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

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

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

                                   FORM 10-Q

 (Mark One)
    [X]         QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934
                  For the quarterly period ended April 30, 2004

                                       OR

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

                       Commission File Number: 333-26091

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

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

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

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


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

     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  May 31,  2004,  the  number  of  shares  outstanding  of  the
registrant's  Common  Stock,  par  value  $.01 per  share,  was  1,000  shares.

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


<PAGE>


Item                                                                Page Number
----                                                                -----------
                       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........   28

 4.  Controls and Procedures...........................................   28

                         PART II - OTHER INFORMATION

 1.  Legal Proceedings.................................................   29

 3.  Defaults Upon Senior Securities...................................   29

 6.  Exhibits and Reports on Form 8-K..................................   30

     Signatures........................................................   31






<PAGE>


                          PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

                         BOOTH CREEK SKI HOLDINGS, INC.

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

                                  (Unaudited)

                                          April 30,    October 31,     May 2,
                                            2004          2003          2003
                                        ------------  -----------   ------------
                  ASSETS

Current assets:
 Cash...................................  $     408    $     809     $      915
 Accounts receivable, net of allowance
  of $64, $47 and $68, respectively.....      3,065        1,827          1,614
 Insurance proceeds receivable..........          -            -            800
 Inventories ...........................      1,493        2,390          1,580
 Prepaid expenses and other current
  assets ...............................      1,064        1,282          1,181
                                        ------------  -----------   ------------
Total current assets ...................      6,030        6,308          6,090

Property and equipment, net ............    107,406      110,683        115,519
Real estate held for development
 and sale ..............................      5,731        6,627          7,349
Deferred financing costs, net of
 accumulated amortization of $5,792,
 $5,235 and $4,658, respectively .......      2,212        2,769          3,164
Timber rights and other assets .........      5,363        5,541          5,921
Goodwill................................     22,938       22,938         22,938
                                        ------------  -----------   ------------
Total assets ...........................  $ 149,680    $ 154,866     $  160,981
                                        ============  ===========   ============

   LIABILITIES AND SHAREHOLDER'S EQUITY (DEFICIT)

Current liabilities:
 Revolving credit facility .............  $   2,350    $  17,750     $    6,850
 Current portion of long-term debt .....      6,386        6,429          5,310
 Accounts payable and accrued
  liabilities ..........................     19,977       34,362         25,067
                                        ------------  -----------   ------------
Total current liabilities ..............     28,713       58,541         37,227

Long-term debt .........................     96,037       98,382        101,332

Other long-term liabilities ............        710          741            756

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 ...................    (47,780)     (74,798)       (50,334)
                                        ------------  -----------   ------------
Total shareholder's equity (deficit)....     24,220       (2,798)        21,666
                                        ------------  -----------   ------------
Total liabilities and shareholder's
 equity (deficit).......................  $ 149,680    $ 154,866     $  160,981
                                        ============  ===========   ============

                            See accompanying notes.

                                       1



<PAGE>



                         BOOTH CREEK SKI HOLDINGS, INC.

                     CONSOLIDATED STATEMENTS OF OPERATIONS
                                 (In thousands)
                                  (Unaudited)

                                Three Months Ended          Six Months Ended
                               ---------------------      ---------------------
                                April 30,    May 2,        April 30,   May 2,
                                  2004        2003           2004       2003
                               ---------   ---------      ---------   ---------

Revenue:
  Resort operations..........  $  50,918   $  50,431       $ 98,233   $  96,946
  Real estate and other
   (including revenues with
   related parties of $5,610
   for the six months ended
   April 30, 2004, and $646
   for the three and six
   months ended
   May 2, 2003)..............        180         646          8,678         662
                               ---------   ---------      ---------   ---------
Total revenue................     51,098      51,077        106,911      97,608

Operating expenses:
  Cost of sales - resort
   operations................     24,409      24,598         50,682      50,694
  Cost of sales - real estate
   and other.................         39         197          1,830         218
  Depreciation and depletion.      3,566       3,904          7,169       7,734
  Selling, general and
   administrative expense....      6,537       6,559         13,794      13,368
                               ---------   ---------      ---------   ---------
Total operating expenses.....     34,551      35,258         73,475      72,014
                               ---------   ---------      ---------   ---------

Operating income.............     16,547      15,819         33,436      25,594


Other income (expense):
  Interest expense...........     (2,893)     (3,089)        (5,949)     (6,460)
  Amortization of deferred
   financing costs...........       (277)       (281)          (557)       (563)
  Gain on early retirement
   of debt...................          -           -              -         506
  Other income...............          4          23             88          26
                               ---------   ---------      ---------   ---------
Other income (expense),net...     (3,166)     (3,347)        (6,418)     (6,491)
                               ---------   ---------      ---------   ---------
Net income...................  $  13,381   $  12,472      $  27,018   $  19,103
                               =========   =========      =========   =========

                            See accompanying notes.

                                        2


<PAGE>


                         BOOTH CREEK SKI HOLDINGS, INC.

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (In thousands)
                                  (Unaudited)

                                                        Six Months Ended
                                                -------------------------------
                                                  April 30,            May 2,
                                                    2004                2003
                                                -------------     -------------


Cash flows from operating activities:
Net income.....................................   $  27,018         $   19,103
Adjustments to reconcile net income to
  net cash provided by operating activities:
   Depreciation and depletion..................       7,169              7,734
   Noncash cost of real estate sales ..........       1,597                190
   Amortization of deferred financing costs ...         557                563
   Gain on early retirement of debt............           -               (506)
   Changes in operating assets and liabilities:
    Accounts receivable .......................      (1,238)               350
    Inventories ...............................         897                718
    Prepaid expenses and other current assets..         218                244
    Accounts payable and accrued liabilities...     (14,385)           (11,057)
    Other long-term liabilites.................         (31)                 -
                                                 -------------     -------------
Net cash provided by operating activities......      21,802             17,339

Cash flows from investing activities:
Capital expenditures for property and
 equipment ....................................      (2,514)            (3,227)
Capital expenditures for real estate
 held for development and sale ................        (701)              (573)
Other assets ..................................         178                143
                                                -------------     -------------
Net cash used in investing activities .........      (3,037)            (3,657)

Cash flows from financing activities:
Borrowings under revolving credit facility ....       8,800             36,905
Repayments under revolving credit facility ...      (24,200)           (31,300)
Principal payments of long-term debt ..........      (3,766)           (19,032)
Deferred financing costs ......................           -                 (4)
                                                -------------     -------------
Net cash used in financing activities .........     (19,166)           (13,431)
                                                -------------     -------------
Increase (decrease) in cash....................        (401)               251

Cash at beginning of period ...................         809                664
                                                -------------     -------------
Cash at end of period ......................... $       408        $       915
                                                =============     =============

                            See accompanying notes.

                                        3


<PAGE>


                         BOOTH CREEK SKI HOLDINGS, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                 April 30, 2004


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 April 30, 2004 and
May 2, 2003 and for the three and six 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 April
30, 2004 and May 2, 2003, and its operating results and cash flows for the three
and six month  periods  then  ended.  Due to the highly  seasonal  nature of the
Company's  business,  the results for the interim  periods are not 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 31,
2003.

Cash

     Included in cash at April 30, 2004 is restricted cash of $308,000, 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:


                                       April 30,      October 31,        May 2,
                                         2004            2003             2003
                                     ----------       -----------     ----------
                                                    (In thousands)

         Retail products.......     $      781       $    1,581      $      816
         Supplies..............            530              625             516
         Food and beverage.....            182              184             248
                                     ----------       -----------     ----------
                                    $    1,493       $    2,390      $    1,580
                                     ==========       ===========     ==========


                                       4
<PAGE>

                         BOOTH CREEK SKI HOLDINGS, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)



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,  and are recognized as
services  are  provided  and  products  are  sold.  Sales of season  passes  are
initially  deferred in unearned revenue and recognized ratably over the 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 Reserve 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 the  advice  of  counsel,
information  provided by third-party  claims  administrators and other pertinent
information,  provides reserves for its best estimate of the eventual outcome of
these  matters.  These  estimated  liabilities  are reviewed  and  appropriately
adjusted as the facts and circumstances related to these contingencies change.

Recently Adopted Accounting Pronouncement

     In January 2003, the Financial  Accounting  Standards Board ("FASB") issued
FASB  Interpretation  No. 46,  "Consolidation of Variable Interest Entities - an
Interpretation  of ARB No.  51" ("FIN  No.  46"),  which  has been  subsequently
deferred and revised by the FASB on several dates. This interpretation addresses
consolidation  and  reporting  by  business  enterprises  of  variable  interest
entities ("VIEs"). VIEs are entities for which control is achieved through means
other than voting rights. FIN No. 46, as revised, provides for various effective
dates for adoption of the interpretation's provisions depending upon the date of
formation of the VIEs and their nature.  The adoption of FIN No. 46 did not have
any  effect on the  Company's  consolidated  financial  position  or  results of
operations.

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.


                                       5
<PAGE>

                         BOOTH CREEK SKI HOLDINGS, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)


2.   Accounts Payable and Accrued Liabilities

     Accounts payable and accrued liabilities consist of the following:

                                           April 30,    October 31,     May 2,
                                             2004          2003          2003
                                         -----------   -----------   -----------
                                                     (In thousands)

     Accounts payable....................  $   3,749     $   3,816     $   2,996
     Accrued compensation and benefits...      3,480         2,951         3,242
     Taxes other than income taxes ......        308           822           499
     Unearned revenue and deposits -
      resort operations..................      4,459        14,739         4,712
     Unearned deposits from related
      party - real estate operations.....          -         5,610         5,610
     Interest............................      1,340         1,355         1,360
     Other...............................      6,641         5,069         6,648
                                         -----------   -----------   -----------
                                           $  19,977     $  34,362     $  25,067
                                         ===========   ===========   ===========


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")
with Fleet  National  Bank,  as  administrative  agent  ("Agent"),  and  certain
lenders.  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 (the "Revolving Credit  Facility") with borrowing  availability of
     up to  $25,000,000,  and a term loan  facility (the "Term  Facility")  with
     outstanding  borrowings  as of April 30,  2004 of  $19,000,000.  Borrowings
     under the Senior  Credit  Facility are  collectively  referred to herein as
     "Loans."

          Interest - For purposes of calculating interest,  Loans can be, at the
     election  of the  Company,  base  rate  loans  or  LIBOR  rate  loans  or a
     combination  thereof.  Base rate loans bear  interest at the sum of (a) the
     higher of (i) Agent's  prime rate or (ii) the  federal  funds rate plus .5%
     plus (b) a margin of 1.5%. LIBOR rate loans bear interest at the LIBOR rate
     plus a margin of 4%. Interest on Loans  outstanding is payable quarterly 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 Term  Facility bore interest at an annual rate of 5.10% as of April 30,
     2004  pursuant to the LIBOR rate  option.  Borrowings  under the  Revolving
     Credit  Facility  bore  interest at an annual rate of 5.50% as of April 30,
     2004 pursuant to 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 Company  satisfied this  requirement for 2004
     on February 25, 2004. The Term Facility  provides for quarterly  commitment
     reductions  of  $1,000,000  on the last  day of  January,  April,  July and
     October of each year  through  October 31, 2005,  the maturity  date of the
     Senior  Credit   Facility.   The  Company  is  required  to  repay  amounts
     outstanding under the Term Facility on such dates by an amount equal to the
     greater of (i) the amount by which  outstanding  Term  Facility  borrowings
     exceed the  then-applicable  term loan  commitment and (ii) the Excess Cash
     Proceeds (as defined in the Senior Credit Facility)  derived from specified
     real estate asset sales determined on a cumulative  basis. No amount of the
     Term Facility which is repaid may be reborrowed.  The entire unpaid balance
     under the Senior Credit Facility is due and payable on October 31, 2005.


                                       6
<PAGE>

                         BOOTH CREEK SKI HOLDINGS, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)


3.   Financing Arrangements - (Continued)

          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  12.5%
     senior notes due March 15, 2007 (the "Senior Notes"). Initial borrowings of
     $25,000,000  under the Term Facility were used to repurchase  Senior Notes,
     together with accrued and unpaid  interest  thereon.  As of April 30, 2004,
     outstanding  borrowings  under  the  Revolving  Credit  Facility  and  Term
     Facility were $2,350,000 and $19,000,000, respectively.

          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  $5,000,000,  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)  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")).

          Primarily  as a  result  of  challenging  weather  conditions  in  the
     northeastern United States during the 2003/04 ski season,  which negatively
     impacted  operating  results  for  the  Company's  Waterville  Valley,  Mt.
     Cranmore and Loon Mountain resorts,  the Company experienced a shortfall of
     approximately  $2,400,000  relative to the required level of Minimum Resort
     EBITDA  under the Senior  Credit  Facility  for the  trailing  four quarter
     period ended April 30, 2004.  The Company  satisfied the Leverage Ratio and
     Adjusted  Leverage Ratio  covenants  under the Senior Credit Facility as of
     and for the period ended April 30, 2004.

          On June 14, 2004,  the Company  obtained an amendment  and waiver (the
     "Amendment and Waiver") from the lenders under the Senior Credit  Facility,
     which modified the Minimum  Resort EBITDA  covenant and waived any defaults
     or events of default arising as a result of the shortfall in Minimum Resort
     EBITDA for the  trailing  four quarter  period ended April 30, 2004.  After
     giving effect to the Amendment and Waiver,  the Company is required to have
     a Minimum Resort EBITDA of (i) $19,500,000 during each rolling four quarter
     period through April 29, 2005 and (ii) $20,500,000 during each rolling four
     quarter  period  from  April 30,  2005 and  thereafter,  which the  Company
     believes is probable of being achieved. It is also required to maintain (a)
     a minimum Leverage Ratio of (i) 1.20 to 1 through January 28, 2005 and (ii)
     1.3 to 1 thereafter and (b) a maximum Adjusted Leverage Ratio of (i) .55 to
     1 through  October 29,  2004,  (ii) .50 to 1 from  October 30, 2004 through
     October 28, 2005 and (iii) .45 to 1 thereafter.

          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.


                                       7
<PAGE>

                         BOOTH CREEK SKI HOLDINGS, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

3.   Financing Arrangements - (Continued)

     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  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 April 30, 2004,
the fair value of these agreements was not significant.

Senior Notes

     As of April 30, 2004,  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 102.083%,  declining to 100% as of March 15,
2005,  plus, in each case,  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.

     During  the  six  months  ended  May  2,  2003,  the  Company   repurchased
$16,000,000  aggregate  principal amount of Senior Notes for $15,080,000.  After
giving effect to the write-off of related deferred  financing costs of $414,000,
the  Company  recognized  a gain on early  retirement  of debt of  $506,000.


                                       8
<PAGE>

                         BOOTH CREEK SKI HOLDINGS, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

3.   Financing Arrangements - (Continued)

Other Debt

     During the six months  ended  April 30,  2004 and May 2, 2003,  the Company
entered into capital lease obligations of $1,378,000 and $682,000, respectively,
for the purchase of equipment.

     As of April 30, 2004, the scheduled maturities of long-term debt, including
capital lease obligations, were as follows:

                                                           (In thousands)

     Six months ending October 2004..................       $      3,061
     Year ending October 2005........................             18,491
     Year ending October 2006........................                625
     Year ending October 2007........................             80,246
                                                             -----------
     Total long-term debt............................            102,423

     Less current portion............................              6,386
                                                             -----------
     Long-term debt..................................       $     96,037
                                                             ===========

4.   Income Taxes

     At  October  31,  2003,  the  Company  had  estimated  net  operating  loss
carryforwards of $100,000,000 for federal income tax reporting  purposes,  which
expire between 2012 and 2023. 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 29, 2004.  Accordingly,  during the six months ended April 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  sold the  final  three  remaining  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 six months ended April 30, 2004.

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").


                                       9
<PAGE>
                         BOOTH CREEK SKI HOLDINGS, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)


5.   Real Estate Transactions - (Continued)

     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 has relieved the existing
$5,610,000  deposit  liability and recognized real estate revenues of $5,610,000
for this transaction  during the six months ended April 30, 2004.  Additionally,
the Convertible  Secured Note has been 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.

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          Six Months Ended
                            -----------------------    -----------------------
                             April 30,    May 2,         April 30,   May 2,
                               2004        2003            2004       2003
                            ----------  -----------    -----------  ----------
                                             (In thousands)
   Revenue:
    Resort operations....    $  50,918   $  50,431      $   98,233   $   96,946
    Real  estate  and
      other..............          180         646           8,678          662
                            ----------  -----------    -----------  -----------
                             $  51,098   $  51,077      $  106,911   $   97,608
                            ==========  ===========    ===========  ===========

   Operating income (loss):
    Resort operations....    $  16,772   $  15,935      $   27,174   $   26,010
    Real  estate  and
      other.............          (225)       (116)          6,262         (416)
                            ----------  -----------    -----------  -----------
                             $  16,547   $  15,819      $   33,436   $   25,594
                            ==========  ===========    ===========  ===========


                                       10
<PAGE>


                         BOOTH CREEK SKI HOLDINGS, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)


6.   Business Segments - (Continued)


                                                 April 30,      October 31,
                                                   2004            2003
                                               -------------  -------------
                                                      (In thousands)
   Segment assets:
    Resort operations..................         $ 134,511       $ 138,522
    Real estate and other..............             9,527          10,423
    Corporate and other
      nonidentifiable assets...........             5,642           5,921
                                               -------------  -------------
                                                $ 149,680       $ 154,866
                                               =============  =============

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


                                  Three Months Ended        Six Months Ended
                               -----------------------   --------------------
                                 April 30,     May 2,     April 30,   May 2,
                                   2004         2003        2004       2003
                                ---------    ---------   ---------  ---------
                                             (In thousands)

   Operating income for
    reportable segments.......  $ 16,547     $ 15,819    $ 33,436   $ 25,594
   Interest expense...........    (2,893)      (3,089)     (5,949)    (6,460)
   Amortization of deferred
    financing costs...........      (277)        (281)       (557)      (563)
   Gain on early retirement
    of debt...................         -            -           -        506
   Other income...............         4           23          88         26
                                ---------    ---------   ---------  ---------
   Net income.................  $ 13,381     $ 12,472    $ 27,018   $ 19,103
                                =========    =========   =========  =========

























                                       11
<PAGE>



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

     The following  discussion  should be read in conjunction with the 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 31,
2003.

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.

     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.


                                       12
<PAGE>

     The Company's  current  resorts have invested  approximately  $60.6 million
(including $10.4 million of equipment  acquired through capital leases and other
debt) in capital  expenditures since October 1999 to upgrade chairlift capacity,
expand  terrain,  improve skier  services,  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.

     Each of the Company's  resorts is subject to the threat of personal  injury
claims  relating  principally to snow sports  activities as well as premises and
vehicular  operations and workers'  compensation  matters. The Company maintains
various forms of insurance  covering  claims related to its properties and usual
and customary  risks  associated  with the operation of  four-season  recreation
resorts.  Due to a variety of factors,  the insurance  industry has  experienced
significant losses and a substantial  reduction in underwriting  capacity in the
past several years, which has generally resulted in significantly higher renewal
premiums for companies seeking insurance.  In connection with its annual renewal
of insurance  coverage for fiscal 2004,  the Company  experienced an increase in
insurance premium costs of approximately $1,000,000 over the level of such costs
in fiscal 2003.

     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. 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 and closing dates for the Company's resorts for the 2003/04 and
2002/03 ski seasons were as follows:

                                                   Opening Dates
                                    --------------------------------------------
                                     2003/04 Season              2002/03 Season
                                    --------------------------------------------

     Northstar.............         November 22, 2003          November 22, 2002
     Sierra................         November 14, 2003          December 16, 2002
     Waterville Valley.....         November 22, 2003          November 22, 2002
     Mt. Cranmore..........         December 13, 2003          November 29, 2002
     Loon Mountain.........         November 26, 2003          November 15, 2002
     The Summit............         November 29, 2003          December 27, 2002


                                                   Closing Dates
                                    --------------------------------------------
                                    2003/04 Season             2002/03 Season
                                    --------------------------------------------

     Northstar.............         April 18, 2004             April 20, 2003
     Sierra................         April 19, 2004             April 27, 2003
     Waterville Valley.....         April 4, 2004              April 6, 2003
     Mt. Cranmore..........         March 28, 2004             March 30, 2003
     Loon Mountain.........         April 18, 2004             April 20, 2003
     The Summit............         April 18, 2004             April 13, 2003


                                       13
<PAGE>

     Total skier visits generated by each of the Company's resorts for the three
and  six  months  ended  April  30,  2004  and  May 2,  2003  were  as  follows:

                                 Three Months Ended
                               ----------------------             Percentage
                               April 30,     May 2,     Increase   Increase
                                 2004         2003     (Decrease) (Decrease)
                               ---------    ---------  ---------   ---------
                                            (In thousands)


   Northstar..................       275          304         (29)     (10)%
   Sierra.....................       174          190         (16)      (8)
   Waterville Valley..........       101          117         (16)     (14)
   Mt. Cranmore...............        65           68          (3)      (4)
   Loon Mountain..............       186          185           1        1
   The Summit.................       227          176          51       29
                                  -------      -------     -------
                                   1,028        1,040         (12)      (1)
                                  =======      =======     =======


                                  Six Months Ended
                               ----------------------             Percentage
                               April 30,     May 2,     Increase   Increase
                                 2004         2003     (Decrease) (Decrease)
                               ---------    ---------  ---------   ---------
                                            (In thousands)


   Northstar..................       535          570         (35)      (6)%
   Sierra.....................       372          353          19        5
   Waterville Valley..........       175          223         (48)     (22)
   Mt. Cranmore...............       102          119         (17)     (14)
   Loon Mountain..............       322          359         (37)     (10)
   The Summit.................       475          329         146       44
                                  -------      -------     -------
                                   1,981        1,953          28        1
                                  =======      =======     =======


     As a result of improved  early season  snowfall in November 2003 and colder
temperatures,  Northstar  opened on schedule for the 2003/04  season on November
22, 2003 and Sierra  opened  ahead of schedule on November  14,  2003.  However,
business  volumes  at  Northstar  and  Sierra  during the  2003/04  season  were
negatively  impacted for several key days between  Christmas  and New Year's Day
due to two major storms that hit the Lake Tahoe  region.  Snowfall in Lake Tahoe
during  January 2004 and the first half of February 2004 was  relatively  modest
compared with  historical  levels.  The Lake Tahoe region  received  significant
snowfall in the second half of February 2004. However, Northern California,  the
primary  market for the Company's Lake Tahoe  resorts,  experienced  record warm
temperatures  for a  prolonged  period in March and April 2004,  which  dampened
skier  demand and  visitation  during the later  portion of the 2003/04  season.
Comparatively,  for the  2002/03  season,  the  Lake  Tahoe  region  experienced
relatively dry conditions and a lack of natural  snowfall  through November 2002
and the first half of  December  2002.  Due to the  strength  of its  snowmaking
system, Northstar opened on schedule for the 2002/03 season. However, Sierra did
not open for the 2002/03  season until  December 16, 2002.  During  mid-December
2002, the region received a series of powerful storms resulting in over six feet
of snowfall at Northstar and Sierra,  which provided excellent skiing conditions
for the 2002/03  Christmas  holiday period.  During January,  February and March
2003,  the Lake Tahoe  region  experienced  natural  snowfall  levels  that were
substantially below long-term  historical levels.  However,  the region received
significant  natural  snowfall in early April 2003, which stimulated late season
visitation.  For the 2003/04 ski season, skier visitation for Northstar declined
by 35,000  visits,  or 6%, as compared to the 2002/03  season,  due primarily to
shortfalls in late season skier visits.  For Sierra,  skier  visitation  for the
2003/04 ski season increased by 19,000 visits, or 5%, as compared to the 2002/03
season,  as increased skier visits in the early part of the ski season due to an
earlier  opening were partially  offset by decreased  skier visits at the end of
the ski season.


                                       14
<PAGE>

     For the first half of the 2003/04 season,  the  northeastern  United States
experienced  relatively  inconsistent  weather patterns,  including,  at varying
times, major snowstorms,  warm temperatures,  periods of heavy rainfall, and for
most of January 2004 and early February 2004,  extended periods of bitterly cold
temperatures.  By comparison,  conditions in the northeastern  United States for
the early part of the  2002/03  ski season  were  generally  good,  with  colder
temperatures and above average natural  snowfall.  Skier visits at the Company's
New  Hampshire  resorts for the first fiscal  quarter of 2004 declined by 84,000
visits,  or 25%,  from the level of skier  visitation  during  the first  fiscal
quarter of 2003. For the later portion of the 2003/04 season, weather conditions
for the  Company's  New  Hampshire  resorts  returned to more  normal  patterns,
although  late  season  conditions  were  generally  less  favorable  than those
experienced at the end of the 2002/03 season. For the 2003/04 season as a whole,
the  Company's  New  Hampshire  resorts  experienced  a decline of 102,000 skier
visits, or 15%, from the level of skier visitation during the 2002/03 season.

     As  compared  to  the  difficult  2002/03  season,  the  Pacific  Northwest
experienced a return to more normal weather patterns for the 2003/04 ski season,
resulting in a significant  rebound in skier  visitation at the Company's Summit
resort in Washington.  For the 2003/04 season,  the Summit opened slightly ahead
of schedule on November  29, 2003.  For 2002/03  season,  the Pacific  Northwest
experienced  unseasonably  warm  temperatures  and  substantially  below average
snowfall.  Snowfall  at the Summit for the  2002/03  season was less than 60% of
historical long-term averages. Additionally,  average temperatures at the Summit
during the 2002/03 season were generally much warmer than normal, and the resort
experienced  a large  amount of rainfall  during the course of the  season.  The
Summit commenced partial  operations for the 2002/03 season on December 27, 2002
on limited terrain.  As a result of the early opening for the 2003/04 season and
substantially  improved  conditions,  skier  visits  for the  Summit for the six
months  ended April 30,  2004  increased  by 146,000  visits,  or 44%,  from the
corresponding period in the prior year.

     Three Months Ended April 30, 2004 Compared to the Three Months Ended May 2,
2003

     The Company's operating results by segment for the three months ended April
30, 2004 and May 2, 2003 were as follows.

                                    Three Months Ended                Percentage
                                    ------------------
                                  April 30,      May 2,     Increase   Increase
                                    2004          2003     (Decrease) (Decrease)
                                 ----------   -----------  ---------- ----------
                                 (In thousands, except revenue per skier visit)

Resort Operations:
Revenue:
   Lift Tickets................. $  17,345     $  18,576    $ (1,231)      (7)%
   Season Passes................    12,048        10,203       1,845       18
   Snow School..................     4,140         4,050          90        2
   Equipment Rental.............     4,114         4,221        (107)      (3)
   Retail.......................     1,824         1,964        (140)      (7)
   Food and Beverage............     7,582         7,539          43        1
   Other........................     3,865         3,878         (13)       -
                                 ----------   -----------  ----------
Total Resort Operations
  Revenue.......................    50,918        50,431         487        1
Cost of Sales - Resort
  Operations....................    24,409        24,598        (189)      (1)
Depreciation Expense............     3,566         3,904        (338)      (9)
Selling, General and
  Administrative Expense -
  Resort Operations.............     6,171         5,994         177        3
                                 ----------   -----------  ----------
Total Resort Operations
  Expenses......................    34,146        34,496        (350)      (1)
                                 ----------   -----------  ----------
Resort Operating Income......... $  16,772     $  15,935    $    837        5
                                 ==========   ===========  ==========
Skier Visits....................     1,028         1,040         (12)      (1)
                                 ==========   ===========  ==========
Revenue per Skier Visit......... $   49.53     $   48.49    $   1.04        2
                                 ==========   ===========  ==========


                                       15
<PAGE>


                                    Three Months Ended
                                    ------------------
                                  April 30,      May 2,               Percentage
                                    2004          2003     (Decrease) (Decrease)
                                 ----------   -----------  ---------- ----------
                                              (In thousands)

Real Estate and Other Operations:
Real Estate Revenue............. $     180     $     646    $   (466)     (72)%
Cost of Sales - Real Estate
  and Other.....................        39           197        (158)     (80)
Selling, General and
  Administrative Expense -
  Real Estate and Other.........       366           565        (199)     (35)
                                 ----------   -----------  ----------
Total Real Estate and Other
  Operating Expenses............       405           762        (357)     (47)
                                 ----------   -----------  ----------
Real Estate and Other
  Operating Loss................ $    (225)    $    (116)   $   (109)     (94)
                                 ==========   ===========  ==========

Resort Operations:

     Revenues from resort  operations  for the three months ended April 30, 2004
were  $50,918,000,  an  increase  of  $487,000,  or 1%, as  compared to the 2003
period. Skier visits for the 2004 period decreased by 12,000 visits, or 1%, from
the 2003 period.  Season pass revenues,  which rose 18% to  $12,048,000  for the
2004  period,  as well as  increased  snow school and food and  beverage  sales,
offset the impact of reduced  lift ticket  sales,  equipment  rentals and retail
sales.

     As  compared  to the three  months  ended May 2,  2003,  resort  operations
revenues  for  Northstar   and  Sierra   decreased  by  $900,000  and  $234,000,
respectively,  primarily due to lower skier visits, partially offset by improved
revenue  per skier visit  yields.  Similarly,  resort  operations  revenues  for
Waterville   Valley  and  Mt.  Cranmore   decreased  by  $374,000  and  $82,000,
respectively,  as compared to the 2003 period due to decreases in skier  visits,
partially offset by improved revenue per skier visit yields.  Resort  operations
revenues for Loon Mountain  increased by $393,000 as compared to the 2003 period
due primarily to improved  revenue per skier visit yields.  The Summit's  resort
operations  revenues  increased by $1,684,000 as compared to the 2003 period due
primarily to substantially higher visitation,  partially offset by lower revenue
per skier visit yields.

     Cost of sales for resort  operations  for the three  months ended April 30,
2004 was  $24,409,000,  a decrease of  $189,000,  or 1%, as compared to the 2003
period.  The slight decrease between the 2004 and 2003 periods was primarily the
result of lower cost of goods  sold for food and  beverage  and  retail  product
sales due to improved inventory management practices.

     Depreciation  expense  for the  three  months  ended  April  30,  2004  was
$3,566,000,  a decrease of $338,000, or 9%, from the 2003 period. The decline in
depreciation  expense was primarily due to certain assets acquired in connection
with the Company's resort acquisition in 1998 having become fully depreciated.

     Selling,  general and administrative  expense for resort operations for the
three months ended April 30, 2004 was  $6,171,000,  an increase of $177,000,  or
3%, as  compared  to the 2003  period.  The  increase  in  selling,  general and
administrative  expense  between the 2004 and 2003 periods was  primarily due to
increased payroll as a result of normal inflationary factors.

     Resort  operating  income for the three  months  ended  April 30,  2004 was
$16,772,000, an increase of $837,000, or 5%, from the operating income generated
for the 2003 period, as a result of the factors discussed above.

Real Estate and Other:

     Revenues from real estate  operations  for the three months ended April 30,
2004 were $180,000,  which was due to the sale of two single family lots at Loon
Mountain. Revenues from real estate operations for the three months ended May 2,
2003  were  $646,000,  due to the  sale  of the  final  lot  within  the  Unit 7
development at Northstar.

                                       16
<PAGE>

     Cost of sales for real  estate and other  operations  for the three  months
ended April 30, 2004 was $39,000, including noncash cost of real estate sales of
$7,000,  primarily  as a result of the sale of two  single  family  lots at Loon
Mountain.  Cost of sales  for real  estate  and other  operations  for the three
months  ended May 2, 2003 was  $197,000,  including  noncash cost of real estate
sales of  $190,000,  as a result of the sale of the final lot  within the Unit 7
development at Northstar.

     Selling,  general  and  administrative  expense  for real  estate and other
operations for the three months ended April 30, 2004 was $366,000, a decrease of
$199,000  from the 2003  period,  primarily  as a result of sales  launch  costs
incurred in the 2003 period for the Unit 7A development at Northstar.

     Operating  loss from real estate and other  operations was $225,000 for the
three  months ended April 30,  2004,  an increase of $109,000  from the $116,000
operating  loss incurred  during the three months ended May 2, 2003, as a result
of the factors discussed above.

Interest Expense and Other Items:

     Interest  expense  for the  three  months  ended  April  30,  2004  totaled
$2,893,000,  a decrease of $196,000,  or 6%, from the Company's interest expense
for the three months ended May 2, 2003,  as a result of reduced  borrowings  and
lower average interest rates.

     As of October 31,  2003,  the  Company had  estimated  net  operating  loss
carryforwards  of  approximately  $100,000,000  for federal income tax reporting
purposes,  which  expire  between  2012 and 2023.  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 29, 2004.  Accordingly,  during the three months ended April
30, 2004, no income tax provision has been provided.

     The  Company's  net income for the three  months  ended  April 30, 2004 was
$13,381,000,  an  increase  of  $909,000  from  the net  income  of  $12,472,000
generated  for the three  months  ended May 2, 2003,  as a result of the factors
discussed above.

     Six Months  Ended  April 30, 2004  Compared to the Six Months  Ended May 2,
2003

     The Company's  operating  results by segment for the six months ended April
30, 2004 and May 2, 2003 were as follows.

                                     Six Months Ended                 Percentage
                                    ------------------
                                  April 30,      May 2,     Increase   Increase
                                    2004          2003     (Decrease) (Decrease)
                                 ----------   -----------  ---------- ----------
                                 (In thousands, except revenue per skier visit)

Resort Operations:
Revenue:
   Lift Tickets................. $  35,048     $  36,717    $ (1,669)      (5)%
   Season Passes................    22,011        19,779       2,232       11
   Snow School..................     7,659         7,507         152        2
   Equipment Rental.............     7,852         7,849           3        -
   Retail.......................     3,994         3,814         180        5
   Food and Beverage............    14,335        13,962         373        3
   Other........................     7,334         7,318          16        -
                                 ----------   -----------  ----------
Total Resort Operations
  Revenue.......................    98,233        96,946       1,287        1
Cost of Sales - Resort
  Operations....................    50,682        50,694         (12)       -
Depreciation Expense............     7,169         7,727        (558)      (7)
Selling, General and
  Administrative Expense -
  Resort Operations.............    13,208        12,515         693        6
                                 ----------   -----------  ----------
Total Resort Operations
  Expenses......................    71,059        70,936         123        -
                                 ----------   -----------  ----------
Resort Operating Income......... $  27,174     $  26,010    $  1,164        4
                                 ==========   ===========  ==========
Skier Visits....................     1,981         1,953          28        1
                                 ==========   ===========  ==========
Revenue per Skier Visit......... $   49.59     $   49.64    $   (.05)       -
                                 ==========   ===========  ==========


                                       17
<PAGE>


                                     Six Months Ended                 Percentage
                                    ------------------
                                  April 30,      May 2,     Increase   Increase
                                    2004          2003     (Decrease) (Decrease)
                                 ----------   -----------  ---------- ----------
                                              (In thousands)
Real Estate and Other Operations:
Revenue:
   Real Estate Revenue.......... $   8,678     $     646    $  8,032       NM
   Timber Revenue...............         -            16         (16)      NM
                                 ----------   -----------  ----------
Total Real Estate and Other
  Operations Revenue............     8,678           662       8,016       NM
Cost of Sales - Real Estate
  and Other.....................     1,830           218       1,612       NM
Depletion Expense...............         -             7          (7)      NM
Selling, General and
  Administrative Expense -
  Real Estate and Other.........       586           853        (267)     (31)%
                                 ----------   -----------  ----------
Total Real Estate and Other
  Operating Expenses............     2,416         1,078       1,338      124
                                 ----------   -----------  ----------
Real Estate and Other
  Operating Income (Loss)....... $   6,262     $    (416)   $  6,678       NM
                                 ==========   ===========  ==========

NM - Not meaningful.


Resort Operations:

     Revenues  from resort  operations  for the six months  ended April 30, 2004
were  $98,233,000,  an  increase of  $1,287,000,  or 1%, as compared to the 2003
period. Skier visits for the 2004 period increased by 28,000 visits, or 1%, from
the 2003 period.  Season pass revenues,  which rose 11% to  $22,011,000  for the
2004  period,  as well as increased  snow  school,  retail and food and beverage
sales, offset the impact of reduced lift ticket sales.

     As compared to the six months ended May 2, 2003, resort operations revenues
for  Northstar  decreased by  $1,347,000,  primarily  due to lower skier visits,
partially  offset by higher  revenue per skier visit yields.  Resort  operations
revenues for Sierra  increased by $514,000 as compared to the 2003 period due to
increased skier visits, partially offset by lower revenue per skier visit yields
due to changes in the mix of skiers.  Resort operations  revenues for Waterville
Valley,  Mt.  Cranmore and Loon Mountain  decreased by $1,504,000,  $574,000 and
$902,000, respectively, as compared to the 2003 period due to decreases in skier
visits,  partially  offset by  improved  revenue  per skier  visit  yields.  The
Summit's resort operations  revenues  increased by $5,100,000 as compared to the
2003 period due primarily to substantially  higher visitation,  partially offset
by lower revenue per skier visit yields.

     Cost of sales for resort operations for the six months ended April 30, 2004
was  $50,682,000,  a decrease of $12,000 as compared to the 2003 period.  Higher
insurance and snowmaking  costs for the 2004 period were offset by the effect of
(i)  lower  variable  operating  costs in the 2004  period  and (ii) a  $475,000
workers' compensation provision in the 2003 period for two large claims matter.

     Depreciation   expense  for  the  six  months  ended  April  30,  2004  was
$7,169,000,  a decrease of $558,000, or 7%, from the 2003 period. The decline in
depreciation  expense was primarily due to certain assets acquired in connection
with the Company's resort acquisition in 1998 having become fully depreciated.

     Selling,  general and administrative  expense for resort operations for the
six months ended April 30, 2004 was $13,208,000, an increase of $693,000, or 6%,
as  compared  to  the  2003  period.  The  increase  in  selling,   general  and
administrative  expense  between the 2004 and 2003 periods was  primarily due to
increased payroll as a result of normal inflationary factors.

     Resort  operating  income  for the six  months  ended  April  30,  2004 was
$27,174,000,  an  increase  of  $1,164,000,  or 4%,  from the  operating  income
generated for the 2003 period, as a result of the factors discussed above.


                                       18
<PAGE>


Real Estate and Other:

     Revenues  from real estate  operations  for the six months  ended April 30,
2004 were  $8,678,000,  which was due to (i) the sale of 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 three single family lots at Loon  Mountain for  $270,000.  Revenues from
real estate  operations for the six months ended May 2, 2003 were $646,000,  due
to the sale of the final lot within the Unit 7 development at Northstar.  Timber
operations  at  Northstar  contributed  revenues of $16,000 for the 2003 period.
There were no timber operations revenues for the 2004 period.

     Cost of sales for real estate and other operations for the six months ended
April 30, 2004 was  $1,830,000,  including  noncash cost of real estate sales of
$1,597,000,  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. Cost of sales for real estate and timber operations for the
six months ended May 2, 2003 was $218,000, including noncash cost of real estate
sales of  $190,000,  as a result of the sale of the final lot  within the Unit 7
development at Northstar.

     Selling,  general  and  administrative  expense  for real  estate and other
operations  for the six months ended April 30, 2004 was $586,000,  a decrease of
$267,000  from the 2003  period,  primarily  as a result of sales  launch  costs
incurred in the 2003 period for the Unit 7A development at Northstar.

     Operating  income from real estate and other  operations was $6,262,000 for
the six months ended April 30, 2004, an increase of $6,678,000 from the $416,000
operating loss incurred  during the six months ended May 2, 2003, as a result of
the factors discussed above.

Interest Expense and Other Items:

     Interest   expense  for  the  six  months  ended  April  30,  2004  totaled
$5,949,000,  a decrease of $511,000,  or 8%, from the Company's interest expense
for the six months  ended May 2, 2003,  as a result of  reduced  borrowings  and
lower average interest rates.

     The Company  recognized a gain on the early  retirement of debt of $506,000
for the six months ended May 2, 2003,  relating to the repurchase of $16,000,000
aggregate  principal  amount of its 12.5%  senior  notes due March 15, 2007 (the
"Senior Notes") during the 2003 period.

     As of October 31,  2003,  the  Company had  estimated  net  operating  loss
carryforwards  of  approximately  $100,000,000  for federal income tax reporting
purposes,  which  expire  between  2012 and 2023.  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 29, 2004. Accordingly, during the six months ended April 30,
2004, no income tax provision has been provided.

     The  Company's  net  income  for the six months  ended  April 30,  2004 was
$27,018,000,  an  increase  of  $7,915,000  from the net  income of  $19,103,000
generated  for the six  months  ended May 2,  2003,  as a result of the  factors
discussed above.


                                       19
<PAGE>


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   with  Fleet   National   Bank,  as
administrative agent ("Agent"),  and certain lenders. The Senior Credit Facility
has since been amended four times, most recently on June 14, 2004 (as so amended
the "Senior Credit Facility").  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  (the
"Revolving Credit  Facility") with borrowing  availability of up to $25,000,000,
and a term loan facility (the "Term Facility") with outstanding borrowings as of
April 30, 2004 of  $19,000,000.  The Senior  Credit  Facility  requires that the
Company not have any borrowings under the Revolving Credit Facility for a period
of 30 consecutive days commencing sometime between January 15 and February 28 of
each year. The Company satisfied this requirement for 2004 on February 25, 2004.
The draw period under the Term Facility has expired.  The Term Facility provides
for  quarterly  commitment  reductions of $1,000,000 on the last day of January,
April, July and October of each year through October 31, 2005, the maturity date
of the  Senior  Credit  Facility.  The  Company  is  required  to repay  amounts
outstanding  under the Term  Facility  on such  dates by an amount  equal to the
greater of (i) the amount by which  outstanding Term Facility  borrowings exceed
the  then-applicable  term loan commitment and (ii) the Excess Cash Proceeds (as
defined in the Senior Credit Facility)  derived from specified real estate asset
sales determined on a cumulative  basis. No amount of the Term Facility which is
repaid may be  reborrowed.  The entire  unpaid  balance  under the Senior Credit
Facility  is due and payable on October 31,  2005.  Borrowings  under the Senior
Credit Facility are secured by (a) a pledge to the Agent for the ratable benefit
of the financial  institutions party to the Senior Credit Facility of all of the
capital  stock  of Booth  Creek's  principal  subsidiaries  and (b) a grant of a
security interest in substantially all of the consolidated assets of Booth Creek
and its subsidiaries.

     The Senior Credit Facility  contains  financial  covenants  relating to the
maintenance of (a) minimum  consolidated  resort EBITDA (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 $5,000,000,  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)  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")).

     Primarily as a result of challenging weather conditions in the northeastern
United States during the 2003/04 ski season, which negatively impacted operating
results for the  Company's  Waterville  Valley,  Mt.  Cranmore and Loon Mountain
resorts,  the  Company  experienced  a  shortfall  of  approximately  $2,400,000
relative to the required  level of Minimum Resort EBITDA under the Senior Credit
Facility for the trailing four quarter  period ended April 30, 2004. The Company
satisfied the Leverage  Ratio and Adjusted  Leverage Ratio  covenants  under the
Senior Credit Facility as of and for the period ended April 30, 2004.


                                       20
<PAGE>


     On June 14,  2004,  the  Company  obtained  an  amendment  and waiver  (the
"Amendment and Waiver") from the lenders under the Senior Credit Facility, which
modified the Minimum Resort EBITDA covenant and waived any defaults or events of
default  arising as a result of the  shortfall in Minimum  Resort EBITDA for the
trailing  four quarter  period ended April 30, 2004.  After giving effect to the
Amendment and Waiver, the Company is required to have a Minimum Resort EBITDA of
(i)  $19,500,000  during each rolling four quarter period through April 29, 2005
and (ii) $20,500,000 during each rolling four quarter period from April 30, 2005
and thereafter,  which the Company believes is probable of being achieved. It is
also required to maintain (a) a minimum  Leverage Ratio of (i) 1.20 to 1 through
January  28,  2005 and  (ii)  1.3 to 1  thereafter  and (b) a  maximum  Adjusted
Leverage  Ratio of (i) .55 to 1 through  October  29,  2004,  (ii) .50 to 1 from
October 30, 2004 through October 28, 2005 and (iii) .45 to 1 thereafter.

     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 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 Term Facility bore
interest at an annual  rate of 5.10% as of April 30, 2004  pursuant to the LIBOR
rate option.  Borrowings under the Revolving Credit Facility bore interest at an
annual rate of 5.50% as of April 30, 2004 pursuant to 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.  Initial  borrowings of
$25,000,000 under the Term Facility were used to repurchase the Company's Senior
Notes,  together with accrued and unpaid interest thereon. As of April 30, 2004,
outstanding  borrowings  under the Revolving  Credit  Facility and Term Facility
were $2,350,000 and $19,000,000, respectively.

     The  Company  had a  working  capital  deficit  of  $22,683,000  (including
$2,350,000 in outstanding  borrowings under the Revolving Credit Facility) as of
April 30,  2004,  which  will  negatively  affect  liquidity  during  2004.  The
Company's  working capital deficit as of May 2, 2003 was $31,137,000  (including
$6,850,000 in outstanding borrowings under the Revolving Credit Facility).

     The Company generated cash from operating activities of $21,802,000 for the
six months ended April 30, 2004, as compared to  $17,339,000  for the comparable
period in 2003.  The increase in operating  cash flows was  primarily due to the
increase in net income for the 2004 period.

     Cash used in investing activities totaled $3,037,000 and $3,657,000 for the
six months ended April 30, 2004 and May 2, 2003,  respectively.  The results for
the  2004  and 2003  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  $19,166,000 for the six months
ended April 30, 2004,  which reflects net repayments  under the Revolving Credit
Facility of $15,400,000 and scheduled  payments of long-term debt of $3,766,000.
Cash used in financing  activities totaled $13,431,000 for the comparable period
in 2003,  which  reflects net advances  under the Revolving  Credit  Facility of
$5,605,000,   scheduled  payments  of  long-term  debt  of  $3,952,000  and  the
repurchase of $16,000,000  aggregate  principal  amount of the Company's  Senior
Notes for $15,080,000.


                                       21
<PAGE>


     The Company's  capital  expenditures  for property and equipment during the
six  months  ended  April 30,  2004 were  $3,892,000  (including  $1,378,000  of
equipment  acquired  through  capital  leases),  and consisted  primarily of the
remaining portion of the Company's fiscal 2003 capital programs and acquisitions
of  grooming   equipment.   Management   anticipates  that  maintenance  capital
expenditures  for its fiscal 2004 capital programs will range from $5,000,000 to
$5,500,000.  The Company's 2004 expansion capital program currently contemplates
spending  of  approximately  $3,000,000.  Capital  expenditures  for real estate
development  projects in fiscal 2004 are estimated to range  between  $2,000,000
and $2,250,000.  The Company plans to fund future capital  expenditures from (i)
available cash flow,  (ii) vendor  financing to the extent  permitted  under the
Senior Credit  Facility and the Indenture for the Company's  Senior Notes and/or
(iii) borrowings  under the Revolving  Credit  Facility.  Commitments for future
capital expenditures for property and equipment and real estate development were
approximately $5,900,000 at April 30, 2004.

     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.

     In December  2003, the Company closed escrow on the final three lots within
the Unit 7A subdivision at Northstar for an aggregate sales price of $2,798,000.
The Company does not anticipate  that it will sell any additional  single family
real estate at Northstar  during the remainder of fiscal 2004. While the Company
is currently evaluating certain potential real estate opportunities at its other
resorts,  there  can  be  no  assurance  that  the  Company  will  realize  such
opportunities in the immediate future or on terms satisfactory to the Company.

     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.  During the 2002/03 and 2003/04 ski
seasons,  the Company  experienced a significant decline in its resort operating
performance  as  compared  to the  level of its  operating  performance  for the
2000/01 and 2001/02 ski seasons due primarily to significant  weather challenges
at certain of its  resorts,  which will  negatively  affect  liquidity in future
periods.  Any further  significant  decline in the Company's  expected operating
performance  could have a material  adverse  effect on the Company's  ability to
service its debt, meet its financial  covenants under the Senior Credit Facility
and make required capital  expenditures.  Due to the expected absence of further
real estate sales at Northstar  in fiscal  2004,  the Company is dependent  upon
cash flows from resort  operations to service its  indebtedness,  fund necessary
capital expenditures and support working capital requirements.

                                       22
<PAGE>


     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.  On June 14, 2004, the Company
obtained  an  amendment  from the  lenders  under  the  Senior  Credit  Facility
modifying these covenants prospectively and a waiver of defaults that had arisen
as a result of the Company's  operating  performance through April 30, 2004. The
Company's ability to meet its 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 April 30, 2004, the Company had $102,423,000 of total long-term debt.
The Company  expects that  existing  cash and cash  generated  from  operations,
together  with  borrowing  availability,  will be adequate to fund the Company's
debt  service  and other cash  operating  requirements  over the next 12 months.
However, in order to meet the Company's off-season liquidity  requirements,  the
Company expects that it will be substantially drawn on the $25,000,000 Revolving
Credit Facility during the early portion of the 2004/05 ski season.  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  and  real  estate  holdings,  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.

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 April 30, 2004, the Company's scheduled
maturities of long-term debt (including  capital lease  obligations),  operating
lease commitments,  purchase obligations and other long-term liabilities for the
periods indicated were as follows:

                                                  Payments Due By Period
                                           -------------------------------------
                                                                           More
                                           Remainder   One to              Than
                                           of Fiscal   Three   Three to    Five
                                   Total     2004      Years  Five Years  Years
                                ---------  --------  --------  -------- --------
                                                  (In thousands)
Long-term debt and capital
  lease obligations............ $ 102,423  $  3,061  $ 19,116  $ 80,246 $     -
Operating lease obligations....     4,243       265     1,742       220   2,016
Purchase obligations...........     3,700     2,000     1,700         -       -
Other long-term liabilities....       710         -       264       179     267
                                ---------  --------  --------  -------- --------
Total.......................... $ 111,076  $  5,326  $ 22,822  $ 80,645 $ 2,283
                                =========  ========  ========  ======== ========


                                       23
<PAGE>

     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 April 30, 2004 were  approximately  $3,800,000  and $549,000,
respectively.  Under the terms of the Senior  Credit  Facility,  the  letters of
credit in the amount of $549,000 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,  and (iv)  evaluation  of  contingencies  and reserve  estimates.  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.
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.

     Revenue  Recognition  for Real  Estate  Sales - Sales and  profits  on real
estate sales are recognized  using the full accrual method at the point that the
Company's receivables from land sales are deemed collectible and the Company has
no significant  remaining  obligations for  construction  or development,  which
typically  occurs upon transfer of title.  If such  conditions  are not met, the
recognition  of all or part of the sales and profit is  postponed.  The  Company
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.

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

     Evaluation  of  Contingencies   and  Reserve   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 the advice of counsel, information provided by
third-party  claims  administrators  and other pertinent  information,  provides
reserves for its best estimate of the eventual  outcome of these matters.  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.

                                       24
<PAGE>

Recently Adopted Accounting Pronouncement

     In January 2003, the Financial  Accounting  Standards Board ("FASB") issued
FASB  Interpretation  No. 46,  "Consolidation of Variable Interest Entities - an
Interpretation  of ARB No.  51" ("FIN  No.  46"),  which  has been  subsequently
deferred and revised by the FASB on several dates. This interpretation addresses
consolidation  and  reporting  by  business  enterprises  of  variable  interest
entities ("VIEs"). VIEs are entities for which control is achieved through means
other than voting rights. FIN No. 46, as revised, provides for various effective
dates for adoption of the interpretation's provisions depending upon the date of
formation of the VIEs and their nature.  The adoption of FIN No. 46 did not have
any  effect on the  Company's  consolidated  financial  position  or  results of
operations.

Seasonality

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

                                       25
<PAGE>

     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 31, 2003 were
$1,053,000.

     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.

     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.

                                       26
<PAGE>

     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  likely  compel  Loon  Mountain to  construct  water  storage
facilities within  approximately three and one-half 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 and one-half 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.

Forward-Looking Statements

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


          o    Uncertainty as to future financial results,
          o    The  substantial  leverage  and  liquidity   constraints  of  the
               Company,
          o    Significant  operating  restrictions  under  the  Company's  debt
               agreements,
          o    The capital  intensive nature of development of the Company's ski
               resorts,
          o    Uncertainties associated with obtaining financing for future real
               estate projects and to undertake future capital improvements,
          o    Uncertainties regarding the timing and success of our real estate
               development  projects and their ultimate  impact on our operating
               results,
          o    Demand for and costs associated with real estate development,
          o    The  discretionary  nature of consumers'  spending for skiing and
               resort real estate,
          o    Regional and national economic conditions,
          o    Weather conditions,
          o    Negative  demand for our  services and  products  resulting  from
               potential terrorism threats,
          o    Availability and cost of commercial air service,
          o    The threat, commencement or continuation of wars,
          o    Availability  and  terms  of  insurance  coverage,   as  well  as
               potential increases in the cost of insurance coverage,
          o    Natural disasters (such as earthquakes and floods),
          o    Competition and pricing pressures,
          o    Governmental regulation and litigation and other risks associated
               with expansion and development,
          o    The  adequacy  of the  water  supplies  at each of the  Company's
               resorts,
          o    Availability of adequate energy supplies for the operation of the
               Company's   resorts,   including   snowmaking   operations,   and
               volatility in the prices charged for energy and fuel,
          o    The  occupancy of leased  property and property  used pursuant to
               the Forest Service permits, and
          o    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 31, 2003.

                                       27
<PAGE>


ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     During the six months  ended  April 30,  2004,  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
31, 2003 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  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 the design of any system of  controls is based in part upon
          certain  assumptions about the likelihood of future events,  and there
          can be no  assurance  that any design will  succeed in  achieving  its
          stated goals under all potential future conditions,  regardless of how
          remote.


     b)   There were no significant  changes in the Company's  internal  control
          over financial  reporting  during the quarterly period ended April 30,
          2004  that  have  materially  affected,  or is  reasonably  likely  to
          materially  affect,  the  Company's  internal  control over  financial
          reporting.


                                       28
<PAGE>


                           PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

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

     In  connection  with  the  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 amount of such award  remains  subject to
appeal and 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 1. "Business - 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.


ITEM 3. DEFAULTS UPON SENIOR SECURITIES

     The Company did not satisfy the minimum consolidated resort EBITDA covenant
under the Senior  Credit  Facility for the four  quarter  period ended April 30,
2004.  On June 14, 2004,  the Company  obtained an amendment and waiver from the
lenders under the Senior  Credit  Facility  modifying  the minimum  consolidated
resort EBITDA  covenant and waiving any defaults or events of default arising as
a result of having  failed to comply with the covenant  through  April 30, 2004.
See Part I, Item 2. "Management's Discussion and Analysis of Financial Condition
and Results of Operations - Liquidity and Capital Resources."


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<PAGE>

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

     a. Exhibits

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

     10.1           Fourth Amendment and Waiver dated as of June 14, 2004 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 Fleet National Bank, 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.

     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.

     b. Reports on Form 8-K

     No reports on Form 8-K were filed during the  quarterly  period ended April
30, 2004.


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<PAGE>

                                   SIGNATURES

     Pursuant to the  requirements  of the Securities  Exchange Act of 1934, the
Registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned, thereunto duly authorized.

                                   BOOTH CREEK SKI HOLDINGS, INC.
                                           (Registrant)


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


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


June 14, 2004


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