UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

                                    FORM 10-Q

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
               ACT OF 1934 FOR THE QUARTER ENDED OCTOBER 28, 2001
                                       or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
     ACT OF 1934 For the transition period from____________ to ____________.

                        --------------------------------
                         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
16,957,593 shares of common stock, $.01 par value, as of December 11, 2001.

<PAGE>


                                Table of Contents



Part I - Financial Information

Item 1.   Financial Statements

Condensed Consolidated Statements of Operations (unaudited) for the 13 weeks
  ended October 28, 2001 and the 13 weeks ended October 29, 2000...............3

Condensed Consolidated Balance Sheets as of October 28, 2001 (unaudited)
  and July 29, 2001............................................................4

Condensed Consolidated Statement of Cash Flows (unaudited) for the 13 weeks
  ended October 28, 2001 and October 29, 2000..................................5

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

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

General.......................................................................12

Liquidity and Capital Resources...............................................14

Changes in Results of Operations..............................................20


Item 3.   Quantitative and Qualitative Disclosures About Market Risk..........23

Part II - Other Information

Item 2.  Changes in Securities and Use of Proceeds............................23

Item 5.  Other Information....................................................24

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


<PAGE>
                         Part I - Financial Information
                           Item 1 Financial Statements

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

<TABLE>
                                                                                 13 weeks ended         13 weeks ended
                                                                                October 28, 2001       October 29, 2000
                                                                                  (unaudited)            (unaudited)

    <S>                                                                        <C>                    <C>
    Net revenues:
         Resort                                                                $         20,317       $         20,912
         Real estate                                                                      2,791                 27,216
                                                                               -------------------    -------------------
              Total net revenues                                                         23,108                 48,128

    Operating expenses:
         Resort                                                                          27,173                 30,343
         Real estate                                                                      4,109                 23,578
         Marketing, general and administrative                                           11,391                 10,443
         Other non-recurring charges (Note 10)                                            1,626                      -
         Depreciation and amortization                                                    4,256                  4,002
                                                                               -------------------    -------------------
              Total operating expenses                                                   48,555                 68,366
                                                                               -------------------    -------------------

    Loss from operations                                                                (25,447)               (20,238)
         Interest expense                                                                13,758                 12,319
                                                                               -------------------    -------------------

    Loss before benefit from income taxes                                               (39,205)               (32,557)
         Benefit from income taxes                                                            -                (11,558)
                                                                               -------------------    -------------------

    Loss before accounting change                                                       (39,205)               (20,999)
         Cumulative effect of accounting change,
            net of taxes of  $0 and ($1,538), respectively (Note 2)                      18,658                 (2,509)
                                                                               -------------------    -------------------

    Loss before preferred stock dividends                                               (57,863)               (18,490)
         Accretion of discount and dividends accrued on
             mandatorily redeemable preferred stock                                       7,588                  5,686
                                                                               -------------------    -------------------
    Net loss available to common shareholders                                 $         (65,451)      $        (24,176)
                                                                               ===================    ===================

    Accumulated deficit, beginning of period                                  $        (226,335)      $        (84,763

    Net loss available to common shareholders                                           (65,451)               (24,176)
                                                                               -------------------    -------------------
    Accumulated deficit, end of period                                        $        (291,786)      $       (108,939)
                                                                               ===================    ===================
    Basic and diluted loss per common share (Note 3)
    Loss from continuing operations                                           $           (1.49)      $          (0.87)

    Cumulative effect of accounting change, net of taxes                                  (0.60)                  0.08
                                                                               -------------------    -------------------
    Net loss available to common shareholders                                 $           (2.09)      $          (0.79)
                                                                               ===================    ===================
    Weighted average common shares outstanding - basic and diluted                   31,344,497             30,469,163
                                                                               ===================    ===================
                          See accompanying notes to (unaudited) Condensed Consolidated Financial Statements.
</TABLE>
<PAGE>

                      Condensed Consolidated Balance Sheets
               (In thousands, except share and per share amounts)
<TABLE>

                                                                                         October 28, 2001           July 29, 2001
                                                                                            (unaudited)
Assets
Current assets
<S>                                                                                  <C>                        <C>
     Cash and cash equivalents                                                       $             9,736        $         11,592
     Restricted cash                                                                                 940                   1,372
     Accounts receivable                                                                          13,615                  13,825
     Inventory                                                                                    13,134                   7,909
     Prepaid expenses                                                                              6,840                   5,286
     Assets held for sale                                                                         86,582                  98,219
     Deferred income taxes                                                                         2,137                   2,137
                                                                                         -----------------      ------------------
           Total current assets                                                                  132,984                 140,340

Property and equipment, net                                                                      441,001                 440,594
Real estate developed for sale                                                                   135,996                 137,478
Goodwill (Note 6)                                                                                  6,887                  23,518
Intangible assets (Note 5)                                                                         8,644                  10,685
Deferred financing costs                                                                          15,254                  16,707
Other assets                                                                                      32,900                  26,903
                                                                                         -----------------      ------------------
          Total assets                                                               $           773,666        $        796,225
                                                                                         =================      ==================

Liabilities, Mandatorily Redeemable Preferred Stock and Shareholders' Equity
Current liabilities

     Current portion of long-term debt                                               $           112,192        $         74,776
     Current portion of subordinated notes and debentures                                            549                     549
     Accounts payable and other current liabilities                                               59,499                  64,872
     Deposits and deferred revenue                                                                26,375                  11,779
                                                                                         -----------------      ------------------
         Total current liabilities                                                               198,615                 151,976

Long-term debt, excluding current portion (Note 7)                                               179,788                 211,362
Subordinated notes and debentures, excluding current portion  (Note 9)                           139,366                 126,564
Other long-term liabilities                                                                       33,709                  34,992
Deferred income taxes                                                                              2,137                   2,137
                                                                                         -----------------      ------------------
         Total liabilities                                                                       553,615                 527,031

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 $55,554 and $54,102, respectively)                 55,554                  54,102
Mandatorily Redeemable 12% Series C-1 Preferred Stock, par value of $1,000 per
     share; 40,000 shares authorized, issued and outstanding, including
     cumulative dividends (redemption value of $40,802) (Note 8)                                  40,802                       -
Mandatorily Redeemable 15% Series C-2 Preferred Stock, par value of $1,000 per
     share; 139,453 shares authorized, issued and outstanding, including
     cumulative dividends (redemption value of $142,949) (Note 8)                                142,949                       -
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 $0 and $178,016, respectively)                          -                 170,266

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;
           16,957,593 and 15,708,633 issued and outstanding, respectively                            170                     160
     Additional paid-in capital                                                                  272,214                 270,853
     Accumulated deficit                                                                        (291,786)               (226,335)
                                                                                         -----------------      ------------------
       Total shareholders' (deficit) equity                                                      (19,254)                 44,826
                                                                                         -----------------      ------------------
Total liabilities, mandatorily redeemable preferred stock and shareholders' equity   $           773,666        $        796,225
                                                                                         =================      ==================

                          See accompanying notes to (unaudited) Condensed Consolidated Financial Statements.
</TABLE>
<PAGE>


                 Condensed Consolidated Statement of Cash Flows
                                 (In thousands)
<TABLE>


                                                                                         13 weeks ended         13 weeks ended
                                                                                        October 28, 2001       October 29, 2000
                                                                                          (unaudited)             (unaudited)
<S>                                                                                     <C>                    <C>
Cash flows from operating activities
Net loss                                                                                $       (57,863)        $      (18,490)
Adjustments to reconcile net loss to net cash used in operating activities:
       Depreciation and amortization                                                              4,256                  4,002
       Amortization of discount on debt                                                             342                     96
       Deferred income taxes                                                                          -                 (9,994)
       Stock compensation charge                                                                     64                    123
       Cumulative effect of change in accounting principle                                       18,658                 (4,047)
       Gain from sale of assets                                                                     (31)                   (64)
       Decrease (increase) in assets:
                  Restricted cash                                                                   432                    138
                  Accounts receivable                                                               210                 (5,786)
                  Inventory                                                                      (5,225)                (4,245)
                  Prepaid expenses                                                               (1,554)                (2,255)
                  Real estate developed for sale                                                  1,482                  8,883
                  Other assets                                                                   (5,997)                (3,051)
       Increase (decrease) in liabilities:
                  Accounts payable and other current liabilities                                 (5,373)                   705
                  Deposits and deferred revenue                                                  14,596                 24,416
                  Other long-term liabilities                                                     6,376                  4,558
                  Other, net                                                                      2,502                      2
                                                                                        -----------------      ------------------
Net cash used in operating activities                                                           (27,125)                (5,009)
                                                                                        -----------------      ------------------
Cash flows from investing activities
       Capital expenditures                                                                      (2,580)               (12,972)
       Proceeds from sale of assets                                                               9,065                     91
                                                                                        -----------------      ------------------
Net cash provided by (used in) investing activities                                               6,485                (12,881)
                                                                                        -----------------      ------------------
Cash flows from financing activities
         Proceeds from long-term debt                                                            35,719                 30,420
         Proceeds from non-recourse real estate debt                                             12,868                 15,975
         Repayment of long-term debt                                                            (17,958)                (5,962)
         Repayment of non-recourse real estate debt                                             (12,871)               (17,498)
         Deferred financing costs                                                                    30                 (1,097)
         Net proceeds from issuance of common stock                                                 997                      -
         Other, net                                                                                  (1)                    11
                                                                                        ----------------       ------------------
Net cash provided by financing activities                                                        18,784                 21,849
                                                                                        ----------------       ------------------

Net (decrease) increase in cash and cash equivalents                                             (1,856)                 3,959
Cash and cash equivalents, beginning of period                                                   11,592                 10,085
                                                                                        ----------------       ------------------

Cash and cash equivalents, end of period                                                $         9,736        $        14,044
                                                                                        =================      ==================

Supplementary disclosure of non-cash items:
Accretion of discount and dividends accrued on mandatorily redeemable preferred stock   $         7,588        $         5,686
Non-cash transfer of real estate developed for sale to fixed assets                     $             -        $        26,239

                          See accompanying notes to (unaudited) Condensed Consolidated Financial Statements.
</TABLE>

<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 (together with the
Parent, the "Company"). The Company operates in two business segments, ski
resort operations and real estate development. The Company performs its real
estate development through its wholly-owned subsidiary, American Skiing Company
Resort Properties, Inc. ("Resort Properties"), and Resort Properties'
subsidiaries, including Grand Summit Resort Properties, Inc. ("Grand Summit").
The Company's fiscal year is a fifty-two week or fifty-three week period ending
on the last Sunday of July. Fiscal 2002 and fiscal 2001 are fifty-two week
reporting periods, with each quarter consisting of 13 weeks. The accompanying
unaudited condensed consolidated financial statements have been prepared in
accordance with generally accepted accounting principles for interim financial
information and with the instructions to Form 10-Q and Rule 10-01 of Regulation
S-X. Accordingly, they do not include all of the information and footnotes
required by generally accepted accounting principles for complete financial
statements. In the opinion of management, all adjustments (consisting of normal
recurring accruals) considered necessary for a fair presentation have been
included.

         Results for interim periods are not indicative of the results expected
for the year due to the seasonal nature of the Company's business. Due to the
seasonality of the ski industry, the Company typically posts losses related to
resort operations during its first and fourth fiscal quarters. 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 for the fiscal year ended July 29, 2001, filed with the Securities and
Exchange Commission on November 14, 2001. Certain amounts in the prior year's
unaudited condensed consolidated financial statements and the audited financial
statements as filed in the Company's Form 10-K have been reclassified to conform
to the current period presentation.

         2. Accounting Change. In July 2001, the FASB issued SFAS No. 142,
"Goodwill and Other Intangible Assets." This statement applies to goodwill and
intangible assets acquired after June 30, 2001, as well as goodwill and
intangible assets previously acquired. Under this statement goodwill as well as
certain other intangible assets determined to have an infinite life, will no
longer be amortized. Instead, these assets will be reviewed for impairment on a
periodic basis. The Company has elected early adoption of the provisions of SFAS
No. 142 during the fiscal quarter ended October 28, 2001. As a result of the
adoption of SFAS No. 142, the Company has recorded an impairment charge of $18.7
million, which has been recorded as a cumulative effect of accounting change in
the accompanying statement of operations. See Notes 5 and 6 for additional
disclosure information required by SFAS No. 142.

         3. Loss per Common Share. Loss per common share for the 13 weeks ending
October 28, 2001 and October 29, 2000, respectively, were determined based on
the following data (in thousands):
<TABLE>

                                                                    13 weeks ended     13 weeks ended
                                                                   October 28, 2001      October 29, 2000
                                                                   --------------------------------------
                                    Loss
            <S>                                                     <C>                  <C>
            Loss before preferred stock dividends and
                  extraordinary items                               $      (39,205)      $       (20,999)
            Accretion of discount and dividends accrued on
                  mandatorily redeemable preferred stock                     7,588                 5,686
                                                                   -----------------   ------------------
           Loss  before accounting changes                                 (46,793)              (26,685)
            Cumulative effect of accounting changes, net of taxes           18,658                (2,509)

            Net loss available to common shareholders               $      (65,451)      $       (24,176)
                                                                   =================   ==================
                                   Shares
            Weighted average shares outstanding (basic and
           diluted)                                                         31,344                30,469
                                                                   =================   ==================
</TABLE>

         At October 28, 2001 and October 29, 2000, the Parent had 14,760,530
shares of its class A common stock issued and outstanding, which are convertible
into shares of the Parent's common stock. The shares of the Parent's common
stock issuable upon conversion of the shares of the Parent's class A common
stock have been included in the calculation of the weighted average shares
outstanding. At October 28, 2001, the Parent had 36,626 shares of its
mandatorily redeemable 10 1/2% convertible preferred stock (the "Series A

<PAGE>

Preferred Stock") and 40,000 shares of its 12% series C-1 convertible
participating preferred stock (the "Series C-1 Preferred Stock") issued and
outstanding, both of which are convertible into shares of the Parent's common
stock. At October 29, 2000, the Parent had 36,626 shares of Series A Preferred
Stock and 150,000 shares of Series B Preferred Stock issued and outstanding,
both of which are convertible into shares of the Parent's common stock. For a
description of the issuance of the shares of Series C-1 Preferred Stock and the
agreement by the holders of shares of Series B Preferred Stock to strip the
shares of Series B Preferred Stock of all their rights (including the right to
convert such shares into shares of the Parent's common stock) except for the
right to elect directors of the Parent, see Note 8 to these unaudited Condensed
Consolidated Financial Statements. The common stock shares into which these
preferred securities are convertible have not been included in the dilutive
share calculation as the impact of their inclusion would be anti-dilutive. The
Parent also had 2,732,819 and 2,128,763 exercisable options outstanding to
purchase shares of its common stock under the Parent's stock option plan as of
October 28, 2001 and October 29, 2000, respectively. These shares are also
excluded from the dilutive share calculation because in each case the exercise
price is greater than the average share price for the periods presented.

         4. Segment Information. The Company currently operates in two business
segments, Resort and Real Estate. The Company's Resort revenues are derived from
a wide variety of sources including lift ticket sales, food and beverage, retail
sales including rental and repair, skier development, lodging and property
management, golf, other summer activities and miscellaneous revenue sources. The
Company's Real Estate revenues are derived from the sale of interests in real
estate development projects undertaken by the Company at its resorts and the
sale of other real property interests. Revenues and operating profits for each
of the two reporting segments are as follows (in thousands):

<TABLE>
                                                       13 weeks ended     13 weeks ended
                                                         October 28,        October 29,
                                                            2001               2000
                                                       ----------------  -----------------
                 <S>                                         <C>                <C>

                 Revenues:
                       Resort                                $  20,317          $  20,912
                       Real Estate                               2,791             27,216
                                                       ----------------  -----------------
                 Total                                       $  23,108          $  48,128
                                                       ----------------  -----------------
                 Loss before benefit from income taxes:
                        Resort                               $ (32,786)         $ (31,432)
                        Real Estate                             (6,419)            (1,125)
                                                       ----------------  -----------------
                 Total                                       $ (39,205)         $ (32,557)
                                                       ----------------  -----------------
</TABLE>

         5. Acquired Other Intangible Assets. As of October 28, 2001, acquired
other intangible assets of the Company, which are entirely attributed to its
Resort segment, are broken down by the following asset classes (in thousands):
<TABLE>

                                                     Gross
                                Asset               Carrying       Accumulated
                                Class                Amount        Amortization
                      -------------------------   ------------   ----------------

                 <S>                                 <C>            <C>
                 Amortized intangible assets
                       Lease agreements              $  1,853       $      (186)
                                                  ============   ================

                 Unamortized intangible assets
                       Tradenames                    $  6,977
                                                  ============
</TABLE>


<PAGE>

         Amortization expense related to acquired other intangible assets was
$14,000 for the quarter ended October 28, 2001. In addition, future amortization
expense related to acquired other intangible assets is estimated to be
approximately $58,000 for each of the next five fiscal years.

         6. Goodwill. The changes in the carrying amount of goodwill for the
quarter ended October 28, 2001 are as follows (in thousands):

                                                                      Resort
                                                                      Segment
                                                                   -------------
Carrying value as of July 29, 2001                                    $  23,518
Impairment losses                                                       (18,658)
Reclassification of previously identified
   other intangible assets no longer allowed under SFAS No. 141           2,027
                                                                   -------------
Carrying value as of October 28, 2001                                 $   6,887
                                                                   =============

         Goodwill associated with the Resort segment is tested for impairment at
the end of each fiscal year, after the final results of the operating ski season
are available. For purposes of implementing SFAS No. 142, the Company used
independent third party appraisals, which were prepared using an income approach
based on expected future cash flows, to establish the fair value of its
reporting units as of July 30, 2001, the date of adoption. The carrying amount
of the reporting units associated with the Company's 1996 acquisition of SKI,
Ltd. and its subsidiaries exceeded their fair values at the date of adoption. As
a result, the Company recognized a transitional impairment loss of $18.7
million, which represented a write-down of goodwill that had been allocated to
those reporting units. This transitional impairment loss has been recorded as a
cumulative effect of accounting change in the Company's statement of operations
for the quarter ended October 28, 2001.

         7. Long-Term Debt. On August 31, 2001, the Company entered into an
amendment to its real estate credit facility which substantially reduced
interest rates and extended amortization and maturity dates. The amended real
estate credit facility is comprised of three tranches, each with separate
interest rates and maturity dates as follows:

o        Tranche A is a revolving facility which has a current maximum principal
         amount of $22 million and bears interest at a variable rate equal to
         the Fleet National Bank Base Rate plus 2.0%, payable monthly in
         arrears. Mandatory principal payments on Tranche A of $3.75 million and
         $2.5 million each will be payable on December 31, 2001 and January 31,
         2002, respectively. So long as no event of default exists under the
         facility, the Company has the option of extending the December 31, 2001
         amortization payment to March 30, 2002. Additional mandatory principal
         reductions will be required in certain prescribed percentages ranging
         from 50% to 75% of net proceeds from any future sales of undeveloped
         parcels. The remaining principal amount outstanding under Tranche A
         will be payable in full on June 30, 2003.

o        Tranche B is a $25 million term facility, which bears interest at a
         fixed rate of 18% per annum, (10% per annum is payable monthly in
         arrears and the remaining 8% per annum accrues, is added to the
         principal balance of Tranche B and bears interest at 18% per annum,
         compounded annually). Mandatory principal payments on Tranche B of $10
         million are due on each of December 31, 2003 and June 30, 2004. The
         remaining $5 million in principal and all accrued and unpaid interest
         on Tranche B will be due in full on December 31, 2004.

o        Tranche C is a $12 million term facility, which bears interest at an
         effective rate of 25% per annum and will mature on December 31, 2005.
         Interest accrues, is added to the principal balance of Tranche C and is
         compounded semi-annually.

         In August 2001, the Company entered into amendments to its $110 million
Textron real estate development loan and its $10 million subordinated real
estate note with Textron, which, among other things, reduced the effective
interest rates and extended the maturity dates of these facilities. The maturity
date for funds advanced under the Steamboat portion of the senior Textron
facility has been extended to March 31, 2003 and the maturity date for funds
advanced under The Canyons portion of the senior Textron facility has been

<PAGE>

extended to September 28, 2002. The interest rate on funds advanced under the
Steamboat portion of the senior Textron facility is Prime plus 3.5% and the
interest rate floor on Steamboat advances is 9.0%. The interest rate on funds
advanced under The Canyons portion of the senior Textron facility is at Prime
plus 2.5%, with a floor of 9.0% for funds advanced by Textron and a floor of
9.5% for funds advanced by other lenders in the syndicate. As of October 28,
2001, the outstanding principal balances of the Steamboat and The Canyons
portions of the Textron real estate development loan were $38.5 million and
$12.8 million, respectively.

         8. Recapitalization. On July 15, 2001, the Parent entered into a
securities purchase agreement with Oak Hill Capital Partners, L.P. and certain
related entities (collectively, "Oak Hill") to assist the Company in meeting its
financing needs. Pursuant to the terms of the securities purchase agreement,
which closed on August 31, 2001:

o        The Parent issued, and Oak Hill purchased, $12.5 million aggregate
         principal amount of junior subordinated notes (the "Junior Subordinated
         Notes"), which are convertible into shares of the Parent's series D
         participating preferred stock (the "Series D Preferred Stock"). These
         Junior Subordinated Notes bear interest at a rate of 11.3025%, which
         compounds annually and is due and payable at maturity of the Junior
         Subordinated Notes in July, 2007. The proceeds of the Junior
         Subordinated Notes were used to fund short-term liquidity needs of
         Resort Properties by way of the purchase of certain real estate assets
         by the Parent from Resort Properties;

o        Oak Hill funded $2.5 million of the $3.5 million of availability
         remaining under Tranche C of the Resort Properties credit facility to
         facilitate amendments to such credit facility. This was the final
         advance under Tranche C, as the maximum availability under this
         facility has now been reduced from $13 million to $12 million;

o        Oak Hill agreed to provide a guarantee of $14 million for the financing
         of certain equipment related to the Heavenly gondola;

o        Oak Hill purchased one million shares of the Parent's common stock for
         an aggregate purchase price of $1 million;

o        Oak Hill and the Parent canceled an agreement to provide Oak Hill with
         warrants for 6 million shares of the Parent's common stock or 15% of
         the common stock of Resort Properties.

         In consideration of Oak Hill's agreements and commitments in accordance
with the terms set forth above, the following has occurred:

o        The outstanding Series B Preferred Stock that was held by Oak Hill was
         stripped of all of its rights and preferences with the exception of the
         right to elect up to four directors;

o        The Parent issued to Oak Hill two new series of Preferred Stock; (i)
         $40 million of Series C-1 Preferred Stock, and (ii) $139.5 million of
         Series C-2 Preferred Stock. The initial face value of the Series C-1
         Preferred Stock and Series C-2 Preferred Stock correspond to the
         accrued liquidation preference of the Series B Preferred Stock
         immediately before being stripped of its right to such accrued
         liquidation preference. The Series C-1 Preferred Stock and Series C-2
         Preferred Stock carry preferred dividends of 12% and 15%, respectively.
         At the Parent's option, dividends can either be paid in cash or accrued
         in additional shares. The Series C-1 Preferred Stock is convertible
         into common stock at a price of $1.25 per share, subject to
         adjustments. The Series C-2 Preferred Stock is not convertible. Both of
         Series C-1 Preferred Stock and Series C-2 Preferred Stock will mature
         in July, 2007;

o        At Oak Hill's option, and subject to the consent of the other lenders
         under the Resort Properties credit facility, Tranche C of the Resort
         Properties credit facility will be exchangeable in whole or in part
         into indebtedness of the Parent when permitted under the existing debt
         agreements.


<PAGE>

         During July 2000, Resort Properties issued debt to Oak Hill under
Tranche C of the real estate credit facility. Additionally, Oak Hill entered
into a securities purchase agreement for the issuance of warrants for 6,000,000
shares of the Parent's common stock with an exercise price of $2.50 per share.
Under the terms of the agreement, net share settlement was required. The
transaction was accounted for as debt issued with detachable warrants under APB
No. 14. APB No. 14 requires the portion of the proceeds of debt securities
issued with detachable stock purchase warrants, which is allocable to the
warrants should be accounted for as paid-in capital. The allocation was based on
the relative fair values of the two securities at the time of issuance. Upon
execution of the transaction, the Parent did not issue Oak Hill the warrants.
Therefore, the Company recorded a $7.7 million long-term liability to represent
the Parent's obligation to issue the warrants. As part of the July 15, 2001
security purchase agreement, Oak Hill agreed to cancel its right to receive
these warrants, as they had an exercise price of $2.50 and the Parent's stock
was then trading at approximately $1 per share. In the first quarter of fiscal
2002, the Company reclassified the $7.7 million other long-term liability to
additional paid-in capital as if the warrants were issued, in accordance with
EITF 96-13, "contracts that require a net share settlement should be initially
measured at fair value and reported in permanent equity. Subsequent changes in
fair value should not be recognized." Therefore, any change in the market value
of the warrants since Oak Hill received the rights to receive the warrants, was
never recognized.

         The Company has accounted for the termination of the liquidation
preference of the Series B Preferred Stock as a capital transaction in
conjunction with the accounting for the termination of the warrants described
above. Accordingly, the Company reversed the carrying value of the Series B
Preferred Stock of $172.1 million as of August 31, 2001 and correspondingly
recorded the Series C-1 Preferred Stock and C-2 Preferred Stock at their initial
face values of $40.0 million and $139.5 million, respectively. No gain or loss
was recognized by the Company related to the recapitalization transactions.


         9. Subordinated Notes. In June of 1996 the Parent issued $120.0 million
of 12% senior subordinated notes (the "Notes"). The Notes are general unsecured
obligations of the Parent, subordinated in right of payment to all existing and
future senior debt of the Company, including all borrowings of the Company under
its senior credit facility. The Notes are fully and unconditionally guaranteed
by all subsidiaries of the Parent with the exception of Ski Insurance,
Killington West, Ltd., Mountain Water Company, Uplands Water Company and Walton
Pond Apartments, Inc. The above listed subsidiaries that are not guarantors are
individually and collectively immaterial to Company's balance sheet and results
of operations. The guarantor subsidiaries are wholly owned subsidiaries of the
Parent and its subsidiaries and the guarantees are full, unconditional, and
joint and several. Some of the guarantor subsidiaries are restricted in their
ability to declare dividends or advice funds to the Parent. Borrowers under the
Resort Properties credit facility are restricted from declaring dividends or
advancing funds to the Parent by any other method, unless specifically approved
by these lenders. The Parent's senior credit facility contains restrictions on
the payment of dividends by the Parent on its common stock. Those restrictions
prohibit the payment of dividends in excess of 50% of the Company's consolidated
net income after July 31, 1997, and further prohibit the payment of dividends
under any circumstances when the effect of such payment would be to cause the
Company's debt to EBITDA ratio (as defined within the credit agreement) to
exceed 4.0 to 1. On an annual basis, the Company has not had net income
subsequent to July 31, 1997.

         Under the indenture governing the Notes, the Parent 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).

         10. Other Non-recurring Charges. For the thirteen weeks ended October
28, 2001, the Company incurred $1.6 million in charges related to the
implementation of its previously announced strategic restructuring plan. These
costs consisted mainly of legal, consulting and financing costs incurred in
connection with its Resort and Real Estate credit facility amendments and the
capital infusion from Oak Hill (See Note 8). There were no employee termination
costs included in this $1.6 million charge, as the Company had completed the
staff reduction phase of its strategic restructuring plan prior to the end of
fiscal 2001. All of the amounts recognized in the first quarter of fiscal 2002
were paid or accrued for services

<PAGE>

previously rendered in connection with this strategic restructuring plan. The
Company has not established any reserves for anticipated future restructuring
charges and did not have such a reserve established at the end of fiscal 2001.
The Company will continue to recognize expenses associated with its strategic
restructuring plan as they are incurred.

         11. Subsequent Events. On December 6, 2001, a syndicate of investors
led by Fleet National Bank funded a $14 million loan under a term loan agreement
entered into with Heavenly Valley, Limited Partnership, one of the Parent's
subsidiaries. This term loan is collateralized by various assets of the gondola
located at Heavenly. The loan matures on November 30, 2006, bears a fixed
interest rate of 10 1/2% and is guaranteed by Oak Hill and the Parent.

<PAGE>
                                     Item 2
                Management's Discussion and Analysis of Financial
                       Condition and Results of Operations

                           Forward-Looking Statements

         Certain statements contained in this report constitute forward-looking
statements within the meaning of Section 27A of the Securities Act and Section
21E of the Exchange Act. These forward-looking statements are not based on
historical facts, but rather reflect our current expectations concerning future
results and events. Similarly, statements that describe our objectives, plans or
goals are or may be forward looking statements. We have tried, wherever
possible, to identify such statements by using words such as "anticipate",
"assume", "believe", "expect", "intend", "plan", and words and terms of similar
substance in connection with any discussion of operating or financial
performance. Such forward-looking statements involve a number of risks and
uncertainties. In addition to factors discussed above, other factors that could
cause actual results, performances or achievements to differ materially from
those projected include, but are not limited to, the following: changes in
regional and national business and economic conditions affecting both our resort
operating and real estate segments; competition and pricing pressures; negative
impact on demand for our products resulting from terrorism and availability of
air travel (including the effect of the September 11th attacks); inability to
complete our restructuring plan; failure to effectively manage growth, business
and financial condition; failure of on-mountain improvements and other capital
expenditures to generate incremental revenue; adverse weather conditions
regionally and nationally; seasonal business activity; changes to federal, state
and local regulations affecting both our resort operating and real estate
segments; failure to renew land leases and forest service permits; disruptions
in water supply that would impact snowmaking operations; the loss of any of our
executive officers or key operating personnel; and other factors listed from
time to time in our documents we filed with the SEC. We caution the reader that
this list is not exhaustive. We operate in a changing business environment and
new risks arise from time to time. The forward looking statements included in
this document are made only as of the date of this document and under section
27A of the Securities Act and section 21E of the Securities Exchange Act, we do
not have or undertake any obligation to publicly update any forward-looking
statements to reflect subsequent events or circumstances.

General
         The following is our discussion and analysis of the financial condition
and results of operations for the quarter ended October 28, 2001. As you read
the material below, we urge you to carefully consider our fiscal 2001 Annual
report on Form 10-K filed on November 14, 2001 and our unaudited condensed
consolidated financial statements and related notes contained elsewhere in this
report.

Restructuring Plan. On May 30, 2001, we announced a comprehensive strategic plan
to improve our capital structure and enhance future operating performance. The
plan includes the following key components:

o     A comprehensive financial restructuring package, including amendments to
      our senior credit facilities and a new capital infusion to enhance
      financial flexibility.
o     Intent to sell Steamboat to reduce our debt.
o     Operational cost savings and improved financial performance through
      reorganization and staff reduction and performance enhancement programs of
      approximately $5 million.
o     Strategic redeployment of management and capital resources to emphasize
      the integration and growth of resort village development and operations.

         We have completed several aspects of this plan to date, including the
restructuring of three of our major credit agreements, an additional capital
infusion by Oak Hill, the implementation of a staff reorganization plan to
improve operational efficiencies and we obtained a $14 million long-term
financing facility for equipment relating to the Heavenly gondola. The ultimate
success of this comprehensive strategic plan is dependent on the execution of
the remaining plan elements, in particular the sale of Steamboat to reduce
leverage. The tragic events of September 11th have delayed the completion of the
sale of Steamboat. We have retained Credit Suisse First Boston and Main Street
Advisors to assist with marketing Steamboat. We have recently entered into a
non-binding letter of intent to sell Steamboat and we are continuing
negotiations with other potential buyers. Although we are currently hopeful that
the sale of Steamboat can be completed within the next sixty to ninety days,
there can be no assurance that we will be able to complete this element of the
strategic plan. The failure to consummate the sale of Steamboat may have
significant adverse effects on our future operating performance and results. For
a more detailed discussion, see "Resort Liquidity" below.

<PAGE>

         As part of our effort to implement the operational cost savings element
of our restructuring plan, we have converted 160 full-time year-round positions
to seasonal positions in order to better match our operating cycle. In addition,
we have eliminated approximately 70 full time year-round positions. We have
commenced this operational reorganization in order to provide us with greater
flexibility in our cost structure and respond more appropriately to the seasonal
nature of our business. Early benefits from these steps were realized during the
fourth quarter of fiscal 2001 and the first quarter of fiscal 2002. We expect
the reorganization benefits to be more fully realized during 2002.

         On December 6, 2001, a syndicate of banks led by Fleet National Bank
funded $14 million under a term loan agreement entered into with Heavenly
Valley, Limited Partnership, one of our subsidiaries. This term loan relates to
the financing of the Heavenly gondola. The loan matures on November 30, 2006,
bears a fixed interest rate of 10 1/2% and is guaranteed by Oak Hill and us.

Recapitalization: On July 15, 2001, we entered into a securities purchase
agreement with Oak Hill Capital Partners, L.P. and certain related entities,
collectively "Oak Hill". Pursuant to the terms of the securities purchase
agreement, which closed on August 31, 2001:

o        We issued, and Oak Hill purchased, $12.5 million aggregate principal
         amount of Junior Subordinated Notes, which are convertible into our
         shares of Series D Preferred Stock. These Junior Subordinated Notes
         bear interest at a rate of 11.3025%, which compounds annually and is
         due and payable at maturity of the Junior Subordinated Notes in July,
         2007. The proceeds of the Junior Subordinated Notes were used to fund
         short-term liquidity needs of our real estate subsidiary, Resort
         Properties, by way of the purchase of certain real estate assets by us
         from Resort Properties;

o        Oak Hill funded $2.5 million of the $3.5 million of availability
         remaining under Tranche C of the Resort Properties credit facility to
         facilitate amendments to such credit facility. This was the final
         advance under Tranche C, as the maximum availability under this
         facility has now been reduced from $13 million to $12 million;

o        Oak Hill agreed to provide a guarantee of $14 million for the financing
         of certain equipment related to the Heavenly gondola;

o        Oak Hill purchased one million of our shares of common stock for an
         aggregate purchase price of $1 million;

o        Oak Hill and the Company canceled an agreement to provide Oak Hill with
         warrants for 6 million shares of our common stock or 15% of the common
         stock of Resort Properties.

         In consideration of Oak Hill's agreements and commitments in accordance
with the terms set forth above, the following has occurred:

o        The outstanding Series B Preferred Stock that was held by Oak Hill was
         stripped of all of its rights and preferences with the exception of the
         right to elect up to four directors; The Series B Preferred Stock will
         lose its remaining rights upon the redemption of the Series C-1
         Preferred Stock and Series C-2 Preferred Stock (described below).

o        We issued to Oak Hill two new series of Preferred Stock; (i) $40
         million of Series C-1 Preferred Stock, and (ii) $139.5 million of
         Series C-2 Preferred Stock. The initial face value of the Series C-1
         Preferred Stock and Series C-2 Preferred Stock correspond to the
         accrued liquidation preference of the Series B Preferred Stock
         immediately before being stripped of its right to such accrued
         liquidation preference. The Series C-1 Preferred Stock and Series C-2
         Preferred Stock carry preferred dividends of 12% and 15%, respectively.
         At our option, we can either pay the dividends in cash or accrue the
         dividends in additional shares. The Series C-1 Preferred Stock is
         convertible into common stock at a price of $1.25 per share, subject to
         adjustments. The Series C-2 Preferred Stock is not convertible. Both of
         Series C-1 Preferred Stock and Series C-2 Preferred Stock mature in
         July, 2007;

o        At Oak Hill's option, and subject to the consent of the other lenders
         under the Resort Properties credit facility, Tranche C of the Resort
         Properties credit facility will be exchangeable in whole or in part
         into our indebtedness when permitted under the existing debt
         agreements.


<PAGE>

         During July 2000, Resort Properties issued debt to Oak Hill under
Tranche C of the real estate credit facility. Additionally, Oak Hill entered
into a securities purchase agreement for the issuance of warrants for 6,000,000
shares of our common stock at an exercise price of $2.50 per share. Under the
terms of the agreement, net share settlement was required. The transaction was
accounted for as debt issued with detachable warrants under APB No. 14. APB No.
14 requires the portion of the proceeds of debt securities issued with
detachable stock purchase warrants, which is allocable to the warrants should be
accounted for as paid-in capital. The allocation was based on the relative fair
values of the two securities at the time of issuance. Upon execution of the
transaction, we did not issue Oak Hill the warrants. Therefore, we recorded a
$7.7 million long-term liability to represent our obligation to issue the
warrants. As part of the July 15, 2001 security purchase agreement, Oak Hill
agreed to cancel its right to receive these warrants, as they had an exercise
price of $2.50 and our stock was then trading at approximately $1 per share. In
the first quarter of fiscal 2002, we reclassified the $7.7 million other
long-term liability to additional paid-in capital as if the warrants were
issued, in accordance with EITF 96-13, "contracts that require a net share
settlement should be initially measured at fair value and reported in permanent
equity. Subsequent changes in fair value should not be recognized." Therefore,
any change in the market value of the warrants since Oak Hill received the
rights to receive the warrants, was never recognized.

         We have accounted for the termination of the liquidation preference of
the Series B Preferred Stock as a capital transaction in conjunction with the
accounting for the termination of the warrants described above. Accordingly, we
reversed the carrying value of the Series B Preferred Stock of $172.1 million as
of August 31, 2001 and correspondingly recorded the Series C-1 Preferred Stock
and C-2 Preferred Stock at their initial face values of $40.0 million and $139.5
million, respectively. We did not recognize any gain or loss related to the
recapitalization transactions.

Liquidity and Capital Resources

Short-Term. Our primary short-term liquidity needs involve funding seasonal
working capital requirements, marketing and selling our real estate development
projects, funding our fiscal 2002 capital improvement program, meeting the
amortization and interest payments on our debt and redeeming our Series A
Preferred Stock on November 15, 2002. We use different sources to fund the cash
requirements of our ski-related and real estate development activities. Other
than the proceeds from the recapitalization described above, our primary source
of liquidity for ski-related working capital and ski-related capital
improvements are cash flows from operations of our non-real estate subsidiaries
and borrowings under our senior credit facility. Other than the proceeds from
the recapitalization described above, real estate development and real estate
working capital is funded primarily through construction financing facilities
established for major real estate development projects, a real estate credit
facility, and net proceeds from the sale of real estate developed for sale after
required construction loan repayments. These real estate facilities are without
recourse to us and our resort operating subsidiaries (although defaults under
these facilities could result in cross-defaults under our major credit
facilities) and are collateralized by significant real estate assets of Resort
Properties, and its subsidiaries, including the assets and stock of Grand
Summit, our primary hotel development subsidiary. As of October 28, 2001, the
book value of the total assets that collateralized these facilities and which
are included in the accompanying unaudited condensed consolidated balance sheet
was approximately $213.2 million.

        Resort Liquidity. We maintain a $159.5 million senior credit facility
with Fleet National Bank, as agent, and certain other lenders. This facility
consists of a $96.7 million revolving portion and a $62.8 million term portion.
The revolving portion of the senior credit facility matures on May 30, 2004 and
the term portion matures on May 31, 2006. On July 12, 2001, we created a $5.2
million additional credit advance under the existing revolving portion of the
facility for the purpose of funding the July 15, 2001 interest payment on our
Senior Subordinated Notes. As described below, we permanently reduced the term
portion by $2.2 million and the availability of the revolving portion of the
facility by $3.3 million in conjunction with our sale of Sugarbush. As of
December 11, 2001, the outstanding amount of the term loan was $61.6 million and
we had drawn or committed for letters of credit approximately $75.4 million of
the total $96.7 million available under the revolving portion of our senior
credit facility.


<PAGE>

         We continue to pursue the sale of Steamboat, the proceeds from which
are expected to substantially reduce our leverage, and hope to have a
transaction completed within the next sixty to ninety days. Should we complete
the Steamboat sale, we presently anticipate that we will be able to meet the
financial covenants of the amended senior credit facility for the foreseeable
future. In the event that we are unable to complete the Steamboat sale or make
the optional prepayment (described below) by the end of calendar 2001, we
presently anticipate that under normal operating circumstances, we will still be
able to meet the financial covenants of the senior credit facility through the
end of fiscal 2002, at which time we would no longer be in compliance under
these covenants and will be required to renegotiate them. There can be no
assurance, however, that we will be able to meet these covenants for the
remainder of fiscal 2002 if we do not complete the Steamboat sale. If we are
unable to obtain acceptable amendments to our senior credit facility, we will be
required to pursue one or more alternative strategies, such as attempting to
renegotiate the terms of the senior credit facility, selling assets, refinancing
or restructuring our indebtedness, selling additional debt or equity securities,
and/or any other alternatives available to us under law while we implement plans
and actions to satisfy our financial obligations. However, we cannot assure you
that any alternative strategies will be available or feasible at the time or
prove adequate. Also, some alternative strategies will require the consent of
our lenders before we engage in those strategies. Our inability to successfully
execute one or more of these alternative strategies would likely have a material
adverse effect on our business and our company.

          In November 2001, we entered into an amendment to the senior credit
facility which allows us to raise an additional $7.2 million through a junior
subordinating participating interest in certain revolving credit advances under
the senior credit facility. Pursuant to a commitment from Oak Hill they would
purchase this participating interest and the proceeds would be used to make the
January 2002 interest payment on our Senior Subordinated Notes. This new advance
will bear interest at a fixed rate of 17.5% and would be repaid first by any
proceeds from the sale of Steamboat. In the event that we do not sell Steamboat,
this junior participating interest in the revolver would only be repaid after
all existing revolving credit advances are paid.


        The term portion of the senior credit facility amortizes in five annual
installments of $650,000 payable on May 31 of each year, with the remaining
portion of the principal due in two substantially equal installments on May 31,
2005 and May 31, 2006. In addition, the senior credit facility requires
mandatory prepayment of the term portion and a reduction in the availability
under the revolving portion of an amount equal to 50% of the consolidated excess
cash flows (as defined in accordance with the senior credit facility) during any
period in which the excess cash flow leverage ratio exceeds 3.50 to 1. We also
have the option to make a prepayment of at least $90 million on or before
December 24, 2001 using the net proceeds from an issuance of equity securities
or the sale of a single asset (or a series of related assets). $50 million of
the optional prepayment shall be used to repay existing revolving credit
advances, with the remainder to be applied to the term facility.

        The interest rate on all term and revolving credit amounts outstanding
(excluding the $5.2 million additional credit advance) is equal to the Fleet
National Bank Base Rate plus 3.0%, until such time that we make the optional
prepayment. Should we make the $90 million optional prepayment, the interest
rates will be reset to a new pricing grid under which the rates for both the
term and revolving facilities will vary, based on our leverage ratios, from a
minimum of the Fleet National Bank Base Rate plus 1.25% or LIBOR plus 2.50% to a
maximum of the Fleet National Bank Base Rate plus 2.25% or LIBOR plus 3.75%.
Should we fail to make the optional prepayment, the interest rates on both the
revolving and term facilities will increase incrementally to the Fleet National
Bank Base Rate plus 4.25%. The $5.2 million additional credit advance bears
interest at a fixed rate of 12%.


<PAGE>

        The senior credit facility includes a provision for a deferred interest
spread, pursuant to which interest shall accrue (effective on May 1, 2001) at a
rate of 2% per annum on all amounts outstanding under the facility. If we fail
to make the optional prepayment, the deferred interest spread will continue to
accrue and we will be obligated to pay the deferred interest spread that has
accrued as of August 1, 2002 on such date. If we are able to make the optional
prepayment, the deferred interest spread that has accrued through the date of
the optional prepayment shall be waived, and, as of the date of the optional
prepayment, the deferred interest spread shall cease to accrue. As of October
28, 2001, we have accrued $1.3 million of deferred interest spread under this
provision.

        The maximum availability of the revolving portion of the senior credit
facility varies between $20.5 million and $96.7 million following a schedule we
negotiated with our lenders and adjusted for the sale of Sugarbush. The
revolving portion of the facility is also subject to an annual 30-day clean-down
requirement, which period must include April 30 of each year, during which the
sum of the outstanding principal balance and letter of credit exposure shall not
exceed $20 million (which amount shall be reduced to $5 million if we make the
optional prepayment described above).

         The senior credit facility contains affirmative, negative and financial
covenants customary for this type of credit facility, which includes maintaining
certain financial ratios. The senior credit facility is secured by substantially
all of our assets and subsidiaries except those of our real estate development
subsidiaries. The senior credit facility also places an annual maximum level of
non-real estate capital expenditures, exclusive of amounts expended on the
Heavenly gondola project. For fiscal 2001, we satisfied the maximum capital
expenditure requirement, as our resort capital expenditures were $8.8 million
for the year (excluding the Heavenly gondola). We are permitted to make total
capital expenditures of up to $30 million in connection with the completion of
the Heavenly gondola in Lake Tahoe, Nevada. The Heavenly gondola became
operational, and began transporting skiers in December 2000. As of December 1,
2001, we have expended $24.9 million on the construction of the Heavenly
gondola. The Company expects to spend the balance of approximately $6 million on
phase II of the project following completion of our strategic restructuring
plan.

        The senior credit facility restricts our ability to pay dividends on our
common stock. We are prohibited from paying dividends in excess of 50% of the
consolidated net income of the non-real estate development subsidiaries after
April 25, 1999, and further prohibited from paying dividends under any
circumstances when the effect of such payment would cause the debt to EBITDA
ratio of the non-real estate development subsidiaries to exceed 4.0 to 1. Based
upon these and other restrictions, we do not expect to be able to pay cash
dividends on our common stock, Series A preferred Stock, Series B Preferred
Stock, Series C-1 Preferred Stock and Series C-2 Preferred Stock during fiscal
2002 or fiscal 2003.

        In July 2001, we paid $700,000 in fees in connection with the closing of
the second amendment to our senior credit facility and the funding of the $5.2
million additional credit advance. An additional $1.6 million in fees are
payable at the earlier of the date of the optional prepayment or December 27,
2001. Should we fail to consummate the optional prepayment, we will be obligated
to pay up to an additional $4.4 million in amendment fees on a periodic basis
through July 31, 2002. All of these contingent fees have been recorded on our
balance sheet as deferred financing costs and will be amortized against income
over the remaining life of the facility.

        On September 28, 2001, we closed on the sale of our Sugarbush ski resort
in Warren, VT to Summit Ventures NE, Inc. The net proceeds from this sale of
approximately $7.3 million after certain working capital adjustments were used
to reduce the revolving portion of our senior credit facility by $5.2 million,
of which $3.3 million was a permanent reduction, and to permanently reduce the
term portion by $2.2 million. In conjunction with this transaction, we also
entered into a third amendment to our senior credit facility, dated as of
September 10, 2001. This amendment, among other things, provides the consent of
the lenders to sell the Sugarbush resort and it further reduces the maximum
revolver availability amounts established in the second amendment to the
facility by $1.5 million, excluding the permanent reduction based on the
proceeds of the sale.

        On December 6, 2001, we closed on a $14 million secured loan with Fleet
National Bank and Black Diamond Capital. This five-year facility, which is
secured by certain equipment related to the Heavenly gondola, bears interest at
a fixed rate of 10 1/2% per annum. Principal and interest will be repaid on a
monthly amortization schedule through its maturity in December 2006.

<PAGE>

        Our high leverage significantly affects our liquidity. As a result of
our leveraged position, we have significant cash requirements to service
interest and principal payments on our debt. Consequently, cash availability for
working capital needs, capital expenditures and acquisitions is significantly
limited, outside of any availability under the senior credit facility.
Furthermore, our senior credit facility and the indenture governing our Senior
Subordinated Notes each contain significant restrictions on our ability to
obtain additional sources of capital and may affect our 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.

         Real Estate Liquidity. To fund working capital and fund its fiscal 2002
real estate development plan, Resort Properties relies on the net proceeds from
the sale of real estate developed for sale after required construction loan
repayments, a $73 million real estate credit facility and construction loans
through special purpose subsidiaries. We have revised our real estate business
plan and completed discussions with our senior lenders regarding near-term
liquidity issues and implemented a package of restructuring initiatives designed
to significantly improve the capital structure and liquidity of Resort
Properties. As part of these restructuring initiatives, we amended our real
estate credit facility in August 2001, which substantially reduced interest
rates and extended amortization and maturity dates (discussed in detail below).
We infused $12.5 million in proceeds from the Junior Subordinated Notes issued
by us to Oak Hill on August 31, 2001 into Resort Properties by way of the sale
of certain real estate assets from Resort Properties to us. $6.25 million of the
proceeds were used to reduce debt under the Tranche A of Resort Properties' real
estate credit facility with the remainder being retained to provide liquidity.
We are closely monitoring macro and resort-specific factors affecting the sale
of our current real estate inventory. Although we have been experiencing an
improvement in sales activities, if we are unable to achieve planned sales
levels during the upcoming ski season and sell certain real estate assets as
part of the Steamboat transaction, the obligatory amortization schedules for our
construction loan and real estate credit facilities may not be achieved and our
ability to meet the working capital requirements of Resort Properties and its
subsidiaries will be adversely impacted.

Real Estate Credit Facility: As amended, the Resort Properties real estate
credit facility is comprised of three tranches, each with separate interest
rates and maturity dates as follows:

o    Tranche A is a revolving facility which, as of December 11, 2001, has a
     current maximum principal amount of $22 million and bears interest at a
     variable rate equal to the Fleet National Bank Base Rate plus 2.0% (payable
     monthly in arrears). Mandatory principal payments on Tranche A of $3.75
     million and $2.5 million each are payable on December 31, 2001 and January
     31, 2002, respectively. So long as no event of default exists under the
     facility, the Company has the option of extending the December 31, 2001
     amortization payment to March 30, 2002. Additional mandatory principal
     reductions will be required in certain prescribed percentages ranging from
     50% to 75% of net proceeds from any future sales of undeveloped parcels.
     The remaining principal amount outstanding under Tranche A will be payable
     in full on June 30, 2003.

o    Tranche B is a term loan facility that has a maximum principal amount of
     $25 million, bears interest at a fixed rate of 18% per annum, (10% per
     annum is payable monthly in arrears and the remaining 8% per annum accrues,
     is added to the principal balance of Tranche B and bears interest at 18%
     per annum, compounded annually). Mandatory principal payments on Tranche B
     of $10 million are due on each of December 31, 2003 and June 30, 2004. The
     remaining $5 million in principal and all accrued and unpaid interest on
     Tranche B are due in full on December 31, 2004.

o    Tranche C is a term loan facility that has a maximum principal amount of
     $12 million, bears interest at an effective rate of 25% per annum and
     matures on December 31, 2005. Interest accrues, is added to the principal
     balance of Tranche C and is compounded semi-annually.

         As of December 1, 2001, the principal balances outstanding, including
accrued and unpaid interest, under Tranches A, B and C of the second amended
real estate facility were $19.0 million, $27.4 million, and $14.2 million,
respectively.


<PAGE>

         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 Grand Summit)
collateralize the real estate credit facility. As of October 28, 2001, the book
value of the total assets that collateralized the real estate facilities, and
are included in the accompanying consolidated balance sheet, was approximately
$213.2 million.

Construction Loan Facility: We conduct substantially all of our real estate
development through single purpose subsidiaries, each of which is a wholly owned
subsidiary of Resort Properties. Grand Summit owns our existing Grand Summit
Hotel projects, which are primarily financed through a $110 million construction
loan facility among Grand Summit and various lenders, including TFC Textron
Financial, the syndication and administrative agent. Due to construction delays
and cost increases at the Steamboat Grand Hotel project, Grand Summit entered
into a $10 million subordinated loan tranche with TFC Textron Financial on July
25, 2000. We have used this facility solely for the purpose of funding the
completion of the Steamboat Grand Hotel.

         We have entered into and closed on a settlement memorandum with the
general contractor for the Steamboat Grand Hotel project, which resolved all
pending claims between the parties and resulted in the removal of certain
mechanics' liens. In connection with these settlements and our restructuring, we
entered into amendments to the construction loan facility. We also issued a $3.8
million note to the general contractor for the remaining balance due under the
Steamboat project. That note matures on March 31, 2001, and is expected to be
fully amortized prior to that date through proceeds of inventory sales at the
Steamboat project.

         As of December 1, 2001, the amount outstanding under the construction
loan facility was $50.1 million and there was no availability remaining under
this facility. The principal is payable incrementally as quartershare sales are
closed based on a predetermined per unit amount, which approximates between 65%
and 80% of the net proceeds of each closing. Mortgages against the project sites
(including the completed Grand Summit Hotels at Killington, Mt. Snow, Sunday
River, Attitash Bear Peak, The Canyons, and Steamboat) collateralize the
facility, which is subject to covenants, representations and warranties
customary for this type of construction facility. The facility is non-recourse
to us and our resort operating subsidiaries (although it is collateralized by
substantial assets of Grand Summit, having a total book value of $150.2 million
as of October 28, 2001, which in turn comprise substantial assets of our
business). In August 2001, we entered into amendments to our Textron
construction loan and subordinated loan tranche facilities, which, among other
things, reduced the effective interest rates and extended the maturity dates of
these facilities. The maturity date for funds advanced under the Steamboat
portion of the senior Textron facility is March 31, 2003 and the maturity date
for funds advanced under the Canyons portion of the senior Textron facility is
September 28, 2002. The interest rate on funds advanced under the Steamboat
portion of the senior Textron facility is Prime plus 3.5% and the interest rate
floor on Steamboat advances is 9.0%. The interest rate on funds advanced under
The Canyons portion of the senior Textron facility is at Prime plus 2.5%, with a
floor of 9.0% for advances made by Textron and 9.5% for advances made by other
lenders in the syndicate.

         We are required to reduce the outstanding principal balance of the
Textron construction facility to $50 million by March 31, 2002 and to $25
million by September 30, 2002. We anticipate that we will be able to meet the
March 31, 2002 amortization level with proceeds from units already sold, but not
yet closed. We anticipate that we will also be able to meet the September 30,
2002 amortization level with proceeds from anticipated quartershare unit sales
over the next ten months. We are closely monitoring macro and resort-specific
factors affecting the sale of our current real estate inventory. Although we
have been experiencing an improvement in sales activities, if we are unable
to achieve planned sales levels during the upcoming ski season and sell certain
real estate assets as part of the Steamboat transaction, the obligatory
amortization schedules set forth above may not be achieved and our ability to
meet the working capital requirements of Resort Properties and its subsidiaries
will be adversely impacted.


<PAGE>

         The amended subordinated loan tranche facility bears interest at a
fixed rate of 20% per annum, payable monthly in arrears, provided that only 50%
of the amount of this interest shall be due and payable in cash and the other
50% of such interest shall, if no events of default exist under the subordinated
loan tranche facility or the construction loan Textron facility, automatically
be deferred until the final payment date. As of December 1, 2001, the amount
outstanding under the subordinated loan tranche facility was $6.9 million and
there was approximately $900,000 of availability remaining to fund completion of
certain penthouse units at the Steamboat Grand Hotel. Those penthouses are under
construction and we expect them to be completed in December 2001 and January
2002.

         Preferred Stock Requirement: We have 36,626 shares of Series A
Preferred Stock outstanding, with an accreted value of $55.4 million as of
October 28, 2001. The Series A Preferred Stock is exchangeable at the option of
the holder into our common stock at a conversion price of $17.10 for each common
share. On November 15, 2002, we will be required to redeem the Series A
Preferred Stock at a redemption price of approximately $62 million, to the
extent that we have funds legally available for such redemption. We do not
expect to redeem the Series A Preferred Stock prior to its mandatory redemption
date, and we can give no assurance that the necessary liquidity will be
available to effect such redemption on a timely basis. We currently plan to
commence discussions with the Series A Preferred Stock holder regarding the
timing and manner of the redemption of the Series A Preferred Stock and/or
possible alteration of the terms thereof when we have completed the remaining
elements of the current restructuring plan. In the event that the Series A
Preferred Stock is not redeemed on its mandatory redemption date, the
Certificate of Designation for the Series A Preferred Stock provides that the
holders shall be entitled to an increased rate of interest on their security and
one seat on our board of directors.

         Long-Term. Our primary long-term liquidity needs are to fund
skiing-related capital improvements at certain of our resorts and the
development of our slope side real estate. With respect to capital needs, we
have invested over $185 million in skiing related facilities since the beginning
of fiscal 1998. As a result, and in keeping with restrictions imposed under the
senior credit facility, we expect our resort capital programs for the next
several fiscal years will be more limited in size. For our 2002 and 2003 fiscal
years, we anticipate our annual maintenance capital needs to be approximately
$10 to $12 million.

         There is a considerable degree of flexibility in the timing and, to a
lesser degree, scope of our growth capital program. Although we can defer
specific capital expenditures for extended periods, continued growth of skier
visits, revenues and profitability will require continued capital investment in
on-mountain improvements. We finance on-mountain capital improvements through
resort cash flow, capital leases and our 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 amended senior credit facility places a maximum level of
non-real estate capital expenditures for fiscal 2002 at $13.8 million. In
addition, we are permitted to and expect to make additional capital expenditures
of up to $6 million in connection with the completion of the Heavenly gondola in
Lake Tahoe, Nevada. The Heavenly gondola became operational, and began
transporting skiers in December 2000. As of December 1, 2001, we have expended
$24.9 million on the construction of the Heavenly gondola. We believe that these
capital expenditure amounts will be sufficient to meet our non-real estate
capital improvement needs for the near future.

         Our business plan anticipates the rapid sale of remaining real estate
inventory and gradual phased development of condominium hotels and townhouses,
as well as associated retail and food and beverage outlets at our resorts. The
timing and extent of these projects are subject to local and state permitting
requirements, which may be beyond our control, as well as our cash flow
requirements and the availability of external capital. We undertake real estate
development through our real estate development subsidiary, Resort Properties.
Recourse on debt incurred to finance this real estate development is limited to
Resort Properties and its subsidiaries, which include Grand Summit. This debt is
usually collateralized by the projects that it finances, which, in some cases,
constitute a significant portion of our assets. As of October 28, 2001, the
total assets collateralizing the real estate facilities, included in the
accompanying unaudited condensed consolidated balance sheet, totaled
approximately $213.2 million. The real estate credit facility and the
construction loan facility currently fund Resort Properties' seven existing
development projects.


<PAGE>

         We expect to undertake future real estate development projects through
special purpose subsidiaries with financing provided principally on a
non-recourse basis to us and our resort operating subsidiaries. Although we
expect this financing to be non-recourse to us and our resort subsidiaries, it
will likely be collateralized by the real estate projects being financed, which
may constitute significant assets to us. We must generate required equity
contributions for these projects before undertaking them, and the projects are
subject to mandatory pre-sale requirements under the real estate credit
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 the possible sale of equity or debt interests in
Resort Properties or its real estate development subsidiaries. Financing
commitments for future real estate development do not currently exist, and we
can offer no assurance that they will be available on satisfactory terms. We
will be required to establish both equity sources and construction facilities or
other financing arrangements for our projects before undertaking them. In
addition, the credit facilities affecting us place significant restrictions on
our ability to secure additional equity or place additional debt.



                       Changes in Results from Operations

         For the 13 weeks ended October 28, 2001 compared to the 13 weeks ended
October 29, 2000

Resort Operations:

         Sale of Sugarbush: We completed the sale of Sugarbush resort on
September 28, 2001. Results of Sugarbush operations are included in our
statement of operations through that date, which covers the first two months of
the fiscal year. For comparability, the results of operations at Sugarbush are
excluded from both current and prior year results in the discussion of the
results of resort operations. The following table reconciles results from resort
operations as reported for the first quarter of fiscal 2002 and fiscal 2001,
both including and excluding the results of Sugarbush resort (in thousands):
<TABLE>
         .
                                  Resort Results as        Sugarbush Results      Results Excluding Sugarbush  Variance
                                   13 Weeks ended            13 Weeks ended            13 Weeks ended          Excluding
                               ------------------------   ---------------------    -----------------------
                                10/29/01     10/28/00     10/29/01   10/28/00       10/29/01    10/28/00       Sugarbush
                               ------------ -----------   ---------- ----------    ----------- -----------    ------------

<S>                               <C>         <C>            <C>       <C>           <C>         <C>             <C>
Total resort revenues             $ 20,317    $ 20,912       $  697    $ 1,087       $ 19,620    $ 19,825        $  (205)
                               ------------ -----------   ---------- ----------    ----------- -----------    ------------

Cost of resort operations           27,173      30,343        1,141      1,971         26,032      28,372         (2,340)
Marketing, general and
      administrative costs          11,391      10,443          458        539         10,933       9,904           1,029
Other non-recurring charges          1,626           -            -          -          1,626           -           1,626
Depreciation and amortization        3,594       3,529            -         14          3,594       3,515              79
Interest expense                     9,319       8,031            8         13          9,311       8,018           1,293
                               ------------ -----------   ---------- ----------    ----------- -----------    ------------
Total resort expenses               53,103      52,346        1,607      2,537         51,496      49,809           1,687
                               ------------ -----------   ---------- ----------    ----------- -----------    ------------

Loss from resort operations     $ (32,786)   $(31,434)      $ (910)   $(1,450)      $(31,876)   $(29,984)       $ (1,892)
                               ============ ===========   ========== ==========    =========== ===========    ============

Resort EBITDA(1), excluding
    other non-recurring charges $ (18,247)   $(19,872)      $ (902)   $(1,423)      $(17,346)   $(18,449)        $  1,104
                               ============ ===========   ========== ==========    =========== ===========    ============
<FN>
(1) - We believe that EBITDA is an indicative measure of a resort company's
operating performance and is generally used by investors to evaluate companies
in the resort industry.
</FN>
</TABLE>



<PAGE>

         The results of our resort operations for the first quarter of Fiscal
2002 include the impact of our strategic restructuring program that was
implemented in the fourth quarter of fiscal 2001. Despite increased revenues
from the new Steamboat hotel and Heavenly gondola, resort revenues decreased 1%
as a result of the softening economy and the impact of the events of September
11th on the travel and leisure business. Resort operating expenses (including
marketing, general and administrative costs) for the first quarter of fiscal
2002 were $1.3 million lower than last year, primarily as a result of the cost
restructuring initiatives we implemented in the fourth quarter of fiscal 2001.
We also incurred $1.6 million in other non-recurring charges related to the
implementation of our strategic restructuring plan. These costs consisted mainly
of organizational restructuring costs and legal, consulting and financing costs
incurred in connection with our credit facility amendments and capital infusion
from Oak Hill. Excluding these restructuring charges, our Resort earnings before
interest, taxes and depreciation, or EBITDA, loss was $1.1 million lower than
the same period last year. Due to the seasonality of the ski industry, we
typically experience losses related to resort operations during our first and
fourth fiscal quarters.

         Recent Trends: Our results for Thanksgiving week were weaker than
during the prior year as a result of warmer than normal weather conditions at
all of our resorts. In the east, all of our resorts were open during
Thanksgiving week, with the exception of Attitash Bear Peak, but with
significantly less terrain than in the prior year when we benefited from
excellent early season conditions. As a result, skier visits in the east were
substantially less than the levels achieved last season. All of our resorts in
the east, excluding Sunday River, were closed following Thanksgiving week due to
warmer than normal weather which impacted snowmaking operations. A return of
colder weather in the east has allowed snowmaking operations to resume and all
of our eastern resorts were open as of December 11, 2001.

         All of our western resorts opened later than last season as a result of
warmer weather and a lack of snowfall. The Canyons resort, in Park City, Utah,
was open by Thanksgiving weekend as a result of significant natural snowfall.
However, the late arrival of the snow impacted reservation activity, and results
for Thanksgiving week were weaker than during the prior year. To date, heavy
snowfall has allowed The Canyons to offer visitors more than double the amount
of terrain than at the same time last season. Heavenly resort, in South Lake
Tahoe, opened on November 23rd with significantly less terrain than last season
resulting in lower visitation. Warm weather and a lack of natural snowfall in
the Colorado Rockies delayed the opening of Steamboat until November 30th.
However, all of our western resorts have seen significant snowfall since
Thanksgiving week and skiing and riding conditions have improved and are
significantly better than last year.

         With improved ski conditions in the west, our reservation and call
activity have improved significantly after a sharp decline following the events
of September 11th. Total winter reservations are down approximately 10%
year-to-date across our resort network, with eastern resorts showing a 2%
decrease and western resorts showing about a 19% decline. We anticipate
that a return to colder weather in east coupled with heavy natural snowfall in
the west will result in improve call volume and reservation activity.

         Season pass sales at our resorts are tracking approximately 6% higher
year-over-year, as of December 9, 2001, with a number of resorts experiencing
double digit increases. Season pass revenues are recognized during our second
and third fiscal quarters.


Real Estate Operations:
         Real estate revenues decreased by $24.4 million in the current quarter
compared to fiscal 2001, from $27.2 million to $2.8 million. Last year we
recognized $15.6 million in revenue from closings at the Steamboat Grand Hotel.
This project went on line during the first quarter of fiscal 2001 and most of
the revenues we recognized were from pre-sales activities. In the first quarter
of fiscal 2002 we recognized $1.5 million in revenues from closings at this
project. Our real estate revenues in the first quarter last year also included
$4.4 million from our sale of option rights to certain real estate land adjacent
to our Heavenly gondola. We had no such land sales in the first quarter of
fiscal 2002. We were $5 million behind last year in closings of quartershare
units at the Grand Summit Hotel at The Canyons, as we recognized $5.3 million in
revenues during the first quarter of fiscal 2001, compared to $0.3 million this
year. Last year's results also included $0.4 million and $0.3 million,
respectively, from sales of units at the Sundial Lodge at The Canyons and the
Locke Mountain Townhomes at Sunday River. Both of these projects were fully-sold
whole ownership condominium facilities for which we have no comparable revenues
in this current fiscal quarter.


<PAGE>

         Our loss from real estate operations increased by $5.3 million, from
$1.1 million in the first quarter of fiscal 2001 to $6.4 million in fiscal 2002.
The largest factor in this increase was the $3.3 million gain that we recognized
last year from the sale of option rights to land at Heavenly, for which we had
no comparable gain this year. We also recognized approximately $1 million less
in Real Estate EBITDA from sales at The Canyons and Steamboat Grand Summit
hotels due to the lower volume of revenues on those projects alluded to above.
We believe that EBITDA is an indicative measure of a resort company's operating
performance and is generally used by investors to evaluate companies in the
resort industry.

         Recent Trends: Over the past several months, we have seen a reduction
in sales volume and sales leads at our properties at Steamboat and The Canyons,
below anticipated levels for this period. We believe that this is primarily the
result of weakening economic conditions, which have impacted destination visits
at both resorts. We remain cautiously optimistic about our ability to move a
significant number of units at Steamboat and The Canyons this ski season. We are
watching carefully the developing economic conditions and adjusting our real
estate operations and plans accordingly. We do not currently have any new
projects in sales or construction. We are in the development planning stage on
several small projects.

         We have recently instituted programs to bring about a complete sell-out
of units at our eastern properties during Fiscal 2002. One of these programs was
an auction of Attitash units that we held on November 3, 2001, which resulted in
the sale of 147 of the remaining 167 units at that location. The auction and
subsequent sales have resulted in approximately $3.8 million in new sales
contracts, all of which we anticipate closing during our second fiscal quarter.

         Cumulative effect of accounting changes. In July 2001, the FASB issued
SFAS No. 142, "Goodwill and Other Intangible Assets." This statement applies to
goodwill and intangible assets acquired after June 30, 2001, as well as goodwill
and intangible assets previously acquired. Under this statement goodwill as well
as certain other intangible assets determined to have an infinite life, will no
longer be amortized. Instead, these assets will be reviewed for impairment on a
periodic basis. We have elected early adoption of the provisions of SFAS No. 142
and have recognized a goodwill impairment charge of $18.7 million in the first
quarter of fiscal 2002. The cumulative accounting change of $2.5 million (net of
$1.5 million tax provision) in fiscal 2001 resulted from recording the fair
value of non-hedging derivatives on our balance sheet in connection with our
initial adoption of SFAS No. 133 Accounting for Derivative Instruments and
Hedging Activities, SFAS No. 137 Accounting for Derivative Instruments and
Hedging Activities - Deferral of the Effective Date of FASB Statement No. 133 -
an Amendment of FASB Statement No. 133 and SFAS No. 138 Accounting for Certain
Derivative Instruments and Certain Hedging Activities - an Amendment of FASB
Statement No. 133.

      Benefit from income taxes decreased from $11.6 million in fiscal 2001 to
$0.0 this year. We have re-evaluated our income tax position, and have
determined that we do not expect to recognize any income tax expense or benefit
in the foreseeable future.

      Accretion of discount and dividends accrued on mandatorily redeemable
preferred stock increased $1.9 million, from $5.7 million for the first quarter
of fiscal 2001 to $7.6 million in fiscal 2002. This increase is primarily
attributable to the increase in the dividend rate from an effective rate of 9.7%
on our Series B preferred Stock to 12% and 15% on our new Series C-1 Preferred
Stock and Series C-2 Preferred Stock, which we issued to replace the Series B
Preferred Stock on August 31, 2001. See "Management's Discussion and Analysis of
Results of Operations - Liquidity - Recapitalization" for more details.

Recently Issued Accounting Standards

         In July 2001, the FASB issued SFAS No. 143, "Accounting for Asset
Retirement Obligations". This statement addresses financial accounting and
reporting for obligations associated with the retirement of tangible long-lived
assets and the associated asset retirement costs. SFAS No. 143 is effective for
financial statements issued for fiscal years beginning after June 15, 2002. We
believe the adoption of SFAS No. 143 will not have a material impact on our
results of operations or financial position and will adopt such standards on
July 29, 2002, as required.


<PAGE>

         In August 2001, the FASB issued SFAS No. 144, "Accounting for the
Impairment or Disposal of Long-Lived Assets." This statement supercedes FASB
Statement No. 121, "Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to Be Disposed Of," and the accounting and reporting
provisions of APB Opinion No. 30, "Reporting the Results of Operations -
Reporting the Effects of Disposal of a Segment of a Business, and Extraordinary,
Unusual and Infrequently Occurring Events and Transactions." This statement
requires that one accounting model be used for long-lived assets to be disposed
of by sale, whether previously held and used or newly acquired, and it broadens
the presentation of discontinued operations to include more disposal
transactions. The provisions of this statement are effective for fiscal years
beginning after December 15, 2001, and interim periods within those fiscal
years, with early adoption permitted. We are currently evaluating whether we
will early adopt the provisions of SFAS No. 144, and management will not be able
to determine the ultimate impact of this statement on its results of operations
or financial position until such time as its provisions are applied.

                                     Item 3
           Quantitative and Qualitative Disclosures about Market Risk

         There have been no material changes in information relating to market
risk since our disclosure included in Item 7A of Form 10-K for the fiscal year
ended July 29, 2001, as filed with the Securities and Exchange Commission on
November 14, 2001.

                          Part II - Other Information

                                     Item 2
                    Changes in Securities and Use of Proceeds

In connection with the recapitalization described in Part I, Item 2 of this
quarterly report on Form 10-Q, on August 31, 2001:

o        We issued, and Oak Hill purchased, $12.5 million aggregate principal
         amount of Junior Subordinated Notes, which are convertible into our
         shares of Series D Preferred Stock. These Junior Subordinated Notes
         bear interest at a rate of 11.3025%, which compounds annually and is
         due and payable at maturity of the Junior Subordinated Notes in July,
         2007. The proceeds of the Junior Subordinated Notes were used to fund
         short-term liquidity needs of our real estate subsidiary, Resort
         Properties by way of the purchase of certain real estate assets by us
         from Resort Properties;

o        Oak Hill purchased one million of our shares of common stock for an
         aggregate purchase price of $1 million;

o        The outstanding Series B Preferred Stock that was held by Oak Hill was
         stripped of all of its rights and preferences with the exception of the
         right to elect up to four directors;

o        We issued to Oak Hill two new series of Preferred Stock; (i) $40
         million of Series C-1 Preferred Stock, and (ii) $139.5 million of
         Series C-2 Preferred Stock. The initial face value of the Series C-1
         Preferred Stock and Series C-2 Preferred Stock correspond to the
         accrued liquidation preference of the Series B Preferred Stock
         immediately before being stripped of its right to such accrued
         liquidation preference. The Series C-1 Preferred Stock and Series C-2
         Preferred Stock carry cumulative preferred dividends of 12% and 15%,
         respectively, compounding quarterly. At our option, we can either pay
         the dividends in cash or accrue the dividends in additional shares. The
         Series C-1 Preferred Stock is convertible into common stock at a price
         of $1.25 per share, subject to adjustments. The Series C-2 Preferred
         Stock is not convertible. Both of Series C-1 Preferred Stock and Series
         C-2 Preferred Stock will mature in July, 2007.


      The issuance of these securities was exempt from registration pursuant to
Section 4(2) of the Securities Act and Regulation D promulgated thereunder. The
transaction was privately negotiated and Oak Hill was an accredited investor at
that time. No public offering or public solicitation was used by us in the
placement of these securities.




<PAGE>

                                     Item 5
                                Other Information

         On December 6, 2001, a syndicate of investors led by Fleet National
Bank funded a $14 million loan under a term loan agreement entered into with
Heavenly Valley, Limited Partnership, one of our subsidiaries. This term loan
relates to the financing of the Heavenly gondola. The loan matures on November
30, 2006, bears a fixed interest rate of 10 1/2% and is guaranteed by Oak Hill
and us. This loan enables us to meet one of the requirements of our senior
credit facility.

                                     Item 6
                        Exhibits and Reports on Form 8-K

a) Exhibits

         Included herewith are the following material agreements:

Exhibit No.       Description

1.       Purchase and Sale Agreement among Sugarbush Resort Holdings, Inc.,
         American Skiing Company and Summit Ventures NE, Inc. Dated as of
         September 7, 2001

2.       Fourth Amendment to the Amended, Restated And Consolidated Credit
         Agreement with respect to the Amended, Restated and Consolidated Credit
         Agreement dated as of October 12, 1999 by and among American Skiing
         Company and the other borrowers party thereto, the lenders party
         thereto and Fleet National Bank, N.A. as agent

3.       Consent Under the Amended, Restated and Consolidated Credit Agreement
         dated as of December 5, 2001

4.       Term Loan Agreement Dated as of December 5, 2001 among Heavenly Valley,
         Limited Partnership, as Borrower, certain Lenders and Fleet National
         Bank, as Administrative Agent



b) Reports on Form 8-K

         The Company filed a report on Form 8-K on September 4, 2001, reporting
that it had closed on the issuance of $12.5 million of its 11.3025% Convertible
Subordinated Notes due 2007, $40 million of its Series C-1 Convertible
Participating Preferred Stock and $138 million of its Series C-2 Preferred Stock
to Oak Hill Capital Partners, L.P. and its affiliates.



<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 12, 2001                             /s/ William Fair
-------------------------------                 --------------------------------
                                                  William Fair
                                                  Chief Executive Officer
                                                  (Duly Authorized Officer)


Date: December 12, 2001                            /s/ Mark J. Miller
-------------------------------                 -------------------------------
                                                   Mark J. Miller
                                                   Senior Vice President
                                                   Chief Financial Officer
                                                   (Principal Financial Officer)