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

                                  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 July 27, 2001

                                       OR

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

                        Commission File Number: 333-26091

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

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

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

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


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

     As of August 24, 2001, the number of shares outstanding of the registrant's
Common Stock, par value $.01 per share, was 1,000 shares.

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

                         TABLE OF CONTENTS



Item                                                        Page Number

                  PART I - FINANCIAL INFORMATION

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

 2.   Management's Discussion and Analysis of Financial
      Condition and Results of Operations.....................    8

 3.   Quantitative and Qualitative Disclosures about
      Market Risk.............................................   19

                    PART II - OTHER INFORMATION

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

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

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

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


                          PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

                         BOOTH CREEK SKI HOLDINGS, INC.

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

                                             July 27,  October 27,  July 28,
                                               2001       2000        2000
                                            ---------- ---------- ----------
                  ASSETS                    (Unaudited)           (Unaudited)
Current assets:
  Cash.....................................   $    845   $    696   $    852
  Accounts receivable, net of allowance of
   $58, $28 and $47, respectively..........      1,272      1,929      1,215
  Insurance proceeds receivable............      1,500      4,070      6,600
  Inventories..............................      1,841      2,106      2,001
  Prepaid expenses and other current assets        948      1,194        727
                                            ---------- ---------- ----------
Total current assets.......................      6,406      9,995     11,395

Property and equipment, net................    140,929    145,746    144,448
Real estate held for development and sale        7,293      6,566      9,074
Deferred financing costs, net of
  accumulated amortization of $4,888,
  $4,162 and $3,881, respectively..........      4,327      5,338      5,570
Timber rights and other assets.............      6,169      5,937      7,840
Goodwill, net of accumulated amortization
  of $10,694, $8,937 and $8,353
  respectively.............................     23,724     25,481     26,136
                                            ---------- ---------- ----------
Total assets...............................   $188,848   $199,063   $204,463
                                            ========== ========== ==========
   LIABILITIES AND SHAREHOLDER'S EQUITY
Current liabilities:
  Senior credit facility...................   $  3,425   $  6,352   $ 10,947
  Current portion of long-term debt........      2,042      1,356      1,475
  Accounts payable and accrued liabilities.     29,606     33,915     31,863
                                            ---------- ---------- ----------
Total current liabilities..................     35,073     41,623     44,285

Long-term debt.............................    128,676    136,790    136,682
Other long-term liabilities................        760        785         25
Commitments and contingencies
Preferred stock of subsidiary; 28,000
  shares authorized, 10,000 shares issued
  and outstanding at July 27, 2001
  (13,000 shares and 14,000 shares at
  October 27, 2000 and July 28, 2000,
  respectively); liquidation preference and
  redemption value of $1,262 at
  July 27, 2001............................      1,262      1,638      1,763
Shareholder's equity:
  Common stock, $.01 par value; 1,000
   shares authorized, issued and
   outstanding.............................       -           -          -
  Additional paid-in capital...............    72,000      72,000     72,000
  Accumulated deficit......................   (48,923)    (53,773)   (50,292)
                                            ---------   --------- ----------
Total shareholder's equity.................    23,077      18,227     21,708
Total liabilities and shareholder's         ---------   --------- ----------
  equity...................................  $188,848    $199,063   $204,463
                                            =========   ========= ==========

                             See accompanying notes.
===============================================================================

<PAGE>

                          BOOTH CREEK SKI HOLDINGS, INC.

                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                 (In thousands)


                                Three Months Ended         Nine Months Ended
                               ---------------------     ---------------------
                               July 27,    July 28,      July 27,    July 28,
                                 2001        2000          2001        2000
                               ---------   ---------     ---------   ---------
                                                  (Unaudited)
Revenue:
  Resort operations..........     $3,498      $4,331       $116,020   $113,615
  Real estate and other......        190         748            190      1,593
                               ---------   ---------      ---------  ---------
Total revenue................      3,688       5,079        116,210    115,208

Operating expenses:
  Cost of sales - resort
   operations................      6,678       6,779         63,349     62,398
  Cost of sales - real estate
   and other.................        167         375            167        708
  Depreciation and depletion.      5,411       5,180         16,247     15,204
  Amortization of goodwill and
   other intangible assets...        595         601          1,785      1,807
  Selling, general and
   administrative expense....      4,320       3,867         18,496     17,472
                               ---------   ---------      ---------  ---------
Total operating expenses.....     17,171      16,802        100,044     97,589
                               ---------   ---------      ---------  ---------
Operating income(loss).......    (13,483)    (11,723)        16,166     17,619


Other income (expense):
  Interest expense...........     (4,007)     (4,582)       (12,470)   (13,823)
  Amortization of deferred
  financing costs............       (239)       (328)          (726)      (803)
  Gain on sale of Grand
  Targhee resort.............          -         389              -        389
  Other income (expense).....        133         (96)           256       (117)
                               ---------   ---------      ---------  ---------
  Total other income
  (expense),net..............     (4,113)     (4,617)       (12,940)   (14,354)
                               ---------   ---------      ---------  ---------

Income(loss)before minority
  interest and extraordinary
  item.......................    (17,596)    (16,340)         3,226      3,265

Minority interest............        (30)        (42)           (99)      (141)
                               ---------   ---------      ---------  ---------
Income before extraordinary
 item........................    (17,626)    (16,382)         3,127      3,124

Extraordinary gain on early
 retirement of debt..........        -           -            1,723         -
                               ---------   ---------      ---------  ---------
Net income(loss).............  $ (17,626)   $(16,382)        $4,850     $3,124
                               =========   =========      =========  =========

                             See accompanying notes.

<PAGE>
                         BOOTH CREEK SKI HOLDINGS, INC.

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (In thousands)


                                                       Nine Months Ended
                                                -------------------------------
                                                  July 27,           July 28,
                                                    2001               2000
                                                -------------     -------------
                                                          (Unaudited)

Cash flows from operating activities:
Net income.....................................   $   4,850         $    3,124
Adjustments to reconcile net income to
  net cash provided by operating activities:
   Depreciation and depletion..................      16,247             15,204
   Amortization of goodwill and other
    intangible assets .........................       1,785              1,807
   Noncash cost of real estate sales ..........           -                351
   Amortization of deferred financing costs ...         726                803
   Gain on sale of Grand Targhee resort........           -               (389)
   Minority interest...........................          99                141
   Extraordinary gain
    on early retirement of debt................      (1,723)                 -
   Changes in operating assets and liabilities,
   net of divestiture:
    Accounts receivable .......................         657                348
    Insurance proceeds receivable..............       2,570             (4,801)
    Inventories ...............................         265                499
    Prepaid expenses and other current assets..         246                203
    Accounts payable and accrued liabilities...      (4,309)             2,858
    Other long-term liabilities ...............         (25)               (25)
                                                -------------     -------------
Net cash provided by operating activities......      21,388             20,123

Cash flows from investing activities:
Capital expenditures for property and
 equipment ....................................      (8,029)           (14,533)
Proceeds on sale of Grand Targhee resort.......          -              11,422
Capital expenditures for real estate
 held for development and sale ................        (727)              (574)
Other assets ..................................        (344)              (576)
                                                -------------     -------------
Net cash used in investing activities .........      (9,100)            (4,261)

Cash flows from financing activities:
Net repayments of senior credit facility ......      (2,927)           (12,088)
Principal payments of long-term debt ..........      (8,735)            (2,570)
Deferred financing costs ......................          (2)              (302)
Purchase of preferred stock of subsidiary
 and payment of dividends .....................        (475)              (511)
                                                -------------     -------------
Net cash used in financing activities .........     (12,139)           (15,471)
                                                -------------     -------------
Increase in cash ..............................         149                391

Cash at beginning of period ...................         696                461
                                                -------------     -------------
Cash at end of period ......................... $       845       $        852
                                                =============     =============

                             See accompanying notes.

<PAGE>


                        BOOTH CREEK SKI HOLDINGS, INC.

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  July 27, 2001


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

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

     The Company divested the Grand Targhee ski resort ("Grand Targhee") on June
20, 2000. Grand Targhee contributed resort operations revenues of $7,367,000 and
income from operations before  depreciation,  depletion and amortization expense
and the noncash cost of real estate sales  ("EBITDA") of $2,229,000 for the nine
months  ended July 28, 2000.  For the three  months  ended July 28, 2000,  Grand
Targhee contributed resort operations revenues of $75,000 and incurred an EBITDA
loss of $302,000.

     The consolidated  financial  statements include the accounts of Booth Creek
and its subsidiaries  (collectively  referred to as the "Company").  Booth Creek
owns all of the common stock of its subsidiaries. Ski Lifts, Inc. (the owner and
operator of the Summit) has shares of  preferred  stock owned by third  parties.
All significant intercompany transactions and balances have been eliminated.

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

     The accompanying  consolidated financial statements as of July 27, 2001 and
July 28, 2000 and for the three and nine month periods then ended are unaudited,
but include all adjustments  (consisting only of normal,  recurring  adjustments
and adjustments to recognize the extraordinary  gain on early retirement of debt
during the nine months ended July 27, 2001) which,  in the opinion of management
of  the  Company,  are  considered  necessary  for a  fair  presentation  of the
Company's  financial  position  at July 27,  2001 and  July  28,  2000,  and its
operating  results  and cash  flows for the three and nine  month  periods  then
ended. Due to the highly seasonal nature of the Company's business,  the results
for the interim periods are not necessarily indicative of results for the entire
year. Certain information and footnote  disclosures  normally included in annual
financial  statements  prepared in accordance with generally accepted accounting
principles  have  been  omitted  pursuant  to  generally   accepted   accounting
principles  applicable  for  interim  periods.   Management  believes  that  the
disclosures made are adequate to make the information  presented not misleading.
The unaudited  consolidated  financial  statements should be read in conjunction
with the following notes and the Company's consolidated financial statements and
accompanying  notes included in the Company's Annual Report on Form 10-K for the
fiscal year ended October 27, 2000.

Cash

     Included in cash at July 27, 2001 is restricted cash of $643,000,  relating
to advance  deposits  and rental  fees due to  property  owners for  lodging and
property rentals.

Pending Accounting Pronouncement

     In June 2001, the Financial  Accounting Standards Board issued Statement of
Financial  Accounting  Standards No. 142, "Goodwill and Other Intangible Assets"
("SFAS No. 142"). Under the new rules,  goodwill will no longer be amortized but
will be subject to annual impairment tests in accordance with the pronouncement.

     The Company  anticipates  applying the new rules on accounting for goodwill
commencing   in  the  first  fiscal   quarter  of  2002.   Application   of  the
nonamortization  provisions of SFAS No. 142 is expected to result in an increase
in net income of $2,340,000  per year. The Company will perform the first of the
required  impairment  tests of goodwill at the beginning of fiscal 2002, and has
not yet  determined  what the effect of these tests will be on the  earnings and
financial position of the Company.


<PAGE>
                        BOOTH CREEK SKI HOLDINGS, INC.

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)



Use of Estimates

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

2. Insurance Proceeds Receivable

     For the 2000/01 ski season,  the Company  arranged for four  separate  paid
skier visit insurance policies covering Bear Mountain, Loon Mountain, Waterville
Valley and the Summit.  The policies have a deductible  for the initial  decline
from targeted paid skier visit and revenue  levels and stated  maximum  coverage
levels.  In addition,  the policies  require the insured to  experience  monthly
and/or annual  snowfall  amounts below certain agreed upon levels before a claim
can be  filed  for  the  decline  in  paid  skier  visits.  In the  accompanying
consolidated  financial  statements as of and for the nine months ended July 27,
2001,  the Company has recorded a receivable  and resort  operating  revenues of
$1,500,000 for expected claims attributable to lower than agreed-upon cumulative
paid skier  visits and snowfall  levels for the 2000/01  season under the Summit
and  Waterville  Valley  policies.  The Company has filed claims under these two
policies, which are currently being reviewed by the insurance underwriters.

     For the 1999/00 ski season,  the Company  arranged for four  separate  paid
skier visit insurance  policies  covering its Lake Tahoe resorts  (Northstar and
Sierra),  its New Hampshire resorts  (Waterville  Valley,  Mt. Cranmore and Loon
Mountain), Bear Mountain and the Summit. Resort operations revenues for the nine
months ended July 28, 2000  included  estimated  claims  revenues of  $6,600,000
under such policies.  For the nine months ended July 27, 2001, resort operations
revenues  included  $254,000 for additional claim recoveries which were received
upon the final settlement of the 1999/00 paid skier visit insurance  policies in
excess of the amounts recognized in fiscal 2000 of $6,600,000.

3. Accounts Payable and Accrued Liabilities

   Accounts payable and accrued liabilities consist of the following:

                                          July 27,   October 27,   July 28,
                                            2001        2000         2000
                                        ---------    ---------   ---------
                                                  (In thousands)
   Accounts payable...................    $2,828        $7,958      $3,706
   Accrued compensation and benefits..     4,023         4,002       3,564
   Taxes other than income............       979         1,157         799
   Unearned  revenue  and  deposits  -
   resort operations..................     5,665         9,582       5,240
   Unearned  deposits  -  real  estate
   operations.........................     6,000         6,000       7,050
   Interest...........................     5,707         2,234       6,359
   Other..............................     4,404         2,982       5,145
                                       ---------     ---------   ---------
                                         $29,606       $33,915     $31,863
                                       =========     =========   =========


4. Financing Arrangements

Senior Credit Facility

     The total maximum  borrowing  availability  under the Company's Amended and
Restated  Credit  Agreement (the "Senior Credit  Facility") is $25 million.  The
final maturity date of the Senior Credit  Facility is March 31, 2002. The Senior
Credit  Facility  requires  that the Company not have  borrowings  thereunder in
excess of $8 million,  in addition to certain amounts  maintained by the Company
in certain  depository  accounts with Fleet  National  Bank,  for a period of 60
consecutive days each year commencing  between February 1 and February 28. Total
borrowings  outstanding  under the Senior Credit  Facility at July 27, 2001 were
approximately  $3.4  million,  which bore interest at an annual rate of 6.75% on
such date.

<PAGE>
Long-Term Debt

     As of July 27, 2001, the Company had outstanding  $125.5 million  aggregate
principal  amount of its senior  notes (the  "Senior  Notes").  The Senior Notes
mature  on March  15,  2007,  and bear  interest  at 12.5%  per  annum,  payable
semi-annually  on March 15 and  September 15 of each year.  The Senior Notes are
redeemable at the option of the Company,  in whole or in part, at any time after
March 15, 2002, with an initial  redemption price of 106.25%  declining  through
maturity,  plus accrued and unpaid  interest to the redemption  date. The Senior
Notes are general senior unsecured obligations of the Company ranking equally in
right of payment with all other existing and future senior  indebtedness  of the
Company and senior in right of payment to any  subordinated  indebtedness of the
Company.

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

     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, LLC, Booth Creek's only
non-guarantor  subsidiary,  are  inconsequential  and the membership interest in
DRE, LLC is 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 nine  months  ended  July 27,  2001,  the  Company  repurchased
$8,000,000  aggregate  principal  amount of Senior Notes for  $5,990,000.  After
giving effect to the write-off of related deferred  financing costs of $287,000,
the Company recognized an extraordinary gain of $1,723,000.

     During the nine  months  ended July 27,  2001,  the  Company  entered  into
long-term  debt and capital lease  obligations of $3,317,000 for the purchase of
equipment.

6. Income Taxes

     As of October 27,  2000,  the  Company had  estimated  net  operating  loss
carryforwards  of  approximately  $74.5 million for federal income tax reporting
purposes,  which  expire  between  2012 and 2020.  The tax  benefits of such net
operating losses are fully offset by a valuation reserve. Based on the Company's
current tax  attributes,  no income tax provision or benefit is expected for the
year ending November 2, 2001. Accordingly, during the nine months ended July 27,
2001, no income tax provision has been provided.

<PAGE>
                        BOOTH CREEK SKI HOLDINGS, INC.

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

7. Business Segments

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


                               Three Months Ended          Nine Months Ended
                             -----------------------    -----------------------
                              July 27,    July 28,        July 27,   July 28,
                                2001        2000            2001       2000
                             ----------  -----------    -----------  ----------
                                              (In thousands)
   Revenue:
    Resort operations....        $3,498      $4,331        $116,020    $113,615
    Real  estate  and
      other..............           190         748             190       1,593
                             ----------  -----------    ----------- -----------
                                 $3,688      $5,079        $116,210    $115,208
                             ==========  ===========    ===========  ==========

   Operating income (loss):
    Resort operations....      $(13,180)   $(11,911)        $16,867     $16,919
    Real  estate  and
      other..............          (303)        188            (701)        700
                             ----------  -----------    ----------- -----------
                               $(13,483)   $(11,723)        $16,166     $17,619
                             ==========  ===========    =========== ===========


                                                  July 27,     October 27,
                                                    2001           2000
                                                -------------  -------------
                                                       (In thousands)
   Segment assets:
    Resort operations...................          $170,609        $180,984
    Real estate and other...............            11,462          10,819
    Corporate and other non-identifiable
      assets............................             6,777           7,260
                                                -------------  -------------
                                                  $188,848        $199,063
                                                =============  =============




   A reconciliation  of combined  operating income (loss) for resort  operations
and real estate and other to consolidated income (loss) before minority interest
is as follows:

                                 Three Months Ended       Nine Months Ended
                               ----------------------   --------------------
                                July 27,    July 28,    July 27,   July 28,
                                 2001         2000        2001       2000
                               ---------    ---------   ---------  ---------
                                               (In thousands)

   Operating income(loss) for
   reportable segments........  $(13,483)    $(11,723)    $16,166    $17,619
   Interest expense...........    (4,007)      (4,582)    (12,470)   (13,823)
   Amortization of deferred
   financing costs............      (239)        (328)       (726)      (803)
   Gain on sale of Grand
   Targhee resort.............        -           389          -         389
   Other income (expense).....       133          (96)        256       (117)

                               ---------    ---------   ---------  ---------
   Income(loss) before
   minority interest..........  $(17,596)    $(16,340)     $3,226     $3,265
                               =========    =========   =========  =========
<PAGE>




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

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

General

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

     The  Company's  four  most   weather-sensitive   resorts,   Bear  Mountain,
Waterville  Valley,  Loon Mountain and Mt.  Cranmore,  have invested  heavily in
snowmaking capabilities to provide coverage on virtually all of their trails and
have been open for skiing at least  143,  138,  142 and 101 days,  respectively,
during  each of the last five ski  seasons,  including  the  2000/01 ski season.
However,  the  efficiency  and  effectiveness  of snowmaking  operations  can be
negatively  impacted by numerous  factors,  including  temperature  variability,
reliability  of water  sources,  the  availability  and cost of adequate  energy
supplies and unfavorable weather events such as heavy rains.

     Northstar,  Sierra  and the  Summit  generally  experience  higher  natural
snowfall levels,  averaging  approximately  311, 476 and 485 inches of snowfall,
respectively,  per year for the past five ski seasons, including the 2000/01 ski
season.  As a result  of  their  historic  natural  snowfall,  their  snowmaking
capabilities in terms of trail coverage are considerably  less extensive than at
the Company's  other  resorts.  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.

     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 2000/01 ski season total skier days were attributable to residents of the
San Francisco/San  Jose,  Sacramento,  Central  California Valley and Lake Tahoe
regions.  At Bear  Mountain,  roughly 90% of the 2000/01 ski season  total skier
days were  attributable  to residents of the Los Angeles,  Orange County and San
Diego  metropolitan  regions.  At  Waterville  Valley,  Loon  Mountain  and  Mt.
Cranmore,  more  than 75% of the  2000/01  ski  season  total  skier  days  were
attributable  to  residents of  Massachusetts  and New  Hampshire,  with a large
percentage of such  visitors  coming from the Boston  metropolitan  area. At the
Summit, the Company estimates that more than 90% of the 2000/01 ski season total
skier days were  attributable  to residents of the  Seattle/Tacoma  metropolitan
region.

     In addition to revenue  generated  from skiing  operations,  the  Company's
resorts generate significant revenue from non-ski operations, including lodging,
conference  center services,  health and tennis clubs and summer activities such
as mountain biking rentals and golf course fees. Moreover, the Company generates
revenues from real estate and timber sales at Northstar, although the amount and
timing of these revenues vary considerably.

     A significant portion of total operating costs at the Company's resorts are
variable,  consisting  primarily  of  retail  and food  service  cost of  sales,
utilities and labor expense.  These  variable costs can fluctuate  significantly
based  upon skier days and  seasonal  factors.  The  Company's  resorts  utilize
significant energy resources in their respective operations, including power for
operating lifts and snowmaking  equipment.  Volatility in the  availability  and
cost of energy resources at the Company's  resorts could have a material adverse
effect on the Company's results of operations in future periods. In this regard,
Bear Mountain has recently been informed by its local electrical  utility of new
proposed electrical rates that could result in an increase of approximately $1.2
million to $1.5 million in annual  electricity  costs.  The Company is currently
evaluating  potential   alternatives  to  mitigate  the  effect  of  these  cost
increases,  including  (1)  opposition  of the proposed  electrical  rates,  (2)
conservation  efforts,  (3) changes in snowmaking  production  and other current
business  practices to reduce  electricity  consumption  during  periods of peak
rates, (4) investment in more energy  efficient  snowmaking  equipment,  and (5)
product  pricing  strategies.  However,  no assurance can be made  regarding the
outcome of this matter.
<PAGE>

     With the exception of certain  management,  administrative  and maintenance
personnel,  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.

Results of Operations

   Overview

     The Company's results of operations are  significantly  impacted by weather
conditions.  For the  1999/00  ski  season,  Northstar  and  Sierra  experienced
unseasonably  dry  weather  and a lack  of  natural  snowfall  during  November,
December and the first part of January,  which  significantly  impacted  terrain
availability  at these resorts during such period.  However,  snowfall for these
resorts  returned  to more  normal  levels  during the later half of January and
February  2000.  Although  snowfall  levels during the 2000/01 ski season in the
Lake Tahoe area were significantly less than historical averages, both Northstar
and Sierra  benefited  from  generally  improved  trail  coverage and conditions
during the 2000  Christmas  holiday  period and early January 2001. In addition,
Sierra  opened  early on November 3, 2000,  as compared to November 24, 1999 for
the 1999/00 ski season. For the 1999/00 ski season, Bear Mountain  experienced a
lack of natural  snowfall  through mid  February  due to dry weather in Southern
California,  although  snowstorm  activity  picked up considerably in the second
half of February and March 2000. For the 2000/01 ski season,  snowfall levels at
Bear  Mountain were more  consistent  with  historical  levels,  and  snowmaking
conditions  were  generally more favorable than in the first half of the 1999/00
ski  season.   The  Company's  New  Hampshire   resorts   experienced   variable
temperatures  and a lack of significant  natural  snowfall through the middle of
January of the 1999/00 ski season.  For the 2000/01 ski season,  temperatures in
the Northeast were generally  colder than the previous year,  which enabled more
efficient  snowmaking  production at the Company's  New  Hampshire  resorts.  In
addition,  natural  snowfall for the 2000/01 season at each of the New Hampshire
resorts was higher  than the prior year,  resulting  in  significantly  improved
conditions,  particularly  during  the  early  and  later  parts of the  season.
Conditions  at the Summit for the  2000/01  season were  relatively  poor due to
lower than  average  snowfall  and  periods of rain for much of January  through
April 2001, as compared to generally  favorable weather  conditions  experienced
during much of the 1999/00 season.

     The Company sold the assets  associated  with the Grand  Targhee  resort on
June  20,  2000.  Grand  Targhee   contributed  resort  operations  revenues  of
$7,367,000  and  income  from  operations  before  depreciation,  depletion  and
amortization  expense and the noncash  cost of real estate sales  ("EBITDA")  of
$2,229,000  for the nine months ended July 28, 2000.  For the three months ended
July 28, 2000, Grand Targhee  contributed resort operations  revenues of $75,000
and incurred an EBITDA loss of $302,000.

   Three  Months  Ended July 27, 2001  Compared to the Three  Months Ended July
28, 2000

     Total  revenue for the three months ended July 27, 2001 was  $3,688,000,  a
decrease of $1,391,000, or 27%, over the Company's revenues for the three months
ended July 28, 2000.  Revenues from resort  operations  for the 2001 period were
$3,498,000, a decrease of $833,000, or 19%, from the Company's resort operations
revenues  for the 2000  period.  The decline in resort  operations  revenues was
primarily due to the combined effects of the following:  (1) revenues recognized
in the 2000 period of $400,000 upon the final settlement with lodging  operators
and corporate customers for certain pre-sold and consignment lift ticket voucher
products, (2) slower summer business in 2001 at Northstar, Waterville Valley and
Loon Mountain,  and (3) the  divestiture of the Grand Targhee  resort.  Revenues
from real estate  sales were  $211,000  for the three months ended July 28, 2000
due to the sale of the  final  lot  within  Phases  4 and 4A of the Big  Springs
development  at  Northstar.  There were no real estate sales for the three month
period ended July 27, 2001. Timber operations  contributed  revenues of $190,000
in the 2001 period as compared to $537,000 in the 2000 period.  The reduction in
timber  harvesting  and  revenues  in the  2001  period  is  principally  due to
harvesting restrictions as a result of adverse fire conditions in the Lake Tahoe
region.

     Cost of sales for resort  operations  for the three  months  ended July 27,
2001 were  $6,678,000,  a decrease of  $101,000,  or 1%, as compared to the 2000
period.  The decrease was primarily the result of the effect of the  divestiture
of the Grand Targhee  resort,  which  incurred  $275,000 in cost of sales in the
2000 period.  Offsetting  the decrease due to the  divestiture  of Grand Targhee
were cost increases of less than 3% due to normal inflationary factors.
<PAGE>

     Cost of sales for real estate and timber  operations  for the three  months
ended July 27,  2001 were  $167,000,  a decrease  of $208,000 as compared to the
2000  period.  The  decrease  was  primarily  the  result  of  decreased  timber
harvesting and the absence of any real estate sales in the 2001 period.

     Selling,  general and  administrative  expenses  for the three months ended
July 27, 2001 were $4,320,000.  Selling, general and administrative expenses for
the 2001 period  increased by $453,000,  or 12%, as compared to the 2000 period,
which was primarily due to the following: (1) general and administrative expense
of $242,000 associated with real estate development  activities at Northstar and
Loon Mountain,  (2) increased  legal and consulting  costs for various legal and
general  business  matters in the ordinary  course of  business,  and (3) normal
inflationary factors.

     Operating loss for the three months ended July 27, 2001 was $13,483,000, an
increase of $1,760,000 from the operating loss generated for the 2000 period, as
a result of the factors discussed above.

     Interest  expense  for  the  three  months  ended  July  27,  2001  totaled
$4,007,000,  a decrease of $575,000 from the Company's  interest expense for the
three  months ended July 28, 2000.  The decrease was  primarily  the result of a
decrease in borrowing  levels under the Company's  Senior Credit Facility in the
2001 period,  as well as the effect of the  repurchase of  $8,000,000  aggregate
principal amount of Senior Notes during the nine months ended July 27, 2001.

     As of October 27, 2000,  the Company had estimated net operating loss carry
forwards  of  approximately  $74.5  million  for  federal  income tax  reporting
purposes,  which  expire  between  2012 and 2020.  The tax  benefits of such net
operating losses are fully offset by a valuation reserve. Based on the Company's
current tax  attributes,  no income tax provision or benefit is expected for the
year ending  November 2, 2001.  Accordingly,  during the three months ended July
27, 2001, no income tax benefit has been provided.

     The  Company's  net loss  for the  three  months  ended  July 27,  2001 was
$17,626,000,  an  increase  of  $1,244,000  from  the net  loss  of  $16,382,000
generated  for the three months ended July 28, 2000,  as a result of the factors
discussed above.

     Total EBITDA loss for the three months ended July 27, 2001 was  $7,477,000,
an increase of $1,555,000,  or 26%, from the EBITDA loss of $5,922,000 generated
for the three months ended July 28, 2000. Resort  operations  incurred an EBITDA
loss of $7,258,000  for the 2001 period as compared to  $6,315,000  for the 2000
period,  an  increase of  $943,000,  or 15%.  Excluding  the effect of the Grand
Targhee resort on the 2000 period,  resort  operations  EBITDA loss for the 2001
period  increased by $1,245,000,  or 21%, over the 2000 period.  Real estate and
other  operations  incurred an EBITDA loss of $219,000 for the 2001  period,  as
compared to an EBITDA contribution of $393,000 during the 2000 period.

   Nine Months  Ended July 27, 2001  Compared to the Nine Months Ended July 28,
2000

     Total revenue for the nine months ended July 27, 2001 was $116,210,000,  an
increase of $1,002,000,  or 1%, over the Company's  revenues for the nine months
ended July 28, 2000.  Revenues from resort  operations  for the 2001 period were
$116,020,000,  an increase of $2,405,000, or 2%, as compared to the 2000 period.
Revenues  from real estate  operations  for the nine months  ended July 28, 2000
were  $1,056,000,  which  were due to the close of escrow on the final four lots
within  Phases 4 and 4A of the Big  Springs  development  located at  Northstar.
There were no  revenues  generated  from real  estate  sales for the nine months
ended July 27, 2001. Timber operations  contributed  revenues of $190,000 in the
2001 period as compared to $537,000 in the 2000 period.  The reduction in timber
harvesting  and  revenues in the 2001 period is  principally  due to  harvesting
restrictions as a result of adverse fire conditions in the Lake Tahoe region.

<PAGE>



     The table below  summarizes  the  sources of the  Company's  revenues  from
resort operations for the nine months ended July 27, 2001 and July 28, 2000. The
information  for the nine months  ended July 28,  2000  includes  the  operating
results of the Grand Targhee resort, which was sold in June 2000.

                                Nine Months Ended
                               ----------------------             Percentage
                                July 27,     July 28,   Increase   Increase
                                 2001         2000     (Decrease) (Decrease)
                               ---------    ---------  ---------   ---------
                                 (In thousands)


   Lift Tickets...............  $ 49,173     $ 44,799    $  4,374         10%
   Season Passes..............    12,837       11,658       1,179         10
   Snow School................     8,959        7,950       1,009         13
   Equipment Rental...........    10,315        8,812       1,503         17
   Retail.....................     5,094        5,291        (197)        (4)
   Food and Beverage..........    17,186       16,511         675          4
   Other......................    10,702       11,994      (1,292)       (11)
                               ---------    ---------   ---------  ---------
   Revenues from Resort
     Operations before Paid
     Skier Visit Insurance....   114,266      107,015       7,251          7
   Paid Skier Visit Insurance.     1,754        6,600      (4,846)       (73)
                               ---------    ---------   ---------  ---------
   Total Resort Operations
     Revenues.................  $116,020     $113,615    $  2,405          2
                               =========    =========   =========  =========


     Total skier visits generated by each of the Company's  resorts for the nine
months ended July 27, 2001 and July 28, 2000 were as follows:

                                     Nine Months Ended
                                  ----------------------             Percentage
                                   July 27,     July 28,   Increase   Increase
                                    2001         2000     (Decrease) (Decrease)
                                 ---------    ---------  ---------   ---------
                                      (In thousands)


   Northstar..................       519          477          42          9%
   Sierra.....................       391          310          81         26
   Bear Mountain..............       333          251          82         33
   Waterville Valley..........       235          204          31         15
   Mt. Cranmore...............       129          100          29         29
   Loon Mountain..............       385          304          81         27
   The Summit.................       508          504           4          1
                                  -------      -------     -------    -------
   Current Resorts............     2,500        2,150         350         16
   Grand Targhee..............         -          137        (137)      (100)
                                  -------      -------     -------    -------
                                   2,500        2,287         213          9
                                  =======      =======     =======    =======

     In the  accompanying  consolidated  financial  statements as of and for the
nine months  ended July 27,  2001,  the Company has  recorded a  receivable  and
resort  operating  revenues of  $1,500,000  for  expected  proceeds  from claims
attributable to lower than agreed-upon cumulative paid skier visits and snowfall
levels under paid skier visit insurance policies in place for the 2000/01 season
for the Summit and Waterville  Valley.  The Company has filed claims under these
two policies, which are currently being reviewed by the insurance underwriters.

     For the 1999/00 ski season,  the Company  arranged for four  separate  paid
skier visit insurance  policies  covering its Lake Tahoe resorts  (Northstar and
Sierra),  its New Hampshire resorts  (Waterville  Valley,  Mt. Cranmore and Loon
Mountain), Bear Mountain and the Summit. Resort operations revenues for the nine
months ended July 28, 2000  included  estimated  claims  revenues of  $6,600,000
under such policies.  For the nine months ended July 27, 2001, resort operations
revenues  included  $254,000 for additional claim recoveries which were received
upon the final settlement of the 1999/00 paid skier visit insurance  policies in
excess of the amounts recognized in fiscal 2000 of $6,600,000.

<PAGE>
     Resort  operations  revenues,  excluding  the  effect of paid  skier  visit
insurance,  were  $114,266,000  for the nine  months  ended  July 27,  2001,  an
increase of $7,251,000, or 7%, from the comparable revenues for the 2000 period.
Revenues for  Northstar  and Sierra  increased  by  $3,175,000  and  $3,762,000,
respectively,  primarily due to higher skier visits.  Revenues for Bear Mountain
increased by $4,400,000 due to higher skier visits, additional season pass sales
and improved per skier  revenue  yields.  Revenues for  Waterville  Valley,  Mt.
Cranmore and Loon Mountain  increased by $947,000,  $1,078,000  and  $1,051,000,
respectively,  due  principally  to higher  skier  visits,  partially  offset by
reduced yields due to changes in the mix of skier visits. Revenues at the Summit
increased  by $205,000  primarily  due to higher  season pass sales and a slight
increase  in skier  visits.  Offsetting  these  increases  was the effect of the
divestiture  of  the  Grand  Targhee  resort,   which  contributed  revenues  of
$7,367,000 during the nine months ended July 28, 2000.

     Cost of sales for resort operations for the nine months ended July 27, 2001
were  $63,349,000,  an  increase  of  $951,000,  or 2%, as  compared to the 2000
period. The increase was primarily the result of increased payroll and operating
expenses  as a result of the more  normalized  operations,  increase in business
volumes and extended seasons at the California and New Hampshire  resorts due to
improved snowfall and terrain conditions.  In addition, the following items also
contributed to the increase: wage pressures due to the competitive labor markets
in the areas of the Company's resorts and statutory changes affecting wage rates
and  overtime  regulations  in  California;  higher  utility  and  fuel  prices;
additional  operating  costs  associated  with  the  launch  of the new  Lookout
Mountain  terrain  expansion at  Northstar;  increased  snowmaking  costs due to
higher snowmaking production; and normal inflationary factors.  Offsetting these
increases was the effect of the divestiture of the Grand Targhee  resort,  which
incurred $4,419,000 in cost of sales in the 2000 period.

     Selling, general and administrative expenses for the nine months ended July
27, 2001 were $18,496,000,  an increase of $1,024,000, or 6%, as compared to the
2000  period.  The  increase  was  primarily  the  result  of  (1)  general  and
administrative  expenses of  $640,000  associated  with real estate  development
activities at Northstar and Loon Mountain,  (2) normal inflationary factors, (3)
sales and marketing  initiatives at the Company's resorts, and (4) marketing and
promotional  activities  associated  with the  launch  of the  Lookout  Mountain
terrain expansion at Northstar. Offsetting these increases was the effect of the
divestiture of the Grand Targhee  resort,  which  incurred  $719,000 in selling,
general and administrative expense in the 2000 period.

     Noncash cost of sales for real estate  operations for the nine months ended
July 28, 2000 was  $351,000 as a result of the close of escrow on the final four
lots within Phases 4 and 4A of the Big Springs development located at Northstar.
There were no real estate sales during the nine months ended July 27, 2001.

     Cost of sales for timber operations for the nine months ended July 27, 2001
was  $167,000,  a decrease of $190,000  from the nine months ended July 28, 2000
primarily due to decreased timber harvesting.

     Operating income for the nine months ended July 27, 2001 was $16,166,000, a
decrease of $1,453,000,  or 8%, from the operating income generated for the 2000
period.

     Interest   expense  for  the  nine  months  ended  July  27,  2001  totaled
$12,470,000,  a decrease of  $1,353,000,  or 10%,  from the  Company's  interest
expense for the nine months ended July 28, 2000.  The decrease was primarily the
result of a decrease in  borrowing  levels  under the  Company's  Senior  Credit
Facility  in the  2001  period,  as  well as the  effect  of the  repurchase  of
$8,000,000  aggregate  principal  amount of Senior  Notes during the nine months
ended July 27, 2001.

     As of October 27,  2000,  the  Company had  estimated  net  operating  loss
carryforwards  of  approximately  $74.5 million for federal income tax reporting
purposes,  which  expire  between  2012 and 2020.  The tax  benefits of such net
operating losses are fully offset by a valuation reserve. Based on the Company's
current tax  attributes,  no income tax provision or benefit is expected for the
year ending November 2, 2001. Accordingly, during the nine months ended July 27,
2001, no income tax provision has been provided.

     The Company  recognized an  extraordinary  gain on the early  retirement of
debt of  $1,723,000  for the nine months  ended July 27, 2001 as a result of the
repurchase of Senior Notes.
<PAGE>

     The  Company's  net income  for the nine  months  ended  July 27,  2001 was
$4,850,000,  an  improvement  of  $1,726,000,  or 55%,  from the net  income  of
$3,124,000 generated for the nine months ended July 28, 2000, as a result of the
factors discussed above.

     Total  EBITDA for the nine months  ended July 27, 2001 was  $34,198,000,  a
decrease of $783,000,  or 2%, from the EBITDA of $34,981,000 for the nine months
ended July 28, 2000. Resort operations contributed EBITDA of $34,815,000 for the
2001 period as  compared  to  $33,745,000  for the 2000  period,  an increase of
$1,070,000 or 3%.  Excluding the effect of the Grand Targhee  resort on the 2000
period, resort operations EBITDA for the 2001 period increased by $3,299,000, or
10%, over the 2000 period.  Real estate and other operations  incurred an EBITDA
loss of $617,000 for the 2001 period as compared to EBITDA  generated  from real
estate and other operations of $1,236,000 for the 2000 period.

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
borrowing  availability  under the Senior Credit Facility.  Virtually all of the
Company's  operating income is generated by its subsidiaries.  As a result,  the
Company  is  dependent  on the  earnings  and cash flow of,  and  dividends  and
distributions  or advances from, its subsidiaries to provide the funds necessary
to meet its debt service  obligations.  The Senior Credit Facility  provides for
borrowing  availability  of up to $25 million  during the term of such facility,
which expires on March 31, 2002.  The Senior Credit  Facility  requires that the
Company not have borrowings  thereunder in excess of $8 million,  in addition to
certain amounts  maintained by the Company in certain  depository  accounts with
Fleet National Bank,  for a period of 60 consecutive  days each year  commencing
between  February 1 and February 28. The Company intends to use borrowings under
the Senior Credit  Facility to meet  seasonal  fluctuations  in working  capital
requirements,   primarily  related  to  off-season  operations  and  maintenance
activities  during  the  months  of  May  through  November,   to  fund  capital
expenditures and to build retail and other inventories prior to the start of the
skiing season and for other cash requirements.  As of July 27, 2001, outstanding
borrowings under the Senior Credit Facility totaled approximately $3.4 million.

     The Company had a net working  capital  deficit of $17.0 million as of July
27, 2001  (including  $3.4 million in  outstanding  borrowings  under the Senior
Credit  Facility,  and excluding $11.7 million of unearned  revenue and deposits
from resort and real estate operations,  which will not require cash spending to
settle such  liabilities),  which will negatively  affect  liquidity  during the
remainder of 2001.

     The Company  generated cash from operating  activities of $21.4 million for
the nine months  ended July 27,  2001 as compared to $20.1  million for the nine
months ended July 28, 2000.

     Cash used in investing activities totaled $9.1 million and $4.3 million for
the nine months ended July 27, 2001 and July 28, 2000, respectively. The amounts
for the 2001 and 2000 periods  primarily  reflect capital  expenditures  for the
purchase of property and  equipment.  In addition,  investing cash flows for the
2000 period reflect $11.4 million in proceeds from the sale of the Grand Targhee
resort on June 20, 2000.

     Cash used in financing  activities  totaled $12.1 million and $15.5 million
for the nine months  ended July 27, 2001 and July 28,  2000,  respectively.  The
amounts for the 2001 and 2000 periods primarily reflect repayments on the Senior
Credit Facility and long-term debt.

     The Company's  capital  expenditures  for property and equipment during the
nine months ended July 27, 2001 were approximately $11.3 million (including $3.3
million of grooming,  lift and other  equipment  acquired  through capital lease
arrangements and other debt).  Management  anticipates that capital expenditures
for the  remainder of fiscal 2001 will range from $5.5 million to $6.0  million,
including  approximately $3.5 million for maintenance  capital  expenditures and
the  remainder  for  expansion  projects,  planning and  approvals.  Significant
expansion  projects  currently  planned or underway at Northstar for fiscal 2001
include: (a) snowmaking system  improvements,  (b) expanded rental equipment and
skier  services  facilities,  and (c) a new restaurant  facility.  The Company's
expansion  planning  and approval  activities  primarily  relate to  preliminary
planning  for certain  fiscal 2002 capital  projects at  Northstar  and on-going
efforts  to  obtain  approvals  for  a  terrain   expansion  at  Loon  Mountain.
Expenditures for real estate held for development and sale are anticipated to be
approximately  $2.0  million  in  fiscal  2001.   Management   anticipates  that
maintenance capital  expenditures for its fiscal 2002 capital program will range
from $5.0 million to $6.0 million.  The scope of fiscal 2002  expansion  capital
activities has not yet been determined.  The Company plans to fund these capital
expenditures  from available cash flow, vendor financing to the extent permitted
under the Senior Credit  Facility and the  Indenture  for the  Company's  Senior
Notes and borrowings under the Senior Credit Facility.
<PAGE>

     Commitments  for  future  capital   expenditures  at  July  27,  2001  were
approximately  $4.0  million  and  primarily  related  to  planned  real  estate
improvements,  Northstar  expansion  projects  and  2001/02  ski  season  rental
equipment and uniforms.

     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.

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

     On November 17, 1999, Trimont Land Company ("TLC"),  the owner and operator
of Northstar,  consummated the sale to Trimont Land Holdings,  Inc.  ("TLH"),  a
wholly-owned  subsidiary of Booth Creek Ski Group, Inc., and an affiliate of the
Company,  of certain single family  development  property for an aggregate sales
price of $7,050,000, subject to adjustment as described below. The consideration
paid to TLC  consisted of  $6,000,000  in cash and a  promissory  note (the "TLH
Note") for $1,050,000,  subject to adjustment.  The Company  obtained a fairness
opinion for the  transaction  from an independent  firm qualified in the subject
matter of the  transaction.  Under the terms of the TLH Note, TLC is entitled to
receive the greater of (a) $1,050,000 plus accrued  interest at 7% per annum, or
(b) the Net Cash Proceeds from the resale of TLH's lots.  "Net Cash Proceeds" is
defined as gross  proceeds  received  by TLH from the  subsequent  resale of the
lots,  after  reduction for (1) the proceeds  applied to repay any  indebtedness
incurred by TLH in  connection  with its  financing of the purchase of the lots,
(2) any fees or other costs incurred by TLH in connection  with its financing of
the purchase or sales of the lots, and (3) any corporate overhead costs incurred
by TLH attributable to the purchase, maintenance, marketing or sale of the lots.
The TLH Note is  prepayable  at any time,  and is due on the earlier to occur of
January 31, 2002 or the date on which the last of the lots owned by TLH has been
sold. Pursuant to the terms of the sale, TLC retained the obligation to complete
the planned  construction  of the  development in accordance  with the tentative
site development plan.  Twenty-six lots owned by TLH are scheduled to be offered
for sale  commencing  September 8, 2001.  The timing of actual lot sales and the
ultimate  proceeds which will be realized by TLH cannot  presently be determined
with exact certainty, and is dependent upon, amongst other things, the number of
potential  buyers,  market demand for the subject  property,  real estate market
conditions in the North Lake Tahoe region and general economic  conditions.  The
Company will  recognize  revenue and related costs of sales for this real estate
transaction upon substantial  completion of construction and the close of escrow
for lot sales  between TLH and third party  buyers,  and has  reflected the cash
received as a deposit.

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

<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  limit the
ability of the Company and its Restricted  Subsidiaries  to, among other things,
incur  additional  indebtedness,  create  liens,  make  investments,  consummate
certain asset sales, create subsidiaries, issue subsidiary stock, consolidate or
merge with any other person,  or transfer all or substantially all of the assets
of the Company.  Further, upon the occurrence of a Change of Control (as defined
in the  Indenture),  the Company may be required to repurchase the Notes at 101%
of  the  principal  amount  thereof,  plus  accrued  and  unpaid  interest.  The
occurrence of a Change of Control may also constitute a default under the Senior
Credit  Facility.  No assurance  can be given that the Company  would be able to
finance a Change of Control repurchase offer.

     The Senior Credit Facility also requires the Company to maintain  specified
consolidated  financial ratios and satisfy certain consolidated financial tests.
The  Company's  ability to meet these  financial  covenants  may be  affected by
events beyond its control,  and there can be no assurance  that the Company will
meet these covenants.

     The Company  currently has $125.5  million  aggregate  principal  amount of
Senior Notes outstanding, which will result in annual cash interest requirements
of  approximately  $15.7 million.  The Company  expects that cash generated from
operations and cash proceeds of planned real estate sales at Northstar, together
with borrowing availability,  will be adequate to fund the interest requirements
on the Senior  Notes and the  Company's  other cash  operating  and debt service
requirements  over the next  twelve  months.  In  order to focus  the  Company's
resources on attractive  investment  opportunities at certain of its resorts and
to satisfy short-term and long-term liquidity  requirements,  the Company may in
the future consider divestitures of non-strategic assets,  including resorts, if
such transactions can be completed on favorable terms.

     Any  decline  in  the  Company's  expected  operating  performance  or  the
inability  of  management  to  successfully  implement  the  Company's  business
strategy  could  have a  material  adverse  effect  on the  Company's  financial
position and  liquidity.  In such case, the Company could be required to attempt
to refinance all or a portion of its existing debt,  sell other assets or obtain
additional  financing.  No assurance can be given of the Company's ability to do
so or the terms of any such  transaction.  In addition,  the Company may 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 historical
results  of  operations  and any  impact  on costs  has been  largely  offset by
increased pricing.

Pending Accounting Pronouncement

     In June 2001, the Financial  Accounting Standards Board issued Statement of
Financial  Accounting  Standards No. 142, "Goodwill and Other Intangible Assets"
("SFAS No. 142"). Under the new rules,  goodwill will no longer be amortized but
will be subject to annual impairment tests in accordance with the pronouncement.

     The Company  anticipates  applying the new rules on accounting for goodwill
commencing   in  the  first  fiscal   quarter  of  2002.   Application   of  the
nonamortization  provisions of SFAS No. 142 is expected to result in an increase
in net income of $2,340,000  per year. The Company will perform the first of the
required  impairment  tests of goodwill at the beginning of fiscal 2002, and has
not yet  determined  what the effect of these tests will be on the  earnings and
financial position of the Company.

Seasonality

     The business of the Company is highly  seasonal,  with the vast majority of
its annual revenues  expected to be generated between November and April of each
fiscal year.  Management  considers it  essential to achieve  optimal  operating
results  during key  holidays and weekends  during this  period.  The  Company's
results of operations are, in turn, significantly dependent on favorable weather
conditions  and other  factors  beyond the  Company's  control.  The Company has
sought to  partially  mitigate the  downside  risk of its  seasonal  business by
purchasing paid skier visit insurance policies.  For the 2000/01 ski season, the
Company  purchased  paid  skier  visit  policies  covering  its  Bear  Mountain,
Waterville Valley, Summit and Loon Mountain resorts.  However, these policies do
not fully protect these resorts against poor weather conditions or other factors
that could adversely affect their operations, and there can be no assurance that
such policies will be available in the future on commercially viable terms or at
all.
<PAGE>

     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
or  controlled  by  easements.  The Company  has the right to use a  substantial
portion of the real property associated with the Bear Mountain,  Sierra,  Summit
and Waterville Valley resorts under the terms of Term Special Use Permits issued
by the United States Forest  Service.  The Bear Mountain permit expires in 2020,
the Sierra permit expires in 2039, the Waterville  Valley permit expires in 2034
and the Summit permit expires in 2032.

     A  substantial  portion  of the  real  property  associated  with  the Loon
Mountain resort is likewise used under United States Forest Service permits.  In
1993,  the United  States Forest  Service  authorized  various  lift,  trail and
snowmaking  improvements  on Loon Mountain and an expansion onto South Mountain.
In 1996,  the United  States Court of Appeals for the First  Circuit (the "First
Circuit")  overturned  this  authorization  on the ground that the United States
Forest Service had failed to properly address certain environmental issues under
the National Environmental Policy Act ("NEPA"). Certain improvements,  including
a snowmaking pipeline and part of the expansion, had been constructed before the
First Circuit ruled.  On May 5, 1997,  the United States  District Court for the
District of New Hampshire  (the  "District  Court")  entered a stipulated  order
which  authorized  existing   improvements  to  remain  in  place  and  existing
operations to continue but generally prohibited future construction,  restricted
use of a major  snowmaking  water source,  and required  certain water discharge
permits to be pursued,  pending United States Forest Service  reconsideration of
the projects under NEPA. These  authorizations and limitations were incorporated
into the final order issued by the District Court on December 11, 1998, and will
remain in effect  until the United  States  Forest  Service  completes  its NEPA
review and issues a new  decision.  On February  12, 1999,  the  District  Court
agreed that the United States  Forest  Service may combine this NEPA review with
its  evaluation  and analysis of the existing  snowmaking  pipeline.  The United
States Forest Service issued a draft  Environmental  Impact Statement in January
2001.  Based on discussions  with the United States Forest Service,  the Company
expects final NEPA documentation to be issued Fall 2001.

     In August  1997,  the United  States  Forest  Service  authorized  the Loon
Mountain resort to construct a new snowmaking  pipeline  across  permitted land.
The United States Forest  Service found that such  construction  was  consistent
with the  District  Court order and enabled the resort to modify its  snowmaking
operations to better  protect water  resources and replace  snowmaking  capacity
lost  under  the  order.  Although  the  pipeline  was  completed,  its  use was
challenged by private parties who asserted that the United States Forest Service
violated NEPA. On January 20, 1998, the District Court issued a decision finding
that the United  States Forest  Service  violated NEPA in failing to address the
potential  for the new  pipeline  to  increase  the  amount of snow made and any
associated environmental effects. On March 10, 1998, the District Court issued a
series of further orders which,  among other things,  directed the United States
Forest Service to re-evaluate the pipeline and enjoined Loon Mountain from using
the pipeline  pending  further action by the court.  On July 2, 1998, the United
States Forest  Service issued a new decision  approving the pipeline,  which was
challenged by several private parties, who again asserted that it violated NEPA.
The United States Forest Service subsequently  withdrew its decision authorizing
the pipeline to conduct further review and the District Court  consolidated  the
lawsuits  concerning  the  pipeline.  On November 19, 1998,  the District  Court
modified the injunction,  allowing Loon Mountain to use the pipeline to withdraw
and convert  159.7  million  gallons of water per ski season into snow while the
United  States  Forest  Service  further  reviewed the pipeline  under NEPA.  On
February 12, 1999, the District Court issued a final order,  which dismissed the
consolidated  lawsuit  concerning  the  pipeline  in light of the United  States
Forest  Service's  decision  to  conduct  further  review of the  pipeline,  and
specified  that the limitation on pipeline usage will continue until that review
is completed  and a new decision is issued.  Such order  remains in effect until
the  additional  NEPA  documentation  is completed  and the United States Forest
Service issues a new decision on the pipeline, which is currently anticipated to
occur during Fall 2001.
<PAGE>

     Existing  use of Loon  Mountain  is  authorized  under a Term  Special  Use
Permit,  which covers facilities and expires in 2006; existing non-skiing use of
Loon Mountain's  South Mountain area is authorized under an annual permit issued
by the United  States Forest  Service that is subject to  reissuance  each year.
After the United States Forest Service reconsiders the pipeline improvements and
expansion under NEPA, it will need to render a new decision and, if appropriate,
issue a new Term Special Use Permit. At that time, the conditions imposed by the
two District Court orders will terminate. Based upon the existing administrative
record, and certain proposed modifications to the resort's snowmaking operations
which are intended to better protect water  resources,  the Company expects that
the pipeline  improvements  and expansion  will be approved by the United States
Forest  Service.  However,  no assurance  can be given  regarding  the timing or
outcome of this process.

     The United  States  Forest  Service has the right to approve the  location,
design and  construction of  improvements  in permit areas and many  operational
matters at resorts with permits. Under the Term Special Use Permits, the Company
is required to pay fees to the United States Forest Service. The fees range from
1.5% to approximately  4.0% of certain revenues,  with the rate generally rising
with increased revenues. The calculation of gross revenues includes, among other
things,  revenue from lift ticket, ski school lesson, food and beverage,  rental
equipment  and retail  merchandise  sales.  Total fees paid to the United States
Forest  Service  by the  Company  during the year ended  October  27,  2000 were
$1,166,000.

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

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

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

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

     Bear  Mountain has a water supply  contract for 500 acre-feet per year with
Big Bear  Municipal  Water  District  executed  January  8,  1988,  the  initial
fifteen-year  term of which expires on January 7, 2003. Big Bear Municipal Water
District's  primary  source of water is from a portion  of the water in Big Bear
Lake shared with Bear Valley  Mutual  Water  Company,  the senior  water  rights
holder.  The water supply  contract  provides for water primarily for snowmaking
and slope  irrigation  purposes.  The  obligation  of Big Bear  Municipal  Water
District to supply  water is excused  only if the level of Big Bear Lake recedes
below  6,735.2 feet above sea level or eight feet below the top of Big Bear Lake
Dam  premised  on normal  conditions  prevailing  and the  absence of  droughts,
earthquakes,  dam failure or other types of similar  calamities  that impact the
ability to obtain or supply water. In the past, Bear Valley Mutual Water Company
pursued  numerous  legal  claims  against  Big  Bear  Municipal  Water  District
including  a claim  that its  rights  in the lake  are not  subject  to Big Bear
Municipal  Water  District's  obligation to supply water to Bear Mountain.  Bear
Valley Mutual Water  Company  withdrew such claim and water was provided to Bear
Mountain on an uncontested  basis while Bear Valley Mutual Water Company and Big
Bear  Municipal  Water  District  successfully  settled their  differences.  The
Company  believes that Bear Valley will not further  pursue its claim  regarding
Bear Mountain's  water supply,  however,  no assurance can be made regarding the
outcome of this matter.

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

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

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

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

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. 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  Natural disasters (such as earthquakes and floods),
o  Availability and terms of paid skier visit insurance coverage,
o  Industry competition,
o  Governmental regulation and litigation and other risks associated with
        expansion and development,
o  The adequacy of the water supplies at each of the Company's resorts,
o  Availability of adequate energy supplies for the operation of the Company's
        resorts, including snowmaking operations, and volatility in the
        prices charged for energy and fuel, and
o  The occupancy of leased property and property used pursuant to the
        United States Forest Service permits.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     There have been no material changes in information  relating to market risk
since the Company's  disclosure  in Item 7a. of the  Company's  Annual Report on
Form 10-K for the year ended October 27, 2000 as filed with the  Securities  and
Exchange Commission.

<PAGE>

                            PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

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

     In  connection  with the merger with Loon Mountain  Recreation  Corporation
("LMRC"), certain shareholders of LMRC (the "LMRC Shareholder Plaintiffs") filed
a lawsuit  against LMRC and its former  directors  alleging  breach of fiduciary
duty and against the Company alleging that the Company failed to comply with the
New Hampshire  Security  Takeover  Disclosure  Act (the  "Takeover  Statute") in
connection  with the  transaction.  The two lawsuits  were  consolidated  in the
Superior  Court of Grafton  County,  New  Hampshire.  Prior to the filing of the
lawsuit against the Company,  the Company  received a "no action" order from the
Bureau  of  Securities  Regulation,  New  Hampshire  Department  of  State  (the
"Bureau")  finding that the Takeover  Statute was  inapplicable  to the proposed
merger.  The LMRC  Shareholder  Plaintiffs'  initial  request for a  preliminary
injunction  prohibiting the Company (or its affiliates) from proceeding with the
LMRC merger was denied by the court.  Before the litigation  proceeded  further,
and prior to the  merger,  the  parties to the  merger  agreement  amended  such
agreement.  The Company then obtained an additional order by the Bureau that the
Takeover Statute did not apply to the merger  transaction.  The Company answered
the LMRC Shareholder Plaintiffs' petition and filed a motion to dismiss the LMRC
Shareholder  Plaintiffs'  action against the Company asserting that the Takeover
Statute did not apply to the transaction as a matter of law. The court initially
denied the  Company's  motion to dismiss but granted the motion to dismiss  upon
reconsideration.  The LMRC Shareholder  Plaintiffs appealed the dismissal to the
New Hampshire  Supreme Court and oral arguments were originally heard in January
of 2000. A New Hampshire  Supreme Court decision was never entered following the
hearing.  Due to a lack of quorum  suffered by the court,  the Takeover  Statute
case has been  scheduled for  re-argument on September 13, 2001 before three New
Hampshire  Superior  Court judges and one New Hampshire  Supreme Court  justice.
Potential  remedies  under  the  Takeover  Statute  include  money  damages  and
rescission  of the  transaction.  While the  Company  does not  believe the LMRC
Shareholder  Plaintiffs will prevail in their actions, no assurances can be made
regarding the outcome of these actions.

     The LMRC  Shareholder  Plaintiffs'  breach of fiduciary duty action against
LMRC,  LMRC's  former  directors and the Company's  Parent  remains  pending and
discovery is being  conducted.  The  Company's  Motion for Summary  Judgment was
denied by the  court.  The  matter  has been  consolidated  for  trial  with the
Corporation Act case described below, but a trial date has not yet been set. The
LMRC  Shareholder  Plaintiffs  were  given  leave by the  court  to amend  their
complaint  to seek  money  damages  against  the  Company,  LMRC and its  former
directors.  If the LMRC  Shareholder  Plaintiffs  are  successful in obtaining a
judgment  against  the former  LMRC  directors,  the  Company  may have  certain
obligations  to  indemnify  the former  directors  pursuant  to the former  LMRC
by-laws. While the Company does not believe the LMRC Shareholder Plaintiffs will
prevail in this lawsuit, no assurances can be made regarding the outcome of this
litigation.

     Also in  connection  with  the  merger  with  LMRC,  the  LMRC  Shareholder
Plaintiffs  exercised  dissenters'  rights  under  the  New  Hampshire  Business
Corporation  Act (the  "Corporation  Act").  Under the  statutory  procedure for
settling the LMRC  Shareholder  Plaintiffs'  dissenters'  rights,  LMRC paid the
plaintiffs an aggregate of $34,436,  or $30.61 per share, as its estimate of the
fair value of their  1,125  shares.  The LMRC  Shareholder  Plaintiffs  demanded
additional payments necessary to compensate them for the $71.38 per share price,
plus  interest,  which  they  asserted  as the fair  value of their  shares.  By
disclosure  dated March 17, 2000, the LMRC  Shareholder  Plaintiffs'  expert has
revised  his  opinion  of fair  value  to  $91.90  per  share.  Pursuant  to the
Corporation  Act, LMRC  commenced a proceeding in the Superior  Court of Grafton
County,  New  Hampshire  seeking a judicial  appraisal  of the value of the LMRC
Shareholder Plaintiffs' shares in LMRC. Discovery in the case is pending and the
matter has been  consolidated  for trial with the fiduciary  duty case described
above. The trial date for these matters is scheduled Decmber 10, 2001. While the
Company believes that the amount paid to the LMRC  Shareholder  Plaintiffs prior
to the  commencement  of the appraisal  proceeding  represents the fair value of
their  shares,  there can be no  assurance  as to the value which the  appraisal
proceeding will assign to the LMRC Shareholder Plaintiffs' 1,125 shares.
<PAGE>

     In 1995, an individual  sued the United States Forest  Service (the "Forest
Service") in the United States  District Court for the District of New Hampshire
(the  "District  Court")  alleging  that the Forest  Service  had  violated  the
National  Environmental Policy Act ("NEPA"), the Clean Water Act ("CWA"), and an
executive order in approving  improvements to facilities on Loon Mountain and an
expansion  of the  Loon  Mountain  resort  on to  South  Mountain.  LMRC  and an
environmental  group  intervened  in the  lawsuit.  The District  Court  entered
summary  judgment  for  the  Forest  Service  on all  claims  and  the  original
plaintiff,  along with the intervening  environmental  group,  (collectively  or
individually,  the "Environmental  Plaintiffs")  appealed. In December 1996, the
United  States  Court of Appeals for the First  Circuit  (the  "First  Circuit")
reversed the  District  Court  decision  and ruled that the Forest  Service must
reconsider certain  environmental  issues under NEPA and that LMRC must obtain a
discharge  permit  under  the CWA for  certain  discharges  from its  snowmaking
system.  The District Court then entered a stipulated  order that:  enjoins LMRC
from any further  construction  implementing  the project with  certain  limited
exceptions;   imposes  various   restrictions  on  LMRC's  existing   snowmaking
operations and requires LMRC to apply for a CWA discharge  permit for discharges
of water and any pollutants  associated  with its  snowmaking;  allows  existing
construction to remain in place and existing uses to continue;  requires LMRC to
undertake certain erosion control and monitoring  measures;  requires the Forest
Service to prepare  supplemental  NEPA  documentation  on the  improvements  and
expansion;  and reserves  the right to require  restoration  of areas  developed
under the original Forest Service approval to their preexisting condition if not
ultimately re-approved by the Forest Service. This order remains in effect until
the supplemental NEPA process is completed. Based on discussions with the Forest
Service,  the Company expects final NEPA  documentation to be issued during Fall
2001. The Company can give no assurance  regarding the timing or outcome of such
process.

     The Environmental  Plaintiffs also filed a motion asking the District Court
to impose against LMRC a CWA civil penalty of $5,550,125 and attorney's fees and
costs in connection with LMRC's  discharges into Loon Pond during its snowmaking
operations  for the 1996/97 ski season and prior years.  In connection  with the
merger with LMRC, the Company  obtained a specific  insurance  policy  providing
$4.5 million of coverage  (above a $1.2 million  deductible)  to cover any civil
penalties,  fees and costs that the District  Court may assess against LMRC. The
discharge  at  issue  involved  water  transfers  from the  East  Branch  of the
Pemigewasset River and drain back from the snowmaking system into Loon Pond. The
District Court dismissed the claim for civil penalties and attorney's fees under
the CWA, and one of the Environmental  Plaintiffs appealed to the First Circuit.
The appeal was stayed to permit settlement negotiations,  and these negotiations
concluded  with the execution of a settlement  agreement  between the appellant,
LMRC and Loon Realty Corp. effective as of February 22, 2001. In accordance with
the terms of the agreement,  the appellant's  claims against LMRC were dismissed
on March 14, 2001.

     In 1997, the  Environmental  Plaintiffs  filed a second lawsuit against the
Forest Service in the District  Court alleging that the Forest Service  violated
NEPA in authorizing  LMRC to construct and operate a snowmaking  pipeline across
permitted land. LMRC intervened in the lawsuit. The District Court held that the
Forest Service had violated NEPA by failing to consider the potential effects of
an increase in  snowmaking  capacity.  The  District  Court then  enjoined  Loon
Mountain  from using the pipeline but later  modified the  injunction  to permit
LMRC to use the pipeline  provided  that,  among other things,  it does not make
snow in excess of the historic  production level utilizing 159.7 million gallons
per ski season.  On February 12, 1999, the District Court dismissed the pipeline
litigation  and allowed the Forest  Service to combine its NEPA  analysis of the
pipeline with the pending NEPA  analysis of the South  Mountain  expansion.  The
injunction  authorizing  LMRC to use the  pipeline  to supply  water for  making
historical   levels  of  snow  remains  in  place  until  the  additional   NEPA
documentation  is completed and the Forest  Service issues a new decision on the
pipeline, which is currently expected to occur during Fall 2001.

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

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

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

a. Exhibits

      None.

b. Reports on Form 8-K

   No reports on Form 8-K were filed during the quarterly  period ended July 27,
   2001.


<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)



September 6, 2001