unit 7A Single Family Lots



In March 2003, Trimont Land Company (TLC), the owner and
operator of Northstar and a wholly-owned subsidiary of the Company, launched the sale of the Unit 7A subdivision at Northstar, which consists of 15 ski-in/ski-out single family lots. TLC closed escrow on the final three lots within the Unit 7A
subdivision in December 2003 for an aggregate sales price of $2,798,000, which has been recognized as revenue from real estate operations in the accompanying statement of operations for the three months ended January 30, 2004.



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##### Table of Contents

BOOTH CREEK SKI HOLDINGS, INC.



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)

(UNAUDITED)



5.
Real Estate Transactions - (Continued)



Sale of Development Real Estate
to a Related Party



On September 22, 2000, TLC and Trimont
Land Holdings, Inc. (TLH), a wholly-owned subsidiary of Parent and an affiliate of the Company, entered into an Agreement for Purchase and Sale of Real Property (the Northstar Real Estate Agreement) pursuant to which TLC
agreed to sell to TLH certain development real estate consisting of approximately 550 acres of land located at Northstar (the Development Real Estate) for a total purchase price of $27,600,000, of which 85% was payable in cash and 15%
was payable in the form of convertible secured subordinated promissory notes. The purchase price was based on an appraisal obtained from an independent third party appraiser. Concurrently therewith, TLC and TLH consummated the sale of the initial
land parcels contemplated by the Northstar Real Estate Agreement, and TLC transferred the bulk of the Development Real Estate to TLH for a total purchase price of $21,000,000, of which $17,850,000, or 85%, was paid in cash and $3,150,000, or 15%,
was paid in the form of a convertible secured subordinated promissory note (the Convertible Secured Note).



In accordance with accounting principles generally accepted in the United States for real estate transactions, during 2000 the Company recorded revenues
for the sale of the initial land parcels to the extent of cash received by TLC. The Company will recognize revenues and profits on the portion of the sales price represented by the Convertible Secured Note as collections are made, and accordingly,
has reflected $3,150,000 of deferred revenue as an offset to the Convertible Secured Note in the accompanying consolidated balance sheets. The Convertible Secured Note requires quarterly interest payments at the rate of 10% per annum if paid in
cash, or 12% if paid in kind, and is due in full in September 2005. No interest is currently being accrued on the Convertible Secured Note, as such interest will be recognized as collections are made. The Convertible Secured Note is secured by
TLHs membership interest in a real estate joint venture (the East West Joint Venture) to which TLH is a party. The Convertible Secured Note is convertible at TLCs option into 15% of TLHs membership interest in the East
West Joint Venture, which enables TLC to obtain, at TLCs option, a profit participation in the Development Real Estate. The Company obtained an opinion from an independent firm qualified and experienced in the subject matter of the transaction
that the terms of the sale of Development Real Estate were fair and reasonable to the Company and TLC and at least as favorable as the terms which could have been obtained in a comparable transaction made on an arms-length basis between unaffiliated
parties.



During the year ended November 1, 2002, TLH paid
$5,610,000 to TLC, which represented the cash portion of the $6,600,000 purchase price for the remaining Development Real Estate subject to the Northstar Real Estate Agreement. The $5,610,000 payment had been deferred as a deposit liability as of
October 31, 2003 pending the consummation of the sale of the remaining Development Real Estate under the Northstar Real Estate Agreement. In December 2003, TLC completed the subdivision of the remaining Development Real Estate and transferred such
real estate to TLH. Accordingly, TLC relieved the existing $5,610,000 deposit liability and recognized real estate revenues of $5,610,000 for this transaction during the three months ended January 30, 2004. Additionally, the Convertible Secured Note
was increased by $990,000 for the 15% noncash portion of the consideration for the remaining Development Real Estate, which has been accounted for in the manner described above for the sale of the initial land parcels.



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##### Table of Contents

BOOTH CREEK SKI HOLDINGS, INC.



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)

(UNAUDITED)



6.
Business Segments



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



|                                           |  |                    |         |   |                  |   |        
|------------------------------------------ |  | ------------------ | ------- | - | ---------------- | - | -------
|                                           |  | Three Months Ended
|                                           |  | January 28, 2005   |         |   | January 30, 2004
|                                           |  | (In thousands)    
|Revenue:                                   |  |                    |         |   |                  |   |        
|Resort operations                          |  | $                  | 42,777  |   |                  | $ | 47,315 
|Real estate and other                      |  |                    |        |   |                  |   | 8,498  
|                                           |  |                    |         |   |                  |   |        
|                                           |  | $                  | 42,777  |   |                  | $ | 55,813 
|                                           |  |                    |         |   |                  |   |        
|Operating income (loss):                   |  |                    |         |   |                  |   |        
|Resort operations                          |  | $                  | 5,339   |   |                  | $ | 10,402 
|Real estate and other                      |  |                    | (451    | ) |                  |   | 6,487  
|                                           |  |                    |         |   |                  |   |        
|                                           |  | $                  | 4,888   |   |                  | $ | 16,889 
|                                           |  |                    |         |   |                  |   |        
|                                           |  |                   
|                                           |  | January 28, 2005   |         |   | October 29, 2004
|                                           |  | (In thousands)    
|Segment assets:                            |  |                    |         |   |                  |   |        
|Resort operations                          |  | $                  | 142,474 |   |                  | $ | 139,686
|Real estate and other                      |  |                    | 10,249  |   |                  |   | 9,789  
|Corporate and other nonidentifiable assets |  |                    | 5,000   |   |                  |   | 5,990  
|                                           |  |                    |         |   |                  |   |        
|                                           |  | $                  | 157,723 |   |                  | $ | 155,465
|                                           |  |                    |         |   |                  |   |        



A reconciliation of
combined operating income for resort operations and real estate and other to consolidated net income is as follows:



|                                         |  |                    |        |   |                  |   |        |  
|---------------------------------------- |  | ------------------ | ------ | - | ---------------- | - | ------ | -
|                                         |  | Three Months Ended |       
|                                         |  | January 28, 2005   |        |   | January 30, 2004 |  
|                                         |  | (In thousands)     |       
|Operating income for reportable segments |  | $                  | 4,888  |   |                  | $ | 16,889 |  
|Interest expense                         |  |                    | (3,267 | ) |                  |   | (3,056 | )
|Amortization of deferred financing costs |  |                    | (467   | ) |                  |   | (280   | )
|Other income                             |  |                    | 1      |   |                  |   | 84     |  
|                                         |  |                    |        |   |                  |   |        |  
|Net income                               |  | $                  | 1,155  |   |                  | $ | 13,637 |  
|                                         |  |                    |        |   |                  |   |        |  



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



The following discussion should be read in conjunction with the unaudited 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 as well as in Part II, Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations  Risk
Factors in the Companys Annual Report on Form 10-K for its fiscal year ended October 29, 2004.



General



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



The Companys three resorts with the lowest average natural snowfall, 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 135, 139 and 99 days, respectively, during each of the last five ski seasons, including the 2003/04 ski season. However, the efficiency and effectiveness of snowmaking operations can be negatively
impacted by numerous factors, including temperature variability, reliability of water sources, availability and cost of adequate energy supplies and unfavorable weather events such as heavy rains.



Sierra and the Summit generally experience higher natural snowfall levels,
averaging approximately 386 and 368 inches of snowfall per year, respectively, for the past five ski seasons. As a result of their historic natural snowfall, these resorts do not have any significant snowmaking infrastructure. However, such resorts
are dependent upon early season snowfall to provide necessary terrain for the important Christmas holiday period, and therefore, the timing and extent of natural snowfall can significantly impact operating conditions. For example, as a result of a
lack of natural snowfall, the Summit was unable to open until January 1, 2005 for the 2004/05 season, and has conducted very limited operations this season due to inadequate snow coverage.



Northstar has averaged approximately 235 inches of snowfall per year for the
past five ski seasons. The resort has snowmaking capabilities to provide coverage on approximately 50% of its trails. Although the resorts operations depend significantly on natural snowfall, particularly in the early part of the ski season,
in recent years the Company has invested in additional snowmaking facilities to improve Northstars snowmaking production capacity.



The Companys results of operations are also highly dependent on the Companys ability to compete in each of the large regional ski markets in
which it operates. Management estimates that at Northstar and Sierra approximately 70% of the 2003/04 ski season total skier visits were attributable to residents of the San Francisco/San Jose, Sacramento, Central California Valley and Lake Tahoe
regions. At Waterville Valley, Loon Mountain and Mt. Cranmore, approximately 80% of the 2003/04 ski season total skier visits 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 2003/04 ski season total skier visits were attributable to residents of the Seattle/Tacoma metropolitan region.



The Company seeks to maximize revenues and operating income by managing the
mix of skier visits and revenue per skier visit. These strategies are also designed to maximize resort cash flow. The strategy for each resort is based on the demographic profile of its market and the physical capacity of its mountain and
facilities. The Company seeks to increase skier visits by developing effective ticket pricing and season pass strategies and sales and marketing programs to improve peak and off-peak volume. The Company also seeks to increase skier visits by
offering a quality guest experience and developing effective target marketing programs. The Company seeks to improve revenue per skier visit by effectively managing the price, quality and value of each of its ski-related services, including retail
shops, equipment rentals, lessons and food and beverage facilities.



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The Companys current resorts have invested approximately $71 million (including $12 million of
equipment acquired through capital leases and other debt) in capital expenditures during the last five fiscal years to upgrade chairlift capacity, expand terrain, improve skier service, enhance retail and food and beverage facilities, increase
snowmaking capabilities and to meet sustaining capital requirements, all of which management believes are important in providing a quality guest experience.



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 visits and seasonal factors. With the exception of certain management, administrative and maintenance personnel, substantially all of the Companys
employees are compensated on an hourly basis. Management believes a key element to maximizing profitability during the winter season is to closely monitor staffing requirements and to adjust staffing levels when skier volumes or seasonal needs
dictate.



The Companys real estate and other segment is
primarily engaged in the sale of single family lots, development real estate and timber at Northstar and Loon Mountain. The revenues, operating income and cash flows of the real estate and other segment are highly variable.



Results of Operations of the Company



Overview



The opening dates for the Companys resorts for the 2004/05 and 2003/04
ski seasons were as follows:



|                  |  |                   |  |                  
|----------------- |  | ----------------- |  | -----------------
|                  |  | Opening Dates    
|                  |  | 2004/05 Season    |  | 2003/04 Season   
|Northstar         |  | November 20, 2004 |  | November 22, 2003
|Sierra            |  | October 29, 2004  |  | November 14, 2003
|Waterville Valley |  | November 20, 2004 |  | November 22, 2003
|Mt. Cranmore      |  | December 11, 2004 |  | December 13, 2003
|Loon Mountain     |  | November 20, 2004 |  | November 26, 2003
|The Summit        |  | January 1, 2005   |  | November 29, 2003



Total skier visits
generated by each of the Companys resorts for the three months ended January 28, 2005 and January 30, 2004 were as follows:



|                  |  |                    |  |                    |  |      |                               |  |     |  
|----------------- |  | ------------------ |  | ------------------ |  | ---- | ----------------------------- |  | --- | -
|                  |  | Three Months Ended |  | Increase(Decrease) |  |      | Percentage Increase(Decrease) | 
|                  |  | January 28,2005    |  | January 30,2004    |  |     
|                  |  | (In thousands)     |  |                    |  |      |                               | 
|Northstar         |  | 274                |  | 260                |  | 14   |                               |  | 5   | %
|Sierra            |  | 227                |  | 198                |  | 29   |                               |  | 15  |  
|Waterville Valley |  | 81                 |  | 74                 |  | 7    |                               |  | 9   |  
|Mt. Cranmore      |  | 43                 |  | 37                 |  | 6    |                               |  | 16  |  
|Loon Mountain     |  | 131                |  | 136                |  | (5   | )                             |  | (4  | )
|The Summit        |  | 42                 |  | 248                |  | (206 | )                             |  | (83 | )
|                  |  |                    |  |                    |  |      |                               |  |     |  
|                  |  | 798                |  | 953                |  | (155 | )                             |  | (16 | )
|                  |  |                    |  |                    |  |      |                               |  |     |  



For the 2004/05
season, Northstar opened on schedule on November 20, 2004, and Sierra opened on October 29, 2004, the earliest opening in its history. Comparatively, Northstar and Sierra opened on November 22, 2003 and November 14, 2003, respectively, for the
2003/04 season. Through late December 2004, combined skier visits for Northstar and Sierra exceeded visitation for the comparable periods during the past five seasons. However, the Lake Tahoe region experienced one of the heaviest storm cycles on
record between December 28, 2004 and January 9, 2005, which significantly disrupted access and visitation to Lake Tahoe ski areas during the later portion of the



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Christmas/New Years holidays and the first half of January 2005. The Company believes that skier visitation in Lake
Tahoe during this storm cycle was approximately 25% below prior season levels. Once the storms cleared, Northstar and Sierra enjoyed favorable conditions with snow pack well above average and strong customer demand. As a result of these factors,
Northstar and Sierra generated 501,000 skier visits for the three months ended January 28, 2005, an increase of 43,000 visits, or 9%, as compared to the three months ended January 30, 2004.



Weather and skiing conditions for the Companys New Hampshire resorts
(Waterville Valley, Mt. Cranmore and Loon Mountain) for the first half of the 2004/05 season were less than ideal, with limited natural snowfall, periods of warm weather and meaningful rainfall. Similarly, conditions for the first half of the
2003/04 season in the northeastern United States were relatively poor. For the three months ended January 28, 2005, the Companys New Hampshire resorts generated 255,000 skier visits, an increase of 8,000 skier visits, or 3%, as compared to the
comparable quarter in fiscal 2004.



Through the date of this
filing, the Summit has experienced one of the lowest snowfall seasons on record. Additionally, the two most significant snow storms this season were followed by substantial rainfall, which materially eroded the snow pack at the resort. As a result,
the resort opened on a limited basis on January 1, 2005, and was forced to close on January 22, 2005 due to inadequate snow coverage. By comparison, conditions at the Summit during the first half of the 2003/04 season were generally favorable. Due
to these conditions, the Summit generated 42,000 skier visits during the three months ended January 28, 2005, a decline of 206,000 visits, or 83%, as compared to skier visitation levels for the three months ended January 30, 2004. Since the end of
January 2005, the Summit has conducted extremely limited operations due to the continued lack of snowfall.



Three Months Ended January 28, 2005 Compared to the Three Months Ended January 30, 2004



The Companys operating results by segment for the three months ended
January 28, 2005 and January 30, 2004 were as follows.



|                                                                    |  |                                                |        |                    |                 |   |                               |  |   |        |   |  |      |   
|------------------------------------------------------------------- |  | ---------------------------------------------- | ------ | ------------------ | --------------- | - | ----------------------------- |  | - | ------ | - |  | ---- | --
|                                                                    |  | Three Months Ended                             |        | Increase(Decrease) |                 |   | Percentage Increase(Decrease) | 
|                                                                    |  | January 28,2005                                |        |                    | January 30,2004 |   |                              
|                                                                    |  | (In thousands, except revenue per skier visit) |       
|Resort Operations:                                                  |  |                                                |        |                    |                 |   |                               |  |   |        |   |  |      |   
|Revenue:                                                            |  |                                                |        |                    |                 |   |                               |  |   |        |   |  |      |   
|Lift tickets                                                        |  | $                                              | 15,510 |                    |                 | $ | 17,703                        |  | $ | (2,193 | ) |  | (12  | )%
|Season passes                                                       |  |                                                | 10,107 |                    |                 |   | 9,963                         |  |   | 144    |   |  | 1    |   
|Snow school                                                         |  |                                                | 3,007  |                    |                 |   | 3,519                         |  |   | (512   | ) |  | (15  | ) 
|Equipment rental                                                    |  |                                                | 3,148  |                    |                 |   | 3,738                         |  |   | (590   | ) |  | (16  | ) 
|Retail                                                              |  |                                                | 2,187  |                    |                 |   | 2,170                         |  |   | 17     |   |  | 1    |   
|Food and beverage                                                   |  |                                                | 6,187  |                    |                 |   | 6,753                         |  |   | (566   | ) |  | (8   | ) 
|Other                                                               |  |                                                | 2,631  |                    |                 |   | 3,469                         |  |   | (838   | ) |  | (24  | ) 
|                                                                    |  |                                                |        |                    |                 |   |                               |  |   |        |   |  |      |   
|Total resort operations revenue                                     |  |                                                | 42,777 |                    |                 |   | 47,315                        |  |   | (4,538 | ) |  | (10  | ) 
|Cost of sales  resort operations                                   |  |                                                | 26,646 |                    |                 |   | 26,273                        |  |   | 373    |   |  | 1    |   
|Depreciation expense                                                |  |                                                | 3,267  |                    |                 |   | 3,603                         |  |   | (336   | ) |  | (9   | ) 
|Selling, general and administrative expense  resort operations     |  |                                                | 7,525  |                    |                 |   | 7,037                         |  |   | 488    |   |  | 7    |   
|                                                                    |  |                                                |        |                    |                 |   |                               |  |   |        |   |  |      |   
|Total resort operations expenses                                    |  |                                                | 37,438 |                    |                 |   | 36,913                        |  |   | 525    |   |  | 1    |   
|                                                                    |  |                                                |        |                    |                 |   |                               |  |   |        |   |  |      |   
|Resort operating income                                             |  | $                                              | 5,339  |                    |                 | $ | 10,402                        |  | $ | (5,063 | ) |  | (49  | ) 
|                                                                    |  |                                                |        |                    |                 |   |                               |  |   |        |   |  |      |   
|Skier visits                                                        |  |                                                | 798    |                    |                 |   | 953                           |  |   | (155   | ) |  | (16  | ) 
|                                                                    |  |                                                |        |                    |                 |   |                               |  |   |        |   |  |      |   
|Revenue per skier visit                                             |  | $                                              | 53.61  |                    |                 | $ | 49.65                         |  | $ | 3.96   |   |  | 8    |   
|                                                                    |  |                                                |        |                    |                 |   |                               |  |   |        |   |  |      |   
|Real Estate and Other Operations:                                   |  |                                                |        |                    |                 |   |                               |  |   |        |   |  |      |   
|Revenue:                                                            |  |                                                |        |                    |                 |   |                               |  |   |        |   |  |      |   
|Real estate revenue                                                 |  | $                                              |       |                    |                 | $ | 8,498                         |  | $ | (8,498 | ) |  | (100 | )%
|Cost of sales  real estate and other                               |  |                                                | 7      |                    |                 |   | 1,791                         |  |   | (1,784 | ) |  | (100 | ) 
|Selling, general and administrative expense  real estate and other |  |                                                | 444    |                    |                 |   | 220                           |  |   | 224    |   |  | 102  |   
|                                                                    |  |                                                |        |                    |                 |   |                               |  |   |        |   |  |      |   
|Total real estate and other operating expenses                      |  |                                                | 451    |                    |                 |   | 2,011                         |  |   | (1,560 | ) |  | (78  | ) 
|                                                                    |  |                                                |        |                    |                 |   |                               |  |   |        |   |  |      |   
|Real estate and other operating income (loss)                       |  | $                                              | (451   | )                  |                 | $ | 6,487                         |  | $ | (6,938 | ) |  | (107 | ) 
|                                                                    |  |                                                |        |                    |                 |   |                               |  |   |        |   |  |      |   



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Resort Operations:



Revenues from resort operations for the three months ended January 28, 2005 were $42,777,000, a decrease of $4,538,000, or 10%, as compared to the 2004
period. Skier visits for the 2005 period decreased by 155,000 visits, or 16%, from the 2004 period. The decline in resort operations revenues and skier visits for the three months ended January 28, 2005 was primarily due to the extraordinarily
difficult weather and operating conditions experienced at the Summit during the 2004/05 season.



As compared to the three months ended January 30, 2004, resort operations revenues for Northstar and Sierra increased by $401,000 and $1,367,000,
respectively, primarily due to higher skier visits. Revenues for Waterville Valley declined by $97,000 due to lower revenue per skier visit yields as a result of changes in the mix of skiers, partially offset by an increase in skier visitation.
Revenues for Mt. Cranmore increased by $90,000 due primarily to higher skier visits, partially offset by lower revenue per ski visit yields. Revenues for Loon Mountain decreased by $317,000 due primarily to reduced skier visitation. The
Summits revenues decreased by $5,982,000 due primarily to substantially lower visitation.



Cost of sales for resort operations for the three months ended January 28, 2005 was $26,646,000, an increase of $373,000, or 1%,as compared to the
2004 period. The increase between the 2005 and 2004 periods was primarily the result of the combined effects of the following: (i) an increase in cost of sales for Sierra of $556,000 due to the earlier opening and significantly increased skier
visitation, (ii) costs associated with the provision of interim facilities at Northstar as discussed further below, (iii) $285,000 in increased rental expense as a result of operating leases for new lifts at Northstar and Loon Mountain, (iv) normal
inflationary impacts, and (v) a reduction in cost of sales for the Summit of $1,901,000 due to the limited operations conducted during the 2004/05 season.



In April 2004, construction commenced for the redevelopment of a substantial portion of the Village at Northstar. Cost of sales for resort operations for
the three months ended January 28, 2005 included $546,000 in nonrecurring expenses associated with establishing interim facilities and amenities within the Village at Northstar to address customer service needs and maintain winter revenue sources
during the 2004/05 season. Such amenities include ticketing and guest service offices, food and beverage venues, locker and ski storage facilities and guest convening areas. In managements view, the interim facilities have been well received
by Northstars customers. Despite the magnitude of this construction project, the resort has gained market share during the 2004/05 season.



Depreciation expense for the three months ended January 28, 2005 was $3,267,000, a decrease of $336,000, or 9%, from the 2004 period. The decline in
depreciation expense was primarily due to the effect of assets having become fully depreciated.



Selling, general and administrative expense for resort operations for the three months ended January 28, 2005 was $7,525,000, an increase of $488,000, or
7%, as compared to the 2004 period. The increase in selling, general and administrative expense between the 2005 and 2004 periods was primarily due to increased corporate governance costs and normal inflationary factors.



Resort operating income for the three months ended January 28, 2005 was
$5,339,000, a decrease of $5,063,000, or 49% from the operating income generated for the 2004 period, as a result of the factors discussed above.



Real Estate and Other:



There were no real estate sales during the three months ended January 28, 2005. Revenues from real estate operations for the three months ended January
30, 2004 were $8,498,000, which was due to (i) the close of escrow on the final three lots within the Unit 7A subdivision at Northstar for an aggregate sales price of $2,798,000, (ii) the transfer and sale of the remaining Development Real Estate
(as defined herein) at Northstar pursuant to the Northstar Real Estate Agreement (as defined herein) between Trimont Land Company and Trimont Land Holdings, Inc. (see Note 5 to the accompanying consolidated financial statements) and (iii) the sale
of a single family lot at Loon Mountain for $90,000.



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Cost of sales for real estate and other operations for the three months ended January 30, 2004 was
$1,791,000, including noncash cost of real estate sales of $1,590,000, primarily as a result of the sale of the final three lots in the Unit 7A subdivision at Northstar and the sale of the remaining Development Real Estate at Northstar.



Selling, general and administrative expense for real estate and other
operations for the three months ended January 28, 2005 was $444,000, an increase of $224,000 from the 2004 period, primarily as a result of increased legal and consulting costs.



Operating loss from real estate and other operations was $451,000 for the three months ended January 28, 2005, as compared
to operating income of $6,487,000 generated during the three months ended January 30, 2004, as a result of the factors discussed above.



Interest Expense and Other Items:



Interest expense for the three months ended January 28, 2005 totaled $3,267,000, an increase of $211,000, or 7% from the Companys interest expense
for the three months ended January 30, 2004, as a result of increased borrowings and higher average interest rates.



As of October 29, 2004 and October 31, 2003, the Company had estimated net operating loss carryforwards of approximately $119,000,000 and $100,000,000,
respectively, for federal income tax reporting purposes, which expire between 2012 and 2024. The tax benefits of such net operating losses are fully offset by a valuation reserve because the Company believes that it is more likely than not that we
will not realize income tax benefits from operating losses in the foreseeable future. Based on the Companys current tax attributes, no income tax provision or benefit is expected for the year ending October 28, 2005. Accordingly, during the
three months ended January 28, 2005 and January 30, 2004, no income tax provision has been provided.



The Companys net income for the three months ended January 28, 2005 was $1,155,000, a decrease of $12,482,000 from the net income of $13,637,000
generated for the three months ended January 28, 2004, primarily as a result of the timing of real estate sales and the effect of operating challenges during the 2004/05 season at the Companys Summit resort.



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 (as defined below). Virtually all of the
Companys operating income is generated by its subsidiaries. As a result, the Company is dependent on the earnings and cash flow of, and dividends and distributions or advances from, its subsidiaries to provide the funds necessary to meet its
debt service obligations.



Effective March 15, 2002, the
Company and its subsidiaries entered into an Amended and Restated Credit Agreement (as amended, the Senior Credit Facility). U.S. Bank National Association is the sole lender and administrative agent (Agent) under the Senior
Credit Facility.



Due to extraordinary weather challenges
experienced at the Companys Summit resort during the first half of the 2004/05 season, the Company did not achieve the Minimum Resort EBITDA and Leverage Ratio covenants (as defined herein) under the Senior Credit Facility for the four quarter
period ended January 28, 2005. Additionally, as a result of such weather challenges, the Company did not satisfy the Designated Cleanup Period (as defined herein) and certain related matters for 2005. On March 18, 2005, the Company obtained a waiver
(the Sixth Amendment) from the lender and Agent under the Senior Credit Facility of any default or event of default arising as a result of these compliance matters. Further, in anticipation of the closing of the Proposed Facilities (as
defined herein), the Company and the Agent have agreed to amend the Senior Credit Facility to (i) change the maturity date of the Senior Credit Facility from October 31, 2005 to May 31, 2005, (ii) reduce permitted borrowing availability under the
revolving credit facility (the Revolving Credit Facility) from $25,000,000 to $18,000,000, (iii) limit capital spending from the date of the Sixth Amendment to the maturity date of the Senior Credit Facility to $3,000,000, and (iv) make
certain other modifications to the definitions, terms and conditions of the Senior Credit Facility.



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The following summary of the terms of the Senior Credit Facility is qualified by reference to the
complete agreement governing the Senior Credit Facility, a copy of which has been filed as an exhibit to our periodic reports.



The Senior Credit Facility provides a Revolving Credit Facility with borrowing availability of up to $18,000,000, and a term loan facility (the Term
Facility) with outstanding borrowings as of January 28, 2005 of $24,583,000. The Senior Credit Facility requires that the Company not have any borrowings under the Revolving Credit Facility for a period of 30 consecutive days commencing
sometime between January 15 and February 28 of each year (the Designated Cleanup Period). The Term Facility provides for quarterly commitment reductions of $417,000 on January 31, 2005 and April 30, 2005. In addition, the Company is
required to repay amounts outstanding under the Term Facility on such dates by an amount equal to the Excess Cash Proceeds (as defined in the Senior Credit Facility) derived from specified real estate asset sales determined on a cumulative basis
from October 2, 2004. No amount of the Term Facility which is repaid may be reborrowed. The entire unpaid balance under the Senior Credit Facility is due and payable on May 31, 2005, the maturity date of the Senior Credit Facility. Additionally, the
Companys 12.5% senior notes (the Senior Notes) mature on March 15, 2007. The Company has commenced the process of obtaining new financing facilities to address the pending maturities of these obligations. The Company has selected a
leading financial institution to act as the lead arranger for certain replacement facilities (the Proposed Facilities). The Company is in the process of negotiating the terms and conditions of the Proposed Facilities and has commenced
discussions with potential lenders for participation in the Proposed Facilities. The proceeds of the Proposed Facilities would be used to refinance outstanding indebtedness under the Senior Credit Facility and Senior Notes and for other general
corporate purposes, as well as to pay fees and expenses related to the transaction. The closing of the Proposed Facilities is subject to satisfactory documentation and other customary conditions for transactions of this nature. Although the Company
intends to aggressively pursue the closing of the Proposed Facilities, no assurances can be given that the Proposed Facilities or any other replacement financing will be entered into or that the Proposed Facilities or any such other replacement
financing would be available or on commercially reasonable terms.



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



The Senior Credit Facility contains financial covenants relating to the maintenance of (a) minimum consolidated resort EBITDA (resort earnings before
interest, taxes, depreciation and amortization, adjusted for certain items specified in the Senior Credit Facility) measured quarterly on a rolling four quarter basis (Minimum Resort EBITDA), (b) a minimum ratio of (y) consolidated
EBITDA (earnings before interest, taxes, depreciation, depletion, amortization and noncash cost of real estate sales, adjusted for certain items specified in the Senior Credit Facility), less $4,000,000, less cash income taxes actually paid during
the period to (z) consolidated debt service (the sum of interest, cash payments of principal made in respect of capitalized lease obligations and mandatory reductions under the Term Facility, adjusted for certain items specified in the Senior Credit
Facility) measured quarterly on a rolling four quarter basis (the Leverage Ratio), and (c) a maximum adjusted consolidated leverage ratio (the ratio of secured indebtedness of the Company and its subsidiaries (with certain exceptions
specified in the Senior Credit Facility) to the sum of the Companys consolidated net worth, as adjusted pursuant to the Senior Credit Facility, and the aggregate principal amount of outstanding Senior Notes (Adjusted Leverage
Ratio).



The Company is required to have a Minimum
Resort EBITDA of $19,500,000 during each rolling four quarter period from October 30, 2004 through April 29, 2005. It is also required to maintain (a) a minimum Leverage Ratio of 1.1 to 1 from October 30, 2004 through the term of the facility, and
(b) a maximum Adjusted Leverage Ratio of .65 to 1.



The Senior
Credit Facility also contains restrictive covenants pertaining to the management and operation of Booth Creek and its subsidiaries. The covenants include, among others, significant limitations on indebtedness, guarantees, letters of credit, liens,
investments, distributions, capital expenditures, mergers, acquisitions, asset sales, fundamental corporate changes, transactions with affiliates, optional payments and modification of debt instruments and issuances of stock.



For purposes of calculating interest, loans under the Senior Credit Facility
can be, at the election of the Company, base rate loans or LIBOR rate loans or a combination thereof. Base rate loans bear interest at the sum of (a) the higher of (i) the Agents prime rate or (ii) the federal funds rate plus .5% plus (b) a
margin of 1.5%. LIBOR



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rate loans bear interest at the LIBOR rate plus a margin of 4%. Interest on loans outstanding is payable quarterly or at
the end of the Interest Period (as defined in the Senior Credit Facility) for loans subject to LIBOR rate options. The Senior Credit Facility also requires commitment fees of .5% based on the unused borrowing availability of the Revolving Credit
Facility. Borrowings outstanding under the Revolving Credit Facility and Term Facility as of January 28, 2005 bore interest at an annual rate of 6.75% pursuant to elections under the base rate option.



Borrowings under the Revolving Credit Facility can be used for working
capital and other general corporate purposes including, with the consent of the lenders, the repurchase of the Companys Senior Notes. As of January 28, 2005, outstanding borrowings under the Revolving Credit Facility and Term Facility were
$5,600,000 and $24,583,000, respectively.



The Company had a
net working capital deficit of $66,481,000 as of January 28, 2005 (including $5,600,000 and $24,583,000 in outstanding borrowings under the Revolving Credit Facility and Term Facility, respectively), which will negatively affect liquidity during
2005. The Companys net working capital deficit as of January 28, 2005 was also due in part to unearned revenue and deposits from resort operations of $19,093,000 for season pass and membership product sales, lodging deposits and other prepaid
products. The Companys working capital deficit as of January 30, 2004 was $36,024,000 (including $4,000,000 in outstanding borrowings under the Term Facility).



The Company generated cash from operating activities of $14,467,000 for the three months ended January 28, 2005, as compared
to $23,156,000 for the comparable period in 2004. The decrease in operating cash flows was primarily due to the decrease in net income for the 2005 period.



Cash used in investing activities totaled $481,000 and $2,034,000 for the three months ended January 28, 2005 and January 30, 2004, respectively. The
results for the 2005 and 2004 periods primarily reflect capital expenditures for the purchase of property and equipment and real estate held for development and sale.



Cash used in financing activities totaled $13,780,000 for the three months ended January 28, 2005, which primarily reflects
net repayments under the Revolving Credit Facility of $11,650,000 and payments of long-term debt of $2,112,000. Cash used in financing activities totaled $18,405,000 for the three months ended January 30, 2004, which reflects net repayments under
the Revolving Credit Facility of $17,750,000 and scheduled payments of long-term debt of $655,000.



The Companys capital expenditures for property and equipment during the three months ended January 28, 2005 were $3,144,000 (including $3,048,000 of
equipment acquired through capital leases), and consisted primarily of the remaining portion of the Companys fiscal 2004 capital programs and acquisitions of grooming equipment. The Company has not yet determined the scope of potential
expansion capital or real estate development projects that may be undertaken as part of its 2005 capital cycle. Maintenance capital spending for the Companys 2005 capital cycle is preliminarily estimated to be in the range of $4,000,000 to
$5,000,000. The Company plans to fund fiscal 2005 capital expenditures from available cash flow, vendor financing to the extent permitted under the Senior Credit Facility and the Indenture for the Companys Senior Notes or borrowings under the
Revolving Credit Facility or Proposed Facilities. Commitments for future capital expenditures for property and equipment and real estate development were approximately $8,200,000 at January 28, 2005, which included a commitment of $5,750,000 for the
purchase of certain commercial and skier services space at Northstar.



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



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



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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 will be 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 significant decline in the Companys expected operating performance could
have a material adverse effect on the Companys ability to service its debt and make required capital expenditures.



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



As of January 28, 2005, the
Company had $108,565,000 of total long-term debt. The Company expects that existing cash, cash generated from operations and cash proceeds of real estate sales, together with existing borrowing availability and anticipated resources under the
Proposed Facilities, will be adequate to fund the Companys debt service and other cash operating requirements over the next 12 months. Although the Company intends to aggressively pursue the closing of the Proposed Facilities, no assurances
can be given that the Proposed Facilities or any other replacement financing will be entered into or that the Proposed Facilities or any such other replacement financing would be available or on commercially reasonable terms. In order to focus the
Companys resources on attractive investment opportunities at certain of its resorts and to satisfy short-term and long-term liquidity requirements, the Company may in the future consider divestitures of non-strategic assets, including resorts,
if such transactions can be completed on favorable terms.



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



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



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Contractual Obligations and Off-Balance Sheet Arrangements



The Companys significant contractual obligations include long-term
debt (including capital lease obligations), operating leases, purchase obligations and other long-term liabilities. As of January 28, 2005, the Companys scheduled maturities of long-term debt, operating lease commitments, purchase obligations
and other long-term liabilities for the periods indicated were as follows:



|                                             |  |                |                        |                        |                  |        |                    |   |                    |  |   |       |  |   |      
|-------------------------------------------- |  | -------------- | ---------------------- | ---------------------- | ---------------- | ------ | ------------------ | - | ------------------ |  | - | ----- |  | - | -----
|                                             |  | Total          |                        | Payments Due By Period
|                                             |  |                | Remainderof Fiscal2005 |                        | One toThreeYears |        | Three toFive Years |   | MoreThan FiveYears
|                                             |  | (In thousands)
|Long-term debt and capital lease obligations |  | $              | 108,565                |                        | $                | 25,513 |                    | $ | 82,397             |  | $ | 655   |  | $ |     
|Operating lease obligations                  |  |                | 11,494                 |                        |                  | 1,706  |                    |   | 3,084              |  |   | 2,505 |  |   | 4,199
|Purchase obligations                         |  |                | 6,100                  |                        |                  | 6,100  |                    |   |                   |  |   |      |  |   |     
|Other long-term liabilities                  |  |                | 874                    |                        |                  |       |                    |   | 471                |  |   | 159   |  |   | 244  
|                                             |  |                |                        |                        |                  |        |                    |   |                    |  |   |       |  |   |      
|Total                                        |  | $              | 127,033                |                        | $                | 33,319 |                    | $ | 85,952             |  | $ | 3,319 |  | $ | 4,443
|                                             |  |                |                        |                        |                  |        |                    |   |                    |  |   |       |  |   |      



In connection with
certain single family real estate development projects at Northstar, self-insured workers compensation arrangements for the Summit and certain other aspects of its operations, the Company has arranged for surety bonds from third-party surety
bonding companies or letters of credit from financial institutions. The aggregate amount of surety bonds and letters of credit in place at January 28, 2005 were $1,922,000 and $614,000, respectively. Under the terms of the Senior Credit Facility,
the letters of credit in the amount of $614,000 reduce the Companys borrowing capacity under the Revolving Credit Facility.



Critical Accounting Policies



The preparation of the Companys consolidated financial statements in conformity with generally accepted accounting principles requires the selection
of appropriate accounting policies, as well as the use of judgment by management in applying such accounting policies and formulating financial estimates. These judgments and estimates are based on historical experience, terms of existing contracts
and customer arrangements and information available from other sources, as appropriate. By their nature, these judgments and estimates are subject to an inherent degree of uncertainty. In applying the Companys accounting policies and
determining financial estimates, different business conditions or the use of different assumptions may result in materially different amounts reported in the Companys consolidated financial statements.



The Company has identified its most critical accounting policies, which
relate to (i) revenue recognition for resort operations, (ii) revenue recognition for real estate sales, (iii) valuation of long-lived assets and goodwill, (iv) evaluation of contingencies and related accrual estimates, and (v) accounting for income
taxes. The critical accounting policies were determined by considering which policies involved the most complexity, subjective decisions or estimation.



Revenue Recognition for Resort Operations  Revenues from resort operations are generated from a wide variety of sources, including lift
ticket sales, snow school lessons, equipment rentals, retail product sales, food and beverage operations, lodging and property management services and other recreational activities, and are recognized when services are provided and products are
sold, and collectibility is assured. Sales of season passes are initially deferred in unearned revenue and recognized ratably over the expected season. The Company also periodically evaluates the collectibility of all of its receivables, and, if
necessary, provides for an adequate allowance for doubtful accounts. Historically, the Companys write-offs of uncollectible accounts have been immaterial, as a substantial portion of the Companys resort sales transactions are settled for
cash or credit card payments at the time of sale.



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



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Valuation of Long-Lived Assets and Goodwill  The Company periodically evaluates whether
there are facts and circumstances that indicate potential impairment of its long-lived assets. If impairment indicators are present, the Company reviews the carrying value of its long-lived assets for continued appropriateness. If the carrying
amount of a long-lived asset exceeds its estimated future cash flows, an impairment charge is recognized for the amount by which the carrying value of the asset exceeds the fair value of the asset. The Company also performs periodic impairment tests
for recorded goodwill. The impairment evaluations for long-lived assets and goodwill are based upon projections of future cash flows, estimated purchase multiples, expected recovery periods for long-lived assets and other relevant factors, and
involve significant use of estimates. While the Company believes its estimates are reasonable, different assumptions could materially affect these evaluations.



Evaluation of Contingencies and Related Accrual Estimates The Companys operations are affected by various contingencies, including
commercial litigation, personal injury claims relating principally to snow sports activities, self-insured workers compensation matters and self-insured employee health and welfare arrangements. With respect to general liability, workers
compensation and health and welfare exposures, the Company maintains various forms of insurance, including specific and aggregate stop-loss policies and arrangements, to limit the Companys overall financial risks. Also, the Companys risk
management function is actively involved in the oversight and management of outstanding general liability and workers compensation claims. The Company performs periodic evaluations of these contingencies and, based on information provided by
third-party claims administrators and other pertinent information, provides accruals for its best estimate of the eventual outcome of these matters in accordance with Statement of Financial Accounting Standards No. 5, Accounting for
Contingencies. These estimated liabilities are reviewed and appropriately adjusted as the facts and circumstances related to these contingencies change. While the Company believes its estimates are reasonable, different assumptions could
materially affect these evaluations.



Accounting for Income
Taxes The Company is required to determine its income taxes under federal income tax laws and regulations and for each state in which it operates. This process requires the Company to estimate its actual current tax obligations together
with assessing temporary differences resulting from differing treatment of items for tax and financial reporting purposes. These temporary differences give rise to deferred tax assets and liabilities. As of October 29, 2004, the Company had gross
deferred tax assets and liabilities of $44,780,000 and $18,599,000, which primarily relate to the benefit of net operating loss carryforwards and asset basis differences for property and equipment, respectively. As of October 29, 2004, the Company
had estimated net operating loss carryforwards of approximately $119,000,000 for federal income tax reporting purposes, which expire between 2012 and 2024. Under generally accepted accounting principles for income taxes, the Company must assess
whether its net deferred tax assets will be recoverable, and to the extent recovery is not likely, establish an appropriate valuation allowance. As of October 29, 2004, the Companys net deferred tax assets of $26,181,000 have been fully offset
by a valuation allowance because the Company believes that it is more likely than not that we will not realize income tax benefits from operating losses in the foreseeable future. The Company will continue to evaluate this matter in future periods,
and a determination that the Company would be able to realize its net deferred tax assets would result in the recognition of a substantial net deferred tax asset and income tax benefit.



Seasonality



The business of the Company is highly seasonal, with the vast majority of its annual revenues expected to be generated between November and April of each
fiscal year. Management considers it essential to achieve optimal operating results during key holidays and weekends during this period. The Companys results of operations are, in turn, significantly dependent upon favorable weather conditions
and other factors beyond the Companys control.



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 improvements in preparation for the ensuing ski season.



Regulation
and Legislation



The Companys operations are
dependent upon its ownership or control over the real property used in its ski operations at each resort. The real property presently used at the Northstar and Mt. Cranmore resorts is owned by the



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Company, leased from third parties or controlled by easements. The Company has the right to use a substantial portion of
the real property associated with the Sierra, Summit and Waterville Valley resorts under the terms of Term Special Use Permits issued by the United States Forest Service (the Forest Service). The Sierra permit expires in 2039, the
Waterville Valley permit expires in 2034 and the Summit permit expires in 2032.



A substantial portion of the real property associated with the Loon Mountain resort is likewise used under a Forest Service Term Special Use Permit. In 1993, the Forest Service authorized various improvements at Loon
Mountain and an expansion onto the adjacent South Mountain. The United States Court of Appeals for the First Circuit overturned this authorization in 1996 on the ground that the Forest Service had failed to properly address certain environmental
issues under the National Environmental Policy Act (NEPA). On remand from the Court of Appeals, the United States District Court for the District of New Hampshire (the District Court) entered a final order dated December 11,
1998 which imposed certain conditions and limitations on the Forest Service and Loon Mountain Recreation Corporation (LMRC) until the Forest Service completed an additional environmental review process under NEPA. In response to a
separate 1997 action filed by an individual and an environmental group, the District Court entered an injunction on February 12, 1999 which limited LMRCs snowmaking and use of a snowmaking pipeline until the Forest Service completed the
additional environmental review process under NEPA. Effective February 22, 2001, certain plaintiffs in the lawsuits alleging violations of environmental laws by the Forest Service and LMRC entered into settlement agreements with LMRC which resolved
all issues among the plaintiffs and LMRC relating to LMRCs prior operations and its proposal for near term expansion and upgrading of Loon Mountain. Among other things, these agreements impose certain restrictions on the operation of the
resort and the future development of certain private land at the resort.



LMRC notified the District Court and interested parties that the December 11, 1998 final order and February 12, 1999 injunction expired under their terms when the Forest Service (i) completed its NEPA process, (ii)
issued a Record of Decision (ROD) on February 26, 2002 approving the Loon Mountain Final Environmental Impact Statement (the Final EIS), and (iii) issued a Term Special Use Permit to LMRC for Loon Mountain on June 24, 2002
(thereby replacing Loon Mountains three existing Forest Service permits). The new Loon Mountain Term Special Use Permit expires in 2042.



Two written administrative appeals to the ROD were filed with the Forest Service. One of the two appellants settled with LMRC and withdrew its appeal. The
Forest Service denied the other administrative appeal and upheld the ROD in a letter decision dated June 7, 2002. With these actions, the Forest Service has concluded its administrative appeal process for the ROD. The ROD and the Forest
Services June 7, 2002 letter decision are subject to judicial review in federal court under the Administrative Procedure Act by the appellant whose administrative appeal was denied by the Forest Service. As of the date of this Report, no
action for judicial review had been filed. The Company can give no assurance regarding whether such a judicial appeal will be filed or the timing or outcome of such a process.



Elements of the expansion and development activities addressed in the Final EIS that occur on private lands will be subject
to separate federal, state and local permitting processes. While the Company believes that it will successfully navigate these remaining steps to undertaking the activities authorized in the ROD, it can give no assurance regarding the timing or
outcome of such processes.



The Forest Service has the right to
approve the location, design and construction of improvements in permit areas and many operational matters at resorts with permits. Under the Term Special Use Permits, the Company is required to pay fees to the Forest Service. The fees range from
1.5% to approximately 4.0% of certain revenues, with the rate generally rising with increased revenues. The calculation of gross revenues includes, among other things, revenue from lift ticket, season pass, ski school lesson, food and beverage,
rental equipment and retail merchandise sales. Total fees paid to the Forest Service by the Company during the fiscal year ended October 29, 2004 were $1,117,000.



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



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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. However, the Company is required from time to time to undertake remediation activities at its resorts to assure
compliance with environmental laws or to address instances of non-compliance. The cost of these activities could be significant. The failure by the Company to comply with applicable environmental laws could result in the imposition of severe
penalties and other costs or restrictions on operations by government agencies or courts that could materially adversely affect operations.



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



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



Certain regulatory approvals associated with a proposed snowmaking
impoundment will impose more stringent minimum stream flow requirements with respect to Waterville Valleys snowmaking operations in the future. These requirements may require Waterville Valley to construct water storage facilities in the next
three years.



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



Recent Trends



Through the date of this
filing, trends by region for the Companys resorts for the completed portion of the second fiscal quarter of 2005 relative to the comparable period in fiscal 2004 were as follows:



| |  |  | Skiing conditions for the Companys Lake Tahoe resorts continue to be good. Revenues and skier visits for these resorts were up moderately as compared to the prior season.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | The Companys New Hampshire resorts have received significant natural snowfall during February and early March, and as a result, skiing conditions are good. Revenues and skier
visits for the New Hampshire resorts were up moderately as compared to prior season levels.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | The Summit, along with most other resorts in the Pacific Northwest region, has continued to experience one of the most difficult snowfall seasons in recorded history. The resort has
operated on an extremely limited basis since mid January 2005. As a result, skier visitation and revenues are down significantly from prior season levels.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Due to the limited operations at the Summit during the 2004/05 season, the Company is seriously evaluating potential
meaningful accommodations or incentives to be provided to the Summits 2004/05 season pass holders. Any such accommodations provided for the 2005/06 season could have a material impact on the Companys future revenues, earnings and cash
flows relating to the Summit season pass programs.



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Forward-Looking Statements



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



| |  |  | Uncertainty as to future financial results,
| | - |  | -------------------------------------------



| |  |  | The substantial leverage and liquidity constraints of the Company,
| | - |  | ------------------------------------------------------------------



| |  |  | Uncertainties associated with the Companys ability to meet its required financial covenants under its principal debt agreements,
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------



| |  |  | Uncertainty as to our ability to refinance the Companys Senior Credit Facility and Senior Notes, which mature on May 31, 2005 and March 15, 2007, respectively,
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Significant operating restrictions under the Companys debt agreements,
| | - |  | -----------------------------------------------------------------------



| |  |  | 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,
| | - |  | -------------------------------------------------------------------------------------------------------------------------------



| |  |  | Uncertainties regarding the timing and success of our real estate development projects and their ultimate impact on our operating results,
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | 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,
| | - |  | ------------------------------------------



| |  |  | Weather conditions,
| | - |  | -------------------



| |  |  | Negative demand for our services and products resulting from potential terrorism threats,
| | - |  | -----------------------------------------------------------------------------------------



| |  |  | Availability and cost of commercial air service,
| | - |  | ------------------------------------------------



| |  |  | The threat, commencement or continuation of wars,
| | - |  | -------------------------------------------------



| |  |  | Availability and terms of insurance coverage, as well as increases in the cost of insurance coverage,
| | - |  | -----------------------------------------------------------------------------------------------------



| |  |  | Natural disasters (such as earthquakes and floods),
| | - |  | ---------------------------------------------------



| |  |  | Competition and pricing pressures,
| | - |  | ----------------------------------



| |  |  | Governmental regulation and litigation and other risks associated with expansion and development,
| | - |  | -------------------------------------------------------------------------------------------------



| |  |  | The adequacy of the water supplies at each of the Companys resorts,
| | - |  | --------------------------------------------------------------------



| |  |  | Availability of adequate energy supplies for the operation of the Companys resorts, including snowmaking operations, and volatility in the prices charged for energy and fuel,
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | The occupancy of leased property and property used pursuant to the Forest Service permits, and
| | - |  | ----------------------------------------------------------------------------------------------



| |  |  | Other factors identified under  Risk Factors in Part II, Item 7. Managements Discussion and Analysis of Financial Condition and Results of
Operations in the Companys Annual Report on Form 10-K for the year ended October 29, 2004.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK



During the three months ended January 28, 2005, there have been no material changes in information relating to market risk from the Companys
disclosure in Item 7a. of the Companys Annual Report on Form 10-K for the year ended October 29, 2004 as filed with the Securities and Exchange Commission.



ITEM 4. CONTROLS AND PROCEDURES



| | a) | The Company, under the supervision and with the participation of the Companys management, including the Companys Chief Executive Officer, President and Chief Operating
Officer and Chief Financial Officer, carried out an evaluation of the effectiveness of the design and operation of the Companys
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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disclosure controls and procedures (the Evaluation) as of the end of the period covered by
this Report. Based upon the Evaluation, the Companys Chief Executive Officer, President and Chief Operating Officer and Chief Financial Officer concluded that the Companys disclosure controls and procedures are effective to ensure that
information required to be disclosed in our periodic reports filed with the Securities and Exchange Commission is recorded, processed, summarized and reported as and when required. In addition, they concluded that there were no significant
deficiencies or material weaknesses in the design or operation of internal controls which could significantly affect the Companys ability to record, process, summarize and report financial information. It should be noted that any system of
controls, however well designed and operated, can provide only reasonable, and not absolute, assurance that the objectives of the system will be met. In addition, the design of any control system is based in part upon certain assumptions about the
likelihood of future events. Because of these and other inherent limitations of control systems, there is only reasonable assurance that the Companys controls will succeed in achieving their stated goals under all potential future conditions.



| | b) | There were no significant changes in the Companys internal control over financial reporting during the quarterly period ended January 28, 2005 that have materially affected,
or is reasonably likely to materially affect, the Companys internal control over financial reporting.
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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PART II. OTHER INFORMATION



ITEM 1. LEGAL PROCEEDINGS



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



In connection with the Companys 1998
acquisition of Loon Mountain Recreation Corporation (LMRC), certain shareholders of LMRC filed several lawsuits challenging the transaction and seeking to exercise dissenters rights under the New Hampshire Business Corporation Act.
Each of these lawsuits has been decided or otherwise resolved in favor of the Company, LMRC and its former directors, resulting in no further liability or obligation relating to the transaction for LMRC, its former directors or the Company and its
affiliates. The New Hampshire Superior Court has awarded attorneys fees to the defendants in certain of these cases in the amount of $972,000 (with $420,000 for LMRC and the Company and $552,000 for the insurer that funded certain costs of defending
the former LMRC directors), although the likelihood or timing of collection of such amount is uncertain.



In 1995, an individual sued the United States Forest Service (the Forest Service) in the United States District Court for the District of New
Hampshire (the District Court) alleging that the Forest Service had violated the National Environmental Policy Act (NEPA), the Clean Water Act (CWA), and an executive order in approving improvements to and an
expansion at Loon Mountain. The District Court entered a final order dated December 11, 1998 that imposed certain conditions and limitations on LMRCs operations. Under its terms, the order was effective until the Forest Service completed an
additional environmental review process under NEPA and issued a new Term Special Use Permit for Loon Mountain. In 1997, an individual and an environmental group 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. The District Court entered an injunction on February 12, 1999 which limited LMRCs use of the snowmaking pipeline until the Forest Service
completed its additional environmental analysis under NEPA and issued a Record of Decision (ROD).



As described in Part I, Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations  Regulation and
Legislation, on February 26, 2002, the Forest Service completed its environmental analysis under NEPA and issued a ROD approving the Final Environmental Impact Statement for Loon Mountain. The Forest Service issued a Term Special Use Permit to
LMRC for Loon Mountain on June 24, 2002. The Forest Service denied an administrative appeal of the ROD in a June 7, 2002 letter decision. The ROD and the June 7, 2002 letter decision are subject to judicial review in federal court by the appellant
whose administrative appeal was denied by the Forest Service. As of the date of this Report, no action for judicial review had been filed. The Company can give no assurance regarding whether such a judicial appeal will be filed or the timing or
outcome of such process.



Effective February 22, 2001, certain
plaintiffs in lawsuits (each of which have now been dismissed or settled) alleging violations of environmental laws by LMRC entered into settlement agreements with LMRC, which resolve all issues among them and LMRC relating to LMRCs prior
operations and current proposal for near term expansion and upgrading of the Loon Mountain resort. Among other things, these agreements impose certain restrictions on the operation of the resort and the future development of certain private land at
the resort.



On September 30, 2004, the Ski Trails Condominium
Owners Association (Ski Trails), the association for a condominium complex located within the Northstar resort, filed a complaint in Placer County Superior Court against Trimont Land Company (TLC), Trimont Land
Holdings, Inc. (TLH), the Company (together with TLC and TLH, the Booth Creek Parties) and Northstar Mountain Properties, LLC. The dispute relates to TLCs easement for aerial tramway facilities over land owned by Ski
Trails. TLC has recently completed the replacement of the lift within the easement area. Ski Trails contends that the terms of the easement required TLC to obtain Ski Trails permission to install the new lift, and that TLC failed to obtain
such permission. The complaint seeks equitable relief including declaratory relief, a request for specific performance of the easement terms, a request for permanent injunction preventing the modification or replacement of the original lift or
altering usage of the easement without



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prior approval and a request for mandatory injunction requiring the removal of any modifications to the original lift
that were not approved in advance by Ski Trails. On November 12, 2004, Ski Trails filed a First Amended Complaint, which together with the original complaint, were served on the Booth Creek Parties on January 7, 2005. The First Amended Complaint
adds an additional cause of action alleging that TLCs use of Village Run and Condo Run ski trails constitutes a trespass on property owned by Ski Trails, and Ski Trails requests both declaratory relief and a preliminary and permanent
injunction against the use of Village and Condo Runs for skiing or other recreational uses. The Booth Creek Parties intend to defend this litigation vigorously and believe that we have meritorious defenses to the action.



ITEM 3. DEFAULTS UPON SENIOR SECURITIES



Due to extraordinary weather challenges experienced at the Companys Summit resort during the first half of the 2004/05 season, the Company did not satisfy the Minimum Resort EBITDA and Leverage Ratio covenants (as defined herein)
under the Senior Credit Facility for the four quarter period ended January 28, 2005. Additionally, as a result of such weather challenges, the Company did not satisfy the Designated Cleanup Period (as defined herein) and certain related matters for
2005. On March 18, 2005, the Company obtained a waiver (the Sixth Amendment) from the lender and Agent under the Senior Credit Facility of any default or event of default arising as a result of these compliance matters. Further, in
anticipation of the closing of the Proposed Facilities (as defined herein), the Company and the Agent have agreed to amend the Senior Credit Facility to (i) change the maturity date of the Senior Credit Facility from October 31, 2005 to May 31,
2005, (ii) reduce permitted borrowing availability under the Revolving Credit Facility from $25,000,000 to $18,000,000, (iii) limit capital spending from the date of the Sixth Amendment to the maturity date of the Senior Credit Facility to
$3,000,000, and (iv) make certain other modifications to the definitions, terms and conditions of the Senior Credit Facility. See Part I, Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations 
Liquidity and Capital Resources.



ITEM 6. EXHIBITS



The following
exhibits are filed herewith.



|            |  |                                                                                                                                                                                                                                                                                                                          
|----------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit No. |  | Description of Exhibit                                                                                                                                                                                                                                                                                                   
|10.1        |  | Sixth Amendment and Waiver dated as of March 18, 2005 to the Amended and Restated Credit Agreement dated as of March 15, 2002 among Booth Creek Ski Holdings, Inc., the other Borrowers
thereunder, the Guarantor named therein, the Lenders named therein, and U.S. Bank National Association, as Agent for the Lenders.
|            | 
|31.1        |  | Certification of George N. Gillett, Jr., Chief Executive Officer, pursuant to Securities and Exchange Commission (SEC) Rule 15d-14(a), as adopted pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.                                                                                                           
|            | 
|31.2        |  | Certification of Christopher P. Ryman, President and Chief Operating Officer, pursuant to SEC Rule 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of
2002.                                                                                                                                      
|            | 
|31.3        |  | Certification of Elizabeth J. Cole, Executive Vice President and Chief Financial Officer, pursuant to SEC Rule 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of
2002.                                                                                                                          
|            | 
|32.1        |  | Certification of George N. Gillett, Jr., Chief Executive Officer, pursuant to SEC Rule 15d-14(b) and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.                                                                                                                       



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|     |  |                                                                                                                                                                                                                           
|---- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|32.2 |  | Certification of Christopher P. Ryman, President and Chief Operating Officer, pursuant to SEC Rule 15d-14(b) and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.            
|     | 
|32.3 |  | Certification of Elizabeth J. Cole, Executive Vice President and Chief Financial Officer, pursuant to SEC Rule 15d-14(b) and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.



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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. COLEElizabeth J. ColeExecutive Vice President andChief Financial Officer(Principal Financial Officer)By:

/s/ BRIAN J. POPEBrian J. PopeVice President of Accounting and Finance(Principal Accounting Officer)




March 18, 2005



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