UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

                                    FORM 10-Q

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
           ACT OF 1934 for the quarterly period ended January 25, 2004
                                       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 checkmark  whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days. Yes [X] No [ ]

Indicate  by check mark  whether  the  registrant  is an  accelerated  filer (as
defined by Rule 12b-2 of the Exchange Act). Yes [ ] No [X]

The number of shares outstanding of each of the issuer's classes of common stock
were 14,760,530  shares of Class A common stock,  $.01 par value, and 16,977,653
shares of common  stock,  $.01 par value,  as of  February  22,  2004.


                                       1
<PAGE>

                               Table of Contents

Part I - Financial Information

Item 1.  Financial Statements

         Condensed Consolidated Statements of Operations for the 13 weeks
              ended January 26, 2003 and January 25, 2004 (unaudited)..........3

         Condensed Consolidated Statements of Operations for the 26 weeks
              ended January 26, 2003 and January 25, 2004 (unaudited)..........4

         Condensed Consolidated Balance Sheets as of July 27, 2003
              and January 25, 2004 (unaudited).................................5

         Condensed Consolidated Statements of Cash Flows for the 26 weeks
              ended January 26, 2003 and January 25, 2004 (unaudited)..........8

         Notes to Condensed Consolidated Financial Statements (unaudited)......9

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

         Executive Summary....................................................18

         General..............................................................19

         Real Estate Credit Agreement Defaults................................19

         Liquidity and Capital Resources......................................19

         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 1.  Legal Proceedings....................................................29

Item 2.  Changes in Securities, Use of Proceeds, and
              Issuer Purchases of Equity Securities...........................30

Item 3.  Defaults Upon Senior Securities......................................30

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

Item 5.  Other Information....................................................31

Item 6.  Exhibits and Reports on Form 8-K.....................................32


                                       2
<PAGE>

Part I - Financial Information
                           Item 1 Financial Statements

                 Condensed Consolidated Statements of Operations
               (In thousands, except share and per share amounts)
                                          13 weeks ended         13 weeks ended
                                         January 26, 2003       January 25, 2004
                                           (unaudited)             (unaudited)
    Net revenues:
         Resort                         $          98,961       $        92,904
         Real estate                                1,325                10,056
                                        -----------------       ----------------
            Total net revenues                    100,286               102,960
                                        -----------------       ----------------

    Operating expenses:
         Resort                                    65,794                62,410
         Real estate                                1,898                 8,538
         Marketing, general and
              administrative                       16,552                20,490
         Depreciation and amortization             11,449                10,631
                                        -----------------       ----------------
            Total operating expenses               95,693               102,069
                                        -----------------       ----------------

    Income from operations                          4,593                   891
    Interest expense, net                          12,042                22,580
                                        -----------------       ----------------

    Net loss                                       (7,449)              (21,689)

    Accretion of discount and dividends
         on mandatorily redeemable
         preferred stock                           (9,243)                    -

                                        -----------------       ----------------
    Net loss available to common
         shareholders                   $         (16,692)      $       (21,689)
                                        =================       ================

    Accumulated deficit, beginning of
         period                         $        (472,150)      $      (556,321)

    Net loss available to common
         shareholders                             (16,692)              (21,689)
                                        -----------------       ----------------

    Accumulated deficit, end of period  $        (488,842)      $      (578,010)
                                        =================       ================

    Basic and diluted net loss per
         common share:
    Net loss available to common
         shareholders                   $          (0.53)       $        (0.68)
                                        =================       ================

    Weighted average common shares
         outstanding - basic and diluted       31,724,141            31,738,183



     See accompanying notes to Condensed Consolidated Financial Statements.


                                       3
<PAGE>


                 Condensed Consolidated Statements of Operations
               (In thousands, except share and per share amounts)
                                          26 weeks ended         26 weeks ended
                                         January 26, 2003       January 25, 2004
                                            (unaudited)            (unaudited)
    Net revenues:
         Resort                         $         115,872       $       109,032
         Real estate                                5,039                12,401
                                        -----------------       ----------------
           Total net revenues                     120,911               121,433
                                        -----------------       ----------------

    Operating expenses:
         Resort                                    88,294                84,935
         Real estate                                5,474                10,196
         Marketing, general and
           administrative                          26,585                30,770
         Restructuring charges                          -                   137
         Depreciation and amortization             13,865                12,934
                                        -----------------       ----------------
           Total operating expenses               134,218               138,972
                                        -----------------       ----------------

    Loss from operations                          (13,307)              (17,539)
    Interest expense, net                          24,316                45,408
                                        -----------------       ----------------

    Net loss                                      (37,623)              (62,947)

    Accretion of discount and dividends
         on mandatorily redeemable
         preferred stock                          (18,174)                    -

                                        -----------------       ----------------
    Net loss available to common
         shareholders                   $         (55,797)      $       (62,947)
                                        =================       ================

    Accumulated deficit, beginning of
         period                         $        (433,045)      $      (515,063)

    Net loss available to common
         shareholders                             (55,797)              (62,947)
                                        -----------------       ----------------

    Accumulated deficit, end of period  $        (488,842)      $      (578,010)
                                        =================       ================

    Basic and diluted net loss per
         common share:
    Net loss available to common
         shareholders                   $          (1.76)       $        (1.98)
                                        =================       ================

    Weighted average common shares
         outstanding - basic and diluted       31,724,141            31,738,183






     See accompanying notes to Condensed Consolidated Financial Statements.

                                       4
<PAGE>


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

                                         July 27, 2003         January 25, 2004
                                          (unaudited)             (unaudited)
    Assets
    Current assets
        Cash and cash equivalents       $           6,596       $        14,636
        Restricted cash                             3,829                 4,496
        Accounts receivable, net                    5,862                 9,974
        Inventory                                   3,653                 7,240
        Prepaid expenses                            3,326                 6,840
        Deferred income taxes                       7,300                 7,300
        Other current assets                          978                   928
                                        -----------------       ----------------
          Total current assets                     31,544                51,414

    Property and equipment, net                   372,926               366,757
    Real estate developed for sale                 48,234                40,478
    Intangible assets, net                          7,058                 6,893
    Deferred financing costs, net                   6,705                 5,344
    Other assets                                    8,838                 8,559
                                        -----------------       ----------------
          Total assets                  $         475,305       $       479,445
                                        =================       ================


                            (continued on next page)



                                       5
<PAGE>


     See accompanying notes to Condensed Consolidated Financial Statements.

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


                                         July 27, 2003         January 25, 2004
                                          (unaudited)             (unaudited)
    Liabilities, Mandatorily Redeemable
         Preferred Stock, and
         Shareholders' Deficit
    Current liabilities
         Current portion of long-term
            debt                        $         138,610       $        97,114
         Current portion of subordinated
            notes and debentures                    1,466                 1,466
     Accounts payable and other current
            liabilities                            53,058                83,500
     Deposits and deferred revenue                  9,723                42,571
     Mandatorily Redeemable Convertible
            10 1/2% Series A Preferred
            Stock, par value of $0.01 per
            share; 40,000 shares authorized;
            36,626 shares issued and
            outstanding, including cumulative
            dividends (redemption value of
            $70,212)                                    -                70,212
                                        -----------------       ----------------
              Total current liabilities           202,857               294,863

     Long-term debt, excluding current
         portion                                   60,178                83,557
     Subordinated notes and debentures,
         excluding current portion                140,095               141,157
     Other long-term liabilities                    3,471                 3,503
     Deferred income taxes                          7,300                 7,300
     Mandatorily Redeemable 8 1/2%
         Series B Preferred Stock;
         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 $53,148)                  -                52,605
     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 $198,687)                 -               196,702
     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                   413,901               779,687
                                        -----------------       ----------------

                                       6
<PAGE>


     Mandatorily Redeemable Convertible
         10 1/2% Series A Preferred
         Stock, par value of $0.01 per
         share; 40,000 shares authorized;
         36,626 shares issued and
         outstanding, including
         cumulative dividends
         (redemption value of $66,663)             66,663                     -
     Mandatorily Redeemable 8 1/2% Series
         B Preferred Stock; 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 $50,105)                         49,520                     -
     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
         $184,621)                                182,516                     -
     Mandatorily Redeemable Nonvoting
         Series D Participating Preferred
         Stock, par value of $0.01 per
         share; 5,000 shares authorized;
         no shares issued or outstanding                -                     -

     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                277,450               277,450
        Accumulated deficit                      (515,063)             (578,010)
                                        -----------------       ----------------
            Total shareholders' deficit          (237,295)             (300,242)
                                        -----------------       ----------------
            Total liabilities,
               mandatorily redeemable
               preferred stock, and
               shareholders' deficit    $         475,305       $       479,445
                                        =================       ================


     See accompanying notes to Condensed Consolidated Financial Statements.


                                       7
<PAGE>

                 Condensed Consolidated Statements of Cash Flows
                                 (In thousands)


                                          26 weeks ended        26 weeks ended
                                         January 26, 2003     January, 25, 2004
                                           (unaudited)           (unaudited)
     Cash flows from operating
          activities
     Net loss                           $         (37,623)      $       (62,947)
     Adjustments to reconcile net loss
            to net cash provided by
            operating activities:
          Depreciation and amortization            15,549                12,934
          Amortization of deferred
            financing costs,
            amortization of original
            issue discount, and accretion
            of discount and dividends on
            mandatorily redeemable preferred
            stock                                     189                22,918
          Non-cash interest on junior
            subordinated notes                        764                   848
          Gain from sale of assets                   (486)                 (302)
          Decrease (increase) in assets:
            Restricted cash                           246                  (667)
            Accounts receivable, net                 (177)               (4,112)
            Inventory                              (3,305)               (3,587)
            Prepaid expenses                       (2,304)               (3,514)
            Real estate developed for sale          2,661                 7,756
            Other assets                           (5,418)                  206
          Increase in liabilities:
            Accounts payable and other
               current liabilities                 20,116                30,440
            Deposits and deferred revenue          30,388                32,848
            Other long-term liabilities             2,234                    32
                                        -----------------       ----------------
               Net cash provided by
                 operating activities              22,834                32,853
                                        -----------------       ----------------

     Cash flows from investing
         activities
            Capital expenditures                   (5,833)               (6,623)
            Proceeds from sale of
              assets                                  705                   451
                                        -----------------       ----------------
               Net cash used in
                 investing activities              (5,128)               (6,172)
                                        -----------------       ----------------

     Cash flows from financing
         activities
            Proceeds from resort senior
              credit facilities                    53,434                31,301
            Repayment of resort senior
              credit facilities                   (65,449)              (45,443)
            Repayment of long-term debt              (944)               (1,172)
            Proceeds from real estate
              debt                                  6,353                 3,667
            Repayment of real estate
              debt                                 (3,088)               (6,994)
            Payment of deferred financing
              costs                                  (490)                    -
                                        -----------------       ----------------
               Net cash used in
                 financing activities             (10,184)              (18,641)
                                        -----------------       ----------------

     Net increase in cash and cash
          equivalents                               7,522                 8,040
     Cash and cash equivalents,
          beginning of period                       6,924                 6,596
                                        -----------------       ----------------
     Cash and cash equivalents, end
          of period                     $          14,446       $        14,636
                                        =================       ================

     Supplemental disclosure of cash
          flow information:
            Accretion of discount and
              dividends on mandatorily
              redeemable preferred
              stock                     $          18,174       $             -
     Cash paid for interest                        22,036                22,820

     See accompanying notes to Condensed Consolidated Financial Statements.

                                       8
<PAGE>
        Notes to Condensed Consolidated Financial Statements (Unaudited)

1.  General

     American  Skiing  Company  (ASC) is  organized  as a  holding  company  and
operates through various subsidiaries  (collectively,  the Company). The Company
operates  in  two  business   segments,   resort   operations  and  real  estate
development.  The  Company  performs  its real  estate  development  principally
through its wholly owned subsidiary,  American Skiing Company Resort Properties,
Inc. (Resort Properties),  and Resort Properties' subsidiaries,  including Grand
Summit Resort  Properties,  Inc. (Grand Summit).  The Company's fiscal year is a
fifty-two  week or  fifty-three  week period  ending on the last Sunday of July.
Fiscal 2004 and Fiscal 2003 are  fifty-two  week  reporting  periods,  with each
quarter   consisting  of  13  weeks.   The  accompanying   unaudited   condensed
consolidated   financial  statements  have  been  prepared  in  accordance  with
accounting  principles  generally  accepted in the United  States of America 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 accounting principles generally accepted in the United
States  of  America  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 losses related to
resort  operations  during its first and fourth fiscal  quarters.  The unaudited
condensed  consolidated  financial statements should be read in conjunction with
the following notes and the Company's consolidated financial statements included
in its Form 10-K for the fiscal  year ended July 27,  2003  (Fiscal  2003) filed
with  the  Securities   and  Exchange   Commission  on  October  27,  2003.  The
accompanying condensed consolidated financial statements reflect adjustments and
reclassifications   made  to  the  unaudited  quarterly  financial   information
presented in Note 20 of the Company's Fiscal 2003 Form 10-K.

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:  allowance for doubtful  accounts,  long-lived
asset valuation,  realizability  and useful lives, and realizability of deferred
income tax assets.  Actual results could differ materially from these estimates.
The following are the Company's significant accounting policies:

Property and Equipment
     Property and equipment are carried at cost, net of accumulated depreciation
and  impairment  charges.  Depreciation  is 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
leasehold  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.  Due to the seasonality of
the Company's business, the Company records a full year of depreciation relating
to its resort  operating  assets  during the  second and third  quarters  of the
Company's fiscal year.

Goodwill and Other Intangible Assets
     As prescribed  in Statement of Financial  Accounting  Standards  (SFAS) No.
142,   "Goodwill  and  Other   Intangible   Assets"  (SFAS  No.  142),   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 16 to 20 years,  and
assessed for impairment utilizing guidance provided by SFAS No. 144, "Accounting
for the Impairment or Disposal of Long-Lived Assets" (SFAS No. 144).


                                       9
<PAGE>

     As of July 27, 2003 and January 25, 2004, other intangible assets consist
     of the following (in thousands):

       ------------------------------------------------------------------
                                     July 27, 2003       January 25, 2004
       ------------------------------------------------------------------
       Definite-lived Intangible
         Assets:
           Lease agreements       $         1,853     $            1,853
           Less accumulated
             amortization                    (288)                  (318)
                                  ----------------    -------------------
                                            1,565                  1,535

       Indefinite-lived
         Intangible Assets:
           Trade names                        170                    170
           Water rights                     5,323                  5,188
                                  ----------------    -------------------
       Intangible Assets, net     $         7,058                  6,893
                                  ================    ===================

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

     Amortization expense related to intangible assets was approximately $14,000
for both the 13 weeks ended January 26, 2003 and the 13 weeks ended January 25,
2004 and approximately $29,000 for both the 26 weeks ended January 26, 2003 and
the 26 weeks ended January 25, 2004. 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,  long-lived  assets,  such as property and
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.

Revenue Recognition
     Resort  revenues  include sales of lift tickets,  tuition from ski schools,
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, adequate 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.

Seasonality
     The Company's  revenues are highly seasonal in nature. For Fiscal 2003, the
Company realized  approximately  87% of resort segment revenues and over 100% of
resort segment  operating  income during the period from November through April.
In addition,  a significant  portion of resort segment revenue and approximately
21% of annual skier visits were generated  during the Christmas and  Presidents'
Day vacation weeks in Fiscal 2003. The Company's  resorts  typically  experience
operating  losses  and  negative  cash  flows for the  period  from May  through
November.

     A high degree of seasonality in the Company's revenues increases the impact
of certain events on its 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.

Stock Option Plan
     Effective  August 1, 1997,  the Company  established  a fixed stock  option
plan, the American  Skiing Company Stock Option Plan (the Plan),  to provide 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

                                       10
<PAGE>

only) as designated by the Compensation  Committee.  The Compensation Committee,
which is  appointed by the Board of  Directors,  is  responsible  for the Plan's
administration.  The Compensation  Committee determines the term of each option,
option exercise price, number of shares for which each option is granted and the
rate at which  each  option  is  exercisable.  Options  granted  under  the Plan
generally expire ten years from the date of grant and vest either immediately or
over a five-year  term.  Incentive  stock options may not have an exercise price
less  than  the fair  market  value of the  common  stock at the date of  grant.
Nonqualified  stock options may be granted at an exercise price as determined by
the  Compensation  Committee.  At January 25, 2004, the Company has  outstanding
options to purchase  3,821,187  shares at a weighted  average  exercise price of
$4.25 under the Plan, which has not changed since July 27, 2003.

     During Fiscal 1998, the Company granted nonqualified options under the Plan
to certain key members of management to purchase  672,010 shares of common stock
with an  exercise  price of $2.00 per share  when the fair  market  value of the
stock was  estimated  to be $18.00  per share.  The  majority  of these  options
(511,530  shares)  were  granted to members of senior  management  and were 100%
vested  on  the  date  of  grant.  Accordingly,  the  Company  recognized  stock
compensation expense of $8.1 million in Fiscal 1998 relating to the grants based
on the intrinsic value of $16.00 per share.  Under these senior management grant
agreements,  the Company also agreed to pay the optionees a fixed tax "bonus" in
the aggregate of $5.8 million to provide for certain fixed tax liabilities  that
the optionees will incur upon  exercise.  The liability for this fixed tax bonus
has been  reduced to reflect  $5.3  million in tax bonus  payments  made through
January 25, 2004 in  connection  with  options  exercised.  The  remaining  $0.5
million tax bonus  liability is reflected in accounts  payable and other current
liabilities  in the  accompanying  consolidated  balance sheet as of January 25,
2004.  The  remainder of these  original  $2.00  options  (160,480  shares) were
granted under the Plan to certain  members of management  and were vested 20% on
the date of grant and vest ratably to 100% over the  following  four years.  For
the 13 weeks ended  January 26, 2003 and January 25, 2004 and the 26 weeks ended
January  26,  2003  and  January  25,  2004,  the  Company  recognized  no stock
compensation expense relating to these options.

    The following table summarizes information about the stock options
    outstanding under the Plan as of January 25, 2004:

<TABLE>
<CAPTION>

    ---------------------------------------------------------------------------------------------
                                     Weighted
                                     Average
       Range of                     Remaining        Weighted                       Weighted
       Exercise                    Contractual        Average                        Average
        Prices      Outstanding  Life (in years)   Exercise Price   Exercisable   Exercise Price
    ---------------------------------------------------------------------------------------------
<S> <C>               <C>              <C>         <C>      <C>       <C>         <C>
        $0.72            25,000        7.4         $         0.72        25,000   $          0.72
     1.75 - 2.50      1,420,337        6.1                   2.11     1,371,003              2.11
     3.00 - 4.00      1,449,250        6.1                   3.17     1,321,750              3.19
     7.00 - 8.75        735,750        4.7                   7.19       733,050              7.19
    14.19 - 18.00       190,850        3.7                  17.55       190,850             17.55
                    -----------                                     -----------
                      3,821,187        5.7         $         4.25     3,641,653   $          4.33
                    ===========                                     ===========


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

     The Company  continues to account for  stock-based  compensation  using the
method prescribed in Accounting Principles Board Opinion No. 25, "Accounting for
Stock  Issued to  Employees",  under  which no  compensation  expense  for stock
options is recognized  for stock option awards  granted to employees at or above
fair market value.  In December 2002, the FASB issued SFAS No. 148,  "Accounting
for  Stock-Based  Compensation  -Transition and Disclosure - an amendment of FAS
123" (SFAS No.  148).  This  statement  amends  SFAS No.  123,  "Accounting  for
Stock-Based  Compensation"  (SFAS No. 123),  to provide  alternative  methods of
transition  for a voluntary  change to the fair value based method of accounting
for stock-based employee compensation, and amends the disclosure requirements to
SFAS No.  123 to  require  prominent  disclosures  in both  annual  and  interim
financial  statements  about the method of accounting for  stock-based  employee
compensation and the effect of the method used on reported results.  The Company
has  adopted  the  disclosure-only   provisions  of  SFAS  No.  148.  Had  stock
compensation  expense been determined based on the fair value at the grant dates
for awards granted under the Company's  Plan,  consistent with the provisions of
SFAS No. 148, the  Company's net loss and loss per share would have been changed
to the pro forma amounts indicated below (dollar amounts in thousands):


                                       11
<PAGE>
<TABLE>
<CAPTION>
     -------------------------------------------------------------------------------------------------------
                              13 weeks ended       13 weeks ended       26 weeks ended        26 weeks ended
                                January26,           January 25,          January 26,           January 25,
                                   2003                 2004                 2003                  2004
     -------------------------------------------------------------------------------------------------------
     <S>                       <C>                  <C>                  <C>                  <C>
     Net loss available to
      common shareholders
       As reported             $    (16,692)        $    (21,689)        $    (55,797)        $     (62,947)
       Stock-based employee
        compensation determined
        under fair-value method
        for all awards, net of
        tax                            (158)                 (55)                (202)                 (174)
                               -------------        -------------        -------------        --------------
       Pro forma               $    (16,850)        $    (21,744)        $    (55,999)        $     (63,121)
                               =============        =============        =============        ==============
     Basic and diluted net
      loss per common share
       As reported             $      (0.53)        $      (0.68)        $      (1.76)        $       (1.98)
       Pro forma                      (0.53)               (0.69)               (1.77)                (1.99)

</TABLE>

     The fair value of each option grant is estimated on the date of grant using
the Black-Scholes  option-pricing  model. There were no option grants during the
13 and 26 weeks ended  January 26, 2003 or the 13 and 26 weeks ended January 25,
2004.

Recently Issued Accounting Standards
     In May 2003, the FASB issued  Statement of Financial  Accounting  Standards
No. 150,  "Accounting for Certain Financial  Instruments with Characteristics of
Both Liabilities and Equity" (SFAS No. 150). SFAS No. 150 establishes  standards
for how financial  instruments  with  characteristics  of both  liabilities  and
equity should be measured and classified and requires that an issuer  classify a
financial  instrument  that is within its scope as a liability.  SFAS No. 150 is
implemented  prospectively and restatement is not permitted. The Company adopted
SFAS No. 150  effective  July 28,  2003.  As a result of adopting  SFAS No. 150,
approximately $298.7 million of mezzanine-level  securities were reclassified to
liabilities  in the  consolidated  balance  sheet in the first quarter of Fiscal
2004.  This  represents  the  carrying  value  of  all  classes  of  mandatorily
redeemable  preferred  stock.  In  addition,   approximately  $43.1  million  of
accretion of discount and dividends on the  preferred  stock in Fiscal 2004 will
be included in interest expense, whereas previously it was reported as accretion
of discount and dividends on mandatorily  redeemable preferred stock. For the 13
and  26  weeks  ended  January  25,  2004,  $10.6  million  and  $20.8  million,
respectively,  of accretion of discount and dividends on the preferred stock was
included in interest  expense.  For the 13 and 26 weeks ended  January 26, 2003,
approximately  $9.2  million and $18.2  million of  accretion  of  discount  and
dividends  on the  preferred  stock was  included in  accretion  of discount and
dividends on mandatorily redeemable preferred stock.

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

3.  Net Income (Loss) per Common Share

     Net income  (loss) per common  share for the 13 and 26 weeks ended  January
26,  2003 and  January  25,  2004,  respectively,  was  determined  based on the
following data (in thousands):

<TABLE>
<CAPTION>
     -------------------------------------------------------------------------------------------------------------------------
                                                       13 weeks ended     13 weeks ended     26 weeks ended     26 weeks ended
                                                      January 26, 2003   January 25, 2004   January 26, 2003   January 25, 2004
     -------------------------------------------------------------------------------------------------------------------------
     <S>                                              <C>                <C>                <C>                <C>
                       Loss
     Income (loss) from operations before accretion
       of discount and dividends on mandatorily
       redeemable preferred stock                     $        (7,449)   $       (21,689)   $       (37,623)   $       (62,947)
     Accretion of discount and dividends on
       mandatorily redeemable preferred stock                  (9,243)                 -            (18,174)                 -
                                                      ----------------   ----------------   ----------------   ----------------
     Income (loss) from operations                    $       (16,692)   $       (21,689)   $       (55,797)   $       (62,947)
                                                      ================   ================   ================   ================

                          Shares
     Weighted average common shares outstanding -
       basic and diluted                                       31,724             31,738             31,724             31,738
                                                      ================   ================   ================   ================

</TABLE>

                                       12
<PAGE>

     As of January 26, 2003 and January  25,  2004,  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 26, 2003 and January 25, 2004, the Company had 36,626
shares of its mandatorily redeemable convertible 10 1/2% preferred stock (Series
A Preferred Stock) and 40,000 shares of its mandatorily  redeemable  convertible
participating 12% preferred stock (Series C-1 Preferred Stock) outstanding, both
of which are convertible into shares of the Company's common stock. If converted
at their  liquidation  preferences  as of January 26, 2003 and January 25, 2004,
these convertible  preferred shares would convert into approximately  41,489,000
and  46,624,000  shares of common stock,  respectively.  For the 13 and 26 weeks
ended January 26, 2003 and January 25, 2004,  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 3,891,179 and 3,821,187 options  outstanding to purchase shares
of its common  stock under the Plan as of January 26, 2003 and January 25, 2004,
respectively.   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,  resorts and real estate. 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):

<TABLE>
<CAPTION>
                                               13 weeks ended     13 weeks ended     26 weeks ended      26 weeks ended
                                              January 26, 2003   January 25, 2004   January 26, 2003    January 25, 2004
     -------------------------------------------------------------------------------------------------------------------
       <S>                                    <C>                <C>                <C>                 <C>
       Revenues:
            Resort                            $         98,961   $         92,904   $        115,872    $       109,032
            Real estate                                  1,325             10,056              5,039             12,401
                                              ----------------   ----------------   ----------------    ----------------
       Total                                  $        100,286   $        102,960   $        120,911    $       121,433
                                              ================   ================   ================    ================

       Income (loss) from operations:
            Resort                            $         (1,282)  $        (17,701)  $        (26,140)   $       (53,573)
            Real estate                                 (6,167)            (3,988)           (11,483)            (9,374)
                                              -----------------  ----------------   ----------------    ----------------
       Total                                  $         (7,449)  $        (21,689)  $        (37,623)   $       (62,947)
                                              =================  ================   ================    ================

</TABLE>

5.  Long-Term Debt

Resort Properties

     On March 30, 2002, Resort  Properties failed to make a mandatory  principal
payment of $3.75 million  under its real estate term facility  (Real Estate Term
Facility).  Resort  Properties  obtained a temporary  waiver of this  default on
April 2, 2002.  Effective  May 20, 2002,  the  temporary  waiver was revoked and
Resort Properties was in default on the facility.

     The Real Estate Term  Facility is  comprised of three  tranches,  each with
separate interest rates and maturity dates as follows:

     o    Tranche A is a revolving  facility  with a current  maximum  principal
          amount of $17.0 million and bears interest at a default  interest rate
          equal to the Fleet  National  Bank  Base  Rate plus 6.0%  (10.0% as of
          January 25, 2004).

     o    Tranche B is a term loan facility with a maximum  principal  amount of
          $25.0 million and bears  interest at a default  interest rate equal to
          29% per annum.


                                       13
<PAGE>

     o    Tranche C is a term loan facility with a maximum  principal  amount of
          $12.0 million and bears  interest at a default  interest rate equal to
          29% per annum.  Interest accrued is added to the principal  balance of
          Tranche C and is compounded semi-annually.

     On May  31,  2002,  the  lenders  accelerated  the due  date of the  entire
remaining  principal and accrued  interest  under the facility.  On November 22,
2002,  Resort Properties  entered into a forbearance  agreement with the lenders
whereby the lenders agreed to not pursue additional  foreclosure remedies and to
cease  publication  of foreclosure  notices for a 30-day  period.  Although this
30-day period expired, management continues discussions with Fleet National Bank
(Fleet) and the other lenders  regarding a restructuring  of this facility,  and
Fleet and the other lenders have not exercised any further foreclosure  remedies
since  the  expiration  of  the  forbearance  agreement.   Management's  ongoing
restructuring  efforts with the lenders are aimed towards a restructuring of the
Real Estate Term Facility,  with the  establishment  of a new entity to hold the
assets of Resort  Properties  which are  pledged  as  collateral  under the Real
Estate Term Facility and certain  other assets.  The equity in the new entity is
expected to be held by a  combination  of the  lenders  under the  facility  and
Resort  Properties.  The Real Estate Term  Facility  remains in default  pending
completion of these negotiations.  As of January 25, 2004, the principal balance
outstanding,  including accrued and unpaid interest,  under the Real Estate Term
Facility was $78.2  million,  which is  presented as a current  liability in the
accompanying condensed consolidated balance sheet.

     There  is  no  assurance  that   negotiations  with  the  lenders  will  be
successfully completed. Furthermore,  regardless of the outcome of this proposed
restructuring,  the Company  may lose  control of assets  pledged as  collateral
under the facility and future  access to value  creation  from these real estate
assets.  A  substantial  portion  of  the  Company's  developable  real  estate,
including  substantially  all of the developable  residential real estate at The
Canyons along with certain core village real estate at Killington, and the stock
of the Company's real estate development  subsidiaries  (including Grand Summit)
is pledged to Fleet and the lenders  under the  facility.  The  commercial  core
units at the Sundial  Lodge at The Canyons and the Mount Snow Grand Summit Hotel
in Vermont  are also  pledged to Fleet and the  lenders.  The Grand  Summit unit
inventory does not secure the Real Estate Term Facility,  although the pledge of
the stock of Grand Summit to secure the Real Estate Term Facility means that the
Company may lose control of the Grand Summit unit inventory to the lenders under
the Real Estate Term Facility.  Other remedies available to the lenders include,
but are not limited to, setoff of cash collateral  amounts in Resort Properties'
name held at Fleet in the amount of approximately  $1.5 million,  foreclosure of
real and personal property owned by Resort Properties and pledged to the lenders
(including  all  of  the  capital  stock  of  the  Company's  hotel  development
subsidiary,  Grand Summit), and other customary secured creditor remedies. As of
January 25, 2004, the carrying value of the total assets that collateralized the
$78.2  million Real Estate Term  Facility and the  Company's  $40.8 million real
estate  construction loan facilities  described below was  approximately  $108.0
million.  This collateral  includes $77.7 million of Grand Summit assets pledged
under the Company's $40.8 million real estate construction loan facilities.

Grand Summit

     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  projects,  which
are primarily financed through a $110 million construction loan facility (Senior
Construction  Loan) between Grand Summit and various lenders,  including Textron
Financial Corporation  (Textron),  the syndication and administrative agent. Due
to construction  delays and cost increases at the Steamboat Grand Hotel project,
Grand Summit entered into a $10 million  subordinated  loan tranche with Textron
(Subordinated  Construction  Loan) on July  25,  2000.  The  Company  used  this
facility solely for the purpose of funding the completion of the Steamboat Grand
Hotel. The Senior  Construction Loan and the Subordinated  Construction Loan are
referred to collectively as the "Construction Loan Facility".

     The Senior Construction Loan has an outstanding  principal balance of $30.6
million as of January 25, 2004 and was in default as of June 29, 2003 due to the
failure by Grand Summit to reduce the principal balance outstanding to a maximum
of $30.0 million as required under the terms of the agreement.  In addition, the
Senior  Construction Loan further required that the loan be reduced to a maximum
of $25.0 million by June 30, 2003 and to $20.0 million by September 30, 2003. As
a result,  the  Subordinated  Construction  Loan also was in default.  Effective
December 31,  2003,  Grand Summit and Textron  entered  into  amendments  to the
Senior  Construction Loan and the Subordinated  Construction  Loan. The terms of
the revised agreements waive the above referenced defaults,  relax the timing of
mandatory principal amortization  requirements,  provide additional liquidity to
support  ongoing  sales and marketing  activities of the remaining  units at The
Canyons Grand Summit and Steamboat Grand hotels, and allow an auction to be held
for the remaining  units at The Canyons Grand Summit Hotel.  The amendments also
require that Grand Summit pay the lenders a $175,000 default waiver fee from the
proceeds of the  auction to satisfy the  previous  default of not  reducing  the
Senior Construction Loan balance to $30.0 million by June 29, 2003.


                                       14
<PAGE>

     The Senior Construction Loan principal 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  inventory at the Grand
Summit Hotels at The Canyons and Steamboat, a promissory note from the Steamboat
Homeowners  Association  secured by the  Steamboat  Grand Summit  Hotel  parking
garage,  and the  commercial  core unit of the  Attitash  Bear Peak Grand Summit
Hotel  collateralize the Senior  Construction Loan. The Senior Construction Loan
is subject to covenants,  representations and warranties customary for this type
of construction  facility.  The Senior  Construction Loan is non-recourse to the
Company and its resort operating  subsidiaries (although it is collateralized by
substantial  assets of Grand Summit,  having a total book value of $77.7 million
as of  January  25,  2004,  which in turn  comprise  substantial  assets  of the
Company's  business).  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 approximately $30.6 million as of January 25, 2004
and had an interest rate on funds  advanced of prime plus 3.5%,  with a floor of
9.0% (9.0% as of January 25, 2004). The principal balance  outstanding under the
Subordinated Construction Loan was approximately $10.2 million as of January 25,
2004 and is due on November 30, 2007. The interest rate on the funds advanced is
20%.

     Upon the repayment of all indebtedness under the Senior  Construction Loan,
the Subordinated  Construction  Loan and all other fees,  Textron will receive a
fee equal to 25% of all gross proceeds of sales of the remaining  unsold quarter
and eighth share units and commercial  units occurring  subsequent to repayment.
Grand Summit and the lenders also agreed to use their best efforts to enter into
an escrow agreement pursuant to which the appropriate deed-in-lieu documentation
in respect to the Senior  Construction  Loan and the  Subordinated  Construction
Loan shall be placed in escrow.  Finally, under the Senior Construction Loan, as
amended,  the following maximum principal balances must be outstanding as of the
following dates:

      June 30, 2004                                    $19,000,000
      September 30, 2004                               $18,000,000
      December 31, 2004                                $17,000,000
      March 31, 2005                                   $14,000,000
      June 30, 2005                                    $12,000,000
      September 30, 2005                               $11,000,000
      December 31, 2005                                $10,000,000
      March 31, 2006                                   $ 5,000,000
      June 30, 2006                                    $          -

     In addition, the amendments to the Subordinated  Construction Loan provided
additional  borrowing  availability of approximately  $0.6 million for a maximum
borrowing  capacity of $10.6 million.  The Subordinated  Construction  Loan will
continue to bear interest at 20%, payable monthly in arrears,  provided that 50%
of the  interest  shall be due and  payable  in cash and the  other  50% of such
interest  shall,   if  no  events  of  default  exist  under  the   Subordinated
Construction  Loan or the Senior  Construction  Loan,  automatically be deferred
until the final payment date of November 30, 2007.

     In late February 2004, an auction was held to sell substantially all of the
remaining units at The Canyons Grand Summit hotel. Closings are still in process
and are  expected  to close in March  2004.  Grand  Summit  expects  to  receive
proceeds  from  auction  presales,  the  auction,  and  post  auction  sales  of
approximately $15.6 million, of which $10.0 million will be used to pay down the
Senior  Construction  Loan,  $4.5 million will be used for Grand Summit's future
working  capital  needs,  and $1.1 million will be used to pay  commissions  and
closing costs.

American Skiing Company

     The Company  entered into an agreement dated February 14, 2003 with General
Electric  Capital  Corporation  (GE  Capital)  and  CapitalSource   Finance  LLC
(CapitalSource)  whereby GE Capital and  CapitalSource  provided a $91.5 million
senior  secured loan facility (the Resort  Senior Credit  Facility)  including a
revolving  credit  facility  (Revolving  Credit  Facility),  tranche A term loan
(Tranche A Term Loan),  supplemental  term loan  (Supplemental  Term Loan),  and
tranche B term loan (Tranche B Term Loan).  The Resort Senior Credit Facility is
secured by substantially  all the assets of the Company (except for the stock of
Resort  Properties  and other real  estate  subsidiaries)  and the assets of its
resort operating  subsidiaries.  Resort  Properties and its subsidiaries are not
guarantors of the Resort Senior Credit  Facility nor are their assets pledged as
collateral  under the Resort  Senior Credit  Facility.  The Resort Senior Credit
Facility consists of the following:


                                       15
<PAGE>

     o    Revolving Credit Facility - $40.0 million,  including letter of credit
          (L/C) availability of up to $5.0. The amount of availability under the
          Revolving  Credit  Facility  will be  correspondingly  reduced  by the
          amount of each L/C issued.

     o    Tranche A Term Loan - $25.0  million  borrowed on the funding  date of
          February 18, 2003.

     o    Supplemental  Term Loan - $6.5 million borrowed on the funding date of
          February 18, 2003.

     o    Tranche B Term Loan - $20.0  million  borrowed on the funding  date of
          February 18, 2003.

     The Revolving  Credit Facility,  Tranche A Term Loan and Supplemental  Term
Loan portions of the Resort Senior Credit  Facility mature on April 15, 2006 and
bear  interest at JPMorgan  Chase Bank's prime rate plus 3.25%  payable  monthly
(7.25% as of January 25, 2004). The Supplemental  Term Loan requires payments of
approximately  $1.0 million on January 15 and July 15 of each year,  and a final
payment of approximately $1.0 million on April 15, 2006. The Tranche B Term Loan
matures on June 15, 2006 and bears  interest at JPMorgan Chase Bank's prime rate
plus 5.0% payable  monthly (12.25% as of January 25, 2004) with an interest rate
floor of  12.25%.  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,  places an
annual limit on the Company's capital expenditures, requires the Company to have
a zero balance on the Revolving Credit Facility on April 1 of each year prior to
maturity and contains an asset monetization  covenant which requires the Company
to refinance the facility or sell assets sufficient to retire the facility on or
prior to December 31, 2005. The Resort Senior Credit Facility also restricts the
Company's  ability to pay cash  dividends on or redeem its common and  preferred
stock.

     As of January 25, 2004, the Company had $13.5 million,  $25.0 million, $5.1
million,  and $20.0 million of principal  outstanding under the Revolving Credit
Facility,  Tranche A Term Loan,  Supplemental Term Loan, and Tranche B Term Loan
portions of the Resort Senior Credit Facility,  respectively.  As of January 25,
2004, the Company had $26.2 million  available for future  borrowings  under the
Revolving Credit Facility.  As of January 25, 2004, the Company had $0.3 million
of L/C's issued under the Resort Senior Credit Facility.

6.  Dividend Restrictions

     Borrowers under the Company's Resort Senior Credit Facility,  which include
ASC, are  restricted  from paying cash  dividends  on any of their  preferred or
common stock other than payments to other borrowers or restricted subsidiaries.

     Borrowers  under  the Real  Estate  Term  Facility,  which  include  Resort
Properties and Resort  Properties'  subsidiaries,  including  Grand Summit,  are
restricted  from  declaring  dividends  or  advancing  funds to ASC by any other
method, unless specifically approved by these lenders.

     Under the indenture governing our 12% senior subordinated notes (the Senior
Subordinated  Notes),  ASC is  prohibited  from paying cash  dividends or making
other distributions to its shareholders.

7.  Phantom Equity Plan

     The Company has established the American Skiing Company Phantom Equity Plan
(the  "LTIP"),  which was  ratified by the Board of  Directors on March 6, 2003.
Certain of ASC's officers participate in this plan. Participants are entitled to
a cash payment on awards  granted  under the LTIP,  upon a Valuation  Event,  as
defined,  or  in  certain  cases  to  the  extent  vested  upon  termination  of
employment.  The amount of any awards are based  ultimately on the Equity Value,
as defined, obtained through a Valuation Event and generally vest over a four or
five-year term as determined by the Compensation Committee. A Valuation Event is
any of the  following:  (i) a  sale  or  disposition  of a  significant  Company
operation or property as determined by the Board;  (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 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,  as  defined.
Compensation  expense will be estimated and recorded based on the probability of
the  Company  achieving  a  Valuation  Event.  During the 13 and 26 weeks  ended
January 25, 2004, the Company  recorded a charge of  approximately  $0.1 million
and $0.2  million,  respectively,  which is included in  marketing,  general and
administrative expenses in the accompanying condensed consolidated statements of


                                       16
<PAGE>

operations.  The total  liability  for the LTIP of $0.7  million is  included in
other  long-term  liabilities  in the January 25,  2004  condensed  consolidated
balance sheet.

8.  Commitments and Contingencies

     As previously reported in the Company's Form 10-K filed on October 27, 2003
with the  Securities  and  Exchange  Commission,  the  Company  entered  into an
agreement  on  January  22,  2002  with  Triple  Peaks,  LLC for the sale of the
Steamboat  resort.  The Company later  determined  that the sale of its Heavenly
resort  more  closely  achieved  the  Company's  restructuring   objectives  and
concluded  that it would not proceed with the sale of the Steamboat  resort.  On
April 5, 2002, Triple Peaks, LLC filed a lawsuit against ASC in federal district
court in  Denver,  alleging  breach of  contract  resulting  from the  Company's
refusal to close on the proposed  sale of the Steamboat  resort.  The suit seeks
both monetary damages resulting from the breach and specific  performance of the
contract. On April 16, 2002, before an answer to its complaint was filed, Triple
Peaks  voluntarily  dismissed  its suit and re-filed a  substantially  identical
complaint in Colorado State District Court in Steamboat,  also naming  Steamboat
Ski & Resort  Corporation,  Resort  Properties and Walton Pond Apartments,  Inc.
(each  direct or indirect  subsidiaries  of ASC) as  additional  defendants.  On
December 31, 2002, the Colorado State District Court issued summary  judgment in
the Company's  favor and against Triple Peaks,  confirming  that the damages the
Company owes Triple Peaks under the contract are limited to $500,000. On January
26, 2003,  Triple Peaks  appealed  the decision of the Colorado  State  District
Court.

     On January 22, 2004, the Colorado Court of Appeals reversed the judgment of
the Colorado  State  District  Court in the  Company's  favor,  finding that the
agreement  between the Company and Triple Peaks did not, under the circumstances
of the  Company's  refusal to close,  limit  damages to  $500,000.  The Court of
Appeals remanded the case to the Colorado State District Court with instructions
to determine  whether  damages or specific  performance of the agreement was the
proper remedy for the Company's refusal to close.

     The Company has filed a Request for  Rehearing  with the Colorado  Court of
Appeals, which request is currently pending. If the Company's request is denied,
the Company plans to appeal the judgment of the Court of Appeals to the Colorado
Supreme  Court and will  continue to assert that damages under the agreement are
limited to  $500,000.  The  Company  has  accrued an amount in the  accompanying
consolidated  balance sheet that it deems  appropriate.  It is possible that the
estimated accrual could change  significantly due to the inherent uncertainty of
litigation and the wide range of possible outcomes. If the decision of the Court
of Appeals is upheld  and leads to a verdict in favor of Triple  Peaks  granting
either summary  judgment or significant  monetary  damages,  or both, the result
could have a  material  adverse  impact on the  financial  position,  results of
operations, and liquidity of the Company.








                                       17
<PAGE>

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

                           Forward-Looking Statements

     Certain  statements  contained  in this report  constitute  forward-looking
statements  within the meaning of Section 27A of the  Securities Act 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);  the payment default
under  our  Real  Estate  Term  Facility  and its  effects  on the  results  and
operations of our real estate segment; any redemption of or legal requirement to
redeem our Series A Preferred Stock; failure to maintain  improvements to resort
operating  performance  at the  covenant  levels  required by our Resort  Senior
Credit  Facility;  a final  determination  against the Company in the  Steamboat
litigation  which leads to material  monetary  damages or an order for  specific
performance  for sale of the  Steamboat  resort;  the  possibility  of  domestic
terrorist  activities and their  respective  effects on the ski,  golf,  resort,
leisure and travel  industries;  failure of on-mountain  improvements  and other
capital expenditures to generate incremental revenue; adverse weather conditions
regionally  and  nationally;  seasonality  of the business;  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 impact of global
warming on long and  short-term  weather  patterns and on ski  conditions at our
resorts;  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.

Executive Summary

     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 manage our  operations  in two business
segments, ski resort operations and mountainside real estate development.

     Our resort  operating  strategies  include taking advantage of multi-resort
network,  increasing  our  revenue per skier,  increasing  brand  awareness  and
customer  loyalty,  expanding  our sales and  marketing  efforts by  selecting a
single advertising agency to provide services nationwide, continuing to focus on
cost management,  and improving our hotel occupancy and operating  margins.  Our
current year results have been affected by challenging weather conditions in the
eastern resorts.  This has been partially offset by favorable snow conditions at
our western resorts and a company-wide increase in our season pass revenues.

     We continue to have  discussions  with our lenders to restructure  our Real
Estate Term Facility  aimed towards  establishing  a new entity to hold our real
estate development assets.  During the thirteen weeks ended January 25, 2004, we
have been successful in amending our real estate  construction  loan facilities.
Subsequent to January 25, 2004, an auction was held to sell the remaining  units
at The Canyons Grand Summit hotel.


                                       18
<PAGE>

General

     The  following is our  discussion  and analysis of financial  condition and
results of  operations  for the 13 and 26 weeks ended  January 25, 2004.  As you
read the  material  below,  we urge you to  carefully  consider  our Fiscal 2003
Annual Report on Form 10-K filed on October 27, 2003 and our unaudited condensed
consolidated  financial statements and related notes contained elsewhere in this
report.

Real Estate Credit Agreement Defaults

     On March 30, 2002, our real estate development subsidiary,  American Skiing
Company Resort Properties, Inc. (Resort Properties),  failed to make a mandatory
principal  payment of $3.75  million  under its Real Estate Term  Facility  with
Fleet  National  Bank (Fleet) and certain  other  lenders.  See  "Liquidity  and
Capital Resources - Real Estate Liquidity - Real Estate Term Facility" below for
a discussion  of the status of our efforts to  restructure  the Real Estate Term
Facility.

     The Senior Construction Loan of Grand Summit was also in payment default as
of June 29,  2003 due to the  failure by Grand  Summit to reduce  the  principal
balance outstanding to a maximum of $30.0 million as required under the terms of
the agreement.  In addition,  the Senior Construction Loan further required that
the loan be reduced to a maximum  of $25.0  million by June 30,  2003 and to $20
million by  September  30, 2003.  As a result,  Grand Summit was also in default
under its $10.0 million Subordinated  Construction Loan with Textron and various
lenders.  Effective  December  31, 2003,  Grand Summit and Textron  entered into
amendments to the Senior  Construction  Loan and the  Subordinated  Construction
Loan. The terms of the revised  agreements waive the above referenced  defaults,
relax  mandatory  principal   amortization   requirements,   provide  additional
liquidity to support  ongoing  sales and  marketing  activities of the remaining
units at The Canyons  Grand  Summit and  Steamboat  Grand  hotels,  and allow an
auction to be held for the  remaining  units at The Canyons  Grand Summit hotel.
The amendments also require that Grand Summit pay the lenders a $175,000 default
waiver fee from the proceeds of the auction to satisfy the  previous  default of
not  reducing  the Senior  Construction  Loan balance to $30 million by June 29,
2003.

     See "Liquidity and Capital Resources - Real Estate Liquidity - Construction
Loan  Facility"  below for further  discussion of the terms of the amendments to
the Construction Loan Facility.

Liquidity and Capital Resources

Short-Term

     Our primary  short-term  liquidity needs involve funding  seasonal  working
capital  requirements,  marketing and selling real estate development  projects,
funding our Fiscal 2004 capital improvement program, and servicing our debt. Our
cash requirements for ski-related and real estate  development/sales  activities
are provided from separate sources.

     As described below, we entered into a new $91.5 million senior secured loan
facility (the Resort  Senior Credit  Facility) on February 14, 2003 and used our
initial borrowings to refinance the prior resort senior credit facility.

     Our  primary  source of  liquidity  for  ski-related  working  capital  and
ski-related capital  improvements are cash flows from operations of our non-real
estate subsidiaries and borrowings under our Resort Senior Credit Facility.  The
total debt  outstanding  on our Resort Senior Credit  Facility as of January 25,
2004 was  approximately  $63.6 million.

     Real estate development and real estate working capital is funded primarily
through unit inventory sales,  short-term rental of remaining unit inventory, as
well as lease  payments from long-term  commercial  tenants.  Historically,  the
Construction  Loan Facility funded such working capital.  The Construction  Loan
Facility is without recourse to ASC and the 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. As of January 25,
2004,  the  carrying  value  of  the  total  assets  that   collateralized   the
Construction Loan Facility and which are included in the accompanying  condensed
consolidated  balance  sheet was  approximately  $77.7  million.  The total debt
outstanding  on the  Construction  Loan  Facility  as of  January  25,  2004 was
approximately  $40.8  million.  See "Real  Estate  Liquidity  - Real Estate Term
Facility" and "Real Estate Liquidity - Construction Loan Facility" below.

     In late February 2004, an auction was held to sell substantially all of the
remaining units at The Canyons Grand Summit hotel. Closings are still in process
and are  expected  to close in March  2004.  Grand  Summit  expects  to  receive
proceeds  from  auction  presales,  the  auction,  and  post  auction  sales  of
approximately $15.6 million, of which $10.0 million will be used to pay down the


                                       19
<PAGE>

Senior  Construction  Loan,  $4.5 million will be used for Grand Summit's future
working  capital  needs,  and $1.1 million will be used to pay  commissions  and
closing costs.

Resort Liquidity

     We entered into an agreement dated February 14, 2003 with General  Electric
Capital  Corporation (GE Capital) and CapitalSource  Finance LLC (CapitalSource)
whereby GE Capital and CapitalSource provided a new $91.5 million senior secured
loan facility (Resort Senior Credit Facility). The Resort Senior Credit Facility
is secured by  substantially  all of our holding company  assets,  excluding the
stock of Resort Properties and other real estate subsidiaries, and the assets of
our resort operating  subsidiaries.  Resort  Properties and its subsidiaries are
not guarantors of the Resort Senior Credit Facility nor are their assets pledged
as collateral under the Resort Senior Credit Facility.

     The Resort Senior Credit Facility consists of the following:

     o    Revolving Credit Facility - $40.0 million,  including letter of credit
          (L/C)  availability of up to $5.0 million.  The amount of availability
          under the Revolving Credit Facility will be correspondingly reduced by
          the  amount  of each  L/C  issued.  As of  January  25,  2004,  we had
          approximately   $13.5   million   borrowed   on  this   facility   and
          approximately  $0.3  million  of  outstanding  L/Cs,  leaving us $26.2
          million  in  availability.

     o    Tranche A Term Loan - $25.0  million  borrowed as of January 25, 2004,
          $0 availability;

     o    Supplemental Term Loan - $5.1 million borrowed as of January 25, 2004,
          $0 availability; and

     o    Tranche B Term Loan - $20.0  million  borrowed as of January 25, 2004,
          $0 availability.

     The Revolving Credit Facility,  Tranche A Term Loan, and Supplemental  Term
Loan portions of the Resort Senior Credit  Facility mature on April 15, 2006 and
bear interest at JPMorgan  Chase Bank's prime rate plus 3.25%,  payable  monthly
(7.25% as of January 25, 2004).  The Supplemental  Term Loan requires  principal
payments of  approximately  $1.0 million on January 15 and July 15 of each year,
with a final  payment  of  approximately  $1.0  million on April 15,  2006.  The
Tranche B Term Loan  matures on June 15,  2006 and bears  interest  at  JPMorgan
Chase Bank's  prime rate plus 5.0%,  payable  monthly  (12.25% as of January 25,
2004) with an interest rate floor of 12.25%.  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, places a limit on our annual capital expenditures, requires the Company
to have a zero balance on the Revolving  Credit Facility on April 1 of each year
prior to maturity, and contains an asset monetization covenant which requires us
to refinance the facility or sell assets sufficient to retire the facility on or
prior to December 31, 2005. The financial  covenants of the Resort Senior Credit
Facility also restrict our ability to pay cash dividends on or redeem our common
and preferred stock.

     As of February 22, 2004, we had $0, $25.0 million,  $5.1 million, and $20.0
million of principal outstanding under the Revolving Credit Facility,  Tranche A
Term Loan,  Supplemental  Term Loan,  and  Tranche B Term Loan  portions  of the
Resort Senior Credit  Facility,  respectively.  Furthermore,  as of February 22,
2004, we had approximately  $0.3 million in outstanding L/Cs with  approximately
$39.7  million  available  for  future  borrowings  under the  Revolving  Credit
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 Fiscal 2004.

     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 a discussion  with our lenders for a waiver of those  covenants
for the period in  question.  Due to the  restrictions  under our Resort  Senior
Credit Facility and the indenture  governing our Senior  Subordinated  Notes, we
have limited access to alternate sources of funding.

     The Company was in compliance  with all  financial  covenants of the Resort
Senior Credit  Facility  through the end of its second fiscal quarter on January
25, 2004.  However,  weather conditions at our eastern resorts in the second and
third  fiscal  quarters  of 2004 have not been  favorable,  and our  results  of



                                       20
<PAGE>

operations  at those  resorts  for such  periods  have been  below  management's
expectations. Accordingly, the Company's ability to meet the financial covenants
of the Resort  Senior  Credit  Facility  for its third  fiscal  quarter  will be
dependent upon the return of operating  revenues to historical  levels and there
can be no assurance  that the Company will continue to meet all of its financial
covenants  under  the  Resort  Senior  Credit  Facility.  The  length of the ski
operating season at the Company's eastern resorts will also impact the Company's
operating results for the third fiscal quarter.

     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 and the indenture  governing our
Senior  Subordinated  Notes contain  significant  restrictions on our ability to
obtain  additional  sources of  capital  and may  affect  our  liquidity.  These
restrictions  include  restrictions  on the sale of assets,  restrictions on the
incurrence  of  additional  indebtedness,  and  restrictions  on the issuance of
preferred stock.

Real Estate Liquidity

     To fund working capital and fund its real estate  development  plan, Resort
Properties  relies  primarily  on unit  inventory  sales,  short-term  rental of
remaining unit  inventory,  as well as lease payments from long-term  commercial
tenants. Resort Properties historically relied on the net proceeds from the sale
of real  estate  developed  for sale,  the Real Estate  Term  Facility,  and the
Construction Loan Facility. A substantial portion of our developable real estate
and the commercial  core units at the Sundial Lodge at The Canyons and the Mount
Snow Grand  Summit  Hotel in Vermont are  pledged to the lenders  under the Real
Estate Term Facility.

Real Estate Term  Facility:  Effective May 20, 2002,  Resort  Properties  was in
default on its Real Estate Term  Facility due to its failure to make a mandatory
principal  payment of $3.75 million and the  indebtedness was accelerated on May
31, 2002. As a result,  all indebtedness under the facility is currently due and
payable.

     The Real Estate Term  Facility is  comprised of three  tranches,  each with
separate interest rates and maturity dates as follows:

     o    Tranche A is a revolving  facility  with a current  maximum  principal
          amount of $17.0 million which bears  interest at a variable rate equal
          to the Fleet  National  Bank Base Rate plus 2.0%  (payable  monthly in
          arrears).  As a result of the default,  the default  interest  rate on
          Tranche A is the Fleet  National Bank Base Rate plus 6.0% (10.0% as of
          January  25,  2004).  Prior  to  the  default,   mandatory   principal
          reductions  were required in certain  prescribed  percentages  ranging
          from 50% to 75% of net proceeds  from any future sales of  undeveloped
          parcels.   Prior  to  the  default,  the  remaining  principal  amount
          outstanding  under  Tranche A was scheduled to be paid in full on June
          30, 2003.

     o    Tranche B is a term loan facility that has a maximum  principal amount
          of $25.0 million, bears interest at a fixed rate of 18% per annum (10%
          per annum is payable monthly in arrears and the remaining 8% per annum
          accrues,  is added to the  principal  balance  of Tranche B, and bears
          interest at 18% per annum,  compounded  annually).  As a result of the
          default,  the  default  interest  rate on  Tranche B is 29% per annum.
          Mandatory principal payments on Tranche B of $10.0 million were due on
          each of December 31, 2003 and June 30, 2004. Prior to the default, the
          remaining  $5.0  million  of  principal  and all  accrued  and  unpaid
          interest on Tranche B was scheduled to be paid in full on December 31,
          2004.

     o    Tranche C is a term loan facility that has a maximum  principal amount
          of $12.0 million, bears interest at an effective rate of 29% per annum
          and,  prior to the  default,  was  scheduled to mature on December 31,
          2005. As a result of the default, the default interest rate on Tranche
          C is 29% per annum. Accrued interest is added to the principal balance
          of Tranche C and is compounded semi-annually.

     On  November  22,  2002,  Resort  Properties  entered  into  a  forbearance
agreement with the lenders  whereby the lenders agreed to not pursue  additional
foreclosure  remedies  and to cease  publication  of  foreclosure  notices for a
30-day  period.  Although  this  30-day  period  expired,  management  continues
discussions  with Fleet and the other lenders  regarding a restructuring of this
facility,  and  Fleet and the  other  lenders  have not  exercised  any  further
foreclosure  remedies  since  the  expiration  of  the  forbearance   agreement.
Management's  ongoing efforts with the lenders are aimed towards a restructuring
of the  facility  with the  establishment  of a new entity to hold the assets of
Resort  Properties'  which are pledged as  collateral  under the  facility.  The


                                       21
<PAGE>

equity in the new entity is expected to be held by a combination  of the lenders
under the  facility  and  Resort  Properties.  The  facility  remains in default
pending completion of these negotiations.

     There  is  no  assurance  that   negotiations  with  the  lenders  will  be
successfully completed. Furthermore,  regardless of the outcome of this proposed
restructuring,  we may lose control of assets  pledged as  collateral  under the
facility and future access to value  creation from these real estate  assets.  A
substantial portion of our developable real estate,  including substantially all
of the  developable  residential  real estate at The Canyons  along with certain
core  village  real  estate  at  Killington,  and the  stock of our real  estate
development  subsidiaries  (including  Grand Summit) is pledged to Fleet and the
lenders under the facility.  The  commercial  core units at the Sundial Lodge at
The Canyons and the Mount Snow Grand Summit Hotel in Vermont are also pledged to
Fleet and the lenders.  The Grand Summit unit inventory does not secure the Real
Estate Term Facility, although the pledge of the stock of Grand Summit to secure
the Real Estate Term Facility means that we may lose control of the Grand Summit
unit  inventory  to the  lenders  under the Real  Estate  Term  Facility.  Other
remedies  available to the lenders  include,  but are not limited to,  setoff of
cash collateral  amounts in Resort  Properties' name held at Fleet in the amount
of approximately  $1.5 million,  foreclosure of real and personal property owned
by Resort  Properties  and pledged to the lenders  (including all of the capital
stock of Grand Summit),  and other customary  secured creditor  remedies.  As of
January 25, 2004, the carrying value of the total assets that collateralized the
$78.2  million Real Estate Term  Facility and the  Company's  $40.8 million real
estate  construction  loan facilities was  approximately  $108.0  million.  This
collateral  includes  $77.7  million of Grand Summit  assets  pledged  under the
Company's $40.8 million real estate construction loan facilities.

     As of January 25,  2004,  the  principal  balances  outstanding,  including
accrued and unpaid  interest,  under Tranches A, B and C of the Real Estate Term
Facility were $11.8 million, $41.8 million, and $24.6 million, respectively.

     As of February 22, 2004,  the  principal  balances  outstanding,  including
accrued and unpaid  interest,  under Tranches A, B and C of the Real Estate Term
Facility were $11.8 million, $42.4 million, and $25.2 million, respectively.

Construction  Loan  Facility:  We conduct  substantially  all of our real estate
development through subsidiaries,  each of which is a wholly owned subsidiary of
Resort Properties. Grand Summit owns our existing Grand Summit Hotel projects at
Steamboat,  The Canyons,  and Attitash Bear Peak,  which are primarily  financed
through the $110 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 million  Subordinated  Construction  Loan.  Together
they comprise the  Construction  Loan Facility.  We used the  Construction  Loan
Facility solely for the purpose of funding the completion of the Steamboat Grand
Hotel.

     The Senior Construction Loan of Grand Summit was also in payment default as
of June 29,  2003 due to the  failure by Grand  Summit to reduce  the  principal
balance outstanding to a maximum of $30.0 million as required under the terms of
the agreement.  In addition,  the Senior Construction Loan further required that
the loan be reduced to a maximum of $25.0  million by June 30, 2003 and to $20.0
million by September 30, 2003. As a result,  the Subordinated  Construction Loan
also was in default.  Effective  December  31,  2003,  Grand  Summit and Textron
entered into  amendments to the Senior  Construction  Loan and the  Subordinated
Construction  Loan.  The  terms  of  the  revised  agreements  waive  the  above
referenced  defaults,  relax  mandatory  principal  amortization   requirements,
provide additional  liquidity to support ongoing sales and marketing  activities
of the remaining  units at The Canyons Grand Summit and Steamboat  Grand hotels,
and allow an auction to be held for the  remaining  units at The  Canyons  Grand
Summit hotel.  The amendments  also require that Grand Summit pays the lenders a
$175,000  default  waiver fee from the  proceeds  of the  auction to satisfy the
previous  default of not  reducing the Senior  Construction  Loan balance to $30
million by June 29, 2003.

     As  of  January  25,  2004,  the  amount   outstanding   under  the  Senior
Construction Loan was $30.6 million and there were no borrowings available under
this  facility.  The  principal 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
Hotels at The  Canyons  and  Steamboat,  a  promissory  note from the  Steamboat
Homeowners  Association  secured by the  Steamboat  Grand Summit  hotel  parking
garage,  and the  commercial  core unit of the  Attitash  Bear Peak Grand Summit
Hotel  collateralize the Senior  Construction  Loan. This facility is subject to
covenants,   representations   and   warranties   customary  for  this  type  of
construction  facility.  The Senior  Construction Loan is non-recourse to us and
our resort operating  subsidiaries (although it is collateralized by substantial
assets of Grand Summit, having a total book value of $77.7 million as of January
25,  2004,  which  in  turn  comprise  substantial  assets  of our  real  estate
business).  The maturity date for funds advanced under the Steamboat  portion of
the Senior Construction Loan is June 30, 2006. The principal balance outstanding
under the Steamboat  portion of the Senior  Construction  Loan was approximately
$30.6 million as of January 25, 2004 and had an interest rate on funds  advanced


                                       22
<PAGE>

of prime plus 3.5%,  with a floor of 9.0% (9.0% as of  January  25,  2004).  The
Canyons  portion of the Senior  Construction  Loan was repaid  during March 2003
from proceeds from quartershare unit sales.

     The  Subordinated  Construction  Loan bears interest at a fixed rate of 20%
per annum,  payable monthly in arrears,  provided that only 50% of the amount of
this  interest  is due and  payable  in cash and the other 50% of such  interest
will, if no events of default exist under the Subordinated  Construction Loan or
the Senior Construction Loan,  automatically be deferred until the final payment
date. The amendments to the Subordinated  Construction Loan provided  additional
borrowing  availability of  approximately  $0.6 million for a maximum  borrowing
capacity  of $10.6  million.  The  maturity  date for funds  advanced  under the
Subordinated  Construction Loan, as amended, is November 30, 2007. The principal
balance  outstanding under the Subordinated  Construction Loan was approximately
$10.2 million as of January 25, 2004 and $0.4 million was  available  under this
facility.  The Subordinated  Construction Loan is secured by the same collateral
which secures the Senior Construction Loan.

     The Senior  Construction Loan, as amended,  must have the following maximum
outstanding principal balances as of the following dates:

      June 30, 2004                                    $19,000,000
      September 30, 2004                               $18,000,000
      December 31, 2004                                $17,000,000
      March 31, 2005                                   $14,000,000
      June 30, 2005                                    $12,000,000
      September 30, 2005                               $11,000,000
      December 31, 2005                                $10,000,000
      March 31, 2006                                   $ 5,000,000
      June 30, 2006                                    $         -

     As  of  February  22,  2004,  the  amount   outstanding  under  the  Senior
Construction Loan was $29.8 million and there were no borrowings available under
this  facility.  As of  February  22,  2004,  the amount  outstanding  under the
Subordinated  Construction  Loan was $10.6  million and there were no borrowings
available under this facility.

     In  addition,   in  late  February  2004,  an  auction  was  held  to  sell
substantially  all of the  remaining  units at The Canyons  Grand Summit  hotel.
Closings  are still in process and are  expected  to close in March 2004.  Grand
Summit expects to receive proceeds from auction presales,  the auction, and post
auction sales of  approximately  $15.6  million,  of which $10.0 million will be
used to pay down the Senior  Construction  Loan,  $4.5  million will be used for
Grand Summit's  future working  capital needs,  and $1.1 million will be used to
pay commissions and closing costs.

Series A Preferred Stock Redemption

     We have 36,626  shares of Series A  Preferred  Stock  outstanding,  with an
accreted value of approximately $70.2 million as of January 25, 2004. The Series
A Preferred Stock was redeemable on November 12, 2002 at an aggregate redemption
price of  approximately  $62  million,  to the extent that we had funds  legally
available for that redemption.  If the Series A Preferred Stock is not permitted
to be redeemed  because there are not legally  available  funds,  we must redeem
that number of shares of Series A Preferred Stock which we can lawfully  redeem,
and from time to time  thereafter,  as soon as funds are legally  available,  we
must  redeem  shares of our Series A  Preferred  Stock  until we have done so in
full.  Prior to the November  12, 2002  redemption  date,  based on all relevant
factors,  our Board of Directors determined not to redeem any shares of stock on
the redemption  date. On January 27, 2003, the holders of the Series A Preferred
Stock  demanded that we redeem all of the Series A Preferred  Stock  immediately
and on April 8, 2003, the Series A Preferred  Stockholders  demanded pursuant to
Delaware law to review  certain of our records.  We will  continue to assess our
obligations with respect to the requirements of the redemption provisions of our
Series A Preferred Stock.  Because the Series A Preferred Stock was not redeemed
on November 12, 2002, the  certificate of designation for the Series A Preferred
Stock  provides  that the holders  are  entitled to elect two new members of our
board of directors.  We have not yet been advised by the holders of the Series A
Preferred  Stock  whether  they  intend  to  exercise  their  right to elect two
directors  at or prior to our next annual  shareholders  meeting or whether they
intend to take any other action,  including legal action,  to seek to compel our
redemption  of the  Series A  Preferred  Stock.  If the  holders of the Series A
Preferred  Stock  were to  commence  any  litigation  to compel us to redeem the
Series A Preferred  Stock,  based on present facts and  circumstances,  we would
vigorously  contest  that  litigation.  If we are  required to redeem all or any
portion of the Series A Preferred Stock, it could have a material adverse effect
on our business, results of operations, and financial condition.


                                       23
<PAGE>

     We are not permitted to redeem our Series A Preferred Stock under the terms
of our Resort  Senior Credit  Facility and the terms of the indenture  governing
our Senior  Subordinated  Notes. If any redemption  occurs or the holders of our
Series A Preferred Stock obtain and seek to enforce a final judgment  against us
that is not paid, discharged or stayed, this could result in an event of default
under  those debt  instruments,  and the  lenders and holders of that debt could
declare all amounts  outstanding  to be due and payable  immediately.  If we are
required to redeem all or any portion of our Series A Preferred Stock, either as
a result of a court judgment or otherwise,  we would have to consider seeking an
amendment or waiver of the terms of the Resort  Senior  Credit  Facility and the
indenture governing the Senior  Subordinated  Notes,  selling material assets or
operations,  refinancing  our  indebtedness  and our Series A  Preferred  Stock,
seeking  to  raise   additional  debt  or  equity  capital,   delaying   capital
expenditures  and other  investments in our business  and/or  restructuring  our
indebtedness  and  preferred  stock.  No assurance can be given that we would be
successful  in taking  any of these  steps or that we would  have the  necessary
liquidity or assets to effect any redemption of our Series A Preferred Stock and
any indebtedness required to be repaid. As a result, any redemption of, or legal
requirement  to  redeem,  our  Series A  Preferred  Stock  could have a material
adverse effect on us.

Long-Term

     Our primary long-term  liquidity needs are to fund  skiing-related  capital
improvements  at certain of our resorts.  For Fiscal  2004,  we  anticipate  our
annual  maintenance  capital  needs to be  approximately  $8.5 million  (through
January 25, 2004, the Company has expended approximately $6.6 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 Fiscal 2004 at $8.5 million,  with the
ability to increase this amount in the future if certain  conditions are met. We
believe that these  capital  expenditure  amounts will be sufficient to meet our
non-real estate capital improvement needs for Fiscal 2004.

     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 Facilty, we
would  engage in a discussion  with our lenders for a waiver of those  covenants
for the period in  question.  Due to the  restrictions  under our Resort  Senior
Credit Facility and the indenture  governing our Senior  Subordinated  Notes, we
have limited access to alternate sources of funding.





                                       24
<PAGE>

                              Results of Operations
     For the 13 weeks ended January 26, 2003 compared to the 13 weeks ended
     January 25, 2004

Resort Operations:

     The components of resort operations for the 13 weeks ended January 26, 2003
and January 25, 2004 are as follows (in thousands):

 ------------------------------------------------------------------------------
                                          13 Weeks ended
                                  -------------------------------  ------------
                                      1/26/03         1/25/04        Variance
                                  --------------- ---------------  ------------

     Total resort revenues        $    98,961     $    92,904      $  (6,057)
                                  --------------- ---------------  ------------

     Cost of resort operations         65,794          62,410         (3,384)
     Marketing, general and
      administrative                   16,552          20,490          3,938
     Depreciation and amortization     10,981          10,197           (784)
     Interest expense                   6,916          17,508         10,592
                                  --------------- ---------------  ------------
     Total resort expenses            100,243         110,605         10,362
                                  --------------- ---------------  ------------

     Loss from resort operations  $    (1,282)    $   (17,701)    $  (16,419)
                                  =============== ===============  ============

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

     Resort revenues were approximately  $6.1 million,  or 6.1%, lower in the 13
weeks ended  January 25,  2004 when  compared to the 13 weeks ended  January 26,
2003. This is a result of a decrease of approximately 16% in skier visits at our
eastern resorts due to extremely  challenging weather conditions.  This included
warmer than normal  weather  conditions in November  which  required us to delay
planned opening dates, followed by alternating record snowfalls and record rains
in early  December,  rain over the Christmas - New Year's  holiday  period,  and
unrelenting sub-zero temperatures and wind on weekends in January. We are unable
to predict future weather  patterns or the impact that weather patterns may have
on our results of operations or visitation.

     The decrease in revenues in the east were  partially  offset by an increase
of  approximately  2% in skier  visits at our western  resorts due to good early
season snowfall,  near record snowfall in December,  and a company-wide increase
of  approximately  $1.8  million in season pass  revenues for the 13 weeks ended
January 25, 2004.  Despite the overall  decrease in skier visits in the east, we
have implemented  certain  initiatives at all of our resorts that have increased
ticket yield per skier visit and increased other  on-mountain  revenue per skier
visit over the comparable period in Fiscal 2003.

     Resort operating expenses (including marketing, general and administrative)
for the 13 weeks ended January 25, 2004 were  approximately  $5.9 million higher
than the same period of Fiscal 2003, primarily as a result of the following:

     (i)       $10.6 million increase in interest expense due primarily to $10.6
               million of  accretion of discount  and  dividends on  mandatorily
               redeemable  preferred  stock for the 13 weeks  ended  January 25,
               2004  that  is now  classified  as  interest  expense  due to the
               adoption of SFAS No. 150,  whereas these amounts were  classified
               as accretion of discount and dividends on mandatorily  redeemable
               preferred  stock for the 13 weeks ended  January 26,  2003;
     (ii)      $3.4 million  decrease in cost of resort  operations due to lower
               volume  of skier  visits  and  implemented  cost  savings,  which
               resulted in payroll savings of approximately $2.1 million;
     (iii)     $4.0 million  increase in marketing,  general and  administrative
               costs due to increased costs  associated with compliance with the
               Sarbanes-Oxley  Act,  continuation  of building a corporate human
               resource group,  and an increase due to accruals  associated with
               our  Phantom  Equity Plan and other  legal  matters,  offset by a
               decrease in marketing  costs;  and
     (iv)      $0.8 million decrease in depreciation.

     Recent Trends: For the four weeks ended February 22, 2004, our revenues are
approximately  $2.0 million ahead of the same period in Fiscal 2003. Our resorts
experienced  increased  skier visits during the  Presidents' Day holiday weekend
due to moderating  weather  conditions in the east. As of February 22, 2004, our
hotel  booking pace for the  remainder of the ski season is  approximately  $0.3
million behind the pace of our bookings at the same time last year. As discussed
above,  our season pass revenue for the remainder of the season will continue to
significantly pace ahead of the comparable period of Fiscal 2003.


                                       25
<PAGE>

     The Company was in compliance  with all  financial  covenants of the Resort
Senior Credit  Facility  through the end of its second fiscal quarter on January
25, 2004.  However,  weather conditions at our eastern resorts in the second and
third  fiscal  quarters  of 2004 have not been  favorable,  and our  results  of
operations  at those  resorts  for such  periods  have been  below  management's
expectations. Accordingly, the Company's ability to meet the financial covenants
of the Resort  Senior  Credit  Facility  for its third  fiscal  quarter  will be
dependent upon the return of operating  revenues to historical levels, and there
can be no assurance  that the Company will be able to meet all of the  financial
covenants  under  the  Resort  Senior  Credit  Facility.  The  length of the ski
operating season at the Company's eastern resorts will also impact the Company's
operating results for the third fiscal quarter.

Real Estate Operations:

     The components of real estate operations are as follows:

 ------------------------------------------------------------------------------
                                              13 weeks ended
                                 --------------------------------  ------------
                                     1/26/03          1/25/04        Variance
                                 --------------- ----------------  ------------

     Total real estate revenues  $     1,325     $     10,056      $    8,731
                                 --------------- ----------------  ------------

     Cost of real estate
      operations                       1,898            8,538           6,640
     Depreciation and
      amortization                       468              434             (34)
     Interest expense                  5,126            5,072             (54)
                                 --------------- ----------------  ------------

     Total real estate expenses        7,492           14,044           6,552
                                 --------------- ----------------  ------------

     Loss from real estate
      operations                 $    (6,167)    $     (3,988)     $    2,179
                                 =============== ================  ============

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

     Real  estate  revenues  increased  by $8.7  million  in the 13 weeks  ended
January 25, 2004 when  compared  to the same  period in Fiscal  2003,  from $1.3
million to $10.1 million. This was primarily due to the sale of three parcels at
our  Steamboat  resort for $8.9  million and an increase of  approximately  $0.3
million of  Steamboat  unit sales,  offset by a decrease of  approximately  $0.7
million in revenues  recognized  on the  closings of  quartershare  units at The
Canyons due to the  announcement  of the auction for the remaining  units at The
Canyons Grand Summit Hotel described below and the expectation that lower prices
would be available at the auction.

     Our loss from real estate operations  decreased by $2.2 million,  from $6.2
million in the 13 weeks ended  January 26, 2003 to $4.0  million in the 13 weeks
ended January 25, 2004. This was a result primarily of the following:

     (i)      $8.7 million increase in revenues recognized as discussed above,
     (ii)     $6.6 million increase in cost of real estate operations resulting
              from the sale of the three parcels at  Steamboat,  and
     (iii)    $0.1 million   decrease  in  interest  expense  and  depreciation
              and amortization.

     Recent  Trends:  In  late  February  2004,  an  auction  was  held  to sell
substantially  all of the  remaining  units at The Canyons  Grand Summit  hotel.
Grand Summit expects to receive proceeds from auction presales, the auction, and
post auction sales of approximately  $15.6 million,  which will result in a gain
of approximately $6.8 million.  These sales are expected to close in March 2004.
Sales volumes at our Grand Summit property at Steamboat continue to decrease. We
believe that this is primarily related to the continuing  disruptions related to
our real  estate  restructuring  efforts  and a  continuing  decline of the real
estate market for these types of units.

Benefit from income taxes:

     We  recorded  no benefit  from  income  taxes for either the 13 weeks ended
January 26, 2003 or the 13 weeks ended  January 25, 2004.  We believe it is more
likely  than not that we will not realize  income tax  benefits  from  operating
losses in the foreseeable future.


                                       26
<PAGE>

Accretion of discount and dividends on mandatorily redeemable preferred stock:

     The dividends on mandatorily  redeemable  preferred  stock for the 13 weeks
ended  January 26, 2003 were $9.2  million.  For the 13 weeks ended  January 25,
2004,  accretion of discount and dividends on mandatorily  redeemable  preferred
stock of $10.6 million is not recorded as accretion of discount and dividends on
mandatorily redeemable preferred stock but has been included in interest expense
in resort  operations  due to the adoption of SFAS No. 150. This increase of the
accretion  is  primarily  attributable  to the  compounding  effect of  accruing
dividends on the value of the preferred shares.



                              Results of Operations
     For the 26 weeks ended January 26, 2003 compared to the 26 weeks ended
     January 25, 2004

Resort Operations:

     The components of resort operations for the 26 weeks ended January 26, 2003
and January 25, 2004 are as follows (in thousands):

 ------------------------------------------------------------------------------
                                            26 Weeks ended
                                  -------------------------------  ------------
                                       1/26/03         1/25/04        Variance
                                  --------------- ---------------  ------------

    Total resort revenues         $    115,872    $    109,032    $     (6,840)
                                  --------------- ---------------  ------------

    Cost of resort operations           88,294          84,935          (3,359)
    Marketing, general and
     administrative                     26,585          30,770           4,185
    Restructuring charges                    -             137             137
    Depreciation and amortization       13,005          12,067            (938)
    Interest expense                    14,128          34,696          20,568
                                  --------------- ---------------  ------------
    Total resort expenses              142,012         162,605          20,593
                                  --------------- ---------------  ------------

    Loss from resort operations   $    (26,140)   $    (53,573)        (27,433)
                                  =============== ===============  ============


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

     Resort revenues were approximately  $6.8 million,  or 5.9%, lower in the 26
weeks ended  January 25,  2004 when  compared to the 26 weeks ended  January 26,
2003. As mentioned previously, this is a result of a decrease in skier visits at
our eastern resorts due to extremely  challenging weather  conditions.  Revenues
also  decreased  due to lower  summer  visits  caused by poor weather and a soft
economy. These decreases were partially offset by an increase in skier visits at
our western resorts due to good early season  snowfall,  near record snowfall in
December,  and a company-wide  increase of approximately  $1.8 million in season
pass revenues.

     Resort operating expenses (including marketing, general and administrative)
for the 26 weeks ended January 25, 2004 were approximately  $16.1 million higher
than the same period of Fiscal 2003, primarily as a result of the following:

     (i)       $20.6 million increase in interest expense due primarily to $20.8
               million of  accretion of discount  and  dividends on  mandatorily
               redeemable  preferred  stock for the 26 weeks  ended  January 25,
               2004  that  is now  classified  as  interest  expense  due to the
               adoption of SFAS No. 150,  whereas these amounts were  classified
               as accretion of discount and dividends on mandatorily  redeemable
               preferred  stock for the 26 weeks ended  January 26,  2003;
     (ii)      $3.4 million  decrease in cost of resort  operations due to lower
               volumes of revenues and due to  implemented  cost savings,  which
               resulted in payroll savings of approximately $2.2 million;
     (iii)     $4.2 million  increase in marketing,  general and  administrative
               costs due to increased costs  associated with compliance with the
               Sarbanes-Oxley  Act,  continuation  of building a corporate human
               resource group,  and an increase due to accruals  associated with
               our  Phantom  Equity Plan and other  legal  matters,  offset by a
               decrease in marketing costs;
     (iv)      $0.1 million increase in  restructuring  charges;  and
     (v)       $0.9  million  decrease  in  depreciation.


                                       27
<PAGE>

Real Estate Operations:

     The components of real estate operations are as follows:

 ------------------------------------------------------------------------------
                                          26 weeks ended
                                 --------------------------------  ------------
                                     1/26/03          1/25/04        Variance
                                 --------------- ----------------  ------------

     Total real estate revenues  $     5,039     $     12,401      $    7,362
                                 --------------- ----------------  ------------

     Cost of real estate
      operations                       5,474           10,196           4,722
     Depreciation and
      amortization                       860              867               7
     Interest expense                 10,188           10,712             524
                                 --------------- ----------------  ------------
     Total real estate expenses       16,522           21,775           5,253
                                 --------------- ----------------  ------------

     Loss from real estate
      operations                 $    (11,483)   $     (9,374)    $     2,109
                                 =============== ================  ============

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

     Real  estate  revenues  increased  by $7.4  million  in the 26 weeks  ended
January 25, 2004 when  compared  to the same  period in Fiscal  2003,  from $5.0
million to $12.4 million. This was primarily due to the sale of three parcels at
our Steamboat resort for $8.9 million and an increase of $1.2 million in closing
of unit sales at Steamboat,  offset by a decrease of $3.1 in revenues recognized
on the closings of quartershare  units at The Canyons due to the announcement of
the  auction  for the  remaining  units at The  Canyons  Grand  Summit  Hotel in
February 2004,  continuing  disruptions related to our real estate restructuring
efforts, and weakening economic conditions.

     Our loss from real estate operations decreased by $2.1 million,  from $11.5
million in the 26 weeks ended  January 26, 2003 to $9.4  million in the 26 weeks
ended January 25, 2004. This was a result primarily of the following:

     (i)      $7.4 million increase in revenues recognized as discussed above,
     (ii)     $4.7 million increase in cost of real estate operations resulting
              from the sale of the three parcels at  Steamboat,  and
     (iii)    $0.5  million  increase in  interest  expense  resulting  from an
              increase in debt balances.

Benefit from income taxes:

     We  recorded  no benefit  from  income  taxes for either the 26 weeks ended
January 26, 2003 or the 26 weeks ended  January 25, 2004.  We believe it is more
likely  than not that we will not realize  income tax  benefits  from  operating
losses in the foreseeable future.

Accretion of discount and dividends on mandatorily redeemable preferred stock:

     The dividends on mandatorily  redeemable  preferred  stock for the 26 weeks
ended  January 26, 2003 were $18.2  million.  For the 26 weeks ended January 25,
2004,  accretion of discount and dividends on mandatorily  redeemable  preferred
stock of $20.8 million is not recorded as accretion of discount and dividends on
mandatorily redeemable preferred stock but has been included in interest expense
due to the adoption of SFAS No. 150. This increase of the accretion is primarily
attributable to the compounding effect of accruing dividends on the value of the
preferred shares.

Recently Issued Accounting Standards:

     In May 2003, the FASB issued  Statement of Financial  Accounting  Standards
No. 150,  "Accounting for Certain Financial  Instruments with Characteristics of
Both Liabilities and Equity" (SFAS No. 150). SFAS No. 150 establishes  standards
for how financial  instruments  with  characteristics  of both  liabilities  and
equity should be measured and classified and requires that an issuer  classify a
financial  instrument  that is within its scope as a liability.  SFAS No. 150 is
implemented  prospectively and restatement is not permitted. The Company adopted
SFAS No. 150  effective  July 28,  2003.  As a result of adopting  SFAS No. 150,
approximately $298.7 million of mezzanine-level  securities were reclassified to
liabilities  in the  consolidated  balance  sheet in the first quarter of Fiscal
2004.  This  represents  the carrying value of all of the classes of mandatorily
redeemable  preferred  stock.  In  addition,   approximately  $43.1  million  of
accretion of discount and dividends on the  preferred  stock in Fiscal 2004 will
be included in interest expense, whereas previously it was reported as accretion


                                       28
<PAGE>

of discount and dividends on mandatorily  redeemable preferred stock. For the 13
weeks and 26 weeks ended  January 25,  2004,  $10.6  million and $20.8  million,
respectively,  of accretion of discount and dividends on the preferred stock was
included in interest  expense.  For the 13 weeks and 26 weeks ended  January 26,
2003 approximately $9.2 million and $18.2 million, respectively, of accretion of
discount  and  dividends  on the  preferred  stock was  included in accretion of
discount and dividends on mandatorily redeemable preferred stock.

                                     Item 3
           Quantitative and Qualitative Disclosures about Market Risk

     There have been no material changes in information  relating to market risk
since our disclosure  included in Item 7A of Form 10-K for the fiscal year ended
July 27, 2003, as filed with the Securities  and Exchange  Commission on October
27, 2003.

                                     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  to ensure that
          information  required  to be  disclosed  by the Company in the reports
          that it files or submits under the Securities  Exchange Act of 1934 is
          recorded,  processed,  summarized and reported within the time periods
          specified in the Securities and Exchange Commission's rules and forms.

(b)       Changes in  internal  controls  over  financial  reporting.  No change
          occurred in the Company's  internal controls over financial  reporting
          during  the  quarter  ended  January  25,  2004  that  has  materially
          affected,  or is reasonably likely to materially affect, the Company's
          internal controls 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.

                           Part II - Other Information

                                     Item 1
                                Legal Proceedings

     As previously reported in the Company's Form 10-K filed on October 27, 2003
with the  Securities  and  Exchange  Commission,  the  Company  entered  into an
agreement  on  January  22,  2002  with  Triple  Peaks,  LLC for the sale of the
Steamboat  resort.  The Company later  determined  that the sale of its Heavenly
resort  more  closely  achieved  the  Company's  restructuring   objectives  and
concluded  that it would not proceed with the sale of the Steamboat  resort.  On
April 5, 2002, Triple Peaks, LLC filed a lawsuit against ASC in federal district
court in  Denver,  alleging  breach of  contract  resulting  from the  Company's
refusal to close on the proposed  sale of the Steamboat  resort.  The suit seeks
both monetary damages resulting from the breach and specific  performance of the
contract. On April 16, 2002, before an answer to its complaint was filed, Triple
Peaks  voluntarily  dismissed  its suit and re-filed a  substantially  identical
complaint in Colorado State District Court in Steamboat,  also naming  Steamboat
Ski & Resort  Corporation,  Resort  Properties and Walton Pond Apartments,  Inc.
(each  direct or indirect  subsidiaries  of ASC) as  additional  defendants.  On
December 31, 2002, the Colorado State District Court issued summary  judgment in
the Company's  favor and against Triple Peaks,  confirming  that the damages the
Company owes Triple Peaks under the contract are limited to $500,000. On January
26, 2003,  Triple Peaks  appealed  the decision of the Colorado  State  District
Court.

     On January 22, 2004, the Colorado Court of Appeals reversed the judgment of
the Colorado  State  District  Court in the  Company's  favor,  finding that the
agreement  between the Company and Triple Peaks did not, under the circumstances
of the  Company's  refusal to close,  limit  damages to  $500,000.  The Court of
Appeals remanded the case to the Colorado State District Court with instructions
to determine  whether  damages or specific  performance of the agreement was the
proper remedy for the Company's refusal to close.


                                       29
<PAGE>

     The Company has filed a Request for  Rehearing  with the Colorado  Court of
Appeals, which request is currently pending. If the Company's request is denied,
the Company plans to appeal the judgment of the Court of Appeals to the Colorado
Supreme  Court and will  continue to assert that damages under the agreement are
limited to  $500,000.  The  Company  has  accrued an amount in the  accompanying
consolidated  balance sheet that it deems  appropriate.  It is possible that the
estimated accrual could change  significantly due to the inherent uncertainty of
litigation and the wide range of possible outcomes. If the decision of the Court
of Appeals is upheld  and leads to a verdict in favor of Triple  Peaks  granting
either summary  judgment or significant  monetary  damages,  or both, the result
could have a  material  adverse  impact on the  financial  position,  results of
operations, and liquidity of the Company.

                                     Item 2
      Changes in Securities, Use of Proceeds, and Issuer Purchases of Equity
      Securities

     None.

                                     Item 3
                         Defaults upon Senior Securities

     On  March  30,  2002,  our  real  estate  development  subsidiary,   Resort
Properties,  failed to make a mandatory principal payment of $3.75 million under
its Real Estate Term Facility.  Resort Properties obtained a temporary waiver of
this default on April 2, 2002.  Effective May 20, 2002, the temporary waiver was
revoked and Resort  Properties was in default on the facility.  On May 31, 2002,
the  lenders  accelerated  the due date of the entire  remaining  principal  and
accrued  interest under the facility.  On November 22, 2002,  Resort  Properties
entered into a forbearance agreement with the lenders whereby the lenders agreed
to not  pursue  additional  foreclosure  remedies  and to cease  publication  of
foreclosure  notices  for a 30-day  period.  Although  this  30-day  period  has
expired,  management  continues  discussions  with  Fleet and the other  lenders
regarding a restructuring of this facility, and Fleet and the other lenders have
not  exercised  any further  foreclosure  remedies  since the  expiration of the
forbearance  agreement.  Management's  ongoing  restructuring  efforts  with the
lenders are aimed towards a restructuring of the facility with the establishment
of a new entity to hold the  assets of Resort  Properties  which are  pledged as
collateral  under the  facility.  The equity in the new entity is expected to be
held by a combination  of the lenders under the facility and Resort  Properties.
The facility remains in default pending completion of these negotiations.

                                     Item 4
               Submission of Matters to a Vote of Security Holders

     On January  14,  2004,  the  Company  held its 2003  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 2004 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:


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<PAGE>

                                 Board Election:

                    Voting For  Voting Against or  Abstaining  Broker Non-Votes
                                    Withheld
William J. Fair    15,443,966(1)    478,012            0              0
David Hawkes       15,442,029(1)    479,949            0              0
Paul Wachter       15,433,316(1)    488,662            0              0
Leslie B. Otten    14,760,530(2)       0               0              0
                   -------------------------------------------------------------
Gordon Gillies     14,760,530(2)       0               0              0
Alexandra Hess     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
William Janes         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 and Branson and Ms. Hess were elected by the
         holders of the Company's Class A common stock.
(3)      Messrs. Dardani, Gruber, Crandall and Janes 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           15,712,180        169,223        40,575            0
Class A Common
 Stock                 14,760,530           0             0               0
Series C-1 Preferred
 Stock                     36,586(1)        0             0               0
                      ---------------------------------------------------------
10 1/2% Series A
Preferred Stock                 0(2)        0             0               0
                      ---------------------------------------------------------
Total All Classes      68,293,121(1)(2)  169,223        40,575            0

(1) The Series C-1  preferred  stock  votes  together  with  common  stock on an
"as-if-converted"  basis. The 36,586 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  37,820,411  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.

(2) The 10 1/2% Series A preferred  stock votes together with common stock on an
"as-if-converted"  basis. The 36,626 shares of 10 1/2% Series A preferred stock,
together  with  accrued  and  unpaid  dividends,  had a  voting  right  equal to
4,008,715  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.

                                     Item 5
                                Other Information

     There have been no material  changes in the  procedures  by which  security
holders may recommend nominees to the Company's board of directors.


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<PAGE>

                                     Item 6
                        Exhibits and Reports on Form 8-K
a) Exhibits

     Included herewith are the following exhibits:

Exhibit No.       Description

4.1       Seventh  Amendment  Agreement  Re: Loan and Security  Agreement  Among
          Grand  Summit  Resort  Properties,   Inc.,  as  Borrower  and  Textron
          Financial  Corporation,  as Administrative  Agent dated as of December
          31, 2003.

4.2       Third  Amendment  Agreement to the  Statement of Intention and Special
          Additional Financing Agreement between Grand Summit Resort Properties,
          Inc. and Textron Financial Corporation dated as of December 31, 2003.

10.1      Executive  Employment  Agreement  between the Registrant and Foster A.
          Stewart, Jr. dated as of September 1, 2003.

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.

b) Reports on Form 8-K

          The Company filed a report on Form 8-K on November 3, 2003  announcing
          its Fiscal 2003 Year End Results.

          The Company filed a report on Form 8-K on December 10, 2003 announcing
          its Fiscal 2004 First Quarter Results.





                                       32
<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 10, 2004

                                   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)





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