American Skiing Company and Subsidiaries

 
                                  United States
                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

                                    FORM 10-Q

               QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934
                      FOR THE QUARTER ENDED APRIL 26, 1998

                          _____________________________

                        Commission File Number 333-33483
                          _____________________________

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

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

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

                                 (207) 824-5196
              (Registrant's telephone number, including area code)

     Not  Applicable  (Former  name,  former  address and former fiscal year, if
     changed since last report.)

     Indicated 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  of class A common  stock  $.01 par value and  15,505,044
shares of common stock $.01 par value outstanding as of June 10, 1998.

<PAGE>

                                Table of Contents

Part I - Financial Information.............................................    1

Item 1 Financial Statements ...............................................    2

         Condensed Consolidated Statement of Operations (Unaudited) for the
         Three Months Ended April 26, 1998 and April 27, 1997..............    2

         Condensed Consolidated Statement of Operations (Unaudited) for the
         Nine Months Ended April 26, 1998 and April 27, 1997...............    3

         Condensed Consolidated Balance Sheet  as of April 26, 1998 (Unaudited)
         and July 27, 1997.................................................    4

         Condensed Consolidated Statement of Cash Flows (Unaudited) for
         the Nine Months Ended April 26, 1998 and April 27, 1997...........    6

         Notes to (Unaudited) Condensed Consolidated Financial Statements..    8

Item 2 Management's Discussion and Analysis of Financial Condition and
Results of Operations.....................................................    12

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

         Liquidity and Capital Resources..................................    13

         Changes in Results of Operations.................................    15

         Changes in Financial Condition...................................    18

         Significant Events................................................   20

         Subsequent Events.................................................   21

         Forward Looking Statements........................................   21

Part II - Other Information...............................................    23



                                       i


<PAGE>

                         Part I - Financial Information
                                     Item 1
                              Financial Statements

          This Form 10-Q is filed by the  American  Skiing  Company  ("ASC") for
          itself and its following wholly-owned subsidiaries:

Sunday River Skiway Corporation               Sunday River, Ltd.
Sunday River Transportation                   Perfect Turn, Inc.
LBO Holding, Inc.                             Sugarbush Resort Holdings, Inc.
Mountain Wastewater Treatment, Inc.           Sugarbush Leasing Company
Sugarbush Restaurants, Inc.                   AJT, Inc. (f/k/a Cranmore, Inc.)
Grand Summit Resort Properties, Inc.          S-K-I Limited
Grand Summit Resort Properties II, Inc.       Club Sugarbush, Inc.
Mount Snow, Ltd.                              Killington, Ltd.
Sugarloaf Mountain Corporation                WVSAL, Inc. (f/k/a Waterville
Dover Restaurants, Inc.....                          Valley Ski Area, Ltd.)
Killington Restaurants, Inc.                  ASC East, Inc.
Resort Software Services, Inc.                Resort Technologies, Inc.
Sugartech                                     ASC Utah
Pico Ski Area Management                      Deerfield Operating Company
ASC West, Inc.                                American Skiing Company Resort 
Properties, Inc.                              Mountainside Corporation
Heavenly Valley Limited Partnership           Heavenly Corporation
Heavenly Ski Resort Corporation               Orlando Resort Corporation
Steamboat Ski and Resort Corporation          Killington West, Ltd.
Steamboat Development Corporation             Mountain Water Company
Ski Insurance Company                         Heavenly Resort Properties, Inc.
Steamboat Resort Properties, Inc.             Canyons Resort Properties, Inc.
Sugarloaf Resort Properties, Inc.             Killington Resort Properties, Inc.
Mount Snow Resort Properties, Inc.            Sugarbush Resort Properties, Inc.
Sunday River Resort Properties, Inc.          Attitash Resort Properties, Inc.

     As used herein,  the term "the Company" means and refers to American Skiing
Company and the subsidiary registrants listed above on a consolidated basis.



                                       1
<PAGE>



<TABLE>

                                      Condensed Consolidated Statement of Operations
                                     (In thousands except share and per share amounts)
<CAPTION>

                                                                                               For the Three Months Ended
                                                                              April 26, 1998                    April 27, 1997
                                                                                 (Unaudited)                       (Unaudited)
<S>                                                                                 <C>                                <C>    
Net revenues:

      Resort                                                                        $144,641                           $81,673
      Real estate                                                                     40,914                             2,674
                                                               ----------------------------------------------------------------
Total net revenues                                                                   185,555                            84,347

Operating expenses:
      Resort                                                                          65,413                            37,981
      Real estate                                                                     28,334                             2,167
      Marketing, general and administrative                                           12,623                             9,097
      Depreciation and amortization                                                   17,960                             8,075
                                                               ----------------------------------------------------------------
Total operating expenses                                                             124,330                            57,320
                                                               ----------------------------------------------------------------

Income from operations                                                                61,225                            27,027

      Interest expense                                                                 7,486                             5,325
                                                               ----------------------------------------------------------------

Income before provision for income taxes                                              53,739                            21,702

      Provision for income tax expense                                                20,958                             8,623
                                                               ----------------------------------------------------------------

Income from continuing operations                                                     32,781                            13,079

Dividends accrued on mandatorily redeemable preferred stock                            1,091                                 -
                                                               ----------------------------------------------------------------

Net income available to common shareholders                                          $31,690                           $13,079
                                                               ================================================================

Retained earnings (accumulated deficit), beginning of  period                      $(11,987)                            $8,221
Add: Net income available to common shareholders                                      31,690                            13,079
                                                               ----------------------------------------------------------------
Retained earnings, end of period                                                     $19,703                           $21,300
                                                               ================================================================

Earnings per common share - basic:
Income from continuing operations                                                      $1.08                            $13.37
Net income available to common shareholders                                            $1.05                            $13.37

Earnings per common share - diluted:
Income from continuing operations                                                      $1.07                            $13.37
Net income available to common shareholders                                            $1.03                            $13.37

 See accompanying Notes to (Unaudited) Condensed Consolidated Financial Statements.
</TABLE>




                                       2
<PAGE>



<TABLE>
                                      Condensed Consolidated Statement of Operations
                                     (in thousands except share and per share amounts)

<CAPTION>
                                                                                                  For the Nine Months Ended

                                                                                     April 26, 1998                  April 27, 1997
                                                                                        (Unaudited)                     (Unaudited)
<S>                                                                                        <C>                             <C>     
Net revenues:
       Resort                                                                              $265,877                        $157,747
       Real estate                                                                           49,614                           5,983
                                                                   -----------------------------------------------------------------
Total net revenues                                                                          315,491                         163,730

Operating expenses:
       Resort                                                                               147,465                          96,192
       Real estate                                                                           34,482                           4,880
       Marketing, general and administrative.                                                33,089                          21,598
       Stock compensation charge (Note 7)                                                    14,254                               -
       Depreciation and amortization                                                         34,475                          16,946
                                                                   -----------------------------------------------------------------
Total operating expenses                                                                    263,765                         139,616
                                                                   -----------------------------------------------------------------

Income from operations                                                                       51,726                          24,114

       Interest expense                                                                      25,028                          18,396
                                                                   -----------------------------------------------------------------

Income before provision for income taxes                                                     26,698                           5,718

       Provision for income tax expense                                                      10,413                           2,549
       Minority interest in loss of subsidiary                                                (456)                               -
                                                                   -----------------------------------------------------------------

Income from continuing operations                                                            16,741                           3,169

Extraordinary loss, net of income tax benefit of $3,248                                       5,081                               -
                                                                   -----------------------------------------------------------------

Net income                                                                                   11,660                           3,169

Accretion of discount and dividends accrued on mandatorily
redeemable preferred stock                                                                    4,262                               -
                                                                   -----------------------------------------------------------------
Net income available to common shareholders                                                  $7,398                          $3,169
                                                                   =================================================================
Retained earnings, beginning of period                                                      $12,305                         $18,131
Add: Net income available to common shareholders                                              7,398                           3,169

                                                                   =================================================================
Retained earnings, end of period                                                            $19,703                         $21,300
                                                                   =================================================================
Earnings (loss) per common share-basic:
Income from continuing operations                                                             $0.69                           $3.24
Extraordinary loss                                                                           ($0.21)                              -
Net income available to common shareholders                                                   $0.30                           $3.24

Earnings (loss) per common share - diluted:
Income from continuing operations                                                             $0.68                           $3.24
Extraordinary loss                                                                           ($0.21)                              -
Net income available to common shareholders                                                   $0.30                           $3.24

See accompanying Notes to (Unaudited) Condensed Consolidated Financial Statements.
</TABLE>




                                       3
<PAGE>



<TABLE>

                                           Condensed Consolidated Balance Sheet
                                                      (in thousands)
<CAPTION>

                                                                                          April 26, 1998               July 27, 1997
                                                                                             (Unaudited)
<S>                                                                                              <C>                         <C>    
ASSETS

Current assets

       Cash and cash equivalents                                                                 $32,588                     $15,558
       Restricted cash                                                                             2,753                       2,812
       Accounts receivable                                                                        19,364                       3,801
       Inventory                                                                                  13,823                       7,282
       Prepaid expenses                                                                            2,192                       1,579
       Deferred tax assets                                                                           770                         422
                                                                           ---------------------------------------------------------
 Total current assets                                                                             71,490                      31,454

       Property and equipment, net                                                               472,271                     252,346
       Real estate developed for sale                                                             97,228                      23,540
       Long-term investments                                                                       7,979                       3,507
       Goodwill                                                                                  103,621                      10,664
       Deferred financing costs                                                                    9,481                       9,431
       Other assets                                                                               22,430                       6,398
                                                                           =========================================================
Total assets                                                                                    $784,500                    $337,340
                                                                           =========================================================
















See accompanying Notes to (Unaudited) Condensed Consolidated Financial Statements.
</TABLE>





                                       4
<PAGE>


<TABLE>
                                           Condensed Consolidated Balance Sheet
                                                      (in thousands)
<CAPTION>

                                                                                          April 26, 1998               July 27, 1997
                                                                                             (Unaudited)
<S>                                                                                              <C>                         <C>    
LIABILITIES, MANDATORILY REDEEMABLE
  PREFERRED STOCK AND SHAREHOLDERS' EQUITY

Current liabilities

      Line of credit and current portion of long-term debt                                       $28,675                     $39,748
      Accounts payable and other current liabilities                                              56,948                      25,738
      Due to stockholder                                                                           1,891                       1,933
      Deposits and deferred revenue                                                                5,248                       4,379
                                                                          ----------------------------------------------------------
Total current liabilities                                                                         92,762                      71,798

      Long-term debt, excluding current portion                                                  195,231                      46,833
      Subordinated notes and debentures                                                          127,899                     149,749
      Minority interest                                                                                -                         626
      Other long-term liabilities                                                                  6,373                       7,898
      Deferred income taxes                                                                       36,138                      28,514
                                                                          ----------------------------------------------------------
Total liabilities                                                                                458,403                     305,418

Mandatorily redeemable preferred stock                                                            38,381                      16,821


Shareholders' equity
      Common stock, Class A                                                                          148                          10
      Common stock                                                                                   161                           -
      Additional paid-in capital                                                                 267,704                       2,786
      Retained earnings                                                                           19,703                      12,305
                                                                          ------------------------------ ---------------------------
                                                                                                        
Total shareholders' equity                                                                       287,716                      15,101

Total liabilities, mandatorily redeemable preferred stock and
shareholders' equity                                                                            $784,500                    $337,340
                                                                          ==========================================================









See accompanying Notes to (Unaudited) Condensed Consolidated Financial Statements.
</TABLE>


                                       5
<PAGE>

<TABLE>
                                      Condensed Consolidated Statement of Cash Flows
                                                      (in thousands)
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------------------
                                                                                                 For the Nine Months Ended
-----------------------------------------------------------------------------------------------------------------------------------
                                                                                      April 26, 1998                April 27, 1997
                                                                                         (Unaudited)                   (Unaudited)
<S>                                                                                          <C>                            <C>   
Cash flows from operating activities:

Net income                                                                                   $11,660                        $3,169

Adjustments to reconcile net income to net cash provided by
operating activities:
Stock option compensation charge                                                              14,254                             -
Depreciation and amortization                                                                 33,088                        19,099
Discount on convertible debt                                                                     342                             -
Minority interest                                                                               (456)                        3,950
Deferred income taxes                                                                          6,960                             -
Non-cash portion of extraordinary loss                                                         3,242                             -
Preferred stock original issue discount                                                        1,841                             -

Decreases (increases) in assets:
Restricted cash                                                                                (733)                         5,200
Accounts receivable                                                                         (14,287)                       (2,494)
Inventory                                                                                    (2,475)                       (1,355)
Prepaid expenses                                                                               (490)                         1,332
Other current assets                                                                               -                           733
Real estate developed for sale                                                              (45,919)                        13,721
Other assets                                                                                 (5,657)                       (1,311)

Increases (decreases) in liabilities:
Accounts payable and other current liabilities                                                13,630                         (383)
Income taxes payable                                                                               -                         (270)
Deposits and deferred revenue                                                                (2,914)                         (406)
Accrued interest                                                                                   -                         3,552
Other long-term liabilities                                                                  (6,161)                         2,883
                                                                  -----------------------------------------------------------------

Cash flow provided by operating activities                                                    5,925                         47,420

Cash flows from investing activities:

Assets held for resale                                                                             -                       (9,070)
Additions to property and equipment                                                         (70,371)                      (22,661)
 Purchase of ski resorts, net of cash purchase                                             (294,364)                             -
 Purchase of ski resort minority interest                                                          -                       (2,492)
Sale (purchase) of long-term investment                                                          497                           144
Net proceeds from sale of assets                                                              11,599                             -
                                                                  -----------------------------------------------------------------

Net cash used in investing activities                                                      (352,639)                      (34,079)

Cash flows from financing activities:
 
 Reductions in note payable to shareholder                                                      (43)                       (3,409)
Net proceeds from initial public offering                                                    244,555                             -
Proceeds from construction loan                                                               31,219                             -


                                       6
<PAGE>

Proceeds from term loan                                                                      105,000                             -
Proceeds from revolving line of credit                                                        50,787                             -
Repayment of revolving line of credit                                                       (59,623)                      (11,839)
Proceeds from subordinated notes                                                              17,500                             -
Repayment of subordinated debt                                                              (21,882)                             -
Net additions (reductions) to other long-term debt                                           (3,769)                           237
                                                                   ----------------------------------------------------------------

Net cash provided by (used in) financing activities                                          363,744                      (15,011)

Net increase (decrease) in cash and cash equivalents                                          17,030                       (1,670)
Cash and cash equivalents at beginning of period                                              15,558                         4,087
                                                                   ----------------------------------------------------------------

Cash and cash equivalents at end of period                                                   $32,588                      $  2,417
                                                                   ================================================================






























See accompanying Notes to (Unaudited) Condensed Consolidated Financial Statements.

</TABLE>

                                       7
<PAGE>

Notes to (Unaudited) Condensed Consolidated Financial Statements


     1.  General.  In the opinion of the  Company,  the  accompanying  unaudited
condensed consolidated financial statements contain all adjustments necessary to
present  fairly the financial  position of the Company as of April 26, 1998, the
results of  operations  for the three and nine  months  ended April 26, 1998 and
April 27, 1997,  and the statement of cash flows for the nine months ended April
26, 1998 and April 27, 1997. All adjustments are of a normal  recurring  nature.
The unaudited  condensed  consolidated  financial  statements  should be read in
conjunction  with the  following  notes and the Company's  audited  consolidated
financial  statements  as of and  for the  year  ended  July  27,  1997  and the
unaudited condensed  consolidated  financial  statements as of and for the three
months  ended  October  26,  1997 as  included  in the Form S-1,  filed with the
Securities and Exchange Commission on February 10, 1998.

     2.  Inventories.  Inventories  are  stated at the lower of cost  (first-in,
first-out) or market,  and consist  primarily of retail goods, food and beverage
products and mountain operating supplies.

     3. Income  Taxes.  The  provision  (benefit) for income taxes is based on a
projected  annual  effective  tax  rate of  39%.  The net  deferred  income  tax
liability  includes the  cumulative  reduction in current  income taxes  payable
resulting  principally  from the excess of depreciation  reported for income tax
purposes over that reported for financial reporting purposes.

     4. Seasonal Business. Results for interim periods are not indicative of the
results  expected  for the  year due to the  seasonal  nature  of the  Company's
business, which is the development and operation of ski resorts.

     5.  Earnings per Common  Share.  Effective  January 25,  1998,  the Company
adopted the provisions of Financial  Accounting  Standards  Board's Statement of
Financial  Accounting Standards No. 128, "Earnings Per Share" ("SFAS 128"). SFAS
128 specifies the  computation,  presentation,  and disclosure  requirements for
earnings per share for public entities.  Earnings per share for the three
and nine  months  ended April 26,  1998 and April 27,  1997 were  determined  as
follows:



                                       8
<PAGE>



 
<TABLE>
<CAPTION>
                   (in thousands)                            Three Months Ended               Nine Months Ended
                                                         April 26,       April 27,        April 26,        April 27,
                    Income                                  1998            1997             1998             1997
                                                       ---------------- -------------- ----------------- ---------------
<S>                                                            <C>            <C>               <C>              <C>   
Income  from continuing operations                             $32,781        $13,079           $16,741          $3,169
Preferred stock accretion                                      (1,091)              -           (4,262)               -
Extraordinary loss                                                   -              -           (5,081)               -
                                                       ---------------- -------------- ----------------- ---------------

Net income available to common shareholders (basic
and diluted)                                                   $31,690        $13,079            $7,398          $3,169
                                                       ================ ============== ================= ===============
                       Shares
Weighted-average shares outstanding (basic)                     30,265            978            24,348             978
Dilutive common stock options                                      463              -               339               -
                                                       ---------------- -------------- ----------------- ---------------
Weighted average shares outstanding (diluted)
                                                                30,728            978            24,687             978
                                                       ================ ============== ================= ===============

</TABLE>

     6. Adjustments and  Reclassifications.  Certain amounts in the prior year's
unaudited condensed  consolidated financial statements and the audited financial
statements filed with the Company's  Registration Statement on February 10, 1998
with the Securities and Exchange Commission have been reclassified to conform to
the current presentation.

     7. Stock Option Plan. The Company recorded a compensation expense charge of
$14.3 million in the quarter  ended  October 26, 1997 to recognize  compensation
expense for stock  options  granted to certain key members of  management.  This
charge is based on the  difference  between the exercise  price of $2.00 and the
estimated fair market value as of the date of grant of $18.00.  Certain  members
of senior  management  are also  being  granted a cash  payment  on the date the
options are exercised to cover individual federal and state income tax liability
generated by exercising the options.  The estimated  amount of the tax liability
payment of $5.7  million  has been  fully  accrued  along with the stock  option
compensation charge of $8.6 million.

     8. Pro Forma  Disclosure.  The following pro forma statements of operations
for the three  and nine  months  ended  April  26,  1998 and April 27,  1997 are
presented for purposes of comparison.  The following pro forma  adjustments have
been made for the following periods:

     The three months ended April 26, 1998 - There are no pro forma adjustments.

     The three  months  ended  April 27, 1997 - The  results of  operations  for
Steamboat,  Heavenly and The Canyons  have been added based on their  historical
results for the three months ended April 27, 1997.

     The nine  months  ended  April 26,  1998 - The  results of  operations  for
Steamboat and Heavenly have been added based on their historical results for the
period from August 1, 1997 through the date of their acquisition on November 12,
1997.  The minority  interest in loss of subsidiary  has been removed to reflect
the exchange of the ASC East minority shareholders.


                                       9
<PAGE>

     The nine  months  ended  April 27,  1997 - The  results of  operations  for
Steamboat,  Heavenly and the Canyons  have been added based on their  historical
results for the nine months ended April 27, 1997. 

     The  following  pro  forma  adjustments  have  been  made  for all  periods
presented in the Pro Forma Consolidated Statement of Operations:

     Pro forma  adjustments  have been made to depreciation  and amortization to
reflect the purchase accounting for the assets of Steamboat and Heavenly and the
changes in the Company's capital structure.

     Pro forma  adjustments  have been posted to interest expense to reflect the
change in the capital  structure of the Company  related to the  acquisition  of
Heavenly  and  Steamboat  and the  initial  public  offering  of the  Company on
November 6, 1997.


                                       10
<PAGE>


<TABLE>

                                         Consolidated Statement of Operations
                                  (In thousands of dollars except per share amounts)
                                                       Pro Forma
<CAPTION>
                                                            Three Months Ended                Nine Months Ended

                                                      April 26,        April 27,       April 26,         April 27,
                                                         1998            1997             1998             1997
<S>                                                    <C>               <C>            <C>                    <C>     
Net revenues:
     Resort                                            $   144,641       $   129,154    $   269,483            $242,538
     Real estate                                            40,914             2,674         49,614               5,983          
                                                    --------------------------------------------------------------------
Total net revenues                                         185,555           131,828        319,097             248,521
                                                    --------------------------------------------------------------------

Operating expenses:
     Resort                                                 65,413            57,229        156,050             143,362
     Real estate                                            28,334             2,167         34,482               4,880
     Marketing, general and administrative                  12,623            11,986         38,067              31,253
     Stock compensation charge                                   -                 -         14,254                   -
     Depreciation and amortization                          17,960            15,242         36,073              32,655
                                                    --------------------------------------------------------------------
Total operating expenses                                   124,330            86,624        278,926             212,150
                                                    --------------------------------------------------------------------

Income from operations                                      61,225            45,204         40,171              36,371

     Interest expense                                        7,486             6,076         25,848              20,648
                                                    --------------------------------------------------------------------

Income before provision for income taxes                    53,739            39,128         14,323              15,723

      Provision for income taxes                            20,958            15,419          5,587               6,451
                                                    --------------------------------------------------------------------
Income from continuing operations                           32,781            23,709          8,736               9,272
Extraordinary loss                                               -                 -          5,081                   -
                                                    --------------------------------------------------------------------
Net income                                                  32,781            23,709          3,655               9,272  
                                   
Accretion of discounts and dividends accrued on                                       
mandatorily redeemable preferred stock                       1,091                 -          4,262                   -
                                                    --------------------------------------------------------------------

Net income (loss) available to common shareholders         $31,690           $23,709         $(607)              $9,272
                                                    ====================================================================

Earnings (loss) per common share - basic:
Income from continuing operations                            $1.08             $0.80          $0.29               $0.31
Extraordinary loss                                               -                 -         ($0.17)                  -
Net income (loss)                                            $1.05             $0.80        ($0.02)               $0.31

Earnings (loss) per common share - diluted:
Income from continuing operations                            $1.07             $0.80          $0.29               $0.31
Extraordinary loss                                               -                 -         ($0.17)                  -
Net income (loss)                                            $1.03             $0.80         ($0.02)              $0.31

</TABLE>



                                       11
<PAGE>



     9.  Significant  Events.  On November 6, 1997,  the Securities and Exchange
Commission declared effective the Company's Form S-1 Registration  Statement for
purposes of registering  the Company's  common stock.  On November 12, 1997, the
Company  settled the sale of (i)833,333  shares of common stock  directly to the
Principal  Shareholder  at $18.00 a share and (ii)  13,916,667  shares of common
stock  to the  public  at  $18.00  per  share  in  the  public  offering  by the
underwriters. Total gross proceeds of $265.5 million were received in connection
with the offering.

     On November 12, 1997, the Company  closed the  acquisition of the Steamboat
and  Heavenly  resorts  for  a  purchase  price,  including  closing  costs  and
adjustments,  of approximately  $298 million.  The acquisition was accounted for
using the purchase  accounting  method.  The consolidated  financial  statements
herein reflect the results of operations of the acquired  Steamboat and Heavenly
ski resorts subsequent to November 12, 1997 and include the balance sheet of the
acquired resorts as of April 26, 1998.

     On November 12, 1997, the Company  entered into a new senior secured credit
facility with a group of lenders  pursuant to which the Company may borrow up to
$215  million.  A portion  of the net  proceeds  of the common  stock  offering,
together with borrowings under the senior credit facility, were used to fund the
purchase of Steamboat and Heavenly ski resorts for  approximately  $290 million,
Also on November  12,  1997,  a portion of the  proceeds  from the common  stock
offering were used to make a $33.6 million investment in the common stock of one
of the Company's major subsidiaries, ASC East, Inc. This investment in ASC East,
Inc. was primarily used to redeem its outstanding  subordinated  discount notes,
which redemption was effected on December 30, 1997.

     The Company has also  exchanged  shares of the  Company's  common stock for
shares of common stock in ASC East,  Inc. This exchange was made to enable three
beneficial  owners of the  minority  interests  to acquire  common  stock in the
Company  at  substantially  the same  exchange  ratio as  Leslie B.  Otten,  the
principal  shareholder  of the Company,  exchanged his shares of ASC East,  Inc.
common stock for shares of common stock in connection  with the formation of the
Company.  The  Company  believes  this will  eliminate  potential  conflicts  of
interest between minority holders and shareholders of the Company.


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

                                     General

     We are pleased to present to you  management's  discussion  and analysis of
financial  condition and results of  operations  for the third quarter of fiscal
1998 and the nine months ended April 26, 1998. The results include the Steamboat
and Heavenly  resorts  which were acquired on November 12, 1998. As you read the
material  below,  we urge you to carefully  consider our  (Unaudited)  Condensed
Consolidated  Financial Statements and related notes contained elsewhere in this
report and the audited  financial  statements and related notes contained in our
Form S-1 Registration Statements filed November 6, 1997 and February 10, 1998.


                                       12
<PAGE>

                         Liquidity and Capital Resources

     Short-Term.  The Company's primary  short-term  liquidity needs are funding
seasonal  working  capital  requirements,  its summer 1998  capital  improvement
program, and servicing  indebtedness.  The summer 1998 capital improvements will
include   expenditures  on  lifts,  trails,   snow-making   equipment  and  base
facilities,   as  well  as  real  estate  development.   Cash  requirements  for
ski-related  and real estate  development  activities  are  provided by separate
sources.  The Company's  primary  sources of liquidity  for working  capital and
ski-related capital improvements are unexpended proceeds from the initial public
offering, cash flow from operations of its subsidiaries and borrowings under the
senior credit facility. Real estate development will be funded primarily through
construction  financing facilities established for major real estate development
projects.

     The Company  established  a new credit  facility on November  12, 1997 (the
"New  Credit   Facility").   The  New  Credit   Facility  is  divided  into  two
sub-facilities, $75 million of which ($30 million of which is available at April
26, 1998) is available  for  borrowings by ASC East,  Inc. and its  subsidiaries
(the  "East  Facility")  and $140  million  of which  ($30  million  of which is
available  at April  26,  1998)  is  available  for  borrowings  by the  Company
excluding ASC East, Inc. and its subsidiaries  (the "West  Facility").  The East
Facility consists of a eight-year revolving credit facility in the amount of $45
million and an eight-year  term facility in the amount of $30 million.  The West
Facility  consists  of an  eight-year  revolving  facility  in the amount of $65
million and an eight-year term facility in the amount of $75 million.

     The  revolving   facilities   are  subject  to  annual  30-day  clean  down
requirements to an outstanding balance of not more than $10 million for the East
Facility  and not more  that $35  million  for the West  Facility.  The  maximum
availability under the revolving facilities will reduce over the term of the New
Credit Facility by certain prescribed amounts. The term facilities amortize at a
rate of approximately  1.0% of the principal amount for the first six years with
the  remaining  portion  of  the  principal  due  in  two  substantially   equal
installments  in years  seven and eight.  Beginning  July  1999,  the New Credit
Facility  requires  mandatory  prepayment of 50% of excess cash flows during any
period in which the ratio of the Company's  total senior debt to EBITDA  exceeds
3.50 to 1. In no event,  however,  will such mandatory prepayments reduce either
revolving  facility  commitment  below  $35  million.  The New  Credit  Facility
contains  affirmative,  negative and financial covenants customary for this type
of senior credit facility including  maintenance of customary  financial ratios.
Except for a leverage test, compliance with financial covenants is determined on
a consolidated basis  notwithstanding the bifurcation of the New Credit Facility
into  sub-facilities.  The East  Facility  is secured by  substantially  all the
assets of ASC East and its  subsidiaries,  except  our real  estate  development
subsidiaries,  which are not borrowers under the New Credit  Facility.  The West
Facility  is secured by  substantially  all the  assets of the  Company  and its
subsidiaries,  except ASC East,  Inc. and its  subsidiaries  and our real estate
development subsidiaries.

     The Company retained  approximately $15 million of unexpended proceeds from
its initial public offering, which it holds in cash equivalents.

     ASC East, Inc. is prohibited under the indenture governing its $120 million
12% Senior  Subordinated  Notes due 2006 from paying  dividends  or making other
distributions  to the Company.  Therefore,  excess cash flow from ASC East, Inc.
cannot  be  distributed  to the  Company  for use by the  Company  or its  other
subsidiaries.


                                       13
<PAGE>

     The Company issued $17.5 million of convertible,  preferred stock and $17.5
million convertible notes in July, 1997 to fund development at its new resort in
Utah called The Canyons.  These  securities were converted on November 12, 1997,
into 10 1/2% Mandatorily Redeemable Preferred Stock of the Company.

     The   Company's   summer  1998   capital   program  is  expected  to  total
approximately $60 million, excluding real estate development. The combination of
unexpended  proceeds  from its initial  public  offering,  cash flow from resort
operations,  capital  leases and the New Credit  Facility is expected to provide
sufficient  funds to meet short term  liquidity  needs for  working  capital and
skiing related capital expenditures.

     The  Company  expects  to  issue   approximately  $100  million  in  senior
subordinated  bonds prior to close of its 1998 fiscal year ("Bond Offering") and
is in the  process of making an offer to  holders  of ASC East,  Inc.'s 12% $120
million Senior  Subordinated  Notes to exchange those  obligations  for 12% $120
million of Senior  Subordinated Bonds of the Company,  with a covenant structure
which will be similar, in all material respects,  to the Company's Bond Offering
("Exchange  Offer").  Although the Bond  Offering and the Exchange  Offer are in
process,  no assurance can be given that these transactions will be consummated.
The Company is simultaneously  pursuing an alternative to the Bond Offering with
its senior lending group and has received a term sheet for arranging an increase
in its senior facility to $350 million ("Additional Senior Credit Facility"). No
assurance  can be given  that the  Additional  Senior  Credit  Facility  will be
consummated.

     The  Company  runs its  real  estate  development  through  single  purpose
subsidiaries.  Construction of existing Grand Summit Hotel projects are financed
through an independent  construction  loan facility with recourse limited to the
real estate development  subsidiaries.  The facility is a customary construction
lending  facility  allowing for periodic draw down as  construction  progresses.
Each  advance  is subject to certain  conditions,  including  obtaining  certain
levels of  preconstruction  sales. The loan is secured by first mortgages on the
Grand  Summit  properties.  Principal  is repaid from 80% to 85% of the proceeds
generated by quartershare  sales.  The construction  facility matures  December,
2000. This facility,  together with funds invested by the Company, is sufficient
to fund the Grand  Summit  Hotel  projects  which were  substantially  completed
during the 1997-1998 ski season.

     The Company  intends to continue  real  estate  development  at its eastern
resorts, and initiate real estate development projects at certain of its western
resorts  during the summer of 1998.  The financing for summer 1998 projects will
consist of two  components.  The Company is in the process of  finalizing a $145
million senior component,  which is a conventional construction loan arranged on
a limited recourse basis with Textron Financial,  the Company's existing project
lender.  A portion of the development  costs are expected to be financed through
equity  infused by the  Company  derived  from  either the Bond  Offering or the
Additional Senior Credit Facility.

     Long-Term.  The Company's  primary  long-term  liquidity  needs are to fund
skiing  related  capital  improvements  at  certain  of its  resorts,  extensive
development of its slopeside real estate and any future  acquisitions  of resort
properties.


                                       14
<PAGE>

     The Company's  largest long-term capital needs relate to The Canyons resort
in Utah and the Company's real estate  development  program.  The Canyons resort
will require an estimated  $40 million over the next four years to fully develop
on-mountain facilities in time for the 2002 Winter Olympic Games.

     There is a  considerable  degree of  flexibility  in the timing  and,  to a
lesser degree,  scope of these capital  improvements.  Although specific capital
expenditures  can be deferred for extended  periods,  continued  growth of skier
visits,  revenues and profitability will require continued capital investment in
on-mountain  improvements.  The  Company's  practice  is to finance  on-mountain
capital  improvements  through resort cash flow and its senior credit  facility.
The  size  and  scope of the  capital  improvement  program  will  generally  be
determined  annually  depending upon future  availability of cash flow from each
season's resort  operations and future borrowing  availability  under the senior
credit facility.

     Development of Grand Summit hotels at several  resorts and alpine  villages
at Sunday River, Killington,  The Canyons and Steamboat will require substantial
funding. The Company expects to undertake these projects through special purpose
subsidiaries  with financing  provided  principally on a limited recourse basis.
The  Company's  ability  to  directly  contribute  equity  toward  or  otherwise
guarantee real estate development is limited to $25 million under the New Credit
Facility.  As currently  contemplated,  the Bond Offering or  Additional  Senior
Credit  Facility  covenants  would  enable  a  significantly   higher  level  of
contribution to real estate development;  however, neither of those transactions
have been consummated and no assurance can be given that either transaction will
be consummated.  Financing commitments for future real estate development do not
currently  exist.  The  Company  will  be  required  to  establish  construction
facilities for these projects before undertaking each development.


                        Changes in Results of Operations

     Changes for the Third  Quarter of Fiscal 1998 compared to the Third Quarter
of Fiscal 1997.


     1. Resort revenues.  Resort revenues increased 77.1% from $81.7 million for
the third quarter of fiscal 1997 to $144.6 for the third quarter of fiscal 1998.
The acquisition of the Steamboat and Heavenly  resorts  acquired on November 12,
1997, and The Canyons resort acquired in July 1997,  accounted for $59.0 million
of the  increase in  revenue.  The  remaining  $3.9  million of the  increase is
principally  attributable  to increases in skier visits,  the acquisition of new
retail and food and beverage operations,  and increased yield per skier visit in
our pre-acquisition group of resorts.

     2. Real estate  revenues.  Real estate revenues  increased $38.2 million in
the third  quarter of fiscal  1998 as  compared  to the third  quarter of fiscal
1997.  The  increase  is   attributable  to  completion  of  the  Company's  new
quartershare  hotels at  Killington,  Mount  Snow and Sunday  River and  closing
quartershare sales at those projects.

     3. Cost of resort  operations.  Cost of resort  operations  increased 72.2%
from $38.0 million to $65.4 million. The acquisition of the Steamboat, Heavenly,


                                       15
<PAGE>

and The  Canyons  resorts  accounted  for $21.9  million  of the  increase.  The
remaining  $5.5  million of the  increase  is  principally  attributable  to the
increases in skier visits and business volume at our pre-acquisition resorts.

     4. Cost of real estate.  Cost of real estate increased $26.2 million in the
third  quarter of fiscal 1998 as compared to the third  fiscal  quarter of 1997.
This increase is attributable principally to increased sales, as outlined above,
and to non-capitalizable costs associated with new projects under development at
Killington, The Canyons and Steamboat.

     5.  Marketing,   general,  and  administrative.   Marketing,  general,  and
administrative  costs  increased  38.5% from $9.1 million to $12.6 million.  The
inclusion of Steamboat,  Heavenly,  and The Canyons resorts accounted for nearly
all of the increase.

     6. Depreciation and amortization.  Depreciation and amortization  increased
from $8.1 million for the third  quarter of fiscal 1997 to $18.0 million for the
third quarter of fiscal 1998.  The increase is principally  attributable  to the
acquisitions of Steamboat,  Heavenly and The Canyons and the summer 1997 capital
program at the Company's eastern resorts.

     7. Interest  expense.  Interest expense increased from $5.3 million for the
third  quarter of fiscal 1997 to $7.5  million  for the third  quarter of fiscal
1998.  This  increase is  primarily  attributable  to the  Company's  New Credit
Facility,  which  was  established  contemporaneously  with the  closing  of its
initial  public  offering  and the  acquisition  of  Steamboat  and  Heavenly on
November 12, 1997.

     8.  Provision for income taxes.  Provision for income taxes  increased from
$8.6 million for the three months ended April 27, 1997 to $21.0  million for the
three  months  ended April 26,  1998.  The  increase is directly  related to the
increase in net income for the period.

     9. Accrued dividends. The $1.1 million balance at April 26, 1998 represents
dividends  accrued on the 10 1/2% Mandatorily  Redeemable  Preferred Stock which
was issued on November 12, 1997.




                                       16
<PAGE>



                        Changes in Results of Operations

     Changes for the First Nine Months of Fiscal 1998 compared to the First Nine
Months of Fiscal 1997.

     1. Resort revenues. Resort revenues increased 68.5% from $157.8 million for
the nine months ended April 27, 1997 to $265.9 million for the nine months ended
April 26, 1998. The acquisition of the Steamboat and Heavenly  resorts  acquired
on November 12, 1997,  and The Canyons resort  acquired in July 1997,  accounted
for $95.2 million of the increase.  The remaining  $12.9 million of the increase
in revenue  is  principally  attributable  to  increases  in skier  visits,  the
acquisition of new retail and food and beverage  operations and increased yields
per skier visit in our pre-acquisition group of resorts.

     2. Real estate revenues.  Real estate revenues  increased $43.6 million for
the nine months  ended April 26, 1998 as compared to the nine months ended April
27, 1997.  The increase is  attributable  to  completion  of the  Company's  new
quartershare  condominium hotels at Killington,  Mount Snow and Sunday River and
closing quartershare sales at those projects.

     3. Cost of resort  operations.  Cost of resort  operations  increased 53.3%
from $96.2 million to $147.5 million.  The  acquisition of Steamboat,  Heavenly,
and The  Canyons  resorts  accounted  for $42.3  million  of the  increase.  The
remaining  $9.0  million of the  increase  is  principally  attributable  to the
increases in skier visits and business volume at our pre-acquisition resorts.

     4. Cost of real estate. Cost of real estate sold increased $29.6 million 
for the nine months  ended April  26,1998 as compared to the nine months ended 
April 27, 1997. The increase is attributable  principally to increased  sales, 
as outlined above,  and to  non-capitalizeable  costs  associated  with new  
projects  under development at Killington, The Canyons, and Steamboat.

     5.  Marketing,   general,  and  administrative.   Marketing,  general,  and
administrative  costs increased  53.2% from $21.6 million to $33.1 million.  The
inclusion of Steamboat,  Heavenly,  and The Canyons  accounted for approximately
$6.6 million of this  increase.  The  remainder  can be  attributed to increased
costs associated with the establishment of ASC corporate  offices,  the new Edge
card  program,  direct to lift  programs,  and other  marketing  and real estate
initiatives throughout our resorts.

     6. Depreciation and amortization.  Depreciation and amortization  increased
$17.5  million for the nine months  ended April  26,1998 as compared to the nine
months ended April 27, 1997.  The increase is  principally  attributable  to the
acquisitions of Steamboat,  Heavenly,  and The Canyons and the additional  plant
and equipment related to the summer 1997 capital improvement program.

     7. Interest expense.  Interest expense increased from $18.4 million for the
nine  months  ended April 27,  1997 to $25.0  million for the nine months  ended
April 26, 1998.  This  increase is primarily  attributable  to the Company's New
Credit Facility, which was established contemporaneously with the closing of its
initial  public  offering  and the  acquisition  of  Steamboat  and  Heavenly on
November 12, 1997.

     8.  Provision  for income taxes.  The provision for income taxes  increased
from $2.6 million for the nine months ended April 27, 1997 to $10.4  million for

                                       17
<PAGE>

the nine months  ended April 26,  1998.  The $7.8  million  increase is directly
related  to the  results  from  operations  for the  period,  which  included  a
non-recurring $14.3 million stock compensation charge.

     9.  Extraordinary  loss. The extraordinary  loss recorded by the Company is
related  to the early  retirement  of the  Company's  revolving  line of credit,
Junior subordinated discount notes, and acquisition  indebtedness related to the
acquisition of Sugarbush.

     10.  Accretion of preferred stock. The accretion of discounts and dividends
accrued on the mandatorily redeemable preferred stock of $4.3 million represents
the accretion of the exchange  feature,  the  amortization of the issuance costs
and the accrual of  dividends  relating to the Series A  Exchangeable  Preferred
Stock prior to its exchange.  The activity in this component for the nine months
ended April 26, 1998 also includes  $1.8 million of dividends  accrued on the 10
1/2% Mandatorily  Redeemable Preferred Stock subsequent to its exchange from the
Series A Exchangeable Preferred Stock on November 12, 1997.

                         Changes in Financial Condition

     Changes  for the First Nine  Months of Fiscal  1998  Compared  to  year-end
Fiscal 1997.

     1. Cash and cash equivalents. Cash and cash equivalents increased 109.5% or
$17.0  million  from $15.6  million as of July 27,  1997 to $32.6  million as of
April 26, 1998. The three primary  reasons for the increase are (1) the seasonal
operating cycle of the Company,  (2) the cash balances at the acquired  resorts,
and (3) unexpended proceeds form the Company's initial public offering.

     2.  Accounts  receivable.  Accounts  receivable  increased  409.4% or $15.6
million from $3.8  million as of July 27, 1997 to $19.4  million as of April 26,
1998. The primary reasons for the increase are (1) the seasonal  operating cycle
of the Company,  (2) balances at the acquired  resorts,  and (3) increased  real
estate sales activity.

     3. Inventory. Inventories increased 89.0% or $6.5 million from $7.3 million
as of July 27,  1997 to $13.8  million as of April 26,  1998.  The $2.9  million
increase is related to the acquisition of Heavenly,  Steamboat,  and The Canyons
resorts with the balance of the increase related to newly acquired retail,  food
and beverage operations and to the seasonal operating cycle of the Company.

     4. Prepaid expenses.  Prepaid expenses  increased 37.5% or $.6 million from
$1.6 million as of July 27, 1997 to $2.2  million as of April 26, 1998.  This is
due primarily to balances at acquired resorts and to prepaid expenses associated
with the pre-sales of quartershare hotel projects at Steamboat and The Canyons.

     5. Property and equipment, net. Property and equipment, net increased 87.2%
or $220.0  million from $252.3  million as of July 27, 1997 to $472.3 million as
of April 26, 1998.  The  acquisition  of the Heavenly and  Steamboat ski resorts
accounted for $186.0 million of the increase.  The remaining increase is related
to capital improvements at the existing resorts, and the acquisition of land and
businesses, net of $15.0 million of depreciation.

     6. Real estate developed for sale. Real estate developed for sale increased
313.6% or $73.7  million from $23.5 million as of July 27, 1997 to $97.2 million

                                       18
<PAGE>

as of April 26, 1998.  The  increase is from the  following:  (1) $40.3  million
related  to  the  construction  of  three   quartershare  hotel  projects  being
constructed  at Killington,  Mount Snow,  and Sunday River ski resorts,  (2) $28
million  related to land held for  development  acquired  with the Steamboat ski
resort,  (3) $7.0 million  related to land  purchased at The Canyons in Utah for
future  development,  and  (4)  $1.6  million  related  to the  construction  of
townhouses at Sunday River.

     7. Long-term  investments.  Long-term  investments increased 127.5% or $4.5
million  from $3.5  million as of July 27, 1997 to $8.0  million as of April 26,
1998.  The primary  reason for the  increase was the  acquisition  of Steamboat
which included investment in a real estate development partnership.

     8. Goodwill.  Goodwill increased 868.2% or $92.9 million from $10.7 million
as of July 27, 1997 to $103.6 million as of April 26, 1998.  The  acquisition of
the  Heavenly  and  Steamboat  ski resorts  accounted  for $77.9  million of the
increase. The remaining balance of $8.4 million (net of amortization of existing
goodwill)  related to the  Company's  purchase of the  minority  interest in ASC
East.

     9. Other assets.  Other assets  increased 250.0% or $16.0 million from $6.4
million as of July 27, 1997 to $22.4  million as of April 26, 1998.  The primary
reason for the increase is the inclusion of various  intangibles  related to the
acquisition of the Steamboat and Heavenly ski resorts.

     10. Current  portion of long-term  debt.  Current portion of long-term debt
decreased 27.7% or $11.0 million from $39.7 as of July 27, 1997 to $28.7 million
as of April 26, 1998. The primary  reason for the decrease is the  restructuring
of the Company's  revolving  lines of credit and the addition of term loans that
replaced  a portion  of the  amounts  previously  funded by  revolving  lines of
credit.

     11.  Accounts  payable  and other  current  liabilities.  Accounts  payable
increased  121.4% or $31.2  million  from $25.7  million as of July 27,  1997 to
$56.9 million as of April 26, 1998.  $10.0 million of the increase is related to
the  acquisition  of Heavenly and  Steamboat ski resorts with the balance of the
increase  resulting  from the  operating  cycle of the Company and  construction
activities related to the quartershare hotel projects.

     12. Deposits and deferred revenue.  Deposits and deferred revenue increased
18.2% or $.8 million from $4.4 million as of July 27, 1997 to $5.2 million as of
April 26,  1998.  The  increase is due to deposits  taken on  pre-sales  of real
estate at The Canyons and Steamboat.

     13. Long-term debt,  excluding current portion.  Long-term debt,  excluding
current portion increased 316.9% or $148.4 million from $46.8 million as of July
27, 1997 to $195.2  million as of April 26,  1998.  The primary  reasons for the
increase are (1) proceeds of $114.4 million  related to the New Credit  Facility
(net of current  portion) at ASC West,  (2) a $34.0 million  increase in the
construction  loan  associated  with the three recently  completed  quartershare
hotel  projects,  and (3) $3.5 million  associated with land acquired for future
development at The Canyons ski resort in Utah.

     14.  Subordinated  notes and debentures.  Subordinated notes and debentures
decreased  14.6% or $21.9  million  due to the early  retirement  of ASC  East's
subordinated discount notes on December 30, 1997.



                                       19
<PAGE>

     15.  Deferred  income taxes.  Deferred  income taxes  increased 20% or $5.6
million from $28.5  million as of July 27, 1997 to $36.2 million as of April 26,
1998. The reason for the increase is net income  generated from July 28, 1997 to
April 26, 1998.

     16. Other  long-term  liabilities.  Other long-term  liabilities  decreased
19.0% or $1.5  million  from $7.9 million as of July 27, 1997 to $6.4 million as
of April 26, 1998.  The primary  reason for the decrease is the  acquisition  of
Heavenly and Steamboat ski resorts.

     17.  Mandatorily   redeemable  preferred  stock.   Mandatorily   redeemable
preferred stock increased  128.6% or $21.6 million from $16.8 million as of July
27, 1997 to $38.4  million as of April 26, 1998.  This increase is due primarily
to the conversion on November 6, 1997 of $16.6 million of 14% convertible  notes
issued on July 29, 1997 to 10 1/2% mandatorily  redeemable  preferred stock. The
remaining increase represents accretion of the exchange feature, amortization of
issuance costs and accrual of dividends.

     18.  Additional  paid-in  capital.  Additional  paid-in  capital  increased
9460.7%  or $264.9  million  from  $2.8  million  as of July 27,  1997 to $267.7
million as of April 26, 1998. The increase is primarily due to (1) the Company's
initial public  offering closed  November 6, 1997,  which  generated  additional
paid-in capital of $244.6 million,  (2) purchase of the minority interest in ASC
East,  Inc.  resulting  in an increase  of $8.7  million to  additional  paid-in
capital,  and (3) the  Company  recording a stock  compensation  charge of $14.3
million resulting in a $8.5 million increase to paid-in capital.

     19. Retained earnings. Retained earnings increased from $12.3 million as of
July 27, 1997 to $19.7  million as of April 26,  1998.  The increase is directly
attributable  to the net income of $7.4  million for the nine months ended April
26,  1998.  The  income  for  this  period   included  a  $14.3  million  dollar
non-recurring  stock compensation  charge and a $5.1 million  extraordinary loss
related to the early retirement of debt.

                               Significant Events

     IPO  Closing and  Acquisition.  The  Company  closed on the initial  public
offering of 14.75 million  shares of its common stock on November 12, 1997.  The
proceeds  were  primarily  used to (1) fund the  acquisition  of  Steamboat  and
Heavenly in an amount totaling $173.3  million,  (2) redeem ASC East,  Inc.'s 13
3/4% subordinated  discount notes due 2007 for an aggregate  redemption price of
approximately  $27.7  million,  and (3) repay  approximately  $7.7  million of a
subsidiary's  outstanding  debt in connection  with the closing of the Company's
initial public offering.

     The Company has retained  approximately $15 million of offering proceeds in
short-term  investments  which  are  classified  as  cash  equivalents  in  the
accompanying (Unaudited) Condensed Consolidated Balance Sheet.

     New Credit  Facility.  The  Company  established  the New  Credit  Facility
described   above  under  the   heading   "Liquidity   and  Capital   Resources"
contemporaneously  with the  closing  of its  initial  public  offering  and the
acquisition of Steamboat and Heavenly on November 12, 1997.

     10 1/2% Mandatorily Redeemable Preferred Stock.  Contemporaneously with the
other  November  12, 1997  closings,  the Company  converted  its $17.5  million
principal  amount of  convertible  notes and its $17.5  million  face  amount of
convertible  preferred stock at a conversion  price,  including accrued interest
and  accumulated  dividends,  of  $36.3  million  into  its 10 1/2%  mandatorily
redeemable preferred stock.


                                       20
<PAGE>

     Consent  Solicitation.  Contemporaneously  with the other November 12, 1997
closings,  the Company closed the Consent Solicitation  transaction described in
its November 6, 1997 Registration Statement.

     Land  Exchange.  The Company  consummated a land exchange with the State of
Vermont on December 1, 1997.  The  exchange  results in the Company  coming into
ownership of over 1,000 acres of valuable development real estate at the base of
the Killington resort.

     Interest  Rate  Swap.  On  February  5, 1998 the  Company  entered  into an
interest rate swap  arrangement  with  BankBoston  that  effectively  lowers the
interest rate on its $120 million senior  subordinated notes due 2002 to 9%. The
Company's  principal risk on the  transaction is that LIBOR decreases below 6.9%
in July 2001 when another swap agreement can be entered into.

     Appointment of Directors.  On February 11th, the Company appointed three of
its four independent directors.  The fourth director is committed to joining the
board before the end of the fiscal year after fulfilling  existing  obligations.
The three  directors  are: Joel B. Alvord,  former  Chairman of Fleet  Financial
Group  and  currently,  President  and  Managing  Director  of  Shawmut  Capital
Partners,  Inc.;  Christopher  J.  Nassetta,  Executive Vice President and Chief
Operating Officer for Host Marriott Corp., formerly Co-founder of Bailey Capital
Corp., a real estate investment and advisory firm; and Gordon Gillies,  a former
attorney and current faculty member of Hebron Academy in Maine.

                                Subsequent Events

     On May 8,  1998  the  Company  initiated  an  Exchange  Offer  and  Consent
Solicitation  whereby the Company  offered to Exchange up to $120 million of its
Senior  Subordinated  notes  for the  outstanding  ASC  East,  Inc.  12%  Senior
Subordinated  Notes  due 2006.  The  Company  filed a report on Form 8-K  making
publicly   available   certain  portions  of  its  Exchange  Offer  and  Consent
Solicitation  relating to the Exchange  Offer.  The deadline for response to the
Exchange Offer has been extended from June 5, 1998 to June 12, 1998.

                           Forward-Looking Statements

     Certain  of the  statements  contained  in  this  section  of  the  report,
including  those under "Future  Events" are  forward-looking.  While the Company
believes that these statements are accurate, its business is highly seasonal and
is dependent upon weather and general economic conditions and various conditions
specific to its  industry.  Future trends and results  cannot be predicted  with
certainty and actual results could differ  materially  from any  forward-looking
statements. In particular:

     1. Ski and resort operations are highly seasonal. Over the last five fiscal
years,  the  Company  realized  an  average of  approximately  86% of its resort
revenues during the period from November through April and a significant portion
of resort revenues (and  approximately 23% of annual skier visits) was generated
during the Christmas and  Presidents'  Day vacation  weeks.  Adverse  weather or
market  conditions  during  these  periods  could  materially  adversely  effect
operating results and financial performance.



                                       21
<PAGE>

     2. The  development  of ski  resorts is capital  intensive.  The  Company's
expansion of its resorts is dependent upon  availability  of necessary  capital.
There can be no  assurance  that the  Company  will have  adequate  funds,  from
internal  or  external  sources,  to  make  all  planned  and  required  capital
expenditures over the long term.

     3. Real estate  development and the Company's  ability to generate revenues
therefrom  may be  adversely  affected  by numerous  factors,  many of which are
beyond the control of the Company,  including the national and regional economic
climate and the ability of the company to obtain all necessary zoning, land use,
buildings,  occupancy and other required governmental permits and authorizations
and changes in real estate,  zoning,  land use,  environmental  or tax laws.  In
addition,  real estate  development  will be dependent upon, among other things,
receipt of adequate  financing on suitable terms,  obtaining and maintaining the
requisite  permits  and  licenses  and,  in  certain  circumstances,   acquiring
additional real estate. There can be no assurance as to whether, when or on what
terms such financing, permits, licenses and real estate may be obtained.


                                       22
<PAGE>


                           Part II - Other Information
                                     Item 2
                    Changes In Securities And Use Of Proceeds

     On November  12,  1997,  the Company  established  the New Credit  Facility
described  above under the heading  "Liquidity and Capital  Resources."  The New
Credit  Facility  contains a  limitation  on the  Company  making  dividends  or
distributions,  or  redeeming  any  shares  of its  stock  in  excess  of 50% of
cumulative  consolidated net income after July 31, 1997, provided that after the
distribution or redemption the ratio of consolidated  total debt to consolidated
earnings before interest, taxes, depreciation and amortization does not exceed 4
to 1.

     On November 12, 1997, the Company issued $36.3 million  principal amount of
its 10 1/2% Mandatorily  Redeemable  Preferred Stock  ("Preferred  Stock").  The
Certificate of Designation  for the preferred  stock  establishes  the following
limitations on the rights of the holders of Common Stock:

     1. The  Preferred  Stock  ranks prior to Common  Stock with  respect to (a)
payment of dividends and (b)  distributions  upon  liquidation or dissolution of
the Company; and

     2. In the event of any  default  upon the  Preferred  Stock,  the number of
members of the Company's  Board of Directors  will be increased by two, and both
new directors will be elected by the holders of Preferred Stock.


                                       23
<PAGE>

                                     Item 6
                                    Exhibits

     Included herewith is the Financial Data Schedule submitted as Exhibit 27 in
accordance with Item 601(c) of Regulation S-K.

                                   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.

                                                     AMERICAN SKIING COMPANY


Date: June 10, 1998                  /s/ Thomas M. Richardson
                                     Thomas M. Richardson
                                     Senior Vice President Finance Chief
                                     Financial Officer (Principal Financial and
                                     Accounting Officer)

Date: June 10, 1998                 /s/ Christopher E. Howard
                                    Christopher E. Howard
                                    Chief Administrative Officer and General
                                    Counsel (Duly Authorized Officer)




                                       24
<PAGE>