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

                                    FORM 10-Q

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
           ACT OF 1934 for the quarterly period ended January 29, 2006
                                       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)

                             136 Heber Avenue, #303
                                  P.O. Box 4552
                              Park City, Utah 84060
                    (Address of principal executive offices)
                                   (Zip Code)

                                 (435) 615-0340
              (Registrant's telephone number, including area code)

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


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


Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, or a non-accelerated filer (see definition of "accelerated
filer" and "large accelerated filer" in Rule 12b-2 of the Exchange Act):


Large accelerated filer  |_|  Accelerated filer  |  | Non-accelerated filer  [X]


Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act). Yes |_| No |X|

As of February 27, 2006, 31,738,183 shares of common stock were issued and
outstanding, of which 14,760,530 shares were Class A common stock.



<PAGE>



                                Table of Contents

Part I - Financial Information

Item 1.  Financial Statements

         Condensed Consolidated Statements of Operations and Changes in
              Accumulated Deficit for the 14 weeks ended January 30, 2005 and
              the 13 weeks ended January 29, 2006
              (unaudited)......................................................3

         Condensed Consolidated Statements of Operations and Changes in
              Accumulated Deficit for the 27 weeks ended January 30, 2005 and
              the 26 weeks ended January 29, 2006
              (unaudited)......................................................4

         Condensed Consolidated Balance Sheets as of July 31, 2005 and January
              29, 2006 (unaudited).............................................5

         Condensed Consolidated Statements of Cash Flows for the 27 weeks ended
              January 30, 2005 and the 26 weeks ended January 29, 2006
              (unaudited)......................................................7

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

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

         General..............................................................20

         Liquidity and Capital Resources......................................21

         Results of Operations................................................25

Item 3.  Quantitative and Qualitative Disclosures about Market Risk...........29

Item 4.  Controls and Procedures..............................................29


Part II - Other Information

Item 4.  Submission of Matters to a Vote of Security Holders..................30

Item 6.  Exhibits.............................................................31



                                       2
<PAGE>

Part I - Financial Information

                                     Item 1
                              Financial Statements

   Condensed Consolidated Statements of Operations and Changes in Accumulated
                                     Deficit
                    (In thousands, except per share amounts)

                                         14 weeks ended          13 weeks ended
                                        January 30, 2005        January 29, 2006
                                           (unaudited)             (unaudited)
                                      ---------------------   ------------------

Net revenues:
        Resort                        $          103,411      $         109,887
        Real estate                                2,663                  2,612
                                      ---------------------   ------------------
           Total net revenues                    106,074                112,499
                                      ---------------------   ------------------

Operating expenses:
        Resort                                    67,786                 67,766
        Real estate                                2,155                  3,443
        Marketing, general and
         administrative                           16,210                 17,885
        Depreciation and amortization             14,400                 13,061
                                      ---------------------   ------------------
           Total operating expenses              100,551                102,155
                                      ---------------------   ------------------

Income from operations                             5,523                 10,344
Interest expense, net                            (21,684)               (22,015)
Write-off of deferred financing costs
     and loss on extinguishment of
     senior subordinated notes                    (5,983)                   -
Increase in fair value of interest
     rate swap agreement                             -                      350
                                      ---------------------   ------------------
Net loss                              $          (22,144)               (11,321)
                                      =====================   ==================

Accumulated deficit, beginning of
     period                           $         (581,285)              (659,079)

Net loss                                         (22,144)               (11,321)
                                      ---------------------   ------------------

Accumulated deficit, end of period    $         (603,429)              (670,400)
                                      =====================   ==================

Basic and diluted net loss per common
     share                            $            (0.70)     $           (0.36)
                                      =====================   ==================

Basic and diluted weighted average
     common shares outstanding                    31,738                 31,738
                                      =====================   ==================



     See accompanying Notes to Condensed Consolidated Financial Statements.

                                       3
<PAGE>

   Condensed Consolidated Statements of Operations and Changes in Accumulated
                                     Deficit
                    (In thousands, except per share amounts)

                                         27 weeks ended          26 weeks ended
                                        January 30, 2005        January 29, 2006
                                           (unaudited)             (unaudited)
                                      ---------------------   ------------------
Net revenues:
        Resort                        $          121,231      $         127,034
        Real estate                                4,389                  5,581
                                      ---------------------   ------------------
           Total net revenues                    125,620                132,615
                                      ---------------------   ------------------

Operating expenses:
        Resort                                    91,395                 91,729
        Real estate                                3,263                  5,385
        Marketing, general and
         administrative                           27,027                 29,453
        Depreciation and amortization             16,679                 15,971
        Gain on sale of property                     -                     (169)
        Impairment loss on property
         sold                                        -                    1,533
                                      ---------------------   ------------------
           Total operating expenses              138,364                143,902
                                      ---------------------   ------------------

Loss from operations                             (12,744)               (11,287)
Interest expense, net                            (41,137)               (43,269)
Write-off of deferred financing costs
     and loss on extinguishment of
     senior subordinated notes                    (5,983)                   -
Increase in fair value of interest
     rate swap agreement                             -                    1,036
                                      ---------------------   ------------------
Net loss                              $          (59,864)     $         (53,520)
                                      =====================   ==================

Accumulated deficit, beginning of
     period                           $         (543,565)              (616,880)

Net loss                                         (59,864)               (53,520)
                                      ---------------------   ------------------

Accumulated deficit, end of period    $         (603,429)              (670,400)
                                      =====================   ==================

Basic and diluted net loss per common
     share                            $            (1.89)     $           (1.69)
                                      =====================   ==================

Basic and diluted weighted average
     common shares outstanding                    31,738                 31,738
                                      =====================   ==================







     See accompanying Notes to Condensed Consolidated Financial Statements.

                                       4
<PAGE>

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

                                         July 31, 2005         January 29, 2006
                                          (unaudited)             (unaudited)
                                      --------------------    ------------------
Assets
Current assets
      Cash and cash equivalents       $            6,216      $          18,756
      Restricted cash                              2,557                  5,910
      Accounts receivable, net                     5,627                  8,515
      Inventory                                    3,576                  7,619
      Prepaid expenses and other                   3,829                  4,900
      Deferred income taxes                        7,536                  7,536
                                      --------------------    ------------------
           Total current assets                   29,341                 53,236

Property and equipment, net                      348,619                340,651
Real estate developed for sale                    22,304                 20,421
Intangible assets, net                             6,307                  6,278
Deferred financing costs, net                      6,472                  5,916
Other assets                                       9,891                 11,029
                                      --------------------    ------------------
           Total assets               $          422,934      $         437,531
                                      ====================    ==================



                            (continued on next page)


















     See accompanying Notes to Condensed Consolidated Financial Statements.


                                       5
<PAGE>

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

                                         July 31, 2005         January 29, 2006
                                          (unaudited)             (unaudited)
                                      --------------------    ------------------
Liabilities and Shareholders' Deficit
Current liabilities
    Current portion of long-term debt $           31,223      $          18,341
    Accounts payable and other current
     liabilities                                  43,219                 67,597
    Deposits and deferred revenue                 22,139                 49,643
                                      --------------------    ------------------
           Total current liabilities              96,581                135,581

Long-term debt, net of current portion           209,519                209,594
Subordinated notes and debentures                102,813                112,493
Other long-term liabilities                       10,635                  6,868
Deferred income taxes                              7,536                  7,536
Mandatorily Redeemable 8 1/2% Series B
 Convertible Participating Preferred
 Stock, par value of $0.01 per share;
 150,000 shares authorized, issued, and
 outstanding (redemption value of $0)                -                      -
Mandatorily Redeemable Convertible
 Participating 12% Series C-1 Preferred
 Stock, par value of $0.01 per share;
 40,000 shares authorized, issued, and
 outstanding, including cumulative
 dividends (redemption value of $63,574
 and $67,434, respectively)                       63,203                 67,139
Mandatorily Redeemable 15% Nonvoting
 Series C-2 Preferred Stock, par value of
 $0.01 per share; 139,453 shares
 authorized, issued, and outstanding,
 including cumulative dividends
 (redemption value of $248,339 and
 $267,261, respectively)                         246,924                266,117
Mandatorily Redeemable Nonvoting Series
 D Participating Preferred Stock, par
 value of $0.01 per share; 5,000 shares
 authorized; no shares issued or
 outstanding                                         -                      -
                                      --------------------    ------------------
           Total liabilities                     737,211                805,328
                                      --------------------    ------------------

Shareholders' deficit
   Common stock, Class A, par value of
    $0.01 per share; 15,000,000 shares
    authorized; 14,760,530 shares issued
    and outstanding                                  148                    148
   Common stock, par value of $0.01 per
    share; 100,000,000 shares
    authorized; 16,977,653 shares issued
    and outstanding                                  170                    170
   Additional paid-in capital                    302,285                302,285
   Accumulated deficit                          (616,880)              (670,400)
                                      --------------------    ------------------
           Total shareholders' deficit          (314,277)              (367,797)
                                      --------------------    ------------------
           Total liabilities and
            shareholders' deficit     $          422,934      $         437,531
                                      ====================    ==================



     See accompanying Notes to Condensed Consolidated Financial Statements.



                                       6
<PAGE>
                 Condensed Consolidated Statements of Cash Flows
                                 (In thousands)

                                         27 weeks ended         26 weeks ended
                                        January 30, 2005       January 29, 2006
                                           (unaudited)            (unaudited)
                                      --------------------    ------------------
Cash flows from operating activities
Net loss                              $          (59,864)               (53,520)
Adjustments to reconcile net loss to
 net cash provided by operating
 activities:
     Depreciation and amortization                16,679                 15,971
     Amortization of deferred financing
      costs and accretion of discount
      and dividends on mandatorily
      redeemable preferred stock                  24,578                 23,685
     Non-cash interest on junior
      subordinated notes                           2,727                  5,793
     Non-cash increase in fair value
      of interest rate swap agreement                -                   (1,036)
     Non-cash Phantom Equity Plan
      compensation expense (recovery)               (103)                   149
     Write-off of deferred financing
      costs and extinguishment of
      senior subordinated notes                    5,983                    -
     Gain from sale of property                     (754)                  (486)
     Impairment loss on property sold                -                    1,533
     Decrease (increase) in assets:
            Restricted cash                        1,729                 (3,353)
            Accounts receivable, net              (3,324)                (2,888)
            Inventory                             (4,393)                (4,043)
            Prepaid expenses and other            (2,655)                (1,071)
            Real estate developed for
             sale                                    931                  1,883
            Other assets                           1,028                    164
     Increase (decrease) in liabilities:
            Accounts payable and other
             current liabilities                  16,630                 24,064
            Deposits and deferred revenue         31,952                 27,504
            Other long-term liabilities              424                    (29)
                                      --------------------    ------------------
              Net cash provided by
               operating activities               31,568                 34,320
                                      --------------------    ------------------
Cash flows from investing activities
     Capital expenditures                        (12,663)                (7,290)
     Proceeds from sale of property                1,008                  2,942
                                      --------------------    ------------------
              Net cash used in
               investing activities              (11,655)                (4,348)
                                      --------------------    ------------------
Cash flows from financing activities
     Proceeds from resort senior credit
      facilities                                 259,750                 46,558
     Repayment of resort senior credit
      facilities                                (137,178)               (58,996)
     Repayment of senior subordinated
      debt                                      (121,875)                   -
     Proceeds from long-term debt                  2,550                    -
     Repayment of long-term debt                  (5,443)                (2,244)
     Repayment of real estate debt                (1,640)                (2,750)
     Deferred financing costs                     (7,271)                   -
                                      --------------------    ------------------
              Net cash used in
               financing activities              (11,107)               (17,432)
                                      --------------------    ------------------
Net increase in cash and cash
 equivalents                                       8,806                 12,540
Cash and cash equivalents,
 beginning of period                               7,024                  6,216
                                      --------------------    ------------------
Cash and cash equivalents, end of
 period                               $           15,830                 18,756
                                      ====================    ==================
Supplemental disclosures of cash flow
 information:
     Cash paid for interest           $           13,800      $          13,266
     Acquisition of equipment held
      under capital leases                        12,674                  4,625
     Conversion of Series A Preferred
      Stock to New Junior Subordinated
      Notes                                       76,673                    -
     Addition of interest to principal
      outstanding for New Junior
      Subordinated Notes                             910                  8,728

                                       7
     See accompanying Notes to Condensed Consolidated Financial Statements.
<PAGE>


        Notes to Condensed Consolidated Financial Statements (unaudited)

1.  General

         American Skiing Company (ASC), a Delaware corporation, and its
subsidiaries (collectively, the Company) own and operate resort facilities, real
estate development companies, golf courses, ski and golf schools, retail shops,
and other related companies. The Company conducts its resort operations through
its wholly owned subsidiaries which operated the following ski resorts during
the 26 weeks ended January 29, 2006 and the 27 weeks ended January 30, 2005:
Sugarloaf/USA and Sunday River in Maine, Attitash in New Hampshire, Killington
and Mount Snow in Vermont, The Canyons in Utah, and Steamboat in Colorado. The
Company conducts its real estate development operations through its wholly owned
subsidiary, American Skiing Company Resort Properties (Resort Properties), and
Resort Properties' subsidiaries, including Grand Summit Resort Properties, Inc.
and The Canyons Resort Properties, Inc.

         The Company reports its results of operations in two business segments,
resort operations and real estate operations. The Company's fiscal year is a
fifty-two week or fifty-three week period ending on the last Sunday of July.
Fiscal 2006 is a fifty-two week reporting period and fiscal 2005 was a
fifty-three week reporting period. Each quarter consists of 13 weeks, with the
exception of the second quarter of fiscal 2005, which consisted of 14 weeks. The
accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with U.S. 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 U.S. generally accepted accounting principles for
complete financial statements. In the opinion of management, all adjustments
(consisting only of normal recurring adjustments) 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 incurs significant
operating losses in its resort operations segment 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 included in its Form 10-K for the fiscal year
ended July 31, 2005 filed with the Securities and Exchange Commission on October
31, 2005.


2.  Significant Accounting Policies

         The preparation of financial statements requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and the disclosure of contingent assets and liabilities at the date
of the financial statements and the reported amounts of sales and expenses
during the reporting periods. Areas where significant judgments are made
include, but are not limited to: allowances for doubtful accounts, litigation
accruals, insurance reserves, long-lived asset valuation, realizability and
useful lives, and allowances for deferred income tax assets. Actual results
could differ materially from these estimates. The following are the Company's
significant accounting policies:

Principles of Consolidation
         The accompanying condensed consolidated financial statements include
the accounts of ASC and its wholly owned subsidiaries. All significant
intercompany accounts and transactions have been eliminated in consolidation.

Cash and Cash Equivalents
         The Company considers all highly liquid debt instruments with an
original maturity to the Company of three months or less to be cash equivalents.
Cash equivalents, which consisted of short-term certificates of deposit, totaled
approximately $0.9 million as of each of July 31, 2005 and January 29, 2006.

Restricted Cash
         Restricted cash consists of deposits received and held in escrow
related to pre-sales of real estate developed for sale, guest advance deposits
for lodging reservations, and cash held in cash collateral accounts by lenders
on behalf of the real estate companies. The cash becomes available to the
Company when the real estate units are sold, the lodging services are provided,
or upon approval of expenditures by lenders.

                                       8
<PAGE>

Inventory
         Inventory is stated at the lower of cost (first-in, first-out method)
or market, and consists primarily of retail goods, food, and beverage products.

Property and Equipment
         Property and equipment are carried at cost, net of accumulated
depreciation, amortization, and impairment charges. Depreciation and
amortization are calculated using the straight-line method over the assets'
estimated useful lives which range from 9 to 40 years for buildings, 3 to 12
years for machinery and equipment, 10 to 50 years for land improvements, and 5
to 30 years for lifts, lift lines, and trails. Assets held under capital lease
obligations are amortized over the shorter of their useful lives or their
respective lease lives, unless a bargain purchase option exists at the end of
the lease in which case the assets are amortized over their estimated useful
lives. Due to the seasonality of the Company's business, the Company records a
full year of depreciation and amortization relating to its ski resort operating
assets during the second and third quarters of the Company's fiscal year.

Real Estate Developed for Sale
         The Company capitalizes as real estate developed for sale the original
acquisition cost of land, direct construction and development costs, property
taxes, interest incurred on costs related to real estate under development, and
other related costs (engineering, surveying, landscaping, etc.) until the
property has been developed to the point it is ready for sale. The cost of sales
for individual parcels of real estate or quarter and eighth share units within a
project is determined using the relative sales value method. Selling costs are
charged to expense in the period in which the related revenue is recognized.

Goodwill and Other Intangible Assets
         As prescribed in Statement of Financial Accounting Standards (SFAS) No.
142, "Goodwill and Other Intangible Assets," certain indefinite-lived intangible
assets, including trademarks, are no longer amortized but are subject to annual
impairment assessments. An impairment loss is recognized to the extent that the
carrying amount exceeds the asset's fair value. Definite-lived intangible assets
continue to be amortized on a straight-line basis over their estimated useful
lives of 31 years, and assessed for impairment utilizing guidance provided by
SFAS No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets."

         As of July 31, 2005 and January 29, 2006, other intangible assets
consist of the following (in thousands):

    ------------------------------------------------------------------------
                                         July 31, 2005     January 29, 2006
    ------------------------------------------------------------------------
    Definite-lived Intangible Assets:
      Lease agreements               $          1,853    $            1,853
      Less accumulated amortization              (404)                 (433)
                                     -----------------   -------------------
                                                1,449                 1,420

    Indefinite-lived Intangible Assets:
      Trade names                                 170                   170
      Water rights                              4,688                 4,688
                                     -----------------   -------------------
    Intangible Assets, net           $          6,307    $            6,278
                                     =================   ===================

    ------------------------------------------------------------------------

         Amortization expense related to intangible assets was approximately
$15,000 for both the 14 weeks ended January 30, 2005 and the 13 weeks ended
January 29, 2006. Future amortization expense related to definite-lived
intangible assets is estimated to be approximately $58,000 for each of the next
five fiscal years.

Long-Lived Assets
         In accordance with SFAS No. 144, "Accounting for the Impairment or
Disposal of Long-Lived Assets," long-lived assets, such as property, equipment,
and definite-lived intangibles are reviewed for impairment whenever events or
changes in circumstances indicate that the carrying amount of an asset may not
be recoverable. Recoverability of assets to be held and used is measured by a
comparison of the carrying amount of an asset to the estimated undiscounted
future cash flows expected to be generated by the asset. If the carrying amount
of an asset exceeds its estimated future cash flows, an impairment charge is
recognized in the amount by which the carrying amount of the asset exceeds the
fair value of the asset. Assets to be disposed of are reported at the lower of
the carrying amount or fair value less costs to sell, and depreciation ceases.

                                       9
<PAGE>

Revenue Recognition
         Resort revenues include sales of lift tickets, skier development, golf
course and other recreational activities fees, sales from restaurants, bars, and
retail and rental shops, and lodging and property management fees (real estate
rentals). Daily lift ticket revenue is recognized on the day of purchase. Lift
ticket season pass revenue is recognized on a straight-line basis over the ski
season, which is the Company's second and third quarters of its fiscal year. The
Company's remaining resort revenues are generally recognized as the services are
performed. Real estate revenues are recognized under the full accrual method
when title has been transferred, initial and continuing investments are adequate
to demonstrate a commitment to pay for the property, and no continuing
involvement exists. Amounts received from pre-sales of real estate are recorded
as restricted cash and deposits and deferred revenue in the accompanying
consolidated balance sheets until the earnings process is complete.

Stock Option Plan
            Effective August 1, 1997, the Company established a fixed stock
option plan, the American Skiing Company Stock Option Plan (the Plan), which is
more fully described in Note 2 of the Company's fiscal 2005 Annual Report on
Form 10-K, that provides for the grant of incentive and non-qualified stock
options for the purchase of up to 8,688,699 shares of the Company's common stock
by officers, management employees, members of the board of directors of the
Company and its subsidiaries, and other key persons (eligible for nonqualified
stock options only) as designated by the Compensation Committee. The Plan has no
restricted stock option component. There have been no options granted since July
2001.

            Prior to July 31, 2005, as permitted under SFAS No. 123, the Company
accounted for its stock option plans following the recognition and measurement
principles of Accounting Principles Board (APB) Opinion No. 25, "Accounting for
Stock Issued to Employees," and related interpretations. Accordingly, no
stock-based compensation had been reflected in net loss for stock options, as
all options granted had an exercise price equal to the market value of the
underlying common stock on the date of grant and the related number of shares
granted was fixed at that point in time.

            In December 2004, the Financial Accounting Standards Board (FASB)
issued SFAS No. 123(R), "Share Based Payment." This statement revised SFAS No.
123 by eliminating the option to account for employee stock options under APB
Opinion No. 25 and requires companies to recognize the cost of employee services
received in exchange for awards of equity instruments based on the grant-date
fair value of those awards (the "fair-value-based" method).

            Effective August 1, 2005, the Company adopted the fair value
recognition provisions of SFAS No. 123(R) using the modified prospective
application method. Under this transition method, compensation cost recognized
in the 13 and 26 week periods ended January 29, 2006, includes amounts of: (a)
compensation cost of all stock-based payments granted prior to, but not yet
vested as of, August 1, 2005 (based on grant-date fair value estimated in
accordance with the original provisions of SFAS No. 123, and previously
presented in the pro-forma footnote disclosures), and (b) compensation cost for
all stock-based payments granted subsequent to August 1, 2005 (based on the
grant-date fair value estimated in accordance with the provisions of SFAS No.
123(R)). In accordance with the modified prospective application method, results
for prior periods have not been restated.

            The effect of adopting SFAS No. 123(R) as of August 1, 2005 for the
26-week period ended January 29, 2006 was less than $1,000 of reported
compensation expense. All outstanding options were fully vested as of January
29, 2006.

            Under the modified prospective application method, results for prior
periods have not been restated to reflect the effects of implementing SFAS No.
123(R). The following pro-forma information, as required by SFAS No. 148,
"Accounting for Stock-Based Compensation-Transition and Disclosure, an amendment
of FASB Statement No. 123," is presented for comparative purposes and
illustrates the effect on net loss and net loss per common share for the period
presented as if the Company had applied the fair value recognition provisions of
SFAS No. 123 to stock-based employee compensation prior to August 1, 2005 (in
thousands, except per share amounts):

                                       10
<PAGE>

<TABLE>


------------------------------------------------------------------------------------------------------------
<CAPTION>
                                       14 weeks ended    13 weeks ended    27 weeks ended    26 weeks ended
                                         January 30,       January 29,       January 30,       January 29,
                                            2005              2006              2005              2006
------------------------------------------------------------------------------------------------------------
     <S>                               <C>               <C>               <C>               <C>
     Net loss
        As reported                    $     (22,144)    $     (11,321)    $     (59,864)    $     (53,520)
        Stock-based employee
          compensation determined under
          fair-value method for all
          awards, net of tax                     (34)              -                 (68)              -
                                       ---------------   --------------------------------------------------
        Pro forma                      $     (22,178)    $     (11,321)    $     (59,932)    $     (53,520)
                                       ===============   ==================================================
     Basic and diluted net loss
       per common share
        As reported                    $        (0.70)   $       (0.36)    $       (1.89)    $       (1.69)
        Pro forma                               (0.70)           (0.36)            (1.89)            (1.69)

------------------------------------------------------------------------------------------------------------
</TABLE>


The following table summarizes stock option activity during the 26 weeks ended
January 29, 2006:
--------------------------------------------------------------------------------
                                                             Weighted Average
                                         Weighted Average  Remaining Contractual
                               Options    Exercise Price           Term
--------------------------------------------------------------------------------
Outstanding at July 31, 2005  3,811,187      $ 4.26                4.25
Granted                               -
Exercised                             -
Forfeited                             -
                              --------------------------------------------------
Outstanding at January 29,
2006                          3,811,187      $ 4.26                3.73
                              ==================================================

Vested at January 29, 2006    3,811,187      $ 4.26                3.73

Exercisable at January 29,
2006                          3,811,187      $ 4.26                3.73
--------------------------------------------------------------------------------

            As of January 29, 2006, all options have vested. Accordingly, there
is no future compensation cost related to non-vested options or non-vested
restricted options to be recognized.

Derivative Financial Instruments
         All derivatives are recognized in the condensed consolidated balance
sheets at their fair values. On the date the derivative contract is entered
into, the Company designates the derivative as either a hedge of the fair value
of a recognized asset or liability ("fair value" hedge), or the variability of
cash flows to be received or paid related to a recognized asset or liability
("cash flow" hedge). During fiscal 2005, the Company entered into an interest
rate swap agreement covering a notional amount of $95.0 million related to its
Resort Senior Credit Facility. The agreement is adjusted to market value at each
reporting period and the increase or decrease is reflected in the condensed
consolidated statements of operations. For the 26-week period ended January 29,
2006, the Company recognized approximately $1.0 million of other non-cash income
from market value adjustments to this agreement.

Accounting for Variable Interest Entities
         In December 2003, the FASB issued a revision to FASB Interpretation
(FIN) No. 46, "Consolidation of Variable Interest Entities" (FIN No. 46(R)). FIN
No. 46(R) clarifies the application of ARB No. 51, "Consolidated Financial
Statements," to certain entities in which equity investors do not have the
characteristics of a controlling financial interest or do not have sufficient
equity risk for the entity to finance its activities without additional
subordinated financial support. FIN No. 46(R) requires the consolidation of
these entities, known as variable interest entities, by the primary beneficiary
of the entity. The primary beneficiary is the entity, if any, that will absorb a
majority of the variable interest entity's expected losses, receive a majority
of the variable interest entity's expected residual returns, or both. Under
these guidelines, the Company adopted FIN No. 46(R) during fiscal 2004.

                                       11
<PAGE>


         On May 14, 2004, Resort Properties completed the restructuring of the
Real Estate Term Facility from Fleet National Bank, Ski Partners, LLC, and Oak
Hill Capital Partners. As a result of the restructuring, a new business venture
called SP Land Company, LLC (SP Land) was created by Ski Partners, LLC, Resort
Properties, and Killington, Ltd. (Killington) (an ASC subsidiary). As part of
the restructuring, certain developmental land parcels at the Killington resort
and cash with a combined carrying value of approximately $2.2 million were
transferred by Resort Properties and Killington into SP Land Company, LLC,
together with all indebtedness, including related interest and fees, under the
Real Estate Term Facility held by Fleet National Bank and Ski Partners, LLC
(Tranche A and B of the Real Estate Term Facility) totaling $55.4 million.
Collectively, Killington and Resort Properties own 25% of the membership
interests of SP Land. The remaining 75% of the membership interests in SP Land
is owned by Ski Partners, LLC, together with a preferential interest in SP Land
of approximately $37.2 million. In accordance with FIN No. 46(R), SP Land is a
variable interest entity and is accounted for on the equity method because it
does not meet the requirements for consolidation.

         As part of the restructuring of the Real Estate Term Facility,
Killington also contributed all of its interest in approximately 256 acres of
developmental real estate into a joint venture entity called Cherry Knoll
Associates, LLC (Cherry Knoll). Each of SP Land and Killington own 50% of the
membership interests in Cherry Knoll. In addition, Killington maintains a
preferential distribution interest in Cherry Knoll of $1.5 million. In
accordance with FIN No. 46(R), Cherry Knoll is a variable interest entity and is
accounted for on the equity method because it does not meet the requirements for
consolidation.

         In October 2004, the Company, through one of its subsidiaries, acquired
a 49% interest in SS Associates, LLC (SS Associates) by contributing its rights
to purchase a building to SS Associates and by making a refundable security
deposit of $0.4 million. In accordance with FIN No. 46(R), the Company
consolidates SS Associates because it meets the requirements of a variable
interest entity for which the Company is the primary beneficiary.

         SS Associates purchased a building in October 2004 for $3.5 million
(including costs to close) with cash and the issuance of long-term debt of $2.5
million. The loan is secured by the building, has 59 monthly payments of $29,000
each, a final payment in October 2009 of $1.5 million, and bears interest at
6.5% per year. SS Associates is obligated on the loan and none of the Company's
remaining subsidiaries is obligated. SS Associates leases the building to the
Company for $0.5 million per year. The non-ASC owned interest in SS Associates
of $0.5 million (owned in part by certain members of mid-level management at the
Company's Killington resort) is included in other long-term liabilities in the
accompanying condensed consolidated balance sheet as of January 29, 2006.

Reclassifications
         Certain amounts in the prior periods' financial statements and related
notes have been reclassified to conform to the current periods' presentation.

Recently Issued Accounting Standards
         In December 2004, the FASB issued SFAS No. 152, "Accounting for Real
Estate Time-Sharing Transactions - an amendment of FASB Statements No. 66 and
67." This statement amends SFAS No. 66, "Accounting for Sales of Real Estate,"
(SFAS No. 66) and SFAS No. 67, "Accounting for Costs and Initial Rental
Operations of Real Estate Projects," to state that the guidance for (a)
incidental operations and (b) costs incurred to sell real estate projects also
applies to real estate time-share transactions. The accounting for those
operations and costs is also subject to the guidance of Statement of Position
(SOP) 04-2, which provides guidance on the seller's accounting for real estate
time-sharing transactions. SFAS No. 152, however, does not change the revenue
guidance in SFAS No. 66. The provisions of SFAS No. 152 became effective for the
quarter ended October 30, 2005 and were adopted by the Company. There was no
material impact to the accompanying condensed consolidated financial statements
due to the adoption of this provision.

         In December 2004, the FASB issued SFAS No. 153, "Exchanges of
Nonmonetary Assets - an Amendment of APB Opinion No. 29" (SFAS No. 153). This
statement amends APB Opinion No. 29 to eliminate the exception for nonmonetary
exchanges of similar productive assets and replaces it with a general exception
for exchanges of nonmonetary assets that do not have commercial substance. A
nonmonetary exchange has commercial substance if the future cash flows of the
entity are expected to change significantly as a result of the exchange. The
provisions of SFAS No. 153 became effective for the quarter ended October 30,
2005 and were adopted by the Company. There was no impact to the accompanying
condensed consolidated financial statements due to the adoption of this
provision.

                                       12
<PAGE>

         In March 2005, the FASB issued FIN No. 47, "Accounting for Conditional
Asset Retirement Obligations" (FIN No. 47). FIN No. 47 clarifies the term
"conditional asset retirement obligation" as used in SFAS No. 143, "Accounting
for Asset Retirement Obligations." SFAS No. 143 refers to a legal obligation to
perform an asset retirement activity in which the timing and (or) method of
settlement are conditional on a future event that may or may not be within the
control of the entity. SFAS No. 143 requires an entity to recognize the fair
value of a legal obligation to perform asset retirement activities when the
obligation is incurred. FIN No. 47 further clarifies when an entity has
sufficient information to reasonably estimate the fair value of a conditional
asset retirement obligation. The provisions of FIN No. 47 became effective for
the quarter ended October 30, 2005 and were adopted by the Company. Management
has determined under SFAS No. 143 that it cannot reasonably estimate the fair
value of its asset retirement obligations relating to certain provisions in its
lease agreements at Attitash, Mount Snow, and Steamboat requiring it to reforest
certain ski terrain leased from the U.S. Forest Service, as the option to renew
these leases is in the control of the Company and management currently has no
intention to terminate the lease. Management has not recorded a liability in its
condensed consolidated financial statements for these obligations. Management
has determined that these obligations are not conditional on a future event and
as such, the adoption of FIN No. 47 has no impact on the accompanying condensed
consolidated financial statements.

3.  Net Loss per Common Share

         Net loss per common share for the periods ended January 30, 2005 and
January 29, 2006, was determined based on the following data (in thousands):
<TABLE>
            --------------------------------------------------------------------------------------------------------
<CAPTION>
                                             14 weeks ended    13 weeks ended    27 weeks ended     26 weeks ended
                                            January 30, 2005  January 29, 2006  January 30, 2005   January 29, 2006
            --------------------------------------------------------------------------------------------------------
            <S>                             <C>               <C>               <C>                <C>
            Net loss                        $       (22,144)  $       (11,521)  $       (59,864)   $       (53,520)
                                            ================  ================  ================   ================



            Weighted average common shares
            outstanding - basic and diluted          31,738            31,738            31,738             31,738
                                            ================  ================  ================   ================

            --------------------------------------------------------------------------------------------------------
</TABLE>

         As of January 30, 2005 and January 29, 2006, the Company had 14,760,530
shares of its Class A common stock outstanding, which are convertible into
shares of the Company's common stock. The shares of the Company's common stock
issuable upon conversion of the shares of the Company's Class A common stock
have been included in the calculation of the weighted average common shares
outstanding. As of January 30, 2005 and January 29, 2006, the Company had 40,000
shares of its mandatorily redeemable convertible participating 12% Series C-1
preferred stock (Series C-1 Preferred Stock) outstanding, which are convertible
into shares of the Company's common stock. If converted at their liquidation
preferences as of January 30, 2005 and January 29, 2006, these convertible
preferred shares would convert into approximately 47,947,000 and 53,947,000
shares of common stock, respectively. For the periods ended January 30, 2005 and
January 29, 2006, the common 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 Company also had 3,811,187
options outstanding to purchase shares of its common stock under the Plan as of
each of January 30, 2005 and January 29, 2006. These stock options are excluded
from the dilutive share calculation, as the impact of their inclusion would be
anti-dilutive.

4.  Segment Information

         In accordance with SFAS No. 131, "Disclosures about Segments of an
Enterprise and Related Information" (SFAS No. 131), the Company has classified
its operations into two business segments, resort operations and real estate
operations. Revenues at each of the resorts are derived from the same lines of
business which include 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 performance
of the resorts is evaluated on the same basis of profit or loss from operations.
Additionally, each of the resorts has historically produced similar operating
margins and attracts the same class of customer. Based on the similarities of
the operations at each of the resorts, the Company has concluded that the
resorts satisfy the aggregation criteria set forth in SFAS No. 131. The
Company's real estate revenues are derived from the sale, resale, and leasing 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
losses for the two business segments are as follows (in thousands):

                                       13
<PAGE>

<TABLE>
       ------------------------------------------------------------------------------------------------------------
<CAPTION>
                                          14 weeks ended      13 weeks ended     27 weeks ended     26 weeks ended
                                         January 30, 2005    January 29, 2006   January 30, 2005   January 29, 2006
       ------------------------------------------------------------------------------------------------------------
       <S>                               <C>                 <C>                <C>                <C>
       Revenues:
            Resort                       $       103,411     $       109,887    $       121,231    $       127,034
            Real estate                            2,663               2,612              4,389              5,581
                                         ----------------    ----------------   ----------------   ----------------
       Total                             $       106,074     $       112,499    $       125,620    $       132,615
                                         ================    ================   ================   ================

       Loss from operations:
            Resort                       $       (21,426)    $        (9,601)   $       (58,548)   $       (50,397)
            Real estate                             (718)             (1,720)            (1,316)            (3,123)
                                         ----------------    ----------------   ----------------   -----------------
       Total                             $       (22,144)    $       (11,321)   $       (59,864)   $       (53,520)
                                         ================    ================   ================   =================

       ------------------------------------------------------------------------------------------------------------
</TABLE>

         Identifiable assets for the two business segments and a reconciliation
of the totals reported for the operating segments to the totals reported in the
condensed consolidated balance sheets is as follows (in thousands):

        ------------------------------------------------------------------------
                                             July 31, 2005      January 29, 2006
        ------------------------------------------------------------------------
        Identifiable Assets:
         Resort                              $     355,483      $       375,553
         Real Estate                                58,296               52,852
                                             --------------     ----------------
                                             $     413,779      $       428,405
                                             ==============     ================
        Assets:
         Identifiable assets for segments    $     413,779      $       428,405
         Intangible and deferred income tax
           assets not allocated to segments          9,155                9,126
                                             --------------     ----------------
                 Total consolidated assets   $     422,934      $       437,531
                                             ==============     ================

        ------------------------------------------------------------------------



5.  Long-Term Debt

Resort Senior Credit Facility

         The Company entered into agreements dated November 24, 2004 with Credit
Suisse, GE Capital, and other lenders whereby the lenders provided the Company
with a $230.0 million senior secured loan facility (Resort Senior Credit
Facility) consisting of a revolving credit facility and two term loan
facilities. The proceeds of the Resort Senior Credit Facility were used to repay
in full the previously existing resort senior credit facility and redeem the
Company's $120.0 million senior subordinated notes (Senior Subordinated Notes),
as well as to pay fees and expenses related to the transaction. The Resort
Senior Credit Facility consists of the following:

         o     Revolving Facility - $40.0 million, including letter of credit
               (L/C) availability of up to $6.0 million. The amount of
               availability under this facility is correspondingly reduced by
               the amount of each L/C issued.

         o     First Lien Term Loan - $85.0 million borrowed on the funding date
               of November 24, 2004.

         o     Second Lien Term Loan - $105.0 million borrowed on the funding
               date of November 24, 2004.

                                       14
<PAGE>

         The Revolving Facility and First Lien Term Loan are provided under a
single credit agreement (collectively, the First Lien Credit Agreement), mature
in November 2010 and bear interest, at the option of the Company, either at a
rate equal to the prime rate, as publicly quoted in The Wall Street Journal,
plus 3.5%, or at a rate equal to LIBOR (as defined) plus 4.5%, payable quarterly
(10.75% based on the prime rate for the Revolving Facility and 9.06% based on
the LIBOR rate for the First Lien Term Loan as of January 29, 2006). The First
Lien Term Loan requires 23 quarterly principal payments of $212,500 beginning on
January 15, 2005 and a final payment of $80.1 million in November 2010. The
Revolving Facility is comprised of two sub-facilities, each in the amount of
$20.0 million and each with separate fees for the unused portion of the
facilities in the amounts of 1.0% and 4.5% per annum, respectively. The Second
Lien Term Loan is provided under a separate credit agreement (Second Lien Credit
Agreement), matures in November 2011, bears interest at a rate equal to the
prime rate, as publicly quoted in The Wall Street Journal, plus 7.0%, or at a
rate equal to LIBOR (as defined) plus 8.0%, payable quarterly (12.56% as of
January 29, 2006 based on the LIBOR rate), and principal is due upon maturity.

         The Revolving Facility and the First Lien Term Loan obligations under
the First Lien Credit Agreement are secured by a first-priority security
interest in substantially all of the Company's assets, other than assets held by
Grand Summit, and the Company's obligations under the Second Lien Credit
Agreement are secured by a second-priority security interest in the same assets.
Collateral matters between the lenders under the First Lien Credit Agreement and
the lenders under the Second Lien Credit Agreement are governed by an
intercreditor agreement.

         The Resort Senior Credit Facility contains affirmative, negative, and
financial covenants customary for this type of credit facility, which includes
maintaining a minimum level of EBITDA (as defined), limiting the Company's
capital expenditures, maintaining a minimum ratio of appraised asset value to
debt, and having a zero balance on the Revolving Credit Facility (excluding
L/Cs) on April 1 of each year. The Resort Senior Credit Facility also contains
events of default customary for such financings, including but not limited to
nonpayment of amounts when due; violation of covenants; cross default and cross
acceleration with respect to other material debt; change of control;
dissolution; insolvency; bankruptcy events; and material judgments. Some of
these events of default allow for grace periods or are qualified by materiality
concepts. The Resort Senior Credit Facility requires the Company to offer to
prepay the loans with proceeds of certain material asset sales and recovery
events, certain proceeds of debt, 50% of excess cash flow, and proceeds from the
issuance of capital stock. The Resort Senior Credit Facility also restricts the
Company's ability to pay cash dividends on or redeem its common and preferred
stock. Pursuant to the requirements of the Resort Senior Credit Facility, on May
23, 2005, the Company entered into an interest rate swap agreement for 50% of
the First Lien Term Loan and the Second Lien Term Loan for a notional amount of
$95.0 million. Under the swap agreement, during the period from May 16, 2005 to
November 15, 2005, the Company paid 4.16% and received the 6-month LIBOR rate.
During the period from November 16, 2005 to May 15, 2008, the Company pays 4.16%
and receives the 3-month LIBOR rate. As a result of entering into this interest
rate swap agreement, the Company has fixed the cash-pay rate on the notional
amount until the maturity of the swap agreement in May 2008. Changes in the fair
value of the interest rate swap agreement are recorded as increase in fair value
of this interest rate swap agreement at each reporting period-end. During the
26-week period ended January 29, 2006, the Company recognized approximately $1.0
million of increase in fair value of this agreement due to market value
adjustments. The total balance sheet effect as of January 29, 2006 is a net
asset of $1.3 million.

         As of January 29, 2006, the Company had $1.9 million, $82.9 million,
and $105.0 million of principal outstanding under the Revolving Facility, First
Lien Term Loan, and Second Lien Term Loan portions of the Resort Senior Credit
Facility, respectively. Furthermore, as of January 29, 2006, the Company had
$1.6 million in outstanding L/Cs with $36.5 million available for additional
borrowings under the Revolving Facility. The Company was in compliance with all
financial covenants of the Resort Senior Credit Facility through January 29,
2006.

Construction Loan Facility

         The Company conducts substantially all of its real estate development
through subsidiaries, each of which is a wholly owned subsidiary of Resort
Properties. Grand Summit owns the existing Grand Summit Hotel project at
Steamboat, which is primarily financed through the $110.0 million Senior
Construction Loan (Senior Construction Loan). Due to construction delays and
cost increases at the Steamboat Grand Hotel project, on July 25, 2000, Grand
Summit entered into the $10.0 million Subordinated Construction Loan, which was
subsequently increased to $10.6 million in December 2003 (Subordinated
Construction Loan). Together, the Senior Construction Loan and the Subordinated
Construction Loan comprise the Construction Loan Facility. The Company used the
Construction Loan Facility solely for the purpose of funding the completion of
the Steamboat Grand Hotel. The Construction Loan Facility is without recourse to
ASC and its resort operating subsidiaries and is collateralized by significant
real estate assets of Resort Properties and its subsidiaries, including the
assets and stock of Grand Summit, ASC's primary hotel development subsidiary.

                                       15
<PAGE>

         The outstanding principal amount under the Construction Loan Facility
is payable incrementally as quarter and eighth share unit sales are closed based
on a predetermined per unit amount, which approximates between 70% and 80% of
the net proceeds of each closing. Mortgages against the commercial core units
and unsold unit inventory at the Grand Summit Hotel at Steamboat and a
promissory note from the Steamboat Homeowners Association secured by the
Steamboat Grand Hotel parking garage collateralize the Senior Construction Loan,
which is subject to covenants, representations, and warranties customary for
this type of construction facility. The Senior Construction Loan is non-recourse
to ASC and its resort operating subsidiaries other than Grand Summit. Grand
Summit has assets with a total carrying value of $39.9 million as of January 29,
2006, which collateralize the Senior Construction Loan. The maturity date for
funds advanced under the Senior Construction Loan is June 30, 2006. The
principal balance outstanding under the Senior Construction Loan was $9.1
million as of January 29, 2006 and had an interest rate on funds advanced of
prime plus 3.5% (10.75% as of January 29, 2006), with a floor of 9.0%.

         On December 6, 2005, Grand Summit received a letter from the lenders
waiving the December 31, 2005 maximum outstanding principal balance requirement.
On December 31, 2005, the principal balance was $9.3 million, or $1.3 million in
excess of the maximum outstanding principal balance under the Senior
Construction Loan. The Senior Construction Loan, as amended, prior to giving
effect to the further amendment described below, requires that Grand Summit's
outstanding borrowings not exceed the following maximum outstanding principal
balances as of the following dates:
                March 31, 2006                   $5,000,000
                June 30, 2006                       -

         On December 8, 2005, the Company announced that it would be conducting
an auction on March 18, 2006 for the remaining unsold developer inventory at the
Grand Summit Hotel at Steamboat. In connection with the auction announcement, on
February 14, 2006, Grand Summit entered into a letter agreement with the lenders
under the Senior Construction Loan waiving the March 31, 2006 maximum
outstanding principal balance requirement and resetting the predetermined per
unit principal paydown amount noted above to 85% of all gross proceeds received
from this auction.

         The Subordinated Construction Loan bears interest at a fixed rate of
20% per annum, payable monthly in arrears. Only 50% of the amount of this
interest is due and payable in cash and the other 50%, if no events of default
exist under the Subordinated Construction Loan or the Senior Construction Loan,
is automatically deferred until the final payment date. The Subordinated
Construction Loan, as amended, matures on November 30, 2007. All $10.6 million
had been borrowed and remained outstanding under the Subordinated Construction
Loan as of January 29, 2006. The Subordinated Construction Loan is secured by
the same collateral which secures the Senior Construction Loan.

         The Subordinated Construction Loan, as amended, requires that Grand
Summit's outstanding borrowings not exceed the following maximum outstanding
principal balances as of the following dates:

                June 30, 2006                    $10,000,000
                December 31, 2006                  8,000,000
                March 31, 2007                     5,000,000
                June 30, 2007                      2,500,000
                November 30, 2007                      -

         The Construction Loan facility is non-recourse to ASC and its
subsidiaries other than Grand Summit.


Other Long-Term Debt

       The Company has $18.4 million of other long-term debt as of January 29,
2006. This is comprised of $10.3 million of capital lease obligations and $8.1
million of notes payable with various lenders.


                                       16
<PAGE>

6.  Subordinated Notes and Debentures

    11.3025% Junior Subordinated Notes
         On July 15, 2001, the Company entered into a securities purchase
agreement with Oak Hill Capital Partners to assist the Company in meeting its
financing needs. Pursuant to the terms of the securities purchase agreement,
which closed on August 31, 2001, the Company issued, and Oak Hill Capital
Partners purchased, $12.5 million aggregate principal amount of Junior
Subordinated Notes (Junior Subordinated Notes), which are convertible into
shares of the Company's Non-voting Series D Participating Preferred Stock
(Series D Preferred Stock). The Junior Subordinated Notes are unsecured and bear
interest at a rate of 11.3025%, which compounds annually and is due and payable
at the maturity of the Junior Subordinated Notes. The Junior Subordinated Notes
were amended in connection with the Company's entry into the Resort Senior
Credit Facility on November 24, 2004 to extend their maturity to May 2012. 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 ASC from Resort Properties. As of January 29, 2006, the outstanding balance
on the Junior Subordinated Notes was approximately $20.1 million including
compounded interest.

     New Junior Subordinated Notes
         In connection with the Company's entry into the Resort Senior Credit
Facility on November 24, 2004, the Company entered into an exchange agreement
with the holder of the Company's Series A Preferred Stock and issued $76.7
million of junior subordinated notes due May 2012 (New Junior Subordinated
Notes) to the holder of the Series A Preferred Stock in exchange for all
outstanding shares of Series A Preferred Stock. The New Junior Subordinated
Notes accrue interest at a rate of 11.25% upon issuance, gradually increasing to
a rate of 13.0% in 2012. No principal or interest payments are required to be
made on the New Junior Subordinated Notes until maturity. However, interest is
added to the principal outstanding on January 1 of each year. On January 1,
2005, $0.9 million of interest was added to the principal outstanding and on
January 1, 2006, $8.6 million was added to the principal outstanding. The New
Junior Subordinated Notes are subordinated to all of the Company's other debt
obligations and all trade payables incurred in the ordinary course of business.
None of the Company's subsidiaries are obligated on the New Junior Subordinated
Notes, and none of the Company's assets serve as collateral for repayment of the
New Junior Subordinated Notes. The indenture governing the New Junior
Subordinated Notes also restricts the Company from paying cash dividends or
making other distributions to its shareholders subject to certain limited
exceptions. As of January 29, 2006, the outstanding balance on the New Junior
Subordinated Notes was $86.2 million. Accrued interest as of January 29, 2006 on
the New Junior Subordinated Notes was $1.7 million.

     Other Subordinated Debentures
         Other subordinated debentures owed by the Company to institutions and
individuals as of January 29, 2006 are unsecured and are due as follows (dollars
in thousands):

                         ------------------------------
                                   Interest  Principal
                           Year      Rate     Amount
                         ------------------------------
                           2010       8%     $   1,292
                           2012       6%         1,155
                           2013       6%         1,065
                           2015       6%         1,500
                           2016       6%         1,196
                                             ----------
                                             $   6,208
                                             ==========

                         ------------------------------

                                       17
<PAGE>


7.  Mandatorily Redeemable Securities

    Series A Preferred Stock
         As of July 25, 2004, the Company had 36,626 shares of Series A
Preferred Stock outstanding. In connection with the Company's entry into the
Resort Senior Credit Facility on November 24, 2004 all outstanding shares of the
Series A Preferred Stock were exchanged for New Junior Subordinated Notes in the
principal amount of $76.7 million.

    Series B Preferred Stock
         Pursuant to a Preferred Stock Subscription Agreement (the Series B
Agreement) dated July 9, 1999, the Company sold 150,000 shares of its 8.5%
Series B Convertible Participating Preferred Stock (Series B Preferred Stock) on
August 9, 1999 to Oak Hill for $150.0 million.

         On August 31, 2001, in connection with a recapitalization transaction,
the Series B Preferred Stock was stripped of all of its economic and governance
rights and preferences, with the exception of its right to elect up to six
directors of ASC. The Company issued mandatorily redeemable Series C-1 Preferred
Stock and Series C-2 Preferred Stock with an aggregate initial face value of
$179.5 million which was equal 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 B Preferred Stock currently remains
outstanding but will lose its remaining rights, including voting rights, upon
redemption of the Series C-1 Preferred Stock and Series C-2 Preferred Stock in
July 2007.

    Series C-1 Preferred Stock and Series C-2 Preferred Stock
         On July 15, 2001, the Company entered into a securities purchase
agreement with Oak Hill to assist the Company in meeting its current financing
needs. Pursuant to the terms of the securities purchase agreement, which closed
on August 31, 2001, the Company issued to Oak Hill two new series of Preferred
Stock: (i) $40.0 million face value of Series C-1 Preferred Stock; and (ii)
$139.5 million face value of Series C-2 Preferred Stock. The initial face values
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 are entitled to annual
preferred dividends of 12% and 15%, respectively. At the Company's option,
dividends can either be paid in cash or in additional shares of preferred stock.
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 the Series C-1 Preferred Stock and Series C-2 Preferred Stock
are mandatorily redeemable and mature in July 2007. As of January 29, 2006,
cumulative dividends in arrears totaled approximately $27.4 million and $127.8
million for the Series C-1 Preferred Stock and Series C-2 Preferred Stock,
respectively. The Series C-1 Preferred Stock and Series C-2 Preferred Stock have
certain voting rights as defined in the securities certificates of designation
relating thereto and rank senior in liquidation preference to all common stock
and Class A common stock outstanding as of January 29, 2006, common stock, Class
A common stock and Series D Preferred Stock issued in the future, and rank pari
passu with each other and the Series B Preferred Stock. The Series C-1 Preferred
Stock is also participating preferred stock and consequently has the right to
participate in any dividends paid or payable to the common stock of the Company
on an as-if-converted basis.

    Series D Preferred Stock
         The Company has authorized the issuance of 5,000 shares of Series D
Preferred Stock. As of January 29, 2006, no shares of Series D Preferred Stock
have been issued. The Series D Preferred Stock is junior in right of preference
to the Series C-1 Preferred Stock and Series C-2 Preferred Stock, is not
entitled to preferred dividends, and is redeemable at the option of the
shareholders.


8.  Dividend Restrictions and Stockholders Agreement

    Dividend Restrictions
         Borrowers under the Resort Senior Credit Facility, which include ASC,
are restricted from paying cash dividends on any of their preferred or common
stock.

         Grand Summit, the borrower under the Construction Loan Facility, is
restricted from declaring dividends or advancing funds to ASC by any other
method, unless specifically approved by the Construction Loan Facility lenders.

                                       18
<PAGE>

    Stockholders Agreement
         The Company, Oak Hill, and Mr. Leslie B. Otten (Mr. Otten) entered into
a Stockholders Agreement, dated as of August 6, 1999, amended on July 31, 2000
(as amended, the Stockholders Agreement), pursuant to which each of Mr. Otten
and Oak Hill agreed to vote its capital stock of the Company so as to cause
there to be:

    o     Six directors of the Company nominated by Oak Hill, so long as Oak
          Hill owns 80% of the shares of common stock it owned as of July 30,
          2000 on a fully diluted basis, such number of directors decreasing
          ratably with the percentage of Oak Hill's ownership of the common
          stock on a fully diluted basis compared to such ownership as of July
          30, 2000; and

    o     Two directors of the Company nominated by Mr. Otten, so long as Mr.
          Otten owns 15% of the shares of common stock outstanding on a fully
          diluted basis, and one director so nominated, so long as Mr. Otten
          owns at least 5% of the shares of common stock outstanding on a fully
          diluted basis.

         As of January 29, 2006, Oak Hill owned not less than 80% of the shares
of common stock it owned as of July 30, 2000, on a fully diluted basis, and Mr.
Otten owned not less than 15% of the shares of common stock outstanding on a
fully diluted basis.

         The Stockholders Agreement provides that, so long as Oak Hill owns at
least 20% of the outstanding shares of common stock on a fully diluted basis,
the affirmative vote of at least one Oak Hill director is required prior to the
approval of (i) the Company's annual budget, (ii) significant executive
personnel decisions, (iii) material actions likely to have an impact of 5% or
more on the Company's consolidated revenues or earnings, amendments to the
Company's articles of incorporation or by-laws, (iv) any liquidation,
reorganization, or business combination of the Company, (v) the initiation of
certain material litigation, and (vi) any material financing of the Company.

         Under the Stockholders Agreement, Oak Hill and Mr. Otten have agreed
not to dispose of their securities of the Company if, (i) as a result of such
transfer, the transferee would own more than 10% of the outstanding shares of
common stock of the Company (on a fully diluted basis), unless such transfer is
approved by the Board of Directors (x) including a majority of the Common
Directors (as defined in the Stockholders Agreement), or (y) the public
stockholders of the Company are given the opportunity to participate in such
transfer on equivalent terms, (ii) the transferee is a competitor of the Company
or any of its subsidiaries, unless such transfer is approved by the Board of
Directors, or (iii) such transfer would materially disadvantage the business of
the Company. The Stockholders Agreement provides for additional customary
transfer restrictions applicable to each of Mr. Otten and Oak Hill as well as
standstill provisions applicable to Oak Hill.

         The Stockholders Agreement provides that, upon the Company's issuance
of shares of common stock or securities convertible into common stock, Mr. Otten
and Oak Hill will have the right to purchase at the same price and on the same
terms, the number of shares of common stock or securities convertible into
common stock necessary for each of them to maintain individually the same level
of beneficial ownership of common stock of the Company on a fully diluted basis
as it owned immediately prior to the issuance. This anti-dilution provision is
subject to customary exceptions.

9.  Phantom Equity Plan

         ASC has established the American Skiing Company Phantom Equity Plan
(LTIP). Certain of ASC's executive officers participate in the LTIP.
Participants are entitled to a payment on awards granted under the LTIP, to the
extent vested upon a Valuation Event (as defined below) or in certain cases upon
termination of employment. The amount of any award is based ultimately on the
Equity Value, as defined by the LTIP, obtained through a Valuation Event. A
Valuation Event is defined in the LTIP as any of the following: (i) a sale or
disposition of a significant Company operation or property as determined by the
Board of Directors; (ii) a merger, consolidation, or similar event of the
Company other than one (A) in which the Company is the surviving entity or (B)
where no Change in Control (as defined in the LTIP) has occurred; (iii) a public
offering of equity securities by the Company that yields net proceeds to the
Company in excess of $50 million; or (iv) a Change in Control. Compensation
expense relating to the LTIP is estimated and recorded based on the probability
of the Company achieving a Valuation Event and its estimated Equity Value.
During the 14 weeks ended January 30, 2005, the Company recorded a recovery of
$0.2 million and during the 13 weeks ended January 29, 2006, the Company
recorded expenses relating to the LTIP of approximately $0.1 million. During the
27 weeks ended January 30, 2005, the Company recorded a net recovery of $0.1
million and during the 26 weeks ended January 29, 2006, the Company recorded
expenses relating to the LTIP of approximately $0.1 million. These are included
in marketing, general, and administrative expenses in the accompanying
consolidated statements of operations. As of January 29, 2006, the total
liability for the LTIP was $1.4 million, which is included in other long-term
liabilities in the condensed consolidated balance sheet.

                                       19
<PAGE>

10.  Commitments and Contingencies

         Certain claims, suits and complaints in the ordinary course of business
are pending or may arise against the Company, including all of its direct and
indirect subsidiaries. In the opinion of management, all matters are adequately
covered by insurance or, if not covered, are without merit or are of such kind,
or involve such amounts, as are not likely to have a material effect on the
financial position, results of operations or liquidity of the Company if
disposed of unfavorably.



                                     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 of 1933, as
amended (the Securities Act), and Section 21E of the Securities Exchange Act of
1934, as amended (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 airline bankruptcies); failure to maintain
improvements to resort operating performance at the covenant levels required by
our Resort Senior Credit Facility; adverse weather conditions regionally and
nationally; changes in weather patterns resulting from global warming; seasonal
business activity; increased gas and energy prices; 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 have filed with the Securities and Exchange
Commission. 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 Exchange Act, we do not have or undertake any obligation to publicly
update any forward-looking statements to reflect subsequent events or
circumstances.

General

         We are organized as a holding company and operate through various
subsidiaries. We are one of the largest operators of alpine ski and snowboard
resorts in the United States. We develop, own and operate a range of
hospitality-related businesses, including skier development programs, hotels,
golf courses, restaurants and retail locations. We also develop, market and
operate ski-in/ski-out alpine villages, townhouses, condominiums, and quarter
and eighth share ownership hotels. We report our results of operations in two
business segments, resort operations and real estate operations.

         Our operating strategies include taking advantage of our multi-resort
network, increasing our revenue per skier, continuing to build brand awareness
and customer loyalty, expanding our sales and marketing efforts, continuing to
focus on cost management, expanding our golf and convention business, improving
our hotel occupancy and operating margins, and capitalizing on real estate
growth opportunities through joint ventures.


                                       20
<PAGE>

         Our revenues are highly seasonal in nature. In fiscal 2005, we realized
approximately 89% of resort operations segment revenues and over 100% of resort
operations segment operating income during the period from mid-November through
April. In addition, a significant portion of resort operations segment revenue
and approximately 20% of annual skier visits were generated during the Christmas
and Presidents' Day vacation weeks in fiscal 2005. Our resorts typically
experience operating losses and negative cash flows for the period from May
through mid-November.

         A high degree of seasonality in our revenues increases the impact of
certain events on our operating results. Adverse weather conditions, access
route closures, equipment failures, and other developments of even moderate or
limited duration occurring during peak business periods could reduce revenues.
Adverse weather conditions can also increase power and other operating costs
associated with snowmaking or could render snowmaking wholly or partially
ineffective in maintaining quality skiing conditions. Furthermore, unfavorable
weather conditions, regardless of actual skiing conditions, can result in
decreased skier visits.

         The following is our discussion and analysis of financial condition and
results of operations as of January 29, 2006 and for the 13 weeks and 26 weeks
then ended. As you read the information below, we urge you to carefully consider
our fiscal 2005 Annual Report on Form 10-K filed on October 31, 2005 and our
unaudited condensed consolidated financial statements and related notes
contained elsewhere in this report.


Liquidity and Capital Resources

Short-Term Liquidity Needs

         Our primary short-term liquidity needs involve funding seasonal working
capital requirements, marketing and selling real estate development projects,
funding our fiscal 2006 capital improvement program, and servicing our debt. Our
cash requirements for ski-related and real estate sales activities are provided
from separate sources.

         Our primary source of liquidity for ski-related working capital and
ski-related capital improvements are cash flows from operating activities of our
resort operating subsidiaries and borrowings under our Resort Senior Credit
Facility. The total debt outstanding under our Resort Senior Credit Facility as
of January 29, 2006 was $189.9 million.

         Real estate working capital is funded primarily through unit inventory
sales and short-term rental of remaining unit inventory. Historically, the
Construction Loan Facility funded such working capital. The Construction Loan
Facility is without recourse to ASC and its subsidiaries other than Grand Summit
and is collateralized by significant real estate assets of Grand Summit. As of
January 29, 2006, the carrying value of the total assets that collateralized the
Construction Loan Facility was $39.9 million. The total debt outstanding on the
Construction Loan Facility as of January 29, 2006 was $19.7 million. See "Real
Estate Liquidity" below.


Resort Liquidity

         We entered into agreements dated November 24, 2004 with Credit Suisse,
GE Capital, and other lenders whereby the lenders provided us with a $230.0
million Resort Senior Credit Facility consisting of a revolving credit facility
and two term loan facilities. The proceeds of the Resort Senior Credit Facility
were used to refinance our prior resort senior credit facility and redeem our
Senior Subordinated Notes as well as to pay fees and expenses related to the
transaction. The Resort Senior Credit Facility consists of the following:

         o     Revolving Facility - $40.0 million, including letter of credit
               (L/C) availability of up to $6.0 million. The amount of
               availability under this facility is correspondingly reduced by
               the amount of each L/C issued.

         o     First Lien Term Loan - $85.0 million borrowed on the funding date
               of November 24, 2004.

         o     Second Lien Term Loan - $105.0 million borrowed on the funding
               date of November 24, 2004.

                                       21
<PAGE>

        The Revolving Facility and First Lien Term Loan are provided under the
First Lien Credit Agreement, mature in November 2010 and bear interest, at our
option, either at a rate equal to the prime rate as publicly quoted in the Wall
Street Journal plus 3.5% or at a rate equal to LIBOR (as defined) plus 4.5%,
payable quarterly (10.75% based on the prime rate for the Revolving Facility and
9.06% based on the LIBOR rate for the First Lien Term Loan as of January 29,
2006). The First Lien Term Loan requires 23 quarterly principal payments of
$212,500 each, beginning on January 15, 2005 and a final payment of $80.1
million in November 2010. The Revolving Facility is comprised of two
sub-facilities, each in the amount of $20.0 million and each with separate fees
for the unused portion of the facilities (in the amounts of 1.0% and 4.5% per
annum, respectively). The Second Lien Term Loan is provided under the Second
Lien Credit Agreement, matures in November 2011, bears interest at a rate equal
to the prime rate as publicly quoted in the Wall Street Journal plus 7.0% or at
a rate equal to LIBOR (as defined) plus 8.0%, payable quarterly (12.56% as of
January 29, 2006 based on the LIBOR rate), and principal is due upon maturity.

        The Revolving Facility and the First Lien Term Loan obligations under
the First Lien Credit Agreement are secured by a first-priority security
interest in substantially all of our assets, other than assets held by Grand
Summit, and our obligations under the Second Lien Credit Agreement are secured
by a second-priority security interest in the same assets. Collateral matters
between the lenders under the First Lien Credit Agreement and the lenders under
the Second Lien Credit Agreement are governed by an intercreditor agreement.

         The Resort Senior Credit Facility contains affirmative, negative, and
financial covenants customary for this type of credit facility, which includes
maintaining a minimum level of EBITDA (as defined), limiting our capital
expenditures, maintaining a minimum ratio of appraised asset value to debt, and
having a zero balance on the Revolving Credit Facility (excluding L/Cs) on April
1 of each year. The Resort Senior Credit Facility also contains events of
default customary for such financings, including but not limited to nonpayment
of amounts when due; violation of covenants; cross default and cross
acceleration with respect to other material debt; change of control;
dissolution; insolvency; bankruptcy events; and material judgments. Some of
these events of default allow for grace periods or are qualified by materiality
concepts. The Resort Senior Credit Facility requires us to prepay the loans with
proceeds of certain material asset sales and recovery events, certain proceeds
of debt, 50% of excess cash flow, and proceeds from the issuance of capital
stock. The Resort Senior Credit Facility also restricts our ability to pay cash
dividends on or redeem our common or preferred stock. Pursuant to the
requirements of the Resort Senior Credit Facility, on May 23, 2005, we entered
into an interest rate swap agreement for 50% of the First Lien Term Loan and the
Second Lien Term Loan for a notional amount of $95.0 million. Under the swap
agreement, during the period of May 16, 2005 to November 15, 2005, we paid 4.16%
and received the 6-month LIBOR rate. During the period from November 16, 2005 to
May 15, 2008, we pay 4.16% and receive the 3-month LIBOR rate. As a result of
entering into this interest rate swap agreement, we have fixed the cash-pay rate
on the notional amount until the maturity of the swap agreement in May 2008.

         As of January 29, 2006, we had $1.9 million, $82.9 million, and $105.0
million of principal outstanding under the Revolving Facility, First Lien Term
Loan, and Second Lien Term Loan portions of the Resort Senior Credit Facility,
respectively. Furthermore, as of January 29, 2006, we had $1.6 million in
outstanding L/Cs with $36.5 million available for additional borrowings under
the Revolving Facility. We currently anticipate that the remaining borrowing
capacity under the Resort Senior Credit Facility will be sufficient to meet our
working capital needs through the end of our second quarter of fiscal 2007.

         We have $18.4 million of other long-term debt as of January 29, 2006.
This is comprised of $10.3 million of capital lease obligations and $8.1 million
of other notes payable with various lenders.

         We closely monitor our operating results that impact our ability to
meet the financial covenants under our Resort Senior Credit Facility. We take
various actions to maintain compliance with our financial covenants, including
selling non-core assets to increase revenues, and reducing our cost structure
during the off-season and seasonal low-visitation at our resorts. In the event
of a violation of the financial covenants under our Resort Senior Credit
Facility, we would engage in discussions with our lenders for a waiver of those
covenants for the period in question. Due to the restrictions under our Resort
Senior Credit Facility, we have limited access to alternate sources of funding.


                                       22
<PAGE>

         Our significant debt levels affect our liquidity. As a result of our
highly 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 Resort Senior Credit Facility.
Furthermore, our Resort Senior Credit Facility contains 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 real estate sales plan, Grand
Summit relies primarily on unit inventory sales, short-term rental of remaining
unit inventory, as well as lease payments from long-term commercial tenants.

         The Company conducts substantially all of its real estate development
through subsidiaries, each of which is a wholly owned subsidiary of Resort
Properties. Grand Summit owns the existing Grand Summit Hotel project at
Steamboat, which is primarily financed through the $110.0 million Senior
Construction Loan. Due to construction delays and cost increases at the
Steamboat Grand Hotel project, on July 25, 2000, Grand Summit entered into the
$10.0 million Subordinated Construction Loan, which was subsequently increased
to $10.6 million in December 2003. Together, the Senior Construction Loan and
the Subordinated Construction Loan comprise the Construction Loan Facility. The
Company used the Construction Loan Facility solely for the purpose of funding
the completion of the Steamboat Grand Hotel. The Construction Loan Facility is
without recourse to ASC and its resort operating subsidiaries and is
collateralized by significant real estate assets of Resort Properties and its
subsidiaries, including the assets and stock of Grand Summit, ASC's primary
hotel development subsidiary.

         The outstanding principal amount under the Construction Loan Facility
is payable incrementally as quarter and eighth share unit sales are closed based
on a predetermined per unit amount, which approximates between 70% and 80% of
the net proceeds of each closing. Mortgages against the commercial core units
and unsold unit inventory at the Grand Summit Hotel at Steamboat and a
promissory note from the Steamboat Homeowners Association secured by the
Steamboat Grand Hotel parking garage collateralize the Senior Construction Loan,
which is subject to covenants, representations, and warranties customary for
this type of construction facility. The Senior Construction Loan is non-recourse
to ASC and its resort operating subsidiaries other than Grand Summit. Grand
Summit has assets with a total carrying value of $39.9 million as of January 29,
2006, which collateralize the Senior Construction Loan. The maturity date for
funds advanced under the Senior Construction Loan is June 30, 2006. The
principal balance outstanding under the Senior Construction Loan was $9.1
million as of January 29, 2006 and had an interest rate on funds advanced of
prime plus 3.5% (10.75% as of January 29, 2006), with a floor of 9.0%.

         On December 6, 2005, Grand Summit received a letter from the lenders
waiving the December 31, 2005 maximum outstanding principal balance requirement.
On December 31, 2005, the principal balance was $9.3 million, or $1.3 million in
excess of the maximum outstanding principal balance under the Senior
Construction Loan. The Senior Construction Loan, as amended, prior to giving
effect to the further amendment described below, requires that Grand Summit's
outstanding borrowings not exceed the following maximum outstanding principal
balances as of the following dates:

                 March 31, 2006                 $5,000,000
                 June 30, 2006                     -

         On December 8, 2005, the Company announced that it would be conducting
an auction on March 18, 2006 for the remaining unsold developer inventory at the
Grand Summit Hotel at Steamboat. In connection with the auction announcement, on
February 14, 2006, Grand Summit entered into a letter agreement with the lenders
under the Senior Construction Loan waiving the March 31, 2006 maximum
outstanding principal balance requirement and resetting the predetermined per
unit principal paydown amount noted above to 85% of all gross proceeds received
from this auction.

         The Subordinated Construction Loan bears interest at a fixed rate of
20% per annum, payable monthly in arrears. Only 50% of the amount of this
interest is due and payable in cash and the other 50%, if no events of default
exist under the Subordinated Construction Loan or the Senior Construction Loan,
is automatically deferred until the final payment date. The Subordinated
Construction Loan, as amended, matures on November 30, 2007. All $10.6 million
had been borrowed and remained outstanding under the Subordinated Construction
Loan as of January 29, 2006. The Subordinated Construction Loan is secured by
the same collateral which secures the Senior Construction Loan.

                                       23
<PAGE>


         The Subordinated Construction Loan, as amended, requires that Grand
Summit's outstanding borrowings not exceed the following maximum outstanding
principal balances as of the following dates:

                 June 30, 2006                  $10,000,000
                 December 31, 2006                8,000,000
                 March 31, 2007                   5,000,000
                 June 30, 2007                    2,500,000
                 November 30, 2007                    -

         There can be no assurance that Grand Summit will meet the future
mandatory amortization requirements of the Senior Construction Loan or the
Subordinated Construction Loan. If Grand Summit fails to meet those future
mandatory amortization requirements, there can be no assurance that the lenders
under those facilities will be willing to enter into a waiver or amendment in
the future on terms acceptable to Grand Summit or at all. Grand Summit is also
engaged in efforts to refinance the Senior Construction Loan and Subordinated
Construction Loan with different lenders in a restructured facility, but
similarly there can be no assurance that a refinancing will be completed prior
to the existing mandatory amortization dates. If Grand Summit is unable to
obtain a waiver from the existing lenders or refinance the Construction Loan
Facility, and Grand Summit does not meet the amortization requirements of the
Senior Construction Loan or Subordinated Construction Loan, Grand Summit will be
in payment default under the Construction Loan Facility and the lenders could
commence enforcement actions against Grand Summit and the assets of Grand Summit
which secure the Construction Loan Facility. The Construction Loan facility is
non-recourse to ASC and its subsidiaries other than Grand Summit.


Long-Term Liquidity Needs

         Our primary long-term liquidity needs are to fund skiing-related
capital improvements at certain of our resorts. For each of fiscal 2006 and
2007, we anticipate our annual maintenance capital needs to be approximately
$10.0 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 flows,
capital leases, and our Resort 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 flows from each season's resort operations, and
future borrowing availability and covenant restrictions under the Resort Senior
Credit Facility. The Resort Senior Credit Facility places a maximum level of
non-real estate capital expenditures for each of fiscal 2006 and 2007 at $15.5
million, including assets purchased under capital leases, with the ability to
increase this amount if certain conditions are met. Additionally, the Resort
Senior Credit Facility allows the maximum expenditure level to increase for
certain specified capital expenditure obligations. We believe that these capital
expenditure amounts will be sufficient to meet our non-real estate capital
improvement needs for fiscal 2006 and 2007.

         As described above, the Revolving Facility and First Lien Term Loan of
the Resort Credit Facility mature in November 2010. The First Lien Term Loan
requires quarterly principal payments of $212,500 each, and a final payment of
approximately $80.1 million in November 2010. The Second Lien Term Loan matures
in November 2011. The Senior Construction Loan has required principal payments
as described above and matures in June 2006. The Subordinated Construction Loan
matures in November 2007.

         We also have mandatorily redeemable Series C-1 Preferred Stock with an
accreted value of $67.4 million as of January 29, 2006 and mandatorily
redeemable Series C-2 Preferred Stock with an accreted value of $267.3 million
as of January 29, 2006, both of which mature in July 2007 and will be required
to be redeemed to the extent that the Company has legally available funds to
effect such redemption. We do not expect to redeem the Series C-1 Preferred
Stock or the Series C-2 Preferred Stock prior to their final maturity. We can
give no assurance that the necessary liquidity will be available to effect the
redemption on a timely basis.

                                       24
<PAGE>


Contractual Obligations

         There have been no material changes outside the Company's ordinary
course of business during the quarterly period ended January 29, 2006.

Off-Balance Sheet Arrangements

         Other than as set forth under "Contractual Obligations" above and our
interest rate swap agreement described above under "Resort Liquidity", we do not
have any off-balance sheet transactions, arrangements, or obligations (including
contingent obligations) that have, or are reasonably likely to have, a material
current or future effect on our financial position, results of operations,
business prospects, liquidity, capital expenditures, or capital resources.


                              Results of Operations
         For the 14 weeks ended January 30, 2005 compared to the 13 weeks ended
January 29, 2006

Resort Operations:

The components of resort operations for the 14 weeks ended January 30, 2005 and
the 13 weeks ended January 29, 2006 are as follows (unaudited, in thousands):


--------------------------------------------------------------------------------
                                 ---------------------------------  ------------
                                  14 weeks ended    13 weeks ended     Variance
                                 January 30, 2005  January 29, 2006
                                 ----------------  ---------------- ------------

Total resort revenues            $        103,411  $        109,887 $     6,476
                                 ----------------  ---------------- ------------

Cost of resort operations                  67,786            67,766         (20)
Marketing, general and
  administrative                           16,210            17,885       1,675
Depreciation and amortization              13,991            12,822      (1,169)
Write-off of deferred financing
  costs and loss on
  extinguishment of senior
  subordinated notes                        5,983              -         (5,983)
                                 ----------------  -----------------------------
Total resort expenses                     103,970            98,473      (5,497)
                                 ----------------  ---------------- ------------

Income (loss) from resort
  operations                                 (559)           11,414      11,973

Interest expense, net                     (20,867)          (21,365)       (498)
Increase in fair value of
  interest rate swap agreement                -                 350         350
                                 ----------------  ---------------- ------------
Loss from resort operations      $        (21,426) $         (9,601)     11,825
                                 ================  ================ ============

--------------------------------------------------------------------------------

Resort revenues were approximately $109.9 million as compared to $103.4 million,
an increase of $6.5 million, or 6.3%, for the 13 weeks ended January 29, 2006
when compared to the 14 weeks ended January 30, 2005. Estimated total skier
visits increased 2.4% for this period over the comparable period of the previous
year. Estimated skier visits at the Company's eastern resorts were 3% lower than
last year, primarily as a result of significant rain events during key weekends.
However estimated skier visits increased 18% and 9%, respectively, at The
Canyons and Steamboat resorts due , in part, to favorable weather and abundant
natural snowfall. Beginning in fiscal 2006, the Company revised the methodology
used to estimate skier visitation at its eastern resorts. The Company now uses
scanning of certain lift ticket products to estimate skier visitation and
believes this methodology to be a more accurate reflection of skier visitation
levels. While this methodology has changed, the Company believes that any
discrepancies in such methods in comparison with prior years are immaterial to
total skier visitation levels reported.

         Our resort segment incurred a $9.6 million operating loss for the 13
weeks ended January 29, 2006, compared to a $21.4 million operating loss for the
14 weeks ended January 30, 2005. This $11.8 million, or 55% , decrease in the
operating loss resulted primarily from the net effect of the following:

                                       25
<PAGE>


         Increases in revenues and decreases in costs:
              (i)      $6.5 million increase in revenues;
              (ii)     $1.2 million decrease in depreciation expense;
              (iii)    $6.0 million decrease due to the non-recurring write-off
                       of deferred financing costs and loss on extinguishment of
                       senior subordinated notes experienced in 2005;
              (iv)     $0.3 million increase in the fair value of the interest
                       rate swap arrangement;

         Partially offset by increases in costs:
              (v)      $1.7 million increase in marketing, general and
                       administrative expenses; and
              (vi)     $0.5 million increase in net interest expense.

         Cost of resort operations did not increase over the prior year, due to
the fact that the Fiscal 2006 quarter contained one less weekly operating
period. Operating costs for this corresponding period (week ended October 31,
2004) in the previous year were approximately $2.1 million. Resort revenues for
the same period were only $0.4 million.

         Recent Trends: For the four weeks ended February 26, 2006, our revenues
are approximately $0.4 million behind revenues for the same period in Fiscal
2005. Our eastern resorts revenues fell $2.0 million with total skier visitation
down by 9.0% from the same period in the prior year. Our western resorts
revenues increased by $1.7 million with total skier visitation up by 3.3% from
the same period in Fiscal 2005. Our eastern resorts have experienced unfavorable
weather conditions for most of January and February, with the notable exception
of the Presidents' Day holiday week during which total skier visitation at our
eastern resorts was up 2.4% year-over-year. The Company's western resorts
enjoyed 10.6% growth in total skier visits during the same holiday period
relative to the comparable week in the prior year. As of March 5, 2006, our
hotel booking pace for the remainder of the ski season is approximately $2.5
million or 6.8% ahead of the pace of our bookings at the same time last year.
Due to strong sales earlier in the year, our season pass revenue for the
remainder of the season will continue to pace significantly ahead of the
comparable period of Fiscal 2005.


Real Estate Operations:

                  The components of real estate operations for the 14 weeks
ended January 30, 2005 and the 13 weeks ended January 29, 2006 are as follows
(unaudited, in thousands):

--------------------------------------------------------------------------------

                                  --------------------------------  ------------
                                   14 weeks ended   13 weeks ended    Variance
                                  January 30, 2005 January 29, 2006
                                  ---------------- ---------------- ------------

Total real estate revenues        $         2,663  $         2,612  $       (51)
                                  ---------------  ---------------- ------------

Cost of real estate operations              2,155            3,443        1,288
Depreciation and amortization                 409              239         (170)
                                  ---------------  ---------------- ------------
Total real estate expenses                  2,564            3,682        1,018
                                  ---------------  ---------------- ------------

Income (loss) from real estate
  operations                                   99           (1,070)      (1,169)

Interest expense, net                        (817)            (650)         167
                                  ---------------  ---------------- ------------

Loss from real estate operations  $          (718) $        (1,720)      (1,002)
                                  ===============  ================ ============

--------------------------------------------------------------------------------


         Real estate revenues were approximately $2.6 million as compared to
$2.7 million, a decrease of $0.1 million, or 1.9%, for the 13 weeks ended
January 29, 2006 when compared to the 14 weeks ended January 30, 2005.


                                       26
<PAGE>


         Our real estate segment incurred a loss from operations of $1.7 million
for the 13 weeks ended January 29, 2006, compared to a loss from operations of
$0.7 million for the 14 weeks ended January 30, 2005. This $1.0 million increase
in loss from operations results primarily from the net effect of the following:

        Decreases in revenues and increases in costs:
        (i)    $0.1 million decrease in revenues;
        (ii)   $1.3 million increase in cost of operations, due primarily to a
               $0.8 million provision for a probable settlement related to real
               estate development obligations at The Canyons;

        Offset by decreases in costs:
        (iii)  $0.2 million decrease in depreciation and amortization costs; and
        (iv)   $0.2 million decrease in interest costs due to the reduction of
               the outstanding construction loans.

         Recent Trends: On December 8, 2005 the Company announced that it would
be conducting an auction on March 18, 2006 for the remaining unsold developer
inventory at the Grand Summit Hotel at Steamboat. As expected, as a result of
the announcement, sales volumes at our Grand Summit property at Steamboat have
decreased as compared to the same period in the prior year.

Benefit from income taxes:

         We recorded no benefit from income taxes for either the 14 weeks ended
January 30, 2005 or the 13 weeks ended January 29, 2006. We believe it is more
likely than not that we will not realize income tax benefits from operating
losses in the foreseeable future, and therefore, have recorded a full valuation
allowance against our existing deferred income tax assets.


                              Results of Operations
         For the 27 weeks ended January 30, 2005 compared to the 26 weeks ended
January 29, 2006

Resort Operations:

         The components of resort operations for the 27 weeks ended January 30,
2005 and the 26 weeks ended January 29, 2006 are as follows (unaudited, in
thousands):

--------------------------------------------------------------------------------

                                 ---------------------------------  ------------
                                  27 weeks ended   26 weeks ended     Variance
                                 January 30, 2005 January 29, 2006
                                 ---------------- ----------------  ------------

Total resort revenues            $       121,231  $       127,034   $     5,803
                                 ---------------- ----------------  ------------

Cost of resort operations                 91,395          91,729            334
Marketing, general and
  administrative                          27,027          29,453          2,426
Depreciation and amortization             15,863          15,502           (361)
Gain on sale of property                    -               (169)          (169)
Write-off of deferred financing
  costs and loss on extinguishment
  of senior subordinated notes             5,983              -          (5,983)
                                 ---------------- ----------------  ------------
Total resort expenses                    140,268         136,515         (3,753)
                                 ---------------- ----------------  ------------

Loss from resort operations              (19,037)         (9,481)         9,556

Interest expense, net                    (39,511)        (41,952)        (2,441)
Increase in fair value of
  interest rate swap agreement              -              1,036          1,036
                                 ---------------- ----------------  ------------
Loss from resort operations      $       (58,548)        (50,397)   $     8,151
                                 ================ ================  ============

--------------------------------------------------------------------------------

                                       27
<PAGE>


         Resort revenues were approximately $127.0 million as compared to $121.2
million, an increase of $5.8 million, or 4.8%, for the 26 weeks ended January
29, 2006 when compared to the 27 weeks ended January 30, 2005. Estimated total
skier visits for the period increased 2.4% over the comparable period of the
previous year. Estimated skier visits at the Company's eastern resorts were 3%
lower than last year, primarily as a result of significant rain events during
key weekends. However estimated skier visits increased 18% and 9%, respectively,
at The Canyons and Steamboat resorts due , in part, to favorable weather and
abundant natural snowfall. Beginning in fiscal 2006, the Company revised the
methodology used to estimate skier visitation at its eastern resorts. The
Company now uses scanning of certain lift ticket products to estimate skier
visitation and believes this methodology to be a more accurate reflection of
skier visitation levels. While this methodology has changed, the Company
believes that any discrepancies in such methods in comparison with prior years
are immaterial to total skier visitation levels reported.

         Our resort segment incurred a $50.4 million operating loss for the 26
weeks ended January 29, 2006, compared to a $58.5 million operating loss for the
27 weeks ended January 30, 2005. This $8.1 million, or 13.9%, decrease in the
operating loss resulted primarily from the net effect of the following:

         Increases in revenues and decreases in costs:
              (i)      $5.8 million increase in revenues;
              (ii)     $0.3  million decrease in depreciation expense;
              (iii)    $0.1 million increase in net gain on sale of property;
              (iv)     $6.0 million decrease due to the nonrecurring write-off
                       of deferred financing costs and loss on extinguishment of
                       senior subordinated notes experienced in 2005;
              (v)      $1.0 million increase in fair value of the interest rate
                       swap arrangement;

         Partially offset by increases in costs:
              (vi)     $0.3 million increase in cost of resort operations;
              (vii)    $2.4 million increase in marketing, general and
                       administrative expense, and;
              (viii)   $2.4 million increase in net interest expense.

         Cost of resort operations increased only $0.3 million over the prior
year, due to the fact that the Fiscal 2006 period contained one less weekly
operating period. Operating costs for this corresponding period (week ended
August 1, 2004) in the previous year were approximately $1.7 million. Revenues
for the same period were approximately $1.6 million.


Real Estate Operations:

         The components of real estate operations for the 27 weeks ended January
30, 2005 and the 26 weeks ended January 29, 2006 are as follows (unaudited, in
thousands):

--------------------------------------------------------------------------------

                                  ---------------------------------- -----------
                                   27 weeks ended   26 weeks ended     Variance
                                  January 30, 2005 January 29, 2006
                                  ---------------- ----------------  -----------

Total real estate revenues        $         4,389  $         5,581   $    1,192
                                  ---------------- ----------------  -----------

Cost of real estate operations              3,263            5,385        2,122
Depreciation and amortization                 816              469         (347)
Impairment loss on sale of
  property                                    -              1,533        1,533
                                  ---------------- ----------------  -----------
Total real estate expenses                  4,079            7,387        3,308
                                  ---------------- ----------------  -----------

Income (loss) from real estate
  operations                                  310           (1,806)      (2,116)

Interest expense, net                      (1,626)          (1,317)         309
                                  ---------------- ----------------  -----------
Loss from real estate operations  $        (1,316) $        (3,123)  $   (1,807)
                                  ================ ================  ===========

--------------------------------------------------------------------------------

                                       28
<PAGE>

         Real estate revenues were approximately $5.6 million as compared to
$4.4 million, an increase of $1.2 million, or 27.2%, for the 26 weeks ended
January 29, 2006 when compared to the 27 weeks ended January 30, 2005.

         Our real estate segment incurred a loss from operations of $3.1 million
for the 26 weeks ended January 29, 2006, compared to a loss from operations of
$1.3 million for the 27 weeks ended January 30, 2005. This $1.8 million increase
in loss from operations results primarily from the net effect of the following:

         Increases in costs and loss on sale of property:
         (i)   $2.1 million increase in cost of operations, due in part to a
               $0.8 million provision for a probable settlement related to real
               estate development obligations at The Canyons;
         (ii)  $1.5 million impairment loss on the sale of retail commercial
               property at the Steamboat Grand Hotel;

         Offset partially by increases in revenues and decreases in costs:
         (iii) $1.2 million increase in revenues;
         (iv)  $0.3 million decrease in depreciation and amortization costs; and
         (v)   $0.3 million decrease in interest costs due to the reduction of
               the outstanding construction loans.


Benefit from income taxes:

         We recorded no benefit from income taxes for either the 27 weeks ended
January 30, 2005 or the 26 weeks ended January 29, 2006. We believe it is more
likely than not that we will not realize income tax benefits from operating
losses in the foreseeable future, and therefore, have recorded a full valuation
allowance against our existing deferred income tax assets.



                                     Item 3
           Quantitative and Qualitative Disclosures about Market Risk

         There have been no material changes in information relating to market
risk since our disclosures included in Item 7A of Form 10-K for the fiscal year
ended July 31, 2005, as filed with the Securities and Exchange Commission on
October 31, 2005.


                                     Item 4
                             Controls and Procedures

(a)      Evaluation of disclosure controls and procedures. Our Chief Executive
         Officer and our Chief Financial Officer carried out an evaluation of
         the effectiveness of our "disclosure controls and procedures" (as
         defined in the Securities Exchange Act of 1934 Rules 13a-15(e) and
         15d-15(e)). Based on that evaluation, these officers have concluded
         that as of the end of the period covered by this report, our disclosure
         controls and procedures were effective

(b)      Changes in internal control over financial reporting. No change
         occurred in the Company's internal control over financial reporting (as
         defined in the Securities Exchange Act of 1934 Rules 13a-15(f) and
         15d-15(f)) during the quarterly period ended January 29, 2006 that has
         materially affected, or is reasonably likely to materially affect, the
         Company's internal control over financial reporting.

         It should be noted that any system of controls, however well designed
and operated, can provide only reasonable, and not absolute, assurance that the
objectives of the system will be met. In addition, the design of any control
system is based in part upon certain assumptions about the likelihood of future
events. Because of these and other inherent limitations of control systems,
there is only reasonable assurance that our controls will succeed in achieving
their stated goals under all potential future conditions.


                                       29
<PAGE>



                           Part II - Other Information

                                     Item 4

               Submission of Matters to a Vote of Security Holders

         On January 17, 2006, the Company held its Annual Meeting of its
shareholders to approve:

            o        The election of the Company's Board of Directors; and
            o        The ratification of KPMG LLP as the Company's independent
                     auditors for the 2006 fiscal year.

         The Company did solicit proxies with respect to the Annual Meeting, and
the Board of Directors listed in the Company's proxy statement with respect to
the Annual Meeting was re-elected in its entirety.

         The results of the Annual Meeting were as follows:

                                 Board Election:

                      Voting For  Voting Against or  Abstaining Broker Non-Votes
                                       Withheld
William J. Fair     13,484,589(1)      374,170           0            0
David Hawkes        13,513,743(1)      345,106           0            0
Paul Wachter        13,468,489(1)      390,270           0            0
Leslie B. Otten     14,760,530(2)         0              0            0
Gordon Gillies      14,760,530(2)         0              0            0
William Janes       14,760,530(2)         0              0            0
Robert Branson      14,760,530(2)         0              0            0
Edward Dardani         150,000(3)         0              0            0
Steven Gruber          150,000(3)         0              0            0
Jay Crandall           150,000(3)         0              0            0

(1) Messrs. Fair, Hawkes and Wachter were elected by the holders of the
    Company's common stock.
(2) Messrs. Otten, Gillies, Janes and Branson were elected by the holders of the
    Company's Class A common stock.
(3) Messrs. Dardani, Gruber and Crandall were elected by the holders of the
    Company's Series B preferred stock.


                            Ratification of KPMG LLP:

                        Voting For  Voting Against  Abstaining  Broker Non-Votes
Common Stock            13,524,606      296,664       37,499           0
Class A Common Stock    14,760,530         0            0              0
Series C-1 Preferred
                        52,397,200(1)      0            0              0
                        --------------------------------------------------------
Total All Classes       80,682,336(1)   296,654       37,499           0


(1) The Series C-1 preferred stock votes together with common stock on an
"as-if-converted" basis. The 40,000 shares of Series C-1 preferred stock, which
were voted at the meeting, together with accrued and unpaid dividends, had a
voting right equal to 52,397,200 shares of common stock as of the date of the
Annual Meeting. The results set forth in the "Total All Classes" row is
calculated using this as-if-converted number.

                                       30
<PAGE>



                                     Item 6
                                    Exhibits

         Included herewith are the following exhibits:

Exhibit No.       Description

10.1              Waiver Agreement dated as of February 14, 2006 to Loan and
                  Security Agreement dated as of September 1, 1998, among Grand
                  Summit Resort Properties, Inc., the lenders named therein, and
                  Textron Financial Corporation as administrative agent.

31.1              Certification of Chief Executive Officer pursuant to Section
                  302 of the Sarbanes-Oxley Act of 2002.

31.2              Certification of Chief Financial Officer pursuant to Section
                  302 of the Sarbanes-Oxley Act of 2002.

32.1              Certification  of Chief Executive  Officer  pursuant to 18
                  U.S.C.  Section 1350 as adopted pursuant to Section 906 of
                  the Sarbanes-Oxley Act of 2002.

32.2              Certification  of Chief Financial  Officer  pursuant to
                  18 U.S.C.  Section 1350 as adopted pursuant to Section 906 of
                  the Sarbanes-Oxley Act of 2002.






                                       31
<PAGE>





                                   SIGNATURES

         Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.

                                   American Skiing Company
Date:  March 15, 2006

                                   By: /s/ William J. Fair
                                   --------------------------------
                                   William J. Fair
                                   President and Chief Executive Officer
                                   (Principal Executive Officer)



                                   By:  /s/ Helen E. Wallace
                                   --------------------------------
                                   Helen E. Wallace
                                   Senior Vice President, Chief
                                   Financial Officer
                                   (Principal Financial Officer)
































                                       32