American Skiing Company and Subsidiaries



                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

                                    FORM 10-Q
               QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934
                     FOR THE QUARTER ENDED OCTOBER 24, 1999

                        --------------------------------
                         Commission File Number 1-13507
                        --------------------------------

                             American Skiing Company
             (Exact name of registrant as specified in its charter)

         Delaware                                         04-3373730
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
incorporation or organization)

P.O. Box 450
Bethel, Maine                                         04217
(Address of principal executive office)             (Zip Code)


                                 (207) 824-8100
              (Registrant's telephone number, including area code)
                                 Not Applicable
              (Former name, former address and former fiscal year,
                         if changed since last report.)

         Indicate by checkmark  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 [  ]

         The number of shares  outstanding  of each of the  issuer's  classes of
common stock were 14,760,530 shares of Class A common stock, $.01 par value, and
15,642,543 shares of common stock, $.01 par value, as of December 6, 1999.

<PAGE>


                                Table of Contents

Part I - Financial Information

Item 1.  Financial Statements

         Condensed Consolidated Statement of Operations (unaudited)
          for the three months ended October 24, 1999 and October 25, 1998.....3

         Condensed Consolidated Balance Sheet
          as of October 24, 1999 (unaudited) and July 25, 1999.................4

         Condensed Consolidated  Statement of Cash Flows (unaudited) for the
          three months ended October 24, 1999 and October 25, 1998.............5

         Notes to (unaudited) Condensed Consolidated Financial Statements......6

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

         General...............................................................9

         Liquidity and Capital Resources......................................10

         Changes in Results of Operations.....................................17

         Changes in Financial Condition.......................................19

         Year 2000 Disclosure.................................................20

         Forward-Looking Statements...........................................22

Item 3.  Quantitative and Qualitative Disclosures
          About Market Risk...................................................22

Part II -Other Information

Item 2.  Changes in Securities................................................23

Item 4.  Submission of Matters to a Vote of Security Holders..................23

Item 6.  Exhibits and Reports on Form 8-K.....................................24


<PAGE>


                         Part I - Financial Information
                           Item 1 Financial Statements

                 Condensed Consolidated Statement of Operations
               (In thousands, except share and per share amounts)

                                                 For the three months ended
                                              October 24, 1999  October 25, 1998
                                                          (unaudited)

Net revenues:
    Resort                                    $         20,806           $20,311
    Real estate                                          2,549             4,485
                                              ----------------   ---------------
Total net revenues                                      23,355            24,796

Operating expenses:
    Resort                                              29,015            28,074
    Real estate                                          3,284             4,040
    Marketing, general and administrative               10,753            10,826
    Depreciation and amortization                        3,202             2,708
                                              ----------------   ---------------
      Total operating expenses                          46,254            45,648
                                              ----------------   ---------------

Loss from operations                                  (22,899)          (20,852)
    Interest expense                                     7,966             8,930
                                              ----------------   ---------------

Loss before benefit from income taxes                 (30,865)          (29,782)
    Benefit from income taxes                          (9,052)          (10,573)
                                              ----------------   ---------------

Loss before extraordinary item and
Accounting change                                     (21,813)          (19,209)
    Extraordinary loss, net of tax
     benefit of $396                                       621                --
    Cumulative effect of change in
    accounting principle, net of tax
     benefit of $449                                       704                --
                                              -----------------  ---------------

Loss before preferred stock dividends                  (23,138)         (19,209)
    Accretion of discount and dividends accrued on
    mandatorily redeemable preferred stock                4,816            1,059
                                              -----------------  ---------------
Net loss available to common shareholders     $        (27,954)  $      (20,268)
                                              =================  ===============

Accumulated deficit, beginning of period      $        (32,311)  $            11

Net loss available to common shareholders              (27,954)         (20,268)
                                              -----------------  ---------------

Accumulated deficit, end of period            $        (60,265)  $      (20,257)
                                              =================  ===============

Basic and fully diluted loss per common share (note 5)
    Loss from continuing operations           $          (0.88)  $        (0.67)
    Extraordinary loss, net of taxes                     (0.02)               --
    Cumulative effect of change in accounting
    principle, net of taxes                              (0.02)               --
                                              -----------------  ---------------
    Net loss available to common shareholders $          (0.92)  $        (0.67)

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

    Weighted average common shares outstanding
    - basic and diluted                              30,286,773       30,285,552
                                              =================  ===============

                      See accompanying notes to (unaudited)
                  Condensed Consolidated Financial Statements.

<PAGE>


                      Condensed Consolidated Balance Sheet
               (In thousands, except share and per share amounts)

                                              October 24, 1999     July 25, 1999
                                                (unaudited)
Assets
Current assets
     Cash and cash equivalents                $          7,827    $        9,003
     Restricted cash                                     7,504             5,480
     Accounts receivable                                 8,573             6,474
     Inventory                                          11,977            10,837
     Prepaid expenses                                    6,638             5,309
     Deferred financing costs                            1,908             1,530
     Deferred income taxes                               4,273             4,273
                                              ----------------    --------------
        Total current assets                            48,700            42,906

Property and equipment, net                            526,506           529,154
Real estate developed for sale                         260,261           207,745
Goodwill                                                76,259            76,672
Intangible assets                                       22,676            22,987
Deferred financing costs                                 9,499             7,749
Long-term investments                                      670               669
Other assets                                            17,583            18,472
Restricted cash                                          1,585             1,148
                                              ----------------    --------------
        Total assets                          $        963,739    $      907,502
                                              =================   ==============

Liabilities, Mandatorily Redeemable Preferred
Stock and Shareholders' Equity
Current liabilities
     Current portion of long-term debt        $         18,831    $       61,555
     Accounts payable and other current
      liabilities                                       82,962            77,951
     Deposits and deferred revenue                      38,396            19,710
     Demand note, Principal Shareholder                     --             1,830
                                              ----------------    --------------
         Total current liabilities                     140,189           161,046

Long-term debt, excluding current portion              286,615           313,844
Subordinated notes and debentures, excluding
 current portion                                       127,125           127,062
Other long-term liabilities                             13,466            13,461
Deposits and deferred revenue                            1,578             1,140
Deferred income taxes                                      162            10,062
Minority interest in subsidiary                            393               396
                                              ----------------    --------------
         Total liabilities                             569,528           627,011

Mandatorily  Redeemable 10 1/2% Preferred
  Stock, par value of $1,000 per share; 40,000
  shares authorized; 36,626 shares issued and
  outstanding; including cumulative dividends
  (redemption value of $45,012 and $43,836,
  respectively)                                         45,012            43,836
Mandatorily  Redeemable 8 1/2% Series B
  Preferred Stock, par value of $1,000 per
  share;  150,000  shares  authorized,  issued
  and  outstanding;   including cumulative
  dividends (redemption value of $153,310 and $0,
  respectively)                                        140,372                --

Shareholders' Equity
    Common stock, Class A, par value of $.01
      per share; 15,000,000 shares authorized;
      14,760,530 issued and outstanding                    148               148
    Common stock, par value of $.01 per share;
      100,000,000 shares authorized; 15,526,243
      issued and outstanding                               155               155
    Additional paid-in capital                         268,789           268,663
     Accumulated deficit                               60,265)          (32,311)
                                              ----------------    --------------
      Total shareholders' equity                       208,827           236,655
                                              ----------------    --------------
Total liabilities, mandatorily redeemable
   preferred stock and shareholders' equity   $        963,739    $      907,502
                                              ================    ==============

                      See accompanying notes to (unaudited)
                  Condensed Consolidated Financial Statements.


<PAGE>


                 Condensed Consolidated Statement of Cash Flows
                                 (In thousands)
                                                  For the three months ended
                                              October 24, 1999  October 25, 1998
                                                           (unaudited)
Cash flows from operating activities
Net loss                                      $       (23,138)    $     (19,209)
Adjustments to reconcile net loss to net cash
 used in operating activities:
     Depreciation and amortization                       3,202             2,708
     Amortization of discount on debt                       88                68
     Deferred income taxes                             (9,897)          (10,573)
     Stock compensation charge                             126                --
     Extraordinary loss                                  1,017                --
     Cumulative effect of change in accounting
      principle                                          1,153                --
     Gain from sale of assets                          (1,402)                --
     Decrease (increase) in assets:
                  Restricted cash                      (2,461)             (118)
                  Accounts receivable                  (2,099)             1,211
                  Inventory                            (1,140)                57
                  Prepaid expenses                     (1,645)             (398)
                  Real estate developed for sale      (53,251)          (12,820)
                  Other assets                             785           (3,558)
     Increase (decrease) in liabilities:
                  Accounts payable and other current
                   liabilities                           5,011             6,451
                  Deposits and deferred revenue         19,124            16,889
                  Other long-term liabilities                5               463
                  Other, net                               (7)                --
                                              ----------------    --------------
Net cash used in operating activities                 (64,529)          (18,829)
                                              ----------------    --------------

Cash flows from investing activities
       Capital expenditures                            (6,496)          (20,017)
       Proceeds from sale of assets                      9,102                --
       Other, net                                           --                26
                                              ----------------    --------------
Net cash provided by (used in) investing
 activities                                              2,606          (19,991)
                                              ----------------    --------------

Cash flows from financing activities
       Net proceeds from issuance of
        mandatorily redeemable securities              136,732                --
       Borrowings (repayments) under Senior
        Credit Facility                              (106,186)             9,595
       Proceeds from long-term debt                        180             4,774
       Proceeds from non-recourse real estate
        debt                                            40,826            19,508
       Repayment of long-term debt                     (3,334)           (1,204)
       Repayment of non-recourse real estate
        debt                                           (2,032)                --
       Deferred financing costs                        (3,609)             (210)
       Repayment of demand note, Principal
        Shareholder                                    (1,830)                --
                                              ----------------    --------------
Net cash provided by financing activities               60,747            32,463
                                              ----------------    --------------

Net increase (decrease) in cash and cash
  equivalents                                          (1,176)           (6,357)
Cash and cash equivalents, beginning of period           9,003            15,370
                                              ----------------    --------------
Cash and cash equivalents, end of period      $          7,827    $        9,013
                                              ================    ==============


                      See accompanying notes to (unaudited)
                  Condensed Consolidated Financial Statements.


<PAGE>


        Notes to (unaudited) Condensed Consolidated Financial Statements

         1. General.  American  Skiing  Company (the "Parent") is organized as a
holding company and operates  through various  subsidiaries  (collectively,  the
"Company").  In the opinion of the Company, the accompanying unaudited condensed
consolidated  financial statements contain all adjustments  necessary to present
fairly the  financial  position  of the  Company as of October  24, 1999 and the
results of operations and the statement of cash flows for the three months ended
October 24, 1999 and October 25, 1998. All adjustments are of a normal recurring
nature. The unaudited condensed consolidated financial statements should be read
in conjunction with the following notes and the Company's consolidated financial
statements in its Form 10-K,  filed with the Securities and Exchange  Commission
on October 23, 1999.

         2. Accounting  Change. In the first quarter of fiscal 2000, the Company
changed its method of  accounting  for  start-up  costs in  accordance  with its
adoption  of AICPA  Statement  of  Position  98-5,  "Reporting  on the  Costs of
Start-up  Activities" ("SOP 98-5").  The change involved  expensing all start-up
costs as incurred,  rather than  capitalizing and  subsequently  amortizing such
costs.  The initial  adoption  of SOP 98-5  resulted  in the  write-off  of $1.2
million of start-up  costs that had previously  been  capitalized as of July 25,
1999.  The net effect of the  write-off of $704,000  (which is net of income tax
benefits of $449,000) has been expensed and reflected as a cumulative  effect of
a change in accounting principle in the accompanying statement of operations for
the three months ended October 24, 1999.

         3. Income  Taxes.  The benefit  from income taxes on loss is based on a
projected  annual effective tax rate of 29.3%. The net deferred income tax asset
includes  the tax  benefit  of  cumulative  net  operating  losses and other tax
attributes,  net of the  reduction  in current  income taxes  payable  resulting
principally  from the excess of  depreciation  reported  for income tax purposes
over that reported for financial reporting purposes. The effective rate includes
a $3.0 million  valuation  allowance  established in the first quarter of fiscal
2000 relating to certain deferred tax assets for prior net operating  losses. As
a result of the Series B Preferred  Stock  Transaction  described in footnote 8,
the  realization  of the tax benefit of certain of the  Company's  net operating
losses and other tax  attributes  is dependent  upon the  occurrence  of certain
future events.  It is the judgment of the Company that a valuation  allowance of
$3.0 million against its deferred tax assets for net operating  losses and other
tax  attributes  is  appropriate  because  it is more  likely  than not that the
benefit of such losses and attributes will not be realized. Based on facts known
at this time, the Company  expects to  substantially  realize the benefit of the
remainder of its net operating  losses and other tax attributes  affected by the
Series B Preferred Stock Transaction.

         4. Seasonal Business. Results for interim periods are not indicative of
the results  expected for the year due to the seasonal  nature of the  Company's
business.

         5. Earnings  (loss) per Common Share.  Effective  January 25, 1998, the
Company  adopted the provisions of the Financial  Accounting  Standards  Board's
Statement of Financial Accounting Standards No. 128, "Earnings Per Share" ("SFAS
128").  SFAS  128  specifies  the  computation,   presentation,  and  disclosure
requirements  for earnings per share for public  entities.  Earnings  (loss) per
common share for the three months  ending  October 24, 1999 and October 25, 1998
were determined based on the following data:



<PAGE>

                                                   Three Months Ended
                                          October 24, 1999      October 25, 1998
                                            (unaudited)           (unaudited)
                                          ----------------      ----------------
               Income (loss)
Loss before preferred stock dividends and
 accretion and extraordinary items        $       (21,813)      $       (19,209)
Accretion of discount and dividends
 accrued on mandatorily redeemable
 preferred stock                                     4,816                 1,059
                                          ----------------      ----------------
Loss before extraordinary items                   (26,629)              (20,268)
Extraordinary loss, net of taxes                       621                     -
Cumulative effect of change in
 accounting principle, net of taxes                    704                     -
                                          ----------------       ---------------
Net loss available to common shareholders $       (27,954)       $      (20,268)
                                          ================       ===============

                    Shares
Total weighted average shares outstanding
 (basic and diluted)                                30,287                30,286
                                          ================       ===============

         The Company  currently has  outstanding  186,626  shares of convertible
preferred stock (represented by two separate classes) which are convertible into
shares of the Company's  common stock.  The common stock shares into which these
securities  are  convertible  have  not  been  included  in the  dilutive  share
calculation as the impact of their inclusion would be anti-dilutive. The Company
also has 3,041,844  exercisable  options  outstanding to purchase  shares of its
common stock under the Company's stock option plan as of October 24, 1999. These
shares are also excluded from the dilutive share  calculation,  as the impact of
their inclusion would also be anti-dilutive.

         6.  Reclassifications.  Certain  amounts in the prior year's  unaudited
condensed consolidated financial statements and the audited financial statements
as filed with the  Securities  and Exchange  Commission on October 23, 1999 have
been reclassified to conform to the current period presentation.

         7.Long Term Debt. The Company  established a senior credit  facility on
November 12, 1997. On October 7, 1999,  this senior credit facility was amended,
restated and  consolidated  from two  sub-facilities  totaling $215 million to a
single facility totaling $165 (the "Senior Credit Facility").  The Senior Credit
Facility  consists of a revolving  credit facility in the amount of $100 million
and a term facility in the amount of $65 million.  The revolving  portion of the
Senior Credit Facility  matures on May 30, 2004, and the term portion matures on
May 31,  2006.  In  conjunction  with the  restructuring  of the  Senior  Credit
Facility,  the Company  wrote-off a pro-rata  portion of its  existing  deferred
financing  costs in the amount of $1.0  million,  or $0.6  million net of income
taxes, which is included in the accompanying Condensed Consolidated Statement of
Operations as an extraordinary loss.

        The Senior Credit Facility contains affirmative,  negative and financial
covenants customary for this type of credit facility,  including  maintenance of
certain  financial  ratios.  The Senior  Credit  Facility is  collateralized  by
substantially all the assets of the Company,  except its real estate development
subsidiaries,   which  are  not  borrowers  under  the  Senior  Credit  Facility
(collectively,  the borrowing  subsidiaries  are referred to as the  "Restricted
Subsidiaries"). The revolving facility is subject to an annual 30-day clean down
requirement to an outstanding balance of not more than $35 million,  which clean
down period must include April 30 of each fiscal year.

        The Senior  Credit  Facility  contains  restrictions  on the  payment of
dividends by the Company on its common stock.  Those  restrictions  prohibit the
payment  of  dividends  in  excess  of  50%  of  the  Restricted   Subsidiaries'
consolidated  net income after April 25, 1999, and further  prohibit the payment
of dividends under any circumstances when the effect of such payment would be to
cause the Restricted  Subsidiaries'  debt to EBITDA ratio (as defined within the
credit agreement) to exceed 4.0 to 1. Based upon these  restrictions (as well as
additional  restrictions  discussed  below),  the Company does not expect to pay
cash  dividends on its common stock,  10.5% Senior  Preferred  Stock or Series B
Senior Preferred Stock in the foreseeable future.

        The maximum  availability  under the revolving facility will reduce over
the term of the Senior Credit Facility by certain prescribed  amounts.  The term
facility  amortizes  at an annual rate of  approximately  1.0% of the  principal
amount for the first four years with the remaining  portion of the principal due
in two substantially equal installments in years five and six. The Senior Credit
Facility  requires  mandatory  prepayment  of the term  facility and a mandatory
reduction in the availability under the revolving facility of an amount equal to
50% of the Restricted Subsidiaries' excess cash flows during any period in which
the ratio of the  Restricted  Subsidiaries'  total senior debt to EBITDA exceeds
3.50 to 1. In no event,  however,  will such  mandatory  prepayments  reduce the
revolving facility commitment below $74.8 million. Management does not presently
expect to generate excess cash flows, as defined in the Senior Credit  Facility,
during fiscal 2000 or fiscal 2001.

         The Senior  Credit  Facility  also  places a maximum  level of non-real
estate  capital  expenditures  for fiscal 2000 of $23.1  million  (exclusive  of
certain  capital  expenditures  in  connection  with  the  sale of the  Series B
Preferred  Stock).  Following  fiscal 2000,  annual resort capital  expenditures
(exclusive of real estate capital  expenditures) are capped at the lesser of (i)
$35  million  or (ii) the  total of the  Restricted  Subsidiaries'  consolidated
EBITDA (as defined  therein) for the four fiscal  quarters ended in April of the
previous  fiscal year less  consolidated  debt service for the same  period.  In
addition to the  foregoing  amounts,  the Company is permitted to and expects to
make capital expenditures of up to $30 million for the purchase and construction
of a new gondola at its Heavenly resort in Lake Tahoe, Nevada, which the Company
currently plans to construct during the 2000 and 2001 fiscal years.

         8. Series B Preferred Stock Transaction.  Pursuant to a Preferred Stock
Subscription  Agreement  (the  "Series B  Agreement")  dated July 9,  1999,  the
Company  sold  150,000  shares of its 8.5%  Series B  Convertible  Participating
Preferred  Stock  ("Series  B  Preferred  Stock")  on August 9, 1999 to Oak Hill
Capital  Partners,  L.P.  and certain  related  entities  ("Oak  Hill") for $150
million.  The Company used  approximately $129 million of the proceeds to reduce
indebtedness  under its Senior  Credit  Facility,  approximately  $30 million of
which ultimately will be reborrowed and invested in the Company's principal real
estate development subsidiary,  American Skiing Company Resort Properties, Inc.,
("Resort  Properties"),  $9 million of which had been reborrowed and invested in
Resort  Properties  as of October 24, 1999.  The  remainder of the proceeds were
used to (1) pay  approximately  $16 million in fees and  expenses in  connection
with the Series B Preferred Stock sale  (approximately  $13 million) and related
transactions  (approximately  $3 million),  and (2) acquire  from the  Company's
principal shareholder certain strategic assets and to repay a demand note issued
by a subsidiary of the Company to the Company's  principal  shareholder,  in the
aggregate amount of $5.4 million.

      The Series B Preferred  Stock is convertible  into shares of the Company's
common stock at an initial  conversion price of $5.25 per share of common stock.
The initial conversion price is subject to an antidilution adjustment.  Assuming
all shares of the Series B  Preferred  Stock are  converted  into the  Company's
common stock at the initial (and current)  conversion  price, Oak Hill would own
approximately 48.5% of the Company's outstanding common stock and Class A common
stock as of August 9, 1999.  Oak Hill is entitled to vote its shares of Series B
Preferred  Stock on matters  (other than the  election of  Directors)  as if its
shares were converted into the Company's common stock. In addition,  Oak Hill as
the  holder  of  Series B  Preferred  Stock  has  class  voting  rights to elect
Directors to the Company's Board of Directors.  Furthermore,  under the Series B
Agreement,  Oak Hill and Mr.  Otten have agreed to use best  efforts and to vote
their  shares in order to ensure that each of them is able to appoint up to four
Directors to the Board (depending on their shareholdings).  Therefore, under the
Series B Agreement and the Company's certificate of incorporation,  Oak Hill and
Mr. Otten together elect eight of the 11 members of the Company's Board.

      Dividends on the Series B Preferred  Stock are payable at the rate of 8.5%
per year.  For the first five  years,  the  Company  may  accrete  and  compound
dividends payable to the liquidation price instead of paying cash dividends,  in
which case the dividend rate will  increase to 9.5% after January 31, 2001,  and
to 10.5% after January 31, 2002. The Series B Agreement requires dividends to be
paid in cash after July 31, 2004.  The dividend rate will revert back to 8.5% at
the time the Company  begins paying the dividend in cash. If the Company  elects
to accrue dividends on the Series B Preferred Stock to the liquidation price for
the first five years,  and  thereafter  pay all  dividends in cash when due, the
Series B Preferred Stock would be convertible into 60.4% of the Company's common
stock after the fifth  anniversary  of its  issuance.  The Company is  currently
accruing dividends on the Series B Preferred Stock at an effective rate of 9.7%,
with the  assumption  that  dividends  will not be paid in cash  until the fifth
anniversary of the issuance.

                                     Item 2
                Management's Discussion and Analysis of Financial
                       Condition and Results of Operations
General

         The  following  is  management's  discussion  and analysis of financial
condition and results of operations for the three months ended October 24, 1999.
As you  read  the  material  below,  we  urge  you  to  carefully  consider  our
Consolidated  Financial Statements and related notes contained elsewhere in this
report and the audited  financial  statements and related notes contained in our
Form 10-K filed with the Securities and Exchange Commission on October 23, 1999.

         The Oak Hill  Transaction.  On August 9, 1999, the Company  consummated
the sale of 150,000  shares of its Series B Convertible  Exchangeable  Preferred
Stock (the "Series B Preferred  Stock") to Oak Hill Capital  Partners,  L.P. and
certain related  entities ("Oak Hill").  The Company  realized gross proceeds of
$150  million on the Series B  Preferred  Stock sale.  The  Company  used $128.6
million of the proceeds to reduce  indebtedness under its Senior Credit Facility
(as described  below),  approximately  $30 million of which  ultimately  will be
reborrowed  and  invested in the  Company's  principal  real estate  development
subsidiary,   American  Skiing  Company  Resort   Properties,   Inc.,   ("Resort
Properties").  As of November  22,  1999,  $14 million has been  reborrowed  and
invested in Resort  Properties.  The  remainder of the proceeds were used to (1)
pay approximately $16 million in fees and expenses in connection with the Series
B Preferred  Stock sale  (approximately  $13 million)  and related  transactions
(approximately  $3  million),  and (2)  acquire  from  the  Company's  principal
shareholder  certain  strategic  assets and to repay a demand  note  issued by a
subsidiary  of  the  Company  to the  Company's  principal  shareholder,  in the
aggregate amount of $5.4 million. As a result of these transactions,  management
believes  that  its  current  capital  resources  are  sufficient  both  to fund
operations at its resorts and to complete  those real estate  projects which are
currently  under  construction.  As more fully  discussed  below,  the Company's
ability to commence and complete new real estate  development  projects  will be
dependent  upon the  Company's  ability to raise  additional  capital and Resort
Properties' ability to obtain additional non-recourse financing.

         In  connection  with the Series B  Preferred  Stock  sale,  the Company
obtained consents (1) from lenders and creditors of the Company stating that the
Series B Preferred  Stock sale would not  constitute a "change of control" under
the relevant loan agreements, (2) from the holders of the 10.5% Senior Preferred
Stock of the Company  approving the issuance of the Series B Preferred Stock and
the terms of such stock and (3) from noteholders under the Indenture relating to
the 12% Senior Subordinated Notes due 2006 of the Company's subsidiary, ASC East
(the "Indenture"), approving the merger of ASC East into the Company and certain
other amendments to the Indenture.

         In  connection  with the Series B  Preferred  Stock  sale,  the Company
simplified its capital structure by merging its two principal subsidiaries,  ASC
East and ASC West, with and into the Parent. In connection with the merger,  the
Parent  assumed all  liabilities of ASC East and ASC West and became the primary
obligor under certain credit  facilities  and under the Indenture.  In addition,
the then current  subsidiaries  of the Parent and ASC West, as well as ASC Utah,
also  became  additional  guarantors  under  the  Indenture.  As a result of the
merger:  (a) the  Company's  capital  structure  has been  simplified,  which is
expected  to make it easier to raise  capital in the future and  administer  the
operations  of the  Company;  (b) the  capital  and  assets  of ASC East and its
subsidiaries  are  available  to  satisfy  the  obligations  of ASC West and its
subsidiaries  under the Company's Senior Credit Facility  (described below); (c)
the Parent and its  subsidiaries  are now  subject  to the  covenants  and other
restrictions contained in the Indenture;  and (d) ASC East is no longer required
to file  annual  reports and make other  filings  under the  regulations  of the
Securities Exchange Act of 1934.

         As a result of the additional  guarantee given by certain  subsidiaries
of the Company,  the noteholders under the Indenture will have priority over the
equity  holders of the Company  with respect to any claims made on the assets of
those   subsidiaries  until  the  obligations  under  the  Indenture  have  been
satisfied.

Liquidity and Capital Resources

         Short-Term.  The  Company's  primary  short-term  liquidity  needs  are
funding  seasonal working capital  requirements,  continuing and completing real
estate  development  projects presently under  construction,  funding its fiscal
2000 capital improvement program and servicing  indebtedness.  Cash requirements
for ski-related and real estate development  activities are provided by separate
sources.  The Company's  primary  sources of liquidity for  ski-related  working
capital and ski-related  capital  improvements  are cash flow from operations of
its non-real estate subsidiaries and borrowings under the Senior Credit Facility
(as  hereinafter  defined).  Real estate  development  and real  estate  working
capital  is funded  primarily  through  (i)  construction  financing  facilities
established for major real estate  development  projects,  (ii) the expected $30
million  equity  contribution  made  available from the proceeds of the Series B
Preferred  Stock  sale and  (iii)  through  a $58  million  term  loan  facility
established  through Resort Properties (the "Resort  Properties Term Facility").
These  construction  financing  facilities and Resort  Properties  Term Facility
(collectively, the "Real Estate Facilities") are without recourse to the Company
and  its  resort  operating   subsidiaries.   The  Real  Estate  Facilities  are
collateralized  by significant  real estate assets of Resort  Properties and its
subsidiaries,  including,  without  limitation,  the  assets  and stock of Grand
Summit Resort Properties, Inc. ("GSRP"), the Company's primary hotel development
subsidiary.  As of October  24,  1999,  the book value of the total  assets that
collateralized the Real Estate Facilities,  and are included in the accompanying
consolidated balance sheet, were approximately $300.6 million.

         Resort Liquidity.  The Company  established a senior credit facility on
November 12, 1997. On October 7, 1999,  this senior credit facility was amended,
restated and  consolidated  from two  sub-facilities  totaling $215 million to a
single facility  totaling $165 million ($46.0 million of which was available for
borrowings at November 22, 1999,  which includes  approximately  $16 million the
Company  intends to transfer to Resort  Properties  in fiscal 2000) (the "Senior
Credit  Facility").  The Senior Credit Facility  consists of a revolving  credit
facility in the amount of $100 million and a term  facility in the amount of $65
million.  The revolving portion of the Senior Credit Facility matures on May 30,
2004, and the term portion matures on May 31, 2006.

         The Senior Credit Facility contains affirmative, negative and financial
covenants customary for this type of credit facility,  including  maintenance of
certain  financial  ratios.  The Senior  Credit  Facility is  collateralized  by
substantially all the assets of the Company,  except its real estate development
subsidiaries  (consisting of Resort Properties and its subsidiaries),  which are
not borrowers  under the Senior  Credit  Facility  (collectively,  the borrowing
subsidiaries  are referred to as the "Restricted  Subsidiaries").  The revolving
facility is subject to an annual 30-day clean down requirement to an outstanding
balance of not more than $35 million, which clean down period must include April
30 of each fiscal year.

        The Senior  Credit  Facility  contains  restrictions  on the  payment of
dividends by the Company on its common stock.  Those  restrictions  prohibit the
payment  of  dividends  in  excess  of  50%  of  the  Restricted   Subsidiaries'
consolidated  net income after April 25, 1999, and further  prohibit the payment
of dividends under any circumstances when the effect of such payment would be to
cause the Restricted  Subsidiaries'  debt to EBITDA ratio (as defined within the
credit agreement) to exceed 4.0 to 1. Based upon these  restrictions (as well as
additional  restrictions  discussed below),  the Company does not expect that it
will be able to pay cash dividends on its common stock,  10.5% Senior  Preferred
Stock or Series B Senior Preferred Stock in the foreseeable future.

        The maximum  availability  under the revolving facility will reduce over
the term of the Senior Credit Facility by certain prescribed  amounts.  The term
facility  amortizes  at an annual rate of  approximately  1.0% of the  principal
amount for the first four years with the remaining  portion of the principal due
in two substantially equal installments in years five and six. The Senior Credit
Facility  requires  mandatory  prepayment  of the term  facility and a mandatory
reduction in the availability under the revolving facility of an amount equal to
50% of the Restricted Subsidiaries' excess cash flows during any period in which
the ratio of the  Restricted  Subsidiaries'  total senior debt to EBITDA exceeds
3.50 to 1. In no event,  however,  will such  mandatory  prepayments  reduce the
revolving facility commitment below $74.8 million. Management does not presently
expect to generate excess cash flows, as defined in the Senior Credit  Facility,
during fiscal 2000 or fiscal 2001.

         Based upon historical operations, management presently anticipates that
the Company will be able to meet the  financial  covenants of the Senior  Credit
Facility.  Failure  to meet one or more of these  covenants  could  result in an
event of  default  under the  Senior  Credit  Facility.  In the event  that such
default were not waived by the lenders  holding a majority of the debt under the
Senior Credit Facility, such default would also constitute defaults under one or
more of the Textron  Facility,  the Key Facility (each as hereinafter  defined),
the Resort Properties Term Facility and the Indenture, the consequences of which
would likely be material and adverse to the Company.

         The Senior  Credit  Facility  also  places a maximum  level of non-real
estate  capital  expenditures  for fiscal 2000 of $23.1  million  (exclusive  of
certain  capital  expenditures  in  connection  with  the  sale of the  Series B
Preferred  Stock).  Following  fiscal 2000,  annual resort capital  expenditures
(exclusive of real estate capital  expenditures) are capped at the lesser of (i)
$35  million  or (ii) the  total of the  Restricted  Subsidiaries'  consolidated
EBITDA (as defined  therein) for the four fiscal  quarters ended in April of the
previous  fiscal year less  consolidated  debt service for the same  period.  In
addition to the  foregoing  amounts,  the Company is permitted to and expects to
make capital expenditures of up to $30 million for the purchase and construction
of a new gondola at its Heavenly resort in Lake Tahoe, Nevada, which the Company
currently plans to construct during the 2000 and 2001 fiscal years.

        The Company  intends to use borrowings  under the Senior Credit Facility
for seasonal  working capital needs,  certain capital  improvements and to build
retail and other inventories prior to the start of the 1999-2000 ski season. The
Company expects to maximize borrowings under the Senior Credit Facility sometime
between  November  and  December  of  1999.  During  this  period,  the  Company
historically has had little,  if any,  borrowing  availability  under the Senior
Credit  Facility.  However,  as a result of the sale of the  Series B  Preferred
Stock and the resulting  paydown in the balance of the revolving  portion of the
Senior Credit Facility,  in Fiscal 2000 management expects that the Company will
have  significant  additional  borrowing  availability  under the Senior  Credit
Facility during this period.

        The Company's liquidity is significantly  affected by its high leverage.
As a result of its leveraged  position,  the Company will have  significant cash
requirements   to  service   interest  and  principal   payments  on  its  debt.
Consequently,  cash availability for working capital needs, capital expenditures
and acquisitions is limited, outside of the availability under the Senior Credit
Facility. Furthermore, the Senior Credit Facility and the Indenture each contain
significant  restrictions on the ability of the Company and its  subsidiaries to
obtain  additional  sources of capital and may affect the  Company's  liquidity.
These restrictions include  restrictions on the sale of assets,  restrictions on
the incurrence of additional  indebtedness  and  restrictions on the issuance of
preferred stock.

        Late in fiscal  1999,  the Company  implemented  a plan to sell  certain
non-strategic  assets in order to improve cash flow due to the effect of adverse
weather  conditions  many of the  Company's  resorts  experienced  in the second
quarter  of  fiscal  1999.  As a result of these  sales,  the  Company  realized
proceeds of $6.8 million and $9.1  million in the fourth  quarter of fiscal 1999
and the first quarter of fiscal 2000, respectively.

        On October 6, 1999, the Parent merged with two of its subsidiaries,  ASC
East, Inc. and ASC West, Inc. In connection with this merger, the Parent assumed
the obligations of ASC East, Inc. under the Indenture,  and each of the material
subsidiaries of ASC West, Inc.  granted  guarantees to secure the obligations of
the Parent under the Indenture.  Each of the material  subsidiaries of ASC East,
Inc. had  previously  granted  guarantees  to secure the  obligations  under the
Indenture.  By assuming the  obligations  of ASC East under the  Indenture,  the
Company  removed a  significant  impediment  to the free flow of cash  among its
subsidiaries  and allowed for the  consolidation  of the Senior Credit Facility.
The assumption also subjects the Parent and its  subsidiaries,  ASC Utah and the
subsidiaries of ASC West, Inc. to the  restrictions on dividends,  indebtedness,
and other  covenants  contained in the Indenture.  Management  believes that the
simplified capital structure,  which resulted from the merger and the assumption
of the Indenture obligations,  will benefit the Company as it pursues additional
financing or other capital sources.

        Under  the  Indenture,  the  Company  is  prohibited  from  paying  cash
dividends  or making  other  distributions  to its  shareholders,  except  under
certain   circumstances   (which  are  not  currently  applicable  and  are  not
anticipated to be applicable in the foreseeable future).

         Real Estate Liquidity: Funding of working capital for Resort Properties
and its fiscal 2000 real estate  development  program is provided  through (i) a
$30  million  equity  contribution  from the  proceeds of the Series B Preferred
Stock  sale  and  (ii)  a term  loan  facility  between  BankBoston  and  Resort
Properties  in  the  maximum  principal  amount  of  $58  million  (the  "Resort
Properties Term Facility").

         The Resort  Properties  Term Facility bears interest at a variable rate
equal to BankBoston's base rate plus 8.25%, or a current rate of 16.5% per annum
(payable  monthly in arrears),  and matures on June 30, 2001. As of November 22,
1999, $52.8 million was outstanding  under the Resort  Properties Term Facility.
The Resort Properties Term Facility is collateralized by security  interests in,
and  mortgages  on,  substantially  all  of  Resort  Properties'  assets,  which
primarily  consist of undeveloped real property and the stock of its real estate
development  subsidiaries  (including  GSRP).  As of October 24, 1999,  the book
value of the  total  assets  that  collateralized  the  Resort  Properties  Term
Facility,  and are included in the accompanying  consolidated balance sheet, was
approximately   $300.6   million.   The  Resort   Properties  Term  Facility  is
non-recourse to the Company and its resort operating subsidiaries.

         In  conjunction  with  the  Resort  Properties  Term  Facility,  Resort
Properties  entered into a syndication  letter with BankBoston (the "Syndication
Letter")  pursuant to which BankBoston  agreed to syndicate up to $43 million of
the Resort Properties Term Facility.  Under the terms of the Syndication Letter,
one or more of the  terms of the  Resort  Properties  Term  Facility  (excepting
certain  terms  such as the  maturity  date and  commitment  fee) may be altered
depending on the  requirements  for  syndication  of the facility.  However,  no
alteration  of the terms of the facility may occur without the consent of Resort
Properties.   Although  Resort  Properties  expects  the  terms  of  the  Resort
Properties  Term  Facility to remain  substantially  similar to those  discussed
above,  one or more of such terms  could be altered  in order to  syndicate  the
facility,  and such alterations could be material and adverse to the Company. As
of November 22, 1999,  BankBoston was actively engaged in syndicating the Resort
Properties  Term  Facility.  The  Syndication  Letter also provides that, in the
event that  BankBoston is unable to syndicate at least $33 million of the Resort
Properties Term Facility,  then BankBoston may at its option,  require repayment
of the  outstanding  balance of the facility  within 120 days of its request for
repayment  by  Resort  Properties.   If  the  syndication  is  unsuccessful  and
BankBoston were to require repayment, there can be no assurance that the Company
could secure replacement financing for the Resort Properties Term Facility.  The
failure to secure replacement financing on terms similar to those existing under
the Resort Properties Term Facility could result in a material adverse effect on
the liquidity of Resort  Properties and its  subsidiaries,  including  GSRP, and
could  also  result  in a default  under the  Indenture  and the  Senior  Credit
Facility.

         The  Company  runs  substantially  all of its real  estate  development
through single purpose subsidiaries,  each of which is a wholly owned subsidiary
of  Resort  Properties.  In its  fourth  fiscal  quarter  of 1998,  the  Company
commenced  construction  on three new hotel projects (two at The Canyons in Utah
and one at Steamboat  in  Colorado).  Two of these new hotel  projects are Grand
Summit Hotels that are being constructed by GSRP. The Grand Summit Hotels at The
Canyons and Steamboat  are being  financed  through a $110 million  construction
loan facility among GSRP and various lenders,  including TFC Textron  Financial,
the syndication agent and  administrative  agent,  which closed on September 25,
1998 (the "Textron Facility").

         As of  November  22,  1999,  the amount  outstanding  under the Textron
Facility was $97.2 million.  The Textron  Facility matures on September 24, 2002
and bears  interest at the rate of prime plus 2.5% per annum.  The  principal of
the Textron Facility is payable  incrementally as quartershare  sales are closed
based on a predetermined per unit amount, which approximates between 50% and 80%
of the net proceeds of each closing.  The Textron Facility is  collateralized by
mortgages against the project sites (including the completed Grand Summit Hotels
at Killington, Mt. Snow, Sunday River and Attitash Bear Peak), and is subject to
covenants,   representations   and   warranties   customary  for  this  type  of
construction  facility.  The Textron Facility is non-recourse to the Company and
its resort operating  subsidiaries (although it is collateralized by substantial
assets  of  GSRP,  $201.9  million  as  of  October  24,  1999,  which  comprise
substantial  assets of the  Company).  The Grand  Summit Hotel at The Canyons is
expected to be opened during the Company's current fiscal quarter. Approximately
54% of the units in this hotel have been  pre-sold  and 80% of the  proceeds  of
those sales will be applied to pay down the Textron Facility. These amounts will
subsequently be available for reborrowing (up to the maximum  outstanding amount
of $110  million)  and used for the  completion  of the  Grand  Summit  Hotel at
Steamboat.

         The  remaining  hotel  project  commenced  by the Company in 1998,  the
Sundial  Lodge  project  at  The  Canyons,  is  being  financed  through  (i)  a
construction  loan facility between Canyons Resort  Properties,  Inc., (a wholly
owned  subsidiary of Resort  Properties) and KeyBank,  N.A. (the "Key Facility")
and  (ii) an $8  million  intercompany  loan  from  Resort  Properties.  The Key
Facility has a maximum principal amount of $29 million, bears interest at a rate
of prime plus 1/4% per annum (payable  monthly in arrears),  and matures on June
30, 2000.  The Company had $17.2 million in advances  outstanding  under the Key
Facility as of November 22, 1999. The Sundial Lodge is expected to begin opening
during the Company's current fiscal quarter.  This project is fully sold out and
sales  proceeds  will be applied to repay the Key  Facility in full.  Management
expects the full  repayment  to occur in the  Company's  second or third  fiscal
quarter,  dependent on the timing of all of the unit closings.  The Key Facility
is  collateralized  by a mortgage  and  security  interest in the Sundial  Lodge
project,  a $5.8  million  payment  guaranty  of Resort  Properties,  and a full
completion  guaranty of Resort  Properties.  The Key Facility is non-recourse to
the Company and its resort operating subsidiaries (although it is collateralized
by substantial assets of Resort Properties and its subsidiaries).  As of October
24, 1999, the book value of the total assets that collateralized the Real Estate
Facilities,  and are included in the  accompanying  consolidated  balance sheet,
were approximately $300.6 million.

         The Company's fiscal 2000 business plan anticipates the commencement of
several  real estate  projects in the Spring of 2000,  including a Grand  Summit
Hotel at  Heavenly,  a  condominium  hotel at The Canyons and  townhomes  at The
Canyons.  The timing and extent of these projects are subject to local and state
permitting  requirements which may be beyond the Company's  control,  as well as
market  demand as  evidenced  by  project  pre-sales,  the  Company's  cash flow
requirements and availability of external capital.

         Long-Term.  The Company's primary long-term liquidity needs are to fund
skiing related capital improvements at certain of its resorts and development of
its slope side real  estate.  The Company has  invested  over $145.5  million in
skiing related  facilities in fiscal years 1998 and 1999 combined.  As a result,
the Company  expects its resort  capital  programs for the next  several  fiscal
years will be more limited in size.  The  Company's  fiscal 2000 resort  capital
program is estimated at approximately $23 million,  plus such additional amounts
as are expended on the Heavenly Gondola project.

         The Company's  largest  long-term  capital needs relate to: (i) certain
resort  capital  expenditure   projects  (including  the  Heavenly  gondola  for
approximately  $25-30  million),  (ii) the  Company's  real  estate  development
program,  and (iii)  repayment of the  Company's  Mandatorily  Redeemable  10.5%
Preferred Stock  (discussed  below).  For the next two fiscal years, the Company
anticipates  its  annual  maintenance  capital  needs  to be  approximately  $12
million.  There is a considerable  degree of flexibility in the timing and, to a
lesser degree, scope of the Company's growth capital program.  Although specific
capital  expenditures can be deferred for extended periods,  continued growth of
skiervisits,   revenues  and   profitability   will  require  continued  capital
investment in on-mountain improvements.

         The Company's practice is to finance on-mountain  capital  improvements
through resort cash flow and its Senior Credit  Facility.  The size and scope of
the capital  improvement program will generally be determined annually depending
upon the strategic importance and expected financial return of certain projects,
future availability of cash flow from each season's resort operations and future
borrowing  availability  and  covenant  restrictions  under  the  Senior  Credit
Facility.  The Senior Credit  Facility places a maximum level of non-real estate
capital expenditures for fiscal 2001 and beyond at the lesser of (i) $35 million
or (ii) the total of (a) the Restricted  Subsidiaries'  consolidated  EBITDA (as
defined  therein)  for the four fiscal  quarters  ended in April of the previous
fiscal year less (b) consolidated  debt service for the same period. In addition
to the  foregoing  amounts,  the  Company is  permitted  to and  expects to make
capital expenditures of up to $30 million for the purchase and construction of a
new  gondola at its  Heavenly  resort in Lake Tahoe,  Nevada,  which the Company
currently plans to construct  during the 2000 and 2001 fiscal years.  Management
believes that these capital  expenditure  amounts will be sufficient to meet the
Company's needs for non-real estate capital improvements for the near future.

         The Company's  business plan  anticipates the development of both Grand
Summit  hotels  and  condominium  hotels at several  resorts,  as well as resort
villages at The Canyons, Heavenly,  Killington,  Steamboat and Sunday River. The
timing and extent of these  projects  are subject to local and state  permitting
requirements  which  may be  beyond  the  Company's  control,  as well as to the
Company's  cash  flow   requirements  and  availability  of  external   capital.
Substantially all of the Company's real estate development is undertaken through
the Company's real estate development subsidiary, Resort Properties. Recourse on
indebtedness  incurred  to finance  this real estate  development  is limited to
Resort Properties and/or its subsidiaries (including GSRP). Such indebtedness is
generally   collateralized   by  the  projects  financed  under  the  particular
indebtedness,  which,  in some cases,  constitutes a significant  portion of the
assets  of  the  Company.  As  of  October  24,  1999,  the  total  assets  that
collateralized the Real Estate Facilities,  and are included in the accompanying
consolidated  balance  sheet,  totaled  approximately  $300.6  million.   Resort
Properties'  seven existing  development  projects are currently being funded by
the Resort Properties Term Facility, the Textron Facility and the Key Facility.

         The  Company  expects  to  undertake  future  real  estate  development
projects   through  special  purpose   subsidiaries   with  financing   provided
principally  on a  non-recourse  basis to the Company  and its resort  operating
subsidiaries.  Although  this  financing is expected to be  non-recourse  to the
Company  and its  resort  subsidiaries,  it will  likely  be  collateralized  by
existing  and future real estate  projects  of the Company  that may  constitute
significant  assets of the  Company.  Required  equity  contributions  for these
projects  must be generated  before those  projects can be  undertaken,  and the
projects  are  subject  to  mandatory  pre-sale  requirements  under the  Resort
Properties  Term Facility.  Potential  sources of equity  contributions  include
sales proceeds from existing real estate projects and assets, (to the extent not
applied to the repayment of indebtedness)  and potential sales of equity or debt
interests in Resort Properties and/or its real estate development  subsidiaries.
Financing commitments for future real estate development do not currently exist,
and no assurance can be given that they will be available on satisfactory terms.
The Company will be required to establish both equity  sources and  construction
facilities or other financing arrangements for these projects before undertaking
each development.

         The Company  issued $17.5 million of  convertible  preferred  stock and
$17.5  million  of  convertible  notes in July 1997 to fund  development  at The
Canyons.  These  securities were converted on November 12, 1997 into Mandatorily
Redeemable 10 1/2% Preferred Stock of the Company. The Mandatorily Redeemable 10
1/2% Preferred  Stock is exchangeable at the option of the holder into shares of
the  Company's  common  stock at a  conversion  price of $17.10 for each  common
share. In the event that the  Mandatorily  Redeemable 10 1/2% Preferred Stock is
held to its maturity date of November 15, 2002,  the Company will be required to
pay the holders the face value of $36.6  million plus  dividends in arrears.  So
long as the Mandatorily  Redeemable 10 1/2% Preferred Stock remains outstanding,
the  Company  may not pay any cash  dividends  on its  common  stock or Series B
Preferred  Stock  unless  accrued  and  unpaid   dividends  on  the  Mandatorily
Redeemable 10 1/2% Preferred Stock have been paid in cash on the most recent due
date.  Because the Company has been accruing unpaid dividends on the Mandatorily
Redeemable 10 1/2%  Preferred  Stock,  the Company is not presently  able to pay
cash  dividends on its common stock or Series B Preferred  Stock and  management
does not expect that the Company will have this ability in the near future.





<PAGE>


                        Changes in Results of Operations

     First Quarter of Fiscal 2000 compared to First Quarter of Fiscal 1999.

         Net loss  available to  shareholders  was $28.0  million,  or $0.92 per
share, for the first quarter of fiscal 2000 compared to $20.3 million,  or $0.67
per share,  for the first  quarter of fiscal 1999,  representing  an increase of
$7.7 million, or 37.9%. The increase in the net loss is mainly the result of (i)
an increase  in  preferred  stock  dividends,  slightly  offset by a decrease in
interest  expense,  (ii) the write-off of certain deferred tax assets,  (iii) an
increase in net operating losses from resort and real estate activities, (iv) an
extraordinary  loss resulting  from the  restructuring  of the Company's  senior
credit  facility,  and (v) the  cumulative  effective of a change in  accounting
principle  relating to start-up  costs at certain of the  Company's  resorts and
hotels. The net loss before  extraordinary items and the cumulative effect of an
accounting  change was $21.8 million,  or $0.72 per share, for the first quarter
of fiscal  2000  compared  to $19.2  million,  or $0.67 per share,  in the first
quarter of fiscal 1999, representing an increase of $2.6 million, or 13.5%.

         Loss from  operations  increased  $2.0  million,  or 9.6%,  from  $20.9
million  in the first  quarter  of  fiscal  1999 to $22.9  million  in the first
quarter of fiscal 2000. The majority of this increase is  attributable  to a net
loss from real estate  operations  in fiscal 2000 of $0.7  million  (real estate
revenues of $2.6 million less real estate expenses of $3.3 million)  compared to
a net gain in fiscal 1999 of $0.4 million (real estate  revenues of $4.5 million
less real estate expenses of $4.1 million).  A decrease in sales of quartershare
units at the  Company's  existing  Grand  Summit  Hotels at its eastern  resorts
accounts  for  $0.4  million  of this  decrease,  and  expenses  related  to the
construction of these existing hotels accounts for an additional $0.4 million of
the decrease.  Sales of these units has decreased in the first fiscal quarter of
2000 when  compared to the prior year,  however,  the overall  sell-out of these
projects  remains  strong as both the Jordan Grand at Sunday River and the Grand
Summit  at  Killington  are now over 70%  sold-out,  with the Grand  Summits  at
Attitash Bear Peak and Mount Snow over 50% sold-out.  Also  contributing  to the
loss in  real  estate  operations  in the  first  quarter  of  fiscal  2000  was
approximately $1.3 million in general and administrative expenses related to the
on-going  operations  of the  Company's  real estate  subsidiaries  and its real
estate development activities. The amount of general and administrative expenses
is consistent with the amount recognized in the first quarter of fiscal 1999.

         The net loss  from  resort  operations  (resort  revenues  less  resort
expenses and  marketing  general and  administrative  expenses)  increased  $0.4
million from $18.6  million in the first quarter of fiscal 1999 to $19.0 million
in the first  quarter of fiscal  2000.  An increase  in resort  revenues of $0.5
million includes $1.6 million in net gains from the sale of non-strategic assets
in the first  quarter of fiscal 2000.  Excluding  the net gains from the sale of
assets,  resort  revenues  decreased in the first quarter of fiscal 2000 by $1.1
million when compared to fiscal 1999.  This decrease is mainly  attributable  to
(i) lower golf and summer  revenues due to reduced  summer  marketing  programs,
(ii) lower retail revenues due to aggressive pricing to liquidate inventory, and
(iii) the loss of rental  income from  commercial  space that the  Company  sold
during  the third and fourth  quarters  of fiscal  1999.  These  decreases  were
slightly offset by increases in food and beverage and lodging revenues mainly as
a result of improved hotel operations.  Resort operating  expenses  increased by
$0.9 million in the first  quarter of fiscal 2000 when  compared to fiscal 1999,
due mainly to increased  maintenance costs, food and beverage and lodging costs,
and retail costs of goods sold.

         Also  contributing  to the increase in the loss from  operations  was a
$0.5 million  increase in depreciation  and amortization in the first quarter of
fiscal 2000  compared to the same quarter in fiscal 1999.  This increase was due
mainly to  amortization of (i) additional  deferred  financing costs incurred to
restructure  the Company's  senior credit  facility and (ii) the consent payment
made to holders of the Company's  Senior  Subordinated  Notes in connection with
the merger of ASC East into the Parent.

         Interest expense decreased $0.9 million, or 10.1%, from $8.9 million in
the first  quarter of fiscal 1999 to $8.0 million in the first quarter of fiscal
2000. This decrease is primarily  attributable to the approximately $120 million
reduction  in the  Company's  senior  credit  facility  from the proceeds of the
Series B Preferred Stock sale offset slightly by an increase in interest expense
related to the Company's non-recourse real estate debt.

         Benefit from income taxes  decreased by $1.5  million,  or 14.2%,  from
$10.6 million (an  effective  rate of 35.5%) in the first quarter of fiscal 1999
to $9.1  million  (an  effective  rate of 29.3%) in the first  quarter of fiscal
2000.  The  decrease in the  effective  rate is due  primarily to a $3.0 million
valuation allowance  established in the first quarter of fiscal 2000 relating to
certain deferred tax assets for prior net operating  losses.  As a result of the
Oak Hill Transaction (see above),  the realization of the tax benefit of certain
of the Company's net operating losses and other tax attributes is dependent upon
the occurrence of certain future events.  It is the judgment of the Company that
a valuation  allowance of $3.0  million  against its deferred tax assets for net
operating  losses and other tax  attributes  is  appropriate  because it is more
likely  than not that the  benefit  of such  losses and  attributes  will not be
realized.   Based  on  facts  known  at  this  time,  the  Company   expects  to
substantially  realize the benefit of the remainder of its net operating  losses
and other tax attributes affected by the Oak Hill Transaction.

         Extraordinary  loss of $0.6 million (net of $0.4 million tax  benefits)
in the first  quarter of fiscal 2000  results  from the  pro-rata  write-off  of
certain existing deferred financing costs related to the Company's senior credit
facility.  This write-off was due to the restructuring of the credit facility in
connection  with the permanent  reduction in the  availability  of the revolving
portion and the pay down of the term portion of the  facility  from the proceeds
of the Series B Preferred Stock sale.

         Cumulative  effect of a change in accounting  principle of $0.7 million
(net of $0.4  million tax  benefit) in the first  quarter of fiscal 2000 results
from the  write-off  of  certain  capitalized  start-up  costs  relating  to the
Company's  hotel and retail  operations and the opening of the Canyons resort in
fiscal 1998.  The accounting  change was due to the Company's  adoption of AICPA
Statement of Position 98-5, "Reporting on the Costs of Start-up Activities". SOP
98-5  requires  the  expensing of all  start-up  costs as incurred,  rather than
capitalizing  and subsequently  amortizing such costs.  Initial adoption of this
SOP should be  reported  as a  cumulative  effective  of a change in  accounting
principles.  Current  start-up  costs are being  expensed  as  incurred  and are
reflected in their appropriate expense classifications

         Accretion of discount and dividends  accrued on mandatorily  redeemable
preferred  stock  increased  $3.7 million from $1.1 million for the three months
ended  October 25, 1998 to $4.8 million for the three  months ended  October 24,
1999.  This  increase is primarily  attributable  to the  additional  accrual of
dividends  on 150,000  shares of 8 1/2% Series B Preferred  Stock  issued to Oak
Hill Capital Partners, LP in the first quarter of fiscal 2000.

                         Changes in Financial Condition

          First Quarter of Fiscal 2000 Compared to Fiscal Year End 1999

         Cash and cash  equivalents  decreased  $1.2 million,  or 13.3%,  from a
balance of $9.0 million at July 25, 1999 to a balance of $7.8 million at October
24, 1999.  The  decrease is primarily  attributable  to the  Company's  seasonal
working capital needs.

         Restricted cash increased $2.0 million,  36.4%,  from a balance of $5.5
million at July 25, 1999 to a balance of $7.5 million at October 24,  1999.  The
increase is primarily due to cash deposits received on pre-sales of units at the
western resort real estate projects currently in the pre-sales phase.

         Accounts receivable increased $2.1 million, or 32.3%, from a balance of
$6.5  million at July 25, 1999 to a balance of $8.6 million at October 24, 1999.
The increase is primarily  attributable to an increase in receivables associated
with seasonal advance hotel bookings.

         Prepaid expenses  increased $1.2 million,  or 24.5%,  from a balance of
$5.3  million at July 25, 1999 to a balance of $6.6 million at October 24, 1999.
The increase is mainly attributable to sales commissions on pre-sold real estate
units at the Company's western resorts.

         Property,  plant and  equipment,  net decreased  $2.7  million,  from a
balance  of $529.2  million at July 25,  1999 to a balance of $526.5  million at
October  24,  1999.  The  decrease  is  attributable  to (i) the sale of certain
non-strategic  assets,  which had a total net book  value of $7.3  million  upon
disposition,  and (ii) a reduced level of capital  expenditures  during the 2000
fiscal year, which did not keep pace with depreciation expense.

         Real estate  developed for resale  increased  $52.6 million,  or 25.3%,
from a balance of $207.7 million at July 25, 1999 to a balance of $260.3 million
at October 24, 1999. The increase is primarily  attributable  to the development
of the  Sundial  Lodge  project at The  Canyons and Grand  Summit  Resort  Hotel
projects at The Canyons and Steamboat,  slightly  offset by sales of the eastern
Grand Summit Hotel inventory.

         Other assets  decreased $0.9 million,  or 4.9%, from a balance of $18.5
million  at July 25,  1999 to a balance of $17.6  million at April 25 1999.  The
decrease is primarily attributable to the redemption of a note receivable.

         Current  portion of long-term  debt decreased  $42.8 million,  or 69.4%
from a balance of $61.6  million at July 25, 1999 to a balance of $18.8  million
at October 24, 1999. The decrease is primarily  attributable to the net pay down
of the  Company's  Senior  Credit  Facility  from the  proceeds  of the Series B
Preferred Stock sale.

         Accounts payable and other current liabilities  increased $5.0 million,
or 6.4%,  from a balance of $78.0 million at July 25, 1999 to a balance of $83.0
million at October 24, 1999. The increase is  attributable  to the  construction
projects at the Company's  real estate  subsidiaries  and an increase in accrued
interest  due to the  timing of  payments  on  capital  leases  for  ski-related
equipment.

         Deposits and deferred revenue increased $18.7 million, or 94.9%, from a
balance of $19.7 million at July 25, 1999 to a balance of $38.4 million at April
26, 1999. The change is attributable to i) an increase of $15.2 million relating
to deferred revenue  associated with the Company's season pass sales and prepaid
ticket programs,  ii) an increase of $4.5 million relating to deposits  received
on lodging at all of the Company's resorts.

         Long-term debt,  excluding current portion decreased $27.2 million,  or
8.7%,  from a balance of $313.8  million at July 25, 1999 to a balance of $286.6
million at October 24, 1999. The increase is attributable to the net pay down of
the Company's Senior Credit Facility from the proceeds of its Series B Preferred
Stock sale.

         Mandatorily  redeemable 10 1/2% preferred stock increased $1.2 million,
or 2.7%,  from a balance of $43.8 million at July 25, 1999 to a balance of $45.0
million at October 24, 1999. The increase is  attributable  to the accretion and
accrual of the dividends payable for the period.

         Mandatorily redeemable 8 1/2% series B preferred stock increased $140.4
million  due to  the  issuance  of  150,000  shares  of  mandatorily  redeemable
preferred  stock to Oakhill  Capital  Partners,  LP during the first  quarter of
fiscal 2000.

         Accumulated  deficit  increased  $28.0  million from a deficit of $32.3
million at July 25,1999 to $60.3  million at October 24,  1999.  The increase is
attributable to the Company's net loss for the period.


Year 2000 Disclosure

     Background. The "Year 2000 Problem" is the result of many existing computer
programs and embedded chip  technologies  containing  programming  code in which
calendar year data is  abbreviated  by using only two digits rather than four to
refer to a year. As a result of this,  some of these programs fail to operate or
may not properly  recognize a year that begins with "20"  instead of "19".  This
may cause such  software to  recognize a date using "00" as the year 1900 rather
than the year 2000. Even systems and equipment that are not typically thought of
as  computer-related  often  contain  embedded  hardware  or  software  that may
improperly  understand dates beginning with the year 2000.  Inability of systems
to  properly  recognize  the  year  2000  could  result  in  system  failure  or
miscalculations causing disruptions to operations, including temporary inability
to process transactions or engage in normal business activities.

The Company has developed a Year 2000 task force with representation  throughout
the  organization.  The task force has  developed  a  comprehensive  strategy to
systematically  evaluate and update systems as  appropriate.  In some cases,  no
system changes are necessary or the changes have already been made. In all other
cases,  modifications  are planned to prepare the  Company's  systems to be Year
2000  compliant  by December  15,  1999.  The  disclosure  below  addresses  the
Company's Year 2000 Project.

     Company's  state of readiness.  The Year 2000 Project is divided into three
initiatives:  (i) Information Technology ("IT") Systems, (ii) Non-IT Systems and
(iii) related third party  providers.  The Company has  identified the following
phases with actual or estimated dates of completion: 1) identify an inventory of
systems,  (completed April 30, 1999), 2) gather certificates and warranties from
providers,  (completed  April 30,  1999),  3)  determine  required  actions  and
budgets, (completed April 30, 1999), 4) perform remediation and tests (completed
November 1, 1999) and 5) designing  contingency and business  continuation plans
for each Company  location (plans are complete and  implementation  is underway.
Implementation is scheduled to be complete by December 15, 1999).

The following is a summary of the different phases and progress to date for each
initiative identified above:

IT Systems:  The Company has  continuously  updated or replaced older technology
with more  current  technology.  As the Company has  acquired  ski  resorts,  it
updated  certain  technology at these  resorts.  The  Company's  main IT systems
include an  enterprise-wide  client server financial system, an  enterprise-wide
client server ticketing and direct to lift system,  a mid-range  enterprise-wide
payroll system, various point of sale and property management systems,  upgraded
personal  computers,  wide area networking and local area  networking.  Phases 1
through 3 are complete.  During phase 1 and 2, the Company  determined  that its
Sugarloaf  and Sugarbush  resorts had not yet  converted to Year 2000  compliant
lodging  systems.  The Company has  subsequently  converted these two resorts to
Year 2000 compliant systems. The Company has developed  contingency and business
contingency  plans  for its  crucial  IT  systems  and  expects  to  have  these
implemented at each Company location by December 15, 1999.

Non-IT  Systems:  Internal  non-IT  systems  are  comprised  of faxes,  copiers,
printers,   postal  systems,   security  systems,   ski  lifts,   elevators  and
telecommunication systems. Phases 1 through 5 are complete for all systems.

Related  third party  providers:  The Company has  identified  its major related
third  party  providers  as  certain  utility   providers,   employee   benefits
administrators and supply vendors. Phases 1 through 5 are complete.

     Actual and  anticipated  costs.  The total cost  associated  with  required
modifications  to become Year 2000  compliant  is not expected to be material to
the Company's  financial  position.  The  estimated  total cost of the Year 2000
Project is approximately $275,000,  substantially all of which had been expended
as of November 22, 1999. This estimate includes  Information  System conversions
for Year 2000 compliant lodging systems at Sugarloaf and Sugarbush.  The Company
had  planned  to  update  these  systems  regardless  of  Year  2000  issues  to
standardize systems within the Company's resorts.  The anticipated costs related
to non-IT systems are deemed by management to be immaterial.

     Risks.  The failure to correct a material Year 2000 problem could result in
an  interruption  in, or a failure of,  certain  normal  business  activities or
operations.  Such failures could  materially and adversely  affect the Company's
results of  operations,  liquidity and financial  condition.  Due to the general
uncertainty  inherent  in the Year  2000  problem,  resulting  in part  from the
uncertainty of the Year 2000  readiness of third-party  suppliers and customers,
the Company is unable to determine at this time whether the consequences of Year
2000  failures  will  have  a  material  impact  on  the  Company's  results  of
operations,  liquidity or financial condition. The Year 2000 Project is expected
to significantly  reduce the Company's level of uncertainty  about the Year 2000
problem.  The Company  believes that,  with the  implementation  of new business
systems and completion of the Year 2000 Project as scheduled, the possibility of
significant  interruptions of normal operations  should be reduced.  Readers are
cautioned  that   forward-looking   statements   contained  in  the  "Year  2000
Disclosures" should be read in conjunction with the Company's  disclosures under
the heading "Forward-Looking Statements".

     Contingency   plans.  The  Company  has  completed  the  development  of  a
contingency  plan  related to Year 2000.  The  Company  is  actively  engaged in
implementing  the contingency  plan to be prepared for any issues that may arise
on January 1, 2000.


                           Forward-Looking Statements

         Certain   information   contained   herein   includes   forward-looking
statements,  the  realization of which may be impacted by the factors  discussed
below.  The  forward-looking  statements  are made  pursuant  to the safe harbor
provisions of the Private Securities  Litigation Reform Act of 1995 (the "Act").
This report contains  forward  looking  statements that are subject to risks and
uncertainties, including, but not limited to, uncertainty as to future financial
results;  substantial  leverage of the Company;  the capital intensive nature of
development  of the Company's  ski resorts;  rapid and  substantial  growth that
could place a  significant  strain on the  Company's  management,  employees and
operations;   uncertainties   associated  with  fully   syndicating  the  Resort
Properties Term Facility;  uncertainties  associated  with obtaining  additional
financing  for future real  estate  projects  and to  undertake  future  capital
improvements;  demand for and costs  associated  with real  estate  development;
changes  in  market  conditions   affecting  the  interval  ownership  industry;
regulation  of  marketing  and sales of the  Company's  quartershare  interests;
seasonality of resort revenues; fluctuations in operating results; dependence on
favorable weather  conditions;  the discretionary  nature of consumers' spending
for skiing,  destination vacations and resort real estate; regional and national
economic  conditions;  laws and regulations  relating to the Company's land use,
development,  environmental compliance and permitting obligations;  termination,
renewal or extension  terms of the  Company's  leases and United  States  Forest
Service  permits;  industry  competition;  the  adequacy of water  supply at the
Company's  properties;  the  ability  of the  Company  to make  its  information
technology  assets  and  systems  year  2000  compliant  and  the  costs  of any
modifications  necessary in that regard;  and other risks  detailed from time to
time in the Company's filings with the Securities and Exchange Commission. These
risks could cause the Company's  actual  results for fiscal year 2000 and beyond
to differ materially from those expressed in any forward looking statements made
by, or on behalf of, the Company.  The foregoing  list of factors  should not be
construed  as  exhaustive  or  as  any  admission   regarding  the  adequacy  of
disclosures made by the Company prior to the date hereof or the effectiveness of
said Act.



                                     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  included in Item 7A of Form 10-K as
filed with the Securities and Exchange Commission on October 23, 1999.


<PAGE>



                           Part II - Other Information

                                     Item 2
                              Changes in Securities

         On August 9, 1999,  the Company  issued to Oak Hill  Capital  Partners,
L.P. and other Oak Hill entities,  all of which are institutional  investors,  a
total of 150,000  shares of 8.5% Series B  Convertible  Participating  Preferred
Stock, par value $.01 per share, for $150 million.  The Series B Preferred Stock
was sold pursuant to the exemption  contained in Section 4(2) of the  Securities
Act of 1933, as amended.  In connection  with the Series B Preferred Stock sale,
fees were paid to the Company's investment advisors Donaldson, Lufkin & Jenrette
Securities  Corporation ($2.4 million),  ING Barings LLC ($2.4 million) and Main
Street Advisors ($1.6 million),  as well as to Oak Hill Investments,  Inc. ($4.6
million).  The  Company  also paid  approximately  $2 million in legal and other
professional fees in conjunction with the Series B Preferred Stock sale.

         The  Series  B  Preferred  Stock  is  convertible  into  shares  of the
Company's common stock  ("Conversion  Stock") at an initial  conversion price of
$5.25 per share of common  stock.  The  initial  conversion  price is subject to
anti-dilution  adjustment.  Assuming all shares of the Series B Preferred  Stock
are  converted  into common  stock of the Company at the initial  (and  current)
conversion  price,  Oak Hill  would  own  approximately  48.5% of the  Company's
outstanding common stock and Class A common stock as of August 9, 1999.



                                     Item 4
               Submission of Matters to a Vote of Security Holders

         On  October  7,  1999,  the  Company  held  a  Special  Meeting  of its
shareholders to approve:

o the reincorporation of the Company in the State of Delaware, and
o the issuance of up to 46,124,575 shares of common stock upon the conversion of
  the Company's Series B Preferred Stock.

         The results of the Special Meeting were as follows:


                            Delaware Reincorporation:

                       Voting For  Voting Against  Abstaining   Broker Non-Votes
Common Stock           5,089,822    3,216,624       30,279              0
Class A Common Stock  14,760,530        0              0                0
10.5% Preferred Stock  36,626(1)        0              0                0
                      ----------    ------------   ----------   ----------------
Total All Classes  22,413,851(1)    3,216,624       30,279              0



                 Issuance of 46,124,575 shares of Common Stock:

                        Voting For  Voting Against  Abstaining  Broker Non-Votes
Common Stock            7,997,698     300,623        38,404             0
Class A Common Stock   14,760,530        0              0               0
10.5% Preferred Stock   36,626(1)        0              0               0
                       ------------ -------------- ------------ ----------------
Total All Classes   25,321,727(1)     300,623        38,404             0

(1)  The  10.5%   Preferred  Stock  votes  together  with  Common  Stock  on  an
"as-if-converted"  basis. The 36,626 shares of 10.5% Preferred  Stock,  together
with accrued and unpaid dividends, have a voting right equal to 2,563,499 shares
of Common  Stock.  The  results  set forth in the "Total All  Classes"  rows are
calculated using this as-if-converted number.


                                     Item 6
                        Exhibits and Reports on Form 8-K

a) Exhibits

         Included  herewith is the Financial Data Schedule  submitted as Exhibit
27 in  accordance  with Item 601(c) of  Regulation  S-K.  Also  included are the
following material agreements entered into in the Company's first fiscal quarter
of 2000.

Exhibit No.       Description

1.        Master  Disposition  and  Development  Agreement by and between  South
          Tahoe Redevelopment  Agency, The City of South Lake Tahoe and American
          Skiing Company Resort  Properties,  Inc.,  Heavenly Resort Properties,
          LLC, Heavenly Valley Limited  Partnership,  Trans-Sierra  Investments,
          Inc. and Cecil's Market, Inc. dated as of October 29, 1999.

2.        The Canyons  Resort  Village  Management  Agreement  dated as of
          November 15, 1999.

3.        Amended and Restated Development Agreement for The Canyons Specially
          Planned Area Snyderville Basin, Summit County, Utah dated as of
          November 15, 1999


b) Reports on Form 8-K

The  Company  filed a report on Form 8-K on  October  13,  1999,  reporting  the
following:

(i) Merger with ASC East, Inc., and ASC West, Inc.
     On October 6, 1999,  American Skiing Company (NYSE: SKI) merged with two of
its wholly owned subsidiaries, ASC East, Inc. and ASC West, Inc. (the "East/West
Merger"). American Skiing Company was the surviving corporation in the East/West
merger.  In  conjunction  with the East/West  Merger,  American  Skiing  Company
entered into a Fourth  Supplemental  Indenture dated as of October 6, 1999, with
respect to ASC East, Inc.'s $120 million 12% Senior Subordinated Notes (the "12%
Notes"). Under the terms of the Fourth Supplemental  Indenture,  American Skiing
Company,  as successor by merger to ASC East,  Inc.,  became the primary obligor
under the 12% Notes. Certain subsidiaries of American Skiing Company also joined
as guarantors of the 12% Notes.

(ii) Reincorporation in Delaware.
     On October 7, 1999, the  shareholders of American  Skiing Company  approved
the  reincorporation  of American  Skiing  Company in Delaware.  Following  that
approval,  on October 12, 1999, American Skiing Company was merged with and into
its   wholly   owned   subsidiary,    ASC   Delaware,    Inc.   (the   "Delaware
Reincorporation").  The surviving entity, also named American Skiing Company, is
a Delaware  corporation  with a Board of  Directors,  shareholders  and  capital
structure  identical to that of the former American Skiing Company,  which was a
Maine  corporation.  Certain  changes  resulting  from the  reincorporation  are
described  more fully in the Company's  Proxy  Statement to  Shareholders  dated
September 8, 1999, on file with the Securities and Exchange Commission.

     Following the Delaware  Reincorporation,  the Common Stock,  par value $.01
per share of American Skiing Company,  a Delaware  corporation,  is deemed to be
registered under Section 12(b) of the Securities  Exchange Act of 1934 by virtue
of the operation of Rule 12g-3 of the Securities and Exchange Commission.


<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.



Date:  December 6, 1999                            /s/ Christopher E. Howard
-------------------------------                    -----------------------------
                                                   Christopher E. Howard
                                                   Executive Vice President
                                                   (Duly Authorized Officer)


Date:  December 6, 1999                            /s/ Mark J. Miller
-------------------------------                    -----------------------------
                                                   Mark J. Miller
                                                   Senior Vice President
                                                   Chief Financial Officer
                                                   (Principal Financial Officer)