<PAGE>   1






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


                                   FORM 10-Q

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


                 FOR THE QUARTERLY PERIOD ENDED AUGUST 1, 1997


                                       OR


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


                       COMMISSION FILE NUMBER:  333-26091


                         BOOTH CREEK SKI HOLDINGS, INC.
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)



             DELAWARE                                     84-1359604
    (STATE OR OTHER JURISDICTION                      (I.R.S. EMPLOYER
   OF INCORPORATION OR ORGANIZATION)                  IDENTIFICATION NO.)
         
    HIGHWAY 267 AND NORTHSTAR DRIVE         
         TRUCKEE, CALIFORNIA                                96160
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)                 (ZIP CODE)



                                 (916) 562-1010
              (REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)


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

     As of August 29, 1997, 1,000 shares of the registrant's common stock were
issued and outstanding.




<PAGE>   2

                               TABLE OF CONTENTS


PART I - FINANCIAL INFORMATION


<TABLE>
<S>                                                                              <C>
         ITEM 1. Financial Statements                                              1
         ITEM 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations                                                             20

PART II - OTHER INFORMATION

         ITEM 1. Legal Proceedings                                                27
         ITEM 6. Exhibits and Reports on Form 8-K                                 27


SIGNATURES                                                                        28
</TABLE>






<PAGE>   3

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS



                         Booth Creek Ski Holdings, Inc.

                    Consolidated Balance Sheets (Unaudited)

               (In thousands, except share and per share amounts)



<TABLE>
<CAPTION>


                                                                         AUGUST 1,  OCTOBER 31,
                                                                            1997        1996

                                                                        ------------------------
<S>                                                                    <C>              <C>
ASSETS
Current assets:
   Cash                                                                 $  7,431          $ -
   Accounts receivable, net of allowance of $13                              775            -
   Inventories                                                             2,940            -
   Prepaid expenses and other current assets                               1,459            -
                                                                       ------------------------
Total current assets                                                      12,605            -
Property and equipment, net                                              128,152            -
Real estate held for development and sale                                 12,931            -
Deferred financing costs, net of accumulated amortization of $513          6,279            -
Timber rights and other assets                                             5,880            -
Goodwill, net of accumulated amortization of $1,150                       25,699            -
                                                                       ------------------------
Total assets                                                           $ 191,546          $ -
                                                                       ========================     
LIABILITIES AND SHAREHOLDER'S EQUITY
Current liabilities:
    Senior credit facility                                             $   7,000          $ -
    Current portion of long-term debt                                        418            -
    Accounts payable and accrued liabilities                              18,157            -
                                                                       ------------------------
Total current liabilities                                                 25,575            -
Long-term debt                                                           119,372            -
Deferred income taxes                                                      2,552            -
Other long-term liabilities                                                  234            -
Commitments and contingencies
Preferred stock of subsidiary; 28,000 shares authorized,
    25,000 shares issued and outstanding; liquidation preference and
    redemption value of $3,282 at August 1, 1997                           3,125            -
Shareholder's equity:
    Common stock, $.01 par value; 1,000 shares authorized, issued
        and outstanding                                                        -            -
    Additional paid-in capital                                            46,500            2
    Note receivable from shareholder                                           -           (2)
    Accumulated deficit                                                   (5,812)           -
                                                                       -------------------------
Total shareholder's equity                                                40,688            -
                                                                       -------------------------
Total liabilities shareholder's equity                                 $ 191,546         $  -
                                                                       =========================                                  
</TABLE>

See accompanying notes.

                                       1


<PAGE>   4




                         Booth Creek Ski Holdings, Inc.

               Consolidated Statements of Operations (Unaudited)

                                 (In thousands)



<TABLE>
<CAPTION>
                                                      THREE MONTHS ENDED  NINE MONTHS ENDED
                                                        AUGUST 1, 1997     AUGUST 1, 1997
                                                      -------------------------------------     
<S>                                                         <C>                  <C>
Revenue:
  Resort operations                                           $  3,284           $ 63,753
  Real estate and other                                          1,197              1,647
                                                      -------------------------------------
Total revenue                                                    4,481             65,400
                                                      -------------------------------------
Operating expenses:
  Cost of sales - resort operations                              4,673             40,778
  Cost of sales - real estate and other                            768              1,146
  Depreciation and depletion                                     2,571              6,998
  Amortization                                                     453              1,150
  Selling, general and administrative expenses                   1,957              8,475
  Management fees and corporate expenses                           638              1,465
                                                      -------------------------------------
Total operating expenses                                        11,060             60,012
                                                      -------------------------------------
Operating income (loss)                                         (6,579)             5,388
Other income (expense):
  Interest expense                                              (3,700)            (8,863)
  Amortization of deferred financing costs                        (345)            (1,541)
  Interest and other income                                         85                140
                                                      -------------------------------------
  Other income (expense), net                                   (3,960)           (10,264)
                                                      -------------------------------------
Loss before income taxes, minority interest and
  extraordinary item                                           (10,539)            (4,876)
Income tax benefit                                               2,635              1,219
                                                      -------------------------------------
Loss before minority interest and extraordinary item            (7,904)            (3,657)
Minority interest                                                  (70)              (157)
                                                      -------------------------------------
Loss before extraordinary item                                  (7,974)            (3,814)
Extraordinary loss on early retirement of debt (net
  of applicable income taxes of $666)                                -             (1,998)
                                                      -------------------------------------
Net loss                                                      $ (7,974)          $ (5,812)
                                                      =====================================
</TABLE>

See accompanying notes.

                                       2


<PAGE>   5




                         Booth Creek Ski Holdings, Inc.

           Consolidated Statement of Shareholder's Equity (Unaudited)

                        Nine months ended August 1, 1997
                                 (In thousands)



<TABLE>
<CAPTION>
                                                                  
                                                                                NOTE
                                 COMMON STOCK               ADDITIONAL       RECEIVABLE
                            ------------------------         PAID-IN            FROM       ACCUMULATED       
                               SHARES         AMOUNT         CAPITAL         SHAREHOLDER     DEFICIT      TOTAL
                            ------------------------------------------------------------------------------------- 
<S>                        <C>            <C>            <C>              <C>             <C>           <C>   
Balance at                                             
  October 31, 1996              1,000      $     -        $       2         $      (2)      $      -     $     -
Payment received on                                  
  shareholder note                                     
  receivable                        -             -                -                2              -           2
Capital contributions               -             -           46,498                -              -      46,498
Net loss                            -             -                -                -         (5,812)     (5,812)
                            -------------------------------------------------------------------------------------- 
Balance at August 1, 1997       1,000      $      -        $  46,500         $      -        $(5,812)    $40,688
                            =======================================================================================
                                                       
</TABLE>                                               
                                                            

See accompanying notes.


                                       3


<PAGE>   6




                         Booth Creek Ski Holdings, Inc.

                Consolidated Statement of Cash Flows (Unaudited)

                        Nine months ended August 1, 1997
                                 (In thousands)



<TABLE>
<S>                                                                                      <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss                                                                                  $  (5,812)
Adjustment to reconcile net loss to net cash                                              
provided by operating activities:                                 
  Depreciation and depletion                                                                  6,998 
  Amortization of goodwill                                                                    1,150 
  Noncash cost of real estate sales                                                             851 
  Amortization of deferred financing costs                                                    1,541 
  Deferred income tax benefit                                                                (1,219)
  Minority interest                                                                             157 
  Extraordinary loss on early retirement of debt                                              1,998 
  Changes in operating assets and liabilities:                                               
    Accounts receivable                                                                         145
    Inventories                                                                                 826
    Prepaid expenses and other current assets                                                   262
    Accounts payable and accrued liabilities                                                  1,747
                                                                                          ---------
Net cash provided by operating activities                                                     8,644
                                                                                          ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of ski resorts, net of cash acquired                                           (141,222)
Capital expenditures for property and equipment                                              (4,550)
Capital expenditures for real estate held for development and sale                             (282)
Other assets                                                                                    488
                                                                                          ---------
Net cash used in investing activities                                                      (145,566)
                                                                                          ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings under senior credit facility                                                       7,000
Proceeds of long-term debt                                                                  216,000
Principal payments of long-term debt                                                       (114,288)
Deferred financing costs                                                                    (10,484)
Purchase of preferred stock of subsidiary                                                      (375)
Payment received on shareholder note receivable                                                   2
Capital contributions                                                                        46,498
                                                                                          ---------
Net cash provided by financing activities                                                   144,353
                                                                                          ---------
Increase in cash                                                                              7,431
Cash at beginning of period                                                                       -
                                                                                          ---------
Cash at end of period                                                                     $   7,431
                                                                                          =========
                                                                                                
</TABLE>

See accompanying notes.

                                       4


<PAGE>   7

                         Booth Creek Ski Holdings, Inc.

                         Notes to Financial Statements

                                 August 1, 1997




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

Booth Creek Ski Holdings, Inc. ("Booth Creek") was organized on October 8, 1996
in the State of Delaware for the purpose of acquiring and operating various ski
resorts, including Northstar-at-Tahoe ("Northstar"), Sierra-at-Tahoe
("Sierra"), Bear Mountain, Waterville Valley, Mt. Cranmore, Snoqualmie Pass
("Snoqualmie") and Grand Targhee, as described more fully in Note 2.

The consolidated financial statements include the accounts of Booth Creek and
its subsidiaries (collectively referred to as the "Company"), all of which are
wholly-owned except for Ski Lifts, Inc. (the owner and operator of Snoqualmie)
as discussed in Note 2.  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 August 1, 1997 and for
the three and nine months then ended are unaudited, but include all adjustments
(consisting only of normal, recurring adjustments except for the extraordinary
loss recognized upon the early retirement of certain debt) which, in the
opinion of management of the Company, are considered necessary for a fair
presentation of the Company's financial position at August 1, 1997, its
operating results for the three and nine months then ended and its cash flows
for the nine months then ended.  Due to the highly seasonal nature of the
Company's business and the effect of recent acquisitions (Note 2), the results
for the interim periods are not necessarily indicative of results for the
entire year.  Certain information and footnote disclosures normally included in
annual financial statements prepared in accordance with generally accepted
accounting principles have been omitted pursuant to generally accepted
accounting principles applicable for interim periods.  Management believes that
the disclosures made are adequate to make the information presented not
misleading.

REPORTING PERIODS

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

BUSINESS AND PRINCIPAL MARKETS

Northstar is a year-round destination resort including ski and golf facilities.
Sierra is a day ski area.  Both Northstar and Sierra are located near Lake
Tahoe, California Bear Mountain is a day


                                       5


<PAGE>   8

                         Booth Creek Ski Holdings, Inc.

                   Notes to Financial Statements (continued)






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

BUSINESS AND PRINCIPAL MARKETS (CONTINUED)

ski area located approximately two hours from Los Angeles, California.
Waterville Valley, a destination resort, and Mt. Cranmore, a day ski area, are
located in New Hampshire. Snoqualmie is located in Northwest Washington and is
a day ski area.  Grand Targhee is a destination ski resort located in Wyoming.

Operations are highly seasonal at all locations with the majority of revenues
realized during the ski season from late November through early April. The
length of the ski season and the profitability of operations are significantly
impacted by weather conditions. Although Northstar, Bear Mountain, Waterville
Valley and Mt. Cranmore have snowmaking capacity to mitigate some of the
effects of adverse weather conditions, abnormally warm weather or lack of
adequate snowfall can materially affect revenues. Sierra, Snoqualmie and Grand
Targhee lack significant snowmaking capability but generally benefit from
higher annual snowfall.

Other operational risks and uncertainties that face the Company include
competitive pressures affecting the number of skier visits and ticket prices;
the success of marketing efforts to maintain and increase skier visits; the
possibility of equipment failure; and continued access to water supplies for
snowmaking.

CASH

Included in cash at August 1, 1997 is restricted cash of $447,000 relating to
advance deposits and rental fees due to property owners for lodging and
property rentals.

INVENTORIES

Inventories are valued at the lower of cost (first-in, first-out) or market.
The components of inventories at August 1, 1997 are as follows:


                                 (In thousands)
        Retail products             $ 1,759
        Supplies                        896
        Food and beverage               285     
                                    -------     
                                    $ 2,940     
                                    =======     
                                                




                                       6


<PAGE>   9

                         Booth Creek Ski Holdings, Inc.

                   Notes to Financial Statements (continued)






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

PROPERTY AND EQUIPMENT

Property and equipment are stated at cost. Depreciation is provided on the
straight-line method based upon the estimated service lives of the property,
which are as follows:

        Land improvements               20 years
        Buildings and improvements      20 years
        Machinery and equipment         3 to 15 years

REAL ESTATE ACTIVITIES

The Company capitalizes as real estate held for development and sale the
original acquisition cost (or appraised value in connection with purchase
business combinations), direct construction and development costs, and other
related costs.  Property taxes, insurance and interest incurred on costs
related to real estate under development are capitalized during periods in
which activities necessary to get the property ready for its intended use are
in progress.  The Company capitalized interest costs of $250,000 for the nine
months ended August 1, 1997.  Land costs and other common costs incurred prior
to construction are allocated to each land parcel benefited.  Construction
related costs are allocated to individual units in each development phase using
the relative sales value method.  Selling expenses are charged against income
in the period incurred.

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

REVENUE RECOGNITION

Revenues are generally recognized as services are provided and products are
sold. Sales of season passes are initially deferred in unearned income and
recognized ratably over the ski season.


                                       7


<PAGE>   10

                         Booth Creek Ski Holdings, Inc.

                   Notes to Financial Statements (continued)





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

AMORTIZATION

The excess of the purchase price over the fair values of the net assets
acquired (goodwill) is being amortized using the straight-line method over a
period of 15 years.

Deferred financing costs are being amortized over the lives of the related
obligations.

ADVERTISING COSTS

The cost of advertisements is expensed when the advertisement is initially
released. The cost of professional services for advertisements, sales
campaigns, promotion, and public relations is expensed when the services are
rendered. The cost of brochures is expensed over the ski season. Advertising
expenses for the nine months ended August 1, 1997 were approximately
$1,704,000.

INCOME TAXES

Deferred income taxes are provided for temporary differences between the
carrying amounts of assets and liabilities for financial reporting purposes and
the amounts used for income tax purposes.

The Company is included in the federal and state tax returns of Parent.  The
provision for federal and state income tax is computed as if the Company filed
separate consolidated tax returns.

USE OF ESTIMATES

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


                                       8


<PAGE>   11

                         Booth Creek Ski Holdings, Inc.

                   Notes to Financial Statements (continued)






2. ACQUISITIONS

As described below, Booth Creek consummated the New Hampshire, California,
Snoqualmie and Grand Targhee acquisitions prior to August 1, 1997.  These
acquisitions have been accounted for using the purchase method of accounting.
The results of operations of the Waterville Valley, Mt. Cranmore, Northstar,
Sierra, Bear Mountain, Snoqualmie and Grand Targhee resorts have been included
in the accompanying statements of operations since the effective dates of such
acquisitions. The consolidated financial statements reflect the preliminary
allocations of purchase price based on the estimated fair values of assets
acquired and liabilities assumed at the respective dates of acquisition and are
subject to final allocations pursuant to appraisals.

THE NEW HAMPSHIRE ACQUISITIONS

On November 27, 1996, Booth Creek Ski Acquisition Corp., a wholly-owned
subsidiary of Booth Creek, purchased the assets of the Waterville Valley and
Mt. Cranmore resorts from subsidiaries of American Skiing Company for an
aggregate purchase price of $17.5 million. The purchase price was paid with
$14.5 million in cash, before giving effect to normal working capital
adjustments for current assets acquired and current liabilities assumed, and
the $2.75 million ASC Seller Note (Note 5).

THE CALIFORNIA ACQUISITIONS

On December 3, 1996, Booth Creek purchased from Fibreboard Corporation all of
the issued and outstanding capital stock of Trimont Land Company, which
operates Northstar, Sierra-at-Tahoe, Inc., which operates Sierra, and Bear
Mountain, Inc., which operates Bear Mountain. The aggregate purchase price was
$121.5 million in cash, before giving effect to normal working capital
adjustments for current assets acquired and current liabilities assumed.

THE SNOQUALMIE ACQUISITION

Effective January 15, 1997, Booth Creek purchased all of the issued and
outstanding common stock of Ski Lifts, Inc. ("Ski Lifts"), the owner and
operator of the ski resort assets of Snoqualmie Pass, for an aggregate purchase
price of approximately $14 million, which included the assumption of
approximately $3.6 million of indebtedness, the issuance by Ski Lifts of the
approximately $9.8 million Snoqualmie Seller Note (Note 5), and other
obligations to the selling shareholders of approximately $600,000.

                                       9



<PAGE>   12

                         Booth Creek Ski Holdings, Inc.

                   Notes to Financial Statements (continued)






2. ACQUISITIONS (CONTINUED)

THE SNOQUALMIE ACQUISITION (CONTINUED)

In connection with the consummation of the Snoqualmie acquisition, Ski Lifts
transferred approximately 71 acres of owned real estate held for development
purposes into a Delaware limited liability company (the "Real Estate LLC"), of
which Ski Lifts is a member and 99% equity interest holder and Booth Creek is
the other member and 1% equity interest holder. In addition, Ski Lifts granted
the Real Estate LLC an option (the "Real Estate Option") to purchase an
additional 14 acres of developmental real estate for nominal consideration. Ski
Lifts also issued 28,000 shares of non-voting preferred stock (the "Ski Lifts
Preferred Stock") to its prior owners having an aggregate liquidation
preference equal to $3.5 million, the aggregate estimated fair market value of
the real estate transferred to the Real Estate LLC and the real estate subject
to the Real Estate Option. Concurrently with these transactions, the Real
Estate LLC entered into an agreement to purchase (the "Preferred Stock Purchase
Agreement") the Ski Lifts Preferred Stock, on a quarterly basis over the five
years following the date of the Snoqualmie Acquisition, at a purchase price
equal to the liquidation preference thereof plus accrued dividends to the date
of purchase. Through August 1, 1997, the Company has advanced the first three
quarterly payments under the Preferred Stock Purchase Agreement aggregating
$375,000.  The Real Estate LLC's obligations under the Preferred Stock Purchase
Agreement are secured by a first priority lien on the developmental real estate
held by the Real Estate LLC and substantially all of its other assets. The Ski
Lifts Preferred Stock provides for a 9% cumulative dividend and is redeemable
at the option of Ski Lifts without premium. In addition, pursuant to the terms
of the Ski Lifts Preferred Stock, the holders thereof have no redemption rights
and are entitled to receive dividend payments only when and if declared by the
board of directors of Ski Lifts.  The amount of cumulative preferred dividends
in arrears at August 1, 1997 was $157,000.

THE GRAND TARGHEE ACQUISITION

On March 18, 1997, Booth Creek acquired all the issued and outstanding capital
stock of Grand Targhee Incorporated, the owner of the ski resort assets of
Grand Targhee, for an aggregate purchase price of approximately $7.9 million
plus contingent payments of up to $2 million based on the performance of Grand
Targhee through the 1998/99 ski season and additional commissions based on the
number of dwelling units developed at the resort through 2012.

                                       10


<PAGE>   13

                         Booth Creek Ski Holdings, Inc.

                   Notes to Financial Statements (continued)






  2. ACQUISITIONS (CONTINUED)

Summary information regarding the preliminary purchase price allocations to the
assets acquired and liabilities assumed in each of the acquisitions described
above is as follows.


<TABLE>
<CAPTION>
                      New Hampshire         California            Snoqualmie            Grand Targhee
                      Acquisitions          Acquisitions          Acquisition           Acquisition
                -----------------------------------------------------------------------------------------
                                                          (In thousands)
<S>                   <C>                   <C>                   <C>                   <C>
Net working capital   $    (672)            $    (5,043)          $    (7,311)          $   (1,203)
Property, plant and
  equipment              17,665                  84,690                19,364                8,547
Real estate and
  other long-term
  assets                      -                  15,899                 4,188                   61
Goodwill                  1,411                  23,188                 2,250                    -
Long-term debt           (2,901)                   (796)               (9,880)                   -
Deferred income
  taxes and other
  long-term
  liabilities                 -                       -                (8,235)                   -
                      ----------------------------------------------------------------------------      
                      $  15,503             $   117,938           $       376           $    7,405
                      ============================================================================      
</TABLE>

PRO FORMA FINANCIAL INFORMATION

The following table represents unaudited pro forma financial information which
presents the Company's consolidated results of operations for the nine months
ended August 1, 1997 as if the acquisitions occurred on November 1, 1996.


                                       (In thousands)
Statement of operations data:
   Revenues                               $  75,625
   Income from operations                 $   1,078
   Loss before extraordinary item         $  (8,725)
   Net loss                               $  (8,725)
                                           
Other data:
   EBITDA                                 $  11,922
   Noncash cost of real estate and other  $     984

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



                                       11


<PAGE>   14

                         Booth Creek Ski Holdings, Inc.

                   Notes to Financial Statements (continued)






2. ACQUISITIONS (CONTINUED)

PRO FORMA FINANCIAL INFORMATION (CONTINUED)

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

3. PROPERTY AND EQUIPMENT

Property and equipment consist of the following at August 1, 1997:


                                              (In thousands)
        Land and improvements                   $ 31,930
        Buildings and improvements                35,058
        Machinery and equipment                   63,470
        Construction in progress                   4,532   
                                                --------   
                                                 134,990   
        Less accumulated depreciation              6,838   
                                                --------   
                                                $128,152   
                                                ========         
                                                           

The allocation of purchase price to and amongst the various categories of
property and equipment was based on preliminary and tentative information and
is subject to change as additional information becomes known.

4. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

Accounts payable and accrued liabilities consist of the following at August 1,
1997:


                                              (In thousands)
        Accounts payable                        $  5,438
        Accrued compensation and benefits          1,695
        Taxes other than income                    1,049
        Unearned income and deposits                 907
        Interest                                   5,478
        Other                                      3,590
                                                --------   
                                                $ 18,157   
                                                ========        
                                                           


                                       12


<PAGE>   15

                         Booth Creek Ski Holdings, Inc.

                   Notes to Financial Statements (continued)






5. FINANCING ARRANGEMENTS

SENIOR CREDIT FACILITY

The following is a summary of certain provisions of the amended and restated 
Credit Agreement (the "Senior Credit Facility") dated as of March 18, 1997 
and subsequently amended on June 15, 1997 and July 30, 1997, among Booth Creek,
its subsidiaries, the financial institutions party thereto and BankBoston, 
N.A. as administrative agent ("Agent").

      General - The Senior Credit Facility provides for borrowing
      availability of up to $20 million.  The Company is required to
      repay all borrowings under the Senior Credit Facility on or before
      March 1 of each year and have no outstanding indebtedness
      thereunder during the two months thereafter. Borrowings under the
      Senior Credit Facility are collectively referred to herein as the
      "Loans."  Total borrowings outstanding under the Senior Credit
      Facility at August 1, 1997 were $7 million.

      Interest - For purposes of calculating interest, the Loans can be,
      at the election of the Company, Base Rate Loans or LIBOR Rate
      Loans or a combination thereof. Subsequent to the offering on
      March 18, 1997 of certain senior notes (see "Long-Term Debt"
      below), Base Rate Loans bear interest at the sum of (a) a margin
      of between 0% and .5%, depending on the level of consolidated
      EBITDA of the Company and its subsidiaries (as determined pursuant
      to the Senior Credit Facility), plus (b) the higher of (i) the
      Agent's base rate or (ii) the federal funds rate plus .5%.  LIBOR
      Rate Loans bear interest at the LIBOR rate plus a margin of
      between 2% and 3%, depending on the level of consolidated EBITDA.
      As of August 1, 1997, the borrowings outstanding bear interest at
      9% pursuant to the Base Rate Loans option.

      Repayment - Subject to the provisions of the Senior Credit
      Facility, the Company may, from time to time, borrow, repay and
      reborrow under the Senior Credit Facility. The entire unpaid
      balance under the Senior Credit Facility is due and payable on
      March 18, 1999.

      Security - Borrowings under the Senior Credit Facility are secured
      by (i) a pledge of the Agent for the ratable benefit of the
      financial institutions party to the Senior Credit Facility of all
      of the capital stock of Booth Creek's principal subsidiaries and
      (ii) a grant of a security interest in substantially all of the
      consolidated assets of Booth Creek and its subsidiaries (excluding
      the Real Estate LLC).

                                       13


<PAGE>   16

                         Booth Creek Ski Holdings, Inc.

                   Notes to Financial Statements (continued)






5. FINANCING ARRANGEMENTS (CONTINUED)

SENIOR CREDIT FACILITY (CONTINUED)

      Covenants - The Senior Credit Facility contains financial
      covenants relating to the maintenance of (i) ratios of (a)
      financing debt to consolidated cash flow, (b) adjusted
      consolidated cash flow to consolidated debt service and (c)
      consolidated cash flow to consolidated interest expense, (ii)
      consolidated net worth, and (iii) consolidated cash flow. The
      Senior Credit Facility also contains restrictive covenants
      pertaining to the management and operation of Booth Creek and its
      subsidiaries. The covenants include, among others, significant
      limitations on indebtedness, guarantees, mergers, acquisitions,
      fundamental corporate changes, capital expenditures, asset sales,
      leases, investments, loans and advances, liens, dividends and
      other stock payments, transactions with affiliates, optional
      payments and modification of debt instruments and issuances of
      stock.

LONG-TERM DEBT

Long-term debt consists of the following instruments at August 1, 1997, which
are described below:


                                        (In thousands)
                     
        Senior Notes                     $ 116,000
        ASC Seller Note                      2,500
        Other debt                           1,290
                                        ----------  
                                           119,790  
        Less current portion                   418  
                                        ----------  
                                         $ 119,372  
                                        ==========  
                                                    
Senior Notes

On March 18, 1997, the Company consummated an offering (the "Offering") of $110
million in senior debt securities (the "Senior Notes").  An additional $6
million aggregate principal amount of Senior Notes were sold by the Company on
April 25, 1997. The proceeds of the Offering, along with $6.5 million in
additional equity contributions of Parent and available cash on hand, were used
to i) repay $90 million in bridge notes bearing interest at approximately 11%,
ii) repay the $9.8 million Snoqualmie Seller Note bearing interest at 5% per
annum and certain other

                                       14


<PAGE>   17

                         Booth Creek Ski Holdings, Inc.

                   Notes to Financial Statements (continued)






5. FINANCING ARRANGEMENTS (CONTINUED)

LONG-TERM DEBT (CONTINUED)

debt assumed in connection with the Snoqualmie acquisition, iii) repay
obligations relating to a $10 million intercompany note payable to Parent, iv)
acquire Grand Targhee and repay certain debt assumed in connection therewith,
and v) pay certain fees and expenses associated with the Offering and the
Senior Credit Facility. Existing deferred financing costs at March 18, 1997 of
approximately $2.7 million relating principally to the bridge notes repaid,
were charged off in connection with the early extinguishment of debt, and have
been reflected as an extraordinary item in the accompanying statement of
operations for the nine months ended August 1, 1997 (net of related income
taxes of $666,000).

The Senior Notes mature on March 15, 2007, and bear interest at 12.5% payable
semiannually on each March 15 and September 15, commencing September 15, 1997.
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
having either assets or shareholders' equity in excess of $20,000 (the
"Guarantors"). All of the Company's direct and indirect subsidiaries are
Restricted Subsidiaries, except the Real Estate LLC. Each Guarantee is
effectively subordinated to all secured indebtedness of such Guarantor. The
Senior Notes are general senior unsecured obligations of the Company ranking
equally in right of payment with all other existing and future senior
indebtedness of the Company and senior in right of payment to any subordinated
indebtedness of the Company.  The Senior Notes are effectively subordinated in
right of payment to all secured indebtedness of the Company and the Guarantors,
including indebtedness under the Senior Credit Facility.  In addition, the
Senior Notes are structurally subordinated to any indebtedness of the Company's
subsidiaries that are not Guarantors.  The indenture for the Senior Notes  (the
"Indenture") contains covenants for the benefit of the holders of the Senior
Notes that, among other things, restrict the ability of the Company and any
Restricted Subsidiaries to: (i) incur additional indebtedness; (ii) pay
dividends and make distributions; (iii) issue stock of subsidiaries; (iv) make
certain investments; (v) repurchase stock; (vi) create liens; (vii) enter into
transactions with affiliates, (viii) enter into sale and leaseback
transactions, (ix) create dividend or other payment restrictions affecting
Restricted Subsidiaries; (x) merge or consolidate the Company or any
Guarantors; and (xi) transfer and sell assets.

The Guarantors are wholly-owned subsidiaries of Booth Creek and have fully and
unconditionally guaranteed the Senior Notes on a joint and several basis.
Booth Creek is a holding company and has no operations, assets or cash flows
separate from its investments in its

                                       15


<PAGE>   18

                         Booth Creek Ski Holdings, Inc.

                   Notes to Financial Statements (continued)






5. FINANCING ARRANGEMENTS (CONTINUED)

LONG-TERM DEBT (CONTINUED)

subsidiaries. In addition, the assets, equity, income and cash flow of the Real
Estate LLC, Booth Creek's only non-guarantor subsidiary described in Note 2,
are inconsequential and the common stock of the Real Estate LLC is entirely
owned by Booth Creek.  Accordingly, Booth Creek has not presented separate
financial statements and other disclosures concerning the Guarantors or
non-guarantor subsidiary because management has determined that such
information is not material to investors.

ASC Seller Note

As part of the purchase price for the acquisitions of Waterville Valley and Mt.
Cranmore, Booth Creek Ski Acquisition Corp., a wholly-owned subsidiary of Booth
Creek, and Waterville Valley Ski Resort, Inc. and Mount Cranmore Ski Resort,
Inc., wholly-owned subsidiaries of Booth Creek Ski Acquisition Corp. and the
respective owners of the assets of the Waterville Valley and Mt. Cranmore
resorts, jointly and severally issued a promissory note to American Skiing
Company in the aggregate principal amount of $2.75 million, of which $2.5
million was outstanding at August 1, 1997.  The ASC Seller Note requires annual
principal payments commencing January 31, 1998 at an initial level of $100,000
per year and increasing to $350,000 by January 31, 2003, with the remaining
principal balance of $1,150,000 due on June 30, 2004. The ASC Seller Note bears
interest at 12% per annum payable semi-annually on each June 30 and December 31
commencing on June 30, 1997.

Other Debt

Other debt of $1,290,000 at August 1, 1997 consists of various capital lease
obligations, notes payables and improvement bond obligations.

During the nine months ended August 1, 1997, the Company paid cash for interest
costs of $3,635,000.


                                       16


<PAGE>   19

                         Booth Creek Ski Holdings, Inc.

                   Notes to Financial Statements (continued)






6. COMMITMENTS AND CONTINGENCIES

LEASE COMMITMENTS

The Company leases certain machinery, equipment and facilities under operating
leases. Aggregate future minimum lease payments as of January 31, 1997 are as
follows:


      Year ending       (In thousands)  
      January 31,  

        1998               $ 2,090
        1999                 1,297
        2000                   730
        2001                   350
        2002                   177
      Thereafter               454
                          --------
                           $ 5,098
                          ========
                         
Total rent expense for all operating leases amounted to $2,974,000 for the nine
months ended August 1, 1997.

In addition, the Company leases property from the U.S. Forest Service under
Special Use Permits for all or certain portions of the operations of Sierra,
Bear Mountain, Waterville Valley, Snoqualmie and Grand Targhee. These leases
are effective through 2008, 2020, 2034, 2032 and 2034, respectively. Lease
payments are based on a percentage of revenues, and were approximately $700,000
for the nine months ended August 1, 1997.

LITIGATION

The nature of the ski industry includes the risk of skier injuries. Generally,
the Company has insurance to cover potential claims; in some cases the amounts
of the claims may be substantial. The Company is also involved in a number of
other claims arising from its operations.

Management, in consultation with legal counsel, believes resolution of these
claims will not have a material adverse impact on the Company's consolidated
financial condition or results of operations.


                                       17


<PAGE>   20

                         Booth Creek Ski Holdings, Inc.

                   Notes to Financial Statements (continued)






6. COMMITMENTS AND CONTINGENCIES (CONTINUED)

PLEDGE OF STOCK

The stock of the Company is pledged to secure $30 million of indebtedness of
the Parent.

7. INCOME TAXES

Income taxes recognized for nine months ended August 1, 1997 are based on the
Company's estimated effective income tax rate for the year ending October 31,
1997.

Net deferred tax liabilities of $2,552,000 at August 1, 1997 relate primarily
to differences between the book and tax bases of certain assets and liabilities
arising as a result of the stock purchase for the Snoqualmie acquisition, as
the underlying net assets of Snoqualmie were not adjusted to their fair values
for tax reporting purposes, offset by deferred tax assets relating principally
to the tax effects of net operating losses generated since inception.

8. MANAGEMENT AGREEMENT AND RELATED PARTY TRANSACTIONS

Booth Creek, Inc. (the "Management Company") provides management services to
Booth Creek, the Parent and Booth Creek's subsidiaries pursuant to the
Management Agreement dated November 27, 1996 (the "Management Agreement")
between Booth Creek and the Management Company.  The Management Company
provides Booth Creek, the Parent and Booth Creek's subsidiaries with financial
advice with respect to, among other matters, cash management, accounting and
data processing systems and procedures, budgeting, equipment purchases,
business forecasts, treasury functions and investor relations.  The Management
Company also provides general supervision and management advice concerning tax,
legal and corporate finance matters, administration and operation, personnel
matters, business insurance and the employment of consultants, contractors and
agents.  Under the terms of the Management Agreement, the Company provides
customary indemnification, reimburses certain costs and pays the Management
Company an annual management fee of $350,000 plus an operating bonus, not to
exceed $400,000, equal to 2.5% of the excess of consolidated EBITDA (as defined
in the Indenture) for such year over $25 million.  The obligation of the
Company to make payments under the Management Agreement is subject to
restrictions under the Indenture and the Senior Credit Facility. Management
fees during the nine months ended August 1, 1997 were approximately $255,000.


                                       18


<PAGE>   21

                         Booth Creek Ski Holdings, Inc.

                   Notes to Financial Statements (continued)






8. MANAGEMENT AGREEMENT AND RELATED PARTY TRANSACTIONS (CONTINUED)

Since the formation of the Company, the Management Company and certain of its
affiliates have made advances and deposits of approximately $1,400,000 through
August 1, 1997, and have incurred expenses of approximately $600,000 through
August 1, 1997, in connection with certain of the acquisitions.  All of these
costs were later reimbursed by the Company pursuant to the Management
Agreement.

9. SUBSEQUENT EVENT

On August 14, 1997, Booth Creek consummated its offer to exchange (the
"Exchange Offer") up to $116 million aggregate principal amount of its Series B
12.5% Senior Notes due 2007, which have been registered under the Securities
Act of 1933, as amended, for a like principal amount of its previously
outstanding, unregistered 12.5% Senior Notes due 2007 (the "Rule 144A Notes").
The Exchange Offer expired on August 13, 1997, on which date 100% of the
outstanding Rule 144A Notes had been received by the exchange agent for the
Exchange Offer.




                                       19


<PAGE>   22




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

     The discussion and analysis below relates to the historical financial
statements and historical and pro forma results of operations of the Company
and the liquidity and capital resources of the Company.  The following
discussion should be read in conjunction with the consolidated financial
statements and related notes thereto included elsewhere in this report.

     Except for historical matters, the matters discussed in Part I, Item 2.
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" are forward-looking statements that involve risks and
uncertainties.  Forward-looking statements are based on management's current
views and assumptions and involve risks and uncertainties that could
significantly affect expected results.  Booth Creek wishes to caution the
reader that the factors below in some cases have effected and could affect
Booth Creek's actual results, causing results to differ materially from those
in any forward-looking statement.  These factors include: regional and national
economic conditions, weather conditions, industry competition and governmental
regulation and risks associated with expansion, leased property and property
used pursuant to the United States Forest Service permits.

GENERAL

     The Company's ski operations are highly sensitive to regional weather
conditions and the overall strength of the regional economies in the areas in
which the Company operates.  The Company believes that the geographic diversity
of the Company's resorts and the use of extensive snowmaking technology coupled
with advanced trail grooming equipment, which together can provide consistent
skiing conditions, can partially mitigate the risk of both economic downturns
and adverse weather conditions in any given region.  However, the Company
remains vulnerable to warm weather, heavy rains and drought conditions, which
can have a significant effect on the operating revenues and profitability at
any one of the Company's resorts.  For example, during the early part of the
1996/97 ski season, the Lake Tahoe region experienced significant rainfall,
flooding and mudslides.  The inclement weather resulted in poor ski conditions
at Northstar and Sierra and a major access highway to Sierra being closed for
several weeks during the first quarter of the Company's current fiscal year.
Furthermore, much of the poor weather occurred during the Christmas holiday
period, a traditionally busy period at the Company's resorts.  As a result,
skier days and resort revenue were adversely impacted.  Certain of the
Company's other resorts also experienced poor weather conditions during the
nine months ended August 1, 1997, which resulted in a reduction in skier days,
revenue and operating income.  These conditions also reduced EBITDA for the
period.

     The Company's three most weather-sensitive resorts, Bear Mountain,
Waterville Valley and Mt. Cranmore, have invested heavily in snowmaking
capabilities to provide coverage on virtually all of their trails and have been
open for skiing at least 122, 159, and 103 days, respectively, during each of
the last six ski seasons.  The Company's Northstar, Sierra, Snoqualmie Pass and
Grand Targhee resorts are less weather-sensitive based on their historical
natural snowfall, averaging approximately 286, 467, 363, and 483 inches of
snow, respectively, per year since 1991 through the 1996/97 ski season.  As a
result of their historic natural snowfall,

                                       20


<PAGE>   23


their snowmaking capabilities are considerably less extensive than at
Bear Mountain, Waterville Valley or Mt. Cranmore.

     The Company's results of operations are also highly dependent on its
ability to compete in each of the large regional ski markets in which it
operates.  At Northstar and Sierra, more than 76% and 75%, respectively, of the
1996/97 ski season total skier days were attributable to residents of the San
Francisco, Sacramento and Central California Valley regions.  At Bear Mountain,
more than 96% of the 1996/97 ski season total skier days were attributable to
residents of the Los Angeles and San Diego metropolitan regions.  At Waterville
Valley and Mt. Cranmore, more than 79% of the 1996/97 ski season total skier
days were attributable to residents of the Boston metropolitan area and
Southern New Hampshire.  At Snoqualmie Pass, the Company estimates that more
than 95% of the 1996/97 ski season total skier days were attributable to
residents of the Seattle/Tacoma metropolitan region.  The Company's Grand
Targhee resort attracts approximately 60% of its skiers from outside its local
skiing population.

     In addition to revenues generated from skiing operations, the Company's
resorts generate significant revenues 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,
real estate and timber sales at Northstar generated $1.6 million during the
nine months ended August 1, 1997, accounting for 6% of Northstar's total
revenue during such period.

     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 the length of the ski season, number of skier days and other
seasonal factors.  With the exception of certain management, marketing and
maintenance personnel, all of the Company's employees are compensated on an
hourly basis.

RESULTS OF OPERATIONS OF THE COMPANY

     HISTORICAL NINE MONTHS ENDED AUGUST 1, 1997

     The Company was formed October 8, 1996.  During the nine months ended
August 1, 1997, the Company made the following acquisitions which are included
in the results of operations of the Company from the respective purchase dates
and were accounted for using the purchase method:


                        RESORT                  ACQUISITION DATE
        ----------------------------------------------------------------


                Waterville Valley               November 27, 1996
                Mt. Cranmore                    November 27, 1996
                Northstar                       December 3, 1996
                Sierra                          December 3, 1996
                Bear Mountain                   December 3, 1996
                Snoqualmie Pass                 January 15, 1997
                Grand Targhee                   March 18, 1997


                                       21


<PAGE>   24




     For the nine months ended August 1, 1997, revenues totaled $65.4 million,
approximately $27.6 million, or 42%, of which was generated by Northstar.
Operating income for the same period totaled $5.4 million, or 8%, of revenues.

     Both revenues and operating income were negatively impacted by the poor
weather conditions experienced by a number of the Company's resorts during the
1996/97 ski season as discussed previously. Operating income is also net of
approximately $8.1 million of depreciation, depletion and amortization expenses
reflecting the stepped up values of the recently acquired resorts.

     Interest expense is primarily composed of interest on $90 million in
bridge notes and $10 million in intercompany notes to the Company's parent (the
"Bridge Financing Facilities"), which bore interest at approximately 11% per
annum through March 18, 1997, and on the Senior Notes (which bore interest at
12.5% per annum) from March 18, 1997 through August 1, 1997.

     Amortization of deferred financing costs relate primarily to fees
associated with the Bridge Financing Facilities and the Senior Notes.
Unamortized fees associated with the Bridge Financing Facilities at March 18,
1997, the date the Bridge Financing Facilities were repaid, totaled
approximately $2.7 million and were written off and reflected as an
extraordinary loss on the early retirement of debt, net of a related $666,000
tax benefit, in the consolidated statement of operations.

     Income taxes have been provided at a 25% rate, the expected effective
income tax rate for the year.

     HISTORICAL THREE MONTHS ENDED AUGUST 1, 1997

     For the three months ended August 1, 1997, revenues totaled $4.5 million,
and primarily related to real estate sales, golf operations, mountain biking
operations and other summer resort activities.

     The operating loss for the three months ended August 1, 1997 was $6.6
million.  The operating loss is net of $3 million of depreciation, depletion
and amortization expenses reflecting the stepped up values of the recently
acquired resorts.

     Interest expense is primarily composed of interest on the 12.5% Senior
Notes.

     The Company has recorded an income tax benefit at a rate of 25% for the
three months ended August 1, 1997.

      PRO FORMA NINE MONTHS ENDED AUGUST 1, 1997 AS COMPARED TO THE COMBINED
      NINE MONTHS ENDED JULY 31, 1996

     The Company was formed on October 8, 1996.  During the nine months ended
August 1, 1997, the Company acquired Northstar, Sierra, Bear Mountain,
Waterville Valley, Mt. Cranmore, Snoqualmie Pass and Grand Targhee.  Each
resort has been included in the statement of




                                       22


<PAGE>   25



operations of the Company from the respective purchase date and
accounted for using the purchase method.

     To provide an understanding of the results of operations of the Company's
resorts for the nine months ended August 1, 1997, for purposes of this
discussion the Company is comparing revenue, operating expenses (excluding
depreciation, depletion and amortization) and cost of sales - real estate and
other on a pro forma basis for the nine months ended August 1, 1997 to the
combined historical results of the seven resorts for the nine months ended July
31, 1996.  Due to the application of purchase accounting and the new capital
structure of the Company, expenses for depreciation, depletion, amortization,
interest and income taxes are not comparable to prior periods.  Accordingly,
the Company has not attempted to compare earnings between periods that include
any of these expenses.  The pro forma and combined information does not purport
to be indicative of results that actually would have occurred had the
acquisitions been made on the dates indicated or of results which may occur in
the future.


<TABLE>
<CAPTION>




                                                PRO FORMA              COMBINED NINE
                                             NINE MONTHS ENDED          NINE MONTHS 
                                                  ENDED                    ENDED
                                              AUGUST 1, 1997           JULY 31, 1996

                                            ------------------------------------------
<S>                                              <C>                 <C>

Revenue:
  Resort operations                             $ 73,674              $ 72,745
  Real estate and other                            1,951                 2,210
                                                ------------------------------        
                                                  75,625                74,955        
Operating expenses:                               
  Resort operations                               63,380                55,539        
  Cost of sales-real estate and other              1,307                 1,153        
                                                ------------------------------        
                                                  64,687                56,692        
                                                ------------------------------        
Operating income before                                                               
depreciation, depletion and                                                           
amortization                                    $ 10,938              $ 18,263        
                                                ==============================        
</TABLE>   

     Total pro forma revenue for the nine months ended August 1, 1997 was $75.6
million, an increase of $670,000 or 1% from the combined revenue of the
Company's resorts for the nine months ended July 31, 1996.  Northstar, Bear
Mountain and Snoqualmie generated increased revenues in the 1997 period of 9%,
16% and 12%, respectively, due primarily to skier day increases of 10%, 29% and
5%, respectively, as compared to the 1996 period.  Skier day growth at Bear
Mountain was offset by reduced ticket prices, due to the mix of ticket types
(adult, children, complimentary, multi-day, season passes, etc.) and various
promotional offers, resulting in the net 16% increase in revenue.  Sierra,
Waterville Valley and Grand Targhee revenues in 1997 decreased 20%, 6% and 10%,
respectively, as compared to the 1996 period, reflecting the decrease in skier
days of 17%, 15% and 19%, respectively.  Road closures at Sierra and Grand
Targhee and less favorable weather conditions contributed to these decreases.
Real estate revenues in the 1997 period declined $259,000 to $2.0 million or
12%, due to fewer lot sales in the 1997 period at Northstar.

                                       23


<PAGE>   26




     Pro forma resort operating expenses, excluding depreciation, depletion and
amortization, for the nine months ended August 1, 1997 totaled $63.4 million,
an increase of $7.8 million, or 14%, from the combined operating expenses of
the Company's resorts for the nine months ended July 31, 1996.  This increase
was primarily due to road closures at Sierra and Grand Targhee, early opening
of many of the Company's resorts (which were expected to generate improved
momentum into peak holiday periods but resulted in increased operating costs)
and poor weather conditions at many of the Company's resorts during peak
holiday periods.

     The pro forma cost of sales - real estate and other for the nine months
ended August 1, 1997 totaled $1.3 million, an increase of $154,000, or 13%,
from the combined costs of the Company's resorts for the nine months ended July
31, 1996.  This increase is due primarily to increased costs allocated to each
parcel in the 1997 period as part of the purchase accounting at Northstar.

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 will be cash flow from operations and
borrowings under the Senior Credit Facility.  Virtually all of the Company's
operating income will be generated by its subsidiaries.  As a result, the
Company will be 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, including the payment of principal of and
interest on the Senior Notes.  The Senior Credit Facility currently provides
for borrowing availability of up to $20 million. The Company is required to
repay all borrowings under the Senior Credit Facility on or before March 1, of
each year and have no outstanding indebtedness thereunder during the two months
thereafter. The Company intends to use borrowings under the Senior Credit
Facility to meet seasonal fluctuations in working capital requirements,
primarily related to off-season operations and maintenance activities during
the months of May through October, to fund capital expenditures for lifts,
trail work, grooming equipment and other on-mountain equipment and facilities
and to build retail and other inventories prior to the start of the skiing
season. The Company expects to fund interest payments on the Senior Notes
through available cash on hand and borrowings under the Senior Credit Facility.

     The Company's pro forma capital expenditures for the year ended October
31, 1996 and the nine months ended August 1, 1997 were approximately $10.3
million and $12.5 million, respectively.  For the pro forma year ended October
31, 1996, expenditures included approximately $5.5 million for maintenance
capital expenditures, $1.2 million for the development of Northstar's Big
Springs project, $1.7 million for two lifts at Grand Targhee, $1.7 million for
a lift at Mt. Cranmore and $200,000 for other facility upgrades.  For the pro
forma nine months ended August 1, 1997, expenditures related primarily to new
lifts at Sierra and Grand Targhee and new snow groomers at various resorts.
Management anticipates that total capital expenditures from March 1997 through
October 1998 will be approximately $15.0 million. Future capital expenditures
include approximately $5.0 million in each of the next two years for resort
maintenance and safety and $5.0 million for resort upgrades that management
deems appropriate.  The Company plans to fund these capital expenditures from
 

                                       24


<PAGE>   27



available cash flows, vendor financing to the extent permitted under
the Senior Credit Facility and the Indenture and borrowings under the Senior
Credit Facility.

     Management believes that there is a considerable degree of flexibility in
the timing (and, to a lesser degree, the scope) of its capital expenditure
program, and even greater flexibility as to its real estate development
objectives.  While the capital expenditure program described above is regarded
by management as important, both as to timing and scope, discretionary capital
spending above maintenance levels can be deferred, in some instances for
substantial periods of time, in order to address cash flow or other
constraints.  With respect to the Company's potential real estate development
opportunities, management believes that such efforts will enhance ski-related
revenues and will contribute independently to earnings.  In addition, with
respect to significant development projects, the Company anticipates entering
into joint venture arrangements that would reduce infrastructure and other
development costs.  Nonetheless, existing lodging facilities in the vicinity of
each resort are believed to be adequate to support current skier volumes, and a
deferral or curtailment of these development efforts is not regarded by
management as likely to adversely affect skier days and ski-related revenues or
profitability.  The Company also believes that its current infrastructure is
sufficient, and that development of real estate opportunities is not presently
necessary, to support its existing operations.

     The Company's liquidity will be significantly affected by the substantial
indebtedness incurred in connection with the financing of the resort
acquisitions, including the indebtedness evidenced by the Senior Notes.  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 may be limited.  In
addition, the Company's high level of debt may increase its vulnerability to
competitive pressures and the seasonality of the skiing and recreational
industries.  Any 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. Further, upon the
occurrence of a Change of Control (as defined in the Indenture), the Company
may be required to repurchase the Senior Notes at 101% of the principal amount
thereof, plus accrued and unpaid interest.  The occurrence of a change of
control may also constitute a default under the Senior Credit Facility.

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

     SEASONALITY

     The business of the Company is highly seasonal, with the vast majority of
its annual revenues expected to be generated between November and April of each
fiscal year.  Management considers it essential to achieve optimal operating
results during key holidays and weekends during this period.  During the
off-season months of May through October, the Company's resorts typically
experience a substantial reduction in labor and utility expense due to the
absence of ski operations, but make significant expenditures for maintenance,
expansion and capital improvement in preparation for the ensuing ski season.

                                       25


<PAGE>   28



ENVIRONMENTAL MATTERS

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

     The Company has not received any notice of material non-compliance with
permits, licenses or approvals necessary for the operation of its properties or
of any material liability under any environmental law or regulation.  However,
at Grand Targhee, the Wyoming Department of Environmental Quality (the "DEQ")
has issued a Notice of Violation of state water pollution requirements based on
alleged discharge from a wastewater lagoon without a permit.  The Company
expects to enter into an amended consent order with the DEQ requiring
construction and operation of a new wastewater facility by November 1998 at a
cost ranging from approximately $750,000 to $1.0 million.  Penalties for the
alleged noncompliance have not been sought by the DEQ or by any other
governmental authority or person, although such action could be pursued.

     Pursuant to the air emissions reduction program currently in effect in the
area regulated by the South Coast Air Quality Management District, where Bear
Mountain is located, Bear Mountain will be required to "bank" emission credits
from other facilities which have already implemented NOx emission reductions.
The Company may purchase "banked" emission credits in a one-time transaction at
the current market rate of approximately $681,000 or over time up to the year
2010 at prevailing market rates.


                                       26


<PAGE>   29




PART II

ITEM 1. LEGAL PROCEEDINGS.

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


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

         a. Exhibits

         Exhibit No.       Description of Exhibit 
         -----------       ----------------------
            
              10.          Amendment  No. 2 to Credit Agreement as Amended
                           and Restated, dated as of July 30, 1997 among
                           Booth  Creek Ski Holdings, Inc., Booth Creek Ski     
                           Acquisition Corp., Trimont Land Company,
                           Sierra-at-Tahoe, Inc., Bear Mountain, Inc.,
                           Waterville Valley Ski Resort, Inc., Mount Cranmore
                           Ski Resort, Inc., Ski Lifts, Inc., Grand Targhee
                           Incorporated and BankBoston, N.A.

              27.          Financial Data Schedule

         b. Reports on Form 8-K

              No reports on Form 8-K were filed during the three months ended
         August 1, 1997.




                                       27


<PAGE>   30




                                   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)



September 15, 1997       /s/ NANCI N. NORTHWAY
---------------------   ---------------------------------------------

Date                     Nanci N. Northway
                         Vice President and Chief Financial Officer
                         (Principal financial and accounting officer)


                                       28
<PAGE>   31


                              INDEX TO EXHIBITS
<TABLE>
<CAPTION>

EXHIBIT NO.                             DESCRIPTION
------- ---                             -----------

        <S>                            <C>

         Exhibit No.                    Description of Exhibit
         -----------                    ----------------------
            10.                         Amendment No. 2 to Credit Agreement as Amended and
                                        Restated, dated as of July 30, 1997 among Booth Creek Ski
                                        Holdings, Inc., Booth Creek Ski Acquisition Corp.,
                                        Trimont Land Company, Sierra-at-Tahoe, Inc., Bear 
                                        Mountain, Inc., Waterville Valley Ski Resort, Inc., Mount 
                                        Cranmore Ski Resort, Inc., Ski Lifts, Inc., Grand Targhee 
                                        Incorporated and BankBoston, N.A.

            27.                         Financial Data Schedule


</TABLE>