UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

                                    FORM 10-Q

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE  SECURITIES EXCHANGE
               ACT OF 1934 FOR THE QUARTER ENDED JANUARY 27, 2002
                                       or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
     ACT OF 1934 For the transition period from____________ to ____________.

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

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

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

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

                                 (207) 824-8100
                                  www.peaks.com
              (Registrant's telephone number, including area code)

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

         Indicate by checkmark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.

Yes [X]  No [  ]


         The number of shares outstanding of each of the issuer's classes of
common stock were 14,760,530 shares of Class A common stock, $.01 par value, and
16,957,593 shares of common stock, $.01 par value, as of March 17, 2002.

<PAGE>




                                Table of Contents

Part I - Financial Information

Item 1.  Financial Statements

         Condensed Consolidated Statements of Operations (unaudited) for the 13
               weeks ended January 27, 2002 and the 13 weeks ended
               January 28, 2001................................................3

         Condensed Consolidated Statements of Operations (unaudited) for the 26
               weeks ended January 27, 2002 and the 26 weeks ended
               January 28, 2001................................................4

         Condensed Consolidated Balance Sheets as of January 27, 2002
               (unaudited) and July 29, 2001...................................5

         Condensed Consolidated Statement of Cash Flows (unaudited) for the 26
               weeks ended January 27, 2002 and the 26 weeks ended
               January 28, 2001................................................6

         Notes to (unaudited) Condensed Consolidated Financial Statements......7

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

         Forward-Looking Statements...........................................14

         General..............................................................14

         Liquidity and Capital Resources......................................15

         Changes in Results of Operations.....................................19


Item 3.  Quantitative and Qualitative Disclosures About Market Risk...........24

Item 4.  Submission of Matters to a Vote of Security Holders..................24


Part II - Other Information

Item 6.  Exhibits and Reports on Form 8-K.....................................25


<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 27, 2002        January 28, 2001
                                                       (unaudited)


   Net revenues:
       Resort                          $        108,839      $          125,539
       Real estate                               12,315                  30,725
                                      ------------------     -------------------
          Total net revenues                    121,154                 156,264

   Operating expenses:
       Resort                                    72,276                  84,291
       Real estate                               11,953                  26,216
       Marketing, general and
          administrative                         18,072                  17,867
       Non-recurring restructuring
          and asset impairment charges
          (Note 12)                              26,253                       -
       Depreciation and amortization             14,582                  19,955
                                      -----------------     -------------------
          Total operating expenses              143,136                 148,329
                                      ------------------     -------------------

Income (loss) from operations                   (21,982)                  7,935
       Interest expense                          13,398                  14,723
                                      ------------------     -------------------

Loss before benefit from income taxes           (35,380)                 (6,788)
       Benefit from income taxes
       (Note 5)                                       -                  (2,188)
                                      ------------------     -------------------

Loss before preferred stock dividends           (35,380)                 (4,600)
       Accretion of discount and
       dividends accrued on
         Mandatorily redeemable
         preferred stock                          8,119                   5,805
                                      ------------------     -------------------
Net loss available to common
       shareholders                    $        (43,499)     $          (10,405)
                                      ==================     ===================

Accumulated deficit, beginning of
       period                          $       (291,786)     $         (108,939)

Net loss available to common
       shareholders                             (43,499)                (10,405)
                                      ------------------     -------------------
Accumulated deficit, end of period     $       (335,285)     $         (119,344)
                                      ==================     ===================

Basic and diluted loss per common
       share (Note 3)
Net loss available to common
       shareholders                    $          (1.37)     $            (0.34)
                                      ==================     ===================
Weighted average common shares
       outstanding - basic and
       diluted                               31,718,123              30,470,486
                                      ==================     ===================



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






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


                                         26 weeks ended          26 weeks ended
                                        January 27, 2002        January 28, 2001
                                                       (unaudited)

Net revenues:
       Resort                          $        129,157        $        146,450
       Real estate                               15,106                  57,941
                                      ------------------     -------------------
          Total net revenues                    144,263                 204,391

Operating expenses:
       Resort                                    99,450                 114,633
       Real estate                               16,062                  49,794
       Marketing, general and
          administrative                         29,463                  28,310
       Non-recurring restructuring
          and asset impairment charges
          (Note 12)                              27,879                       -
       Depreciation and amortization             18,838                  23,957
                                      ------------------     -------------------
          Total operating expenses              191,692                 216,694
                                      ------------------     -------------------

Loss from operations                            (47,429)                (12,303)
       Interest expense                          27,156                  27,042
                                      ------------------     -------------------

Loss before benefit from income taxes           (74,585)                (39,345)
       Benefit from income taxes
          (Note 5)                                    -                 (13,746)
                                      ------------------     -------------------

Loss before extraordinary item and
       accounting change                        (74,585)                (25,599)

       Cumulative effect of
       accounting change,
          Net of taxes of $ 0 and
          $1,538, respectively
          (Note 2)                               18,658                  (2,509)
                                      ------------------     -------------------

Loss before preferred stock
       dividends                                (93,243)                (23,090)
       Accretion of discount and
         dividends accrued on
             Mandatorily redeemable
             preferred stock                     15,707                  11,491
                                      ------------------     -------------------
Net loss available to common
       shareholders                    $       (108,950)                (34,581)
                                      ==================     ===================


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

Net loss available to common
       shareholders                            (108,950)                (34,581)
                                      ------------------     -------------------
Accumulated deficit, end of period     $       (335,285)     $         (119,344)
                                      ==================     ===================

Basic and  diluted loss per common
       share (Note 3)
Loss from continuing operations        $          (2.86)     $            (1.22)
  Extraordinary loss, net of taxes                    -                       -
  Cumulative effect of change in
   accounting principle, net of taxes              (.59)                   0.08
                                      ------------------     -------------------
Net loss available to common
       shareholders                    $          (3.45)     $            (1.14)
                                      ==================     ===================

Weighted average common shares
       outstanding - basic and diluted       31,541,327              30,469,824
                                      ==================     ===================




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



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

                                        January 27, 2002         July 29, 2001
                                          (unaudited)
Assets
Current assets
     Cash and cash equivalents          $        22,529       $          11,592
     Restricted cash                              1,821                   1,372
     Accounts receivable                         11,073                  13,825
     Inventory                                   13,560                   7,909
     Prepaid expenses                             7,778                   5,286
     Assets held for sale (Note 13)              55,026                  98,219
     Deferred income taxes                        2,137                   2,137
                                        ----------------      ------------------
           Total current assets                 113,924                 140,340

Property and equipment, net                     430,255                 440,594
Real estate developed for sale                  128,128                 137,478
Goodwill (Note 7)                                 6,887                  23,518
Intangible assets (Note 6)                        8,629                  10,685
Deferred financing costs                         14,357                  16,707
Other assets                                     29,670                  26,903
                                        ----------------      ------------------
          Total assets                  $       731,850       $         796,225
                                        ================      ==================

Liabilities, Mandatorily Redeemable
  Preferred Stock and Shareholders'
  Equity (Deficit)
Current liabilities
     Current portion of long-term debt
      (Note 8)                          $       259,971       $          74,776
     Current portion of subordinated
      notes and debentures                      148,529                     549
     Accounts payable and other current
      liabilities                                75,331                  64,872
     Deposits and deferred revenue               32,968                  11,779
                                        ----------------      ------------------
         Total current liabilities              516,799                 151,976

Long-term debt, excluding current
  portion (Note 8)                                    -                 211,362
Subordinated notes and debentures,
  excluding current portion (Note 10)                 -                 126,564
Other long-term liabilities                      28,240                  34,992
Deferred income taxes                             2,137                   2,137
                                        ----------------      ------------------
         Total liabilities                      547,176                 527,031

Mandatorily Redeemable 10 1/2% Preferred
  Stock, par value of $1,000 per share;
  40,000 shares authorized; 36,626 shares
  issued and outstanding; including
  cumulative Dividends; Due November
  15, 2002; (redemption value of $57,033
  and $54,102, respectively)                     57,033                  54,102
Mandatorily Redeemable 12% Series C-1
  Preferred Stock, par value of $1,000
  per share; 40,000 shares authorized,
  issued and outstanding, including
  cumulative dividends (redemption value
  of $42,036) (Note 9)                           42,036                       -
Mandatorily Redeemable 15% Series C-2
  Preferred Stock, par value of $1,000
  per share; 139,453 shares authorized,
  issued and outstanding, including
  cumulative dividends (redemption value
  of $148,354) (Note 9)                         148,354                       -
Mandatorily Redeemable 8 1/2% Series B
  Preferred Stock, par value of $1,000 per
  share; 150,000 shares authorized, issued
  and outstanding; including cumulative
  dividends (redemption value of $0 and
  $178,016, respectively)                             -                 170,266

Shareholders' Equity (Deficit)
     Common stock, Class A, par value of $.01
     per share; 15,000,000 shares authorized;
     14,760,530 issued and outstanding              150                     148
     Common stock, par value of $.01 per share;
     100,000,000 shares authorized; 16,957,593
     and 15,708,633 issued and outstanding,
     respectively                                   167                     160
     Additional paid-in capital                 272,219                 270,853
     Accumulated deficit                       (335,285)               (226,335)
                                        ----------------      ------------------
        Total shareholders' equity
         (deficit)                              (62,749)                 44,826
                                        ----------------      ------------------
Total liabilities, mandatorily
  redeemable preferred stock and
  shareholders' equity (deficit)        $       731,850      $          796,225
                                        ================      ==================

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


                 Condensed Consolidated Statement of Cash Flows
                                 (In thousands)


                                         26 weeks ended         26 weeks ended
                                        January 27, 2002       January 28, 2001
                                                      (unaudited)
Cash flows from operating activities
Net loss                                $       (93,243)      $         (23,090)
Adjustments to reconcile net loss to
  net cash used in operating activities:
     Depreciation and amortization               18,838                  23,957
     Amortization of discount on debt               199                     706
     Deferred income taxes                            -                 (12,203)
     Stock compensation charge                       69                     246
     Cumulative effect of change in
      accounting principle                       18,658                  (4,047)
     Gain from sale of assets                      (483)                     (5)
     Decrease (increase) in assets:
         Restricted cash                           (449)                 (2,173)
         Accounts receivable                      2,752                  (6,074)
         Inventory                               (5,651)                 (5,037)
         Prepaid expenses                        (2,492)                 (5,621)
         Real estate developed for sale           9,350                  26,180
         Other assets                            (2,767)                 (5,215)
Increase (decrease) in liabilities:
         Accounts payable and other current
          liabilities                            10,459                  21,945
         Deposits and deferred revenue           21,188                  29,774
         Other long-term liabilities                912                   6,989
         Other, net                              34,057                      (2)
                                        ----------------      ------------------
Net cash provided by operating
  activities                                     11,397                  46,330
                                        ----------------      ------------------

Cash flows from investing activities
     Capital expenditures                        (5,349)                (22,459)
     Proceeds from sale of assets                 9,598                     178
     Other, net                                      (6)                      -
                                        ----------------      ------------------
Net cash provided by (used in)
  investing activities                            4,243                 (22,281)
                                        ----------------      ------------------
Cash flows from financing activities
     Proceeds from Senior Credit
      Facility                                   47,018                  52,202
     Repayment of Senior Credit
      Facility                                  (66,859)                (46,628)
     Proceeds from long-term debt                27,050                       -
     Proceeds from non-recourse real
      estate debt                                17,619                  19,924
     Repayment of long-term debt                 (5,225)                 (2,419)
     Repayment of non-recourse real
      estate debt                               (25,099)                (36,594)
     Deferred financing costs                      (206)                   (296)
     Proceeds from exercise of stock
      options                                       997                       -
     Proceeds from issuance of warrants               -                   2,000
     Other, net                                       2                      11
                                        ----------------      ------------------
Net cash used in financing activities            (4,703)                (11,800)
                                        ----------------      ------------------
Net increase in cash and cash
  equivalents                                    10,937                  12,249
Cash and cash equivalents, beginning
  of period                                      11,592                  10,085
                                        ----------------      ------------------
Cash and cash equivalents, end of period $       22,529                  22,334
                                        ================      ==================

Supplementary disclosure of non-cash
  item:
Non-cash transfer of real estate
  developed for sale to fixed assets     $            -                  26,239


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





<PAGE>

        Notes to (unaudited) Condensed Consolidated Financial Statements

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

         Results for interim periods are not indicative of the results expected
for the year due to the seasonal nature of the Company's business. The unaudited
condensed consolidated financial statements should be read in conjunction with
the following notes and the Company's consolidated financial statements for the
fiscal year ended July 29, 2001 included in the Company's annual report on Form
10-K, filed with the Securities and Exchange Commission on November 14, 2001.
Certain amounts in the prior year's unaudited condensed consolidated financial
statements and the audited financial statements as filed in the Company's Form
10-K have been reclassified to conform to the current period presentation.

         2. Accounting Change. In July 2001, the Financial Accounting Standards
Board (FASB) issued Statement of Financial Accounting Standards (SFAS) No. 142,
Goodwill and Other Intangible Assets. This statement applies to goodwill and
intangible assets acquired after June 30, 2001, as well as goodwill and
intangible assets previously acquired. Under this statement, goodwill as well as
certain other intangible assets determined to have an infinite life, will no
longer be amortized. Instead, these assets will be reviewed for impairment on a
periodic basis. The Company has elected early adoption of the provisions of SFAS
No. 142 during the fiscal quarter ended October 28, 2001. As a result of the
adoption of SFAS No. 142, the Company recorded an impairment charge of $18.7
million, which has been recorded as a cumulative effect of accounting change in
the accompanying consolidated statement of operations. See Notes 6 and 7 for
additional disclosure information required by SFAS No. 142.

         In the first quarter of fiscal 2001, the Company changed its method of
accounting for interest rate swaps in accordance with its adoption of SFAS No.
133 Accounting for Derivative Instruments and Hedging Activities, SFAS No. 137
Accounting for Derivative Instruments and Hedging Activities - Deferral of the
Effective Date of FASB Statement No. 133 - an Amendment of FASB Statement No.
133 and SFAS No. 138 Accounting for Certain Derivative Instruments and Certain
Hedging Activities - an Amendment of FASB Statement No. 133 (collectively "SFAS
No. 133 as amended").

         SFAS No. 133 as amended requires that derivatives be recorded on the
balance sheet as an asset or liability at fair value. The Company has entered
into three interest rate swap agreements that do not qualify for hedge
accounting under SFAS No. 133 as amended. As of July 30, 2000, the Company had
$8.6 million recorded in Other Long Term Liabilities in the accompanying
Consolidated Balance Sheet and had been recording the net effect of the
anticipated $2.1 million in interest savings from these agreements on a straight
line basis over the life of the agreements through the income statement. Upon
adoption of SFAS No. 133 as amended, the fair value of these swaps was recorded
as a $6.5 million asset and an $11.1 million liability, with a corresponding
$4.6 million entry to cumulative effect of accounting change in earnings. The
$8.6 million recorded in Other Long Term Liabilities was also recognized through
a cumulative effect of accounting change in earnings, resulting in a net
cumulative effect of accounting change of $4.0 million (before a $1.5 million
provision for income taxes). Subsequent changes in the fair values of the swaps
are being recorded through the income statement as an adjustment to interest
expense.



<PAGE>

         3. Loss per Common Share. Loss per common share for the 13 weeks, and
the 26 weeks ending January 27, 2002 and January 28, 2001, respectively, were
determined based on the following data (in thousands):
<TABLE>

                                                    13 weeks ended     13 weeks ended    26 weeks ended     26 weeks ended
                                                   January 27, 2002   January 28, 2001   January 27, 2002   January 28, 2001
                                                   -------------------------------------------------------------------------
<S>                                                <C>                <C>                <C>                 <C>
                      Loss
Loss before preferred stock dividends
  and accretion and extraordinary items            $    (35,380)      $      (4,600)     $     (74,585)      $     (25,599)
Accretion of discount and dividends accrued on
   Mandatorily redeemable preferred stock                 8,119               5,805             15,707              11,491
                                                   -----------------  -----------------  ----------------   ----------------
Loss before extraordinary items                         (43,499)            (10,405)           (90,292)            (37,090)
Extraordinary loss, net of taxes                              -                   -                                      -
Cumulative effect of accounting changes, net of taxes         -                   -             18,658              (2,509)
                                                   -----------------  -----------------  ----------------   ----------------
Net loss available to common shareholders          $    (43,499)      $     (10,405)     $    (108,950)      $     (34,581)
                                                   =================  =================  ================   ================

                      Shares
                                                   -----------------  -----------------  ----------------   ----------------
Weighted  average shares  outstanding - basic and
diluted                                                  31,718              30,470             31,541              30,470
                                                   =================  =================  ================   ================
</TABLE>

         At January 27, 2002 and January 28, 2001, the Parent had 14,760,530
shares of its class A common stock issued and outstanding, which are convertible
into shares of the Parent's common stock. The shares of the Parent's common
stock issuable upon conversion of the shares of the Parent's class A common
stock have been included in the calculation of the weighted average shares
outstanding. At January 27, 2002, the Parent had 36,626 shares of its
mandatorily redeemable 10 1/2% convertible preferred stock (the "Series A
Preferred Stock") and 40,000 shares of its 12% series C-1 convertible
participating preferred stock (the "Series C-1 Preferred Stock") issued and
outstanding, both of which are convertible into shares of the Parent's common
stock. At January 28, 2001 the Parent had 36,626 shares of Series A Preferred
Stock and 150,000 shares of Series B Preferred Stock issued and outstanding,
both of which are convertible into shares of the Parent's common stock. For a
description of the issuance of the shares of Series C-1 Preferred Stock and the
agreement by the holders of shares of Series B Preferred Stock to strip the
shares of Series B Preferred Stock of all their rights (including the right to
convert such shares into shares of the Parent's common stock) except for the
right to elect directors of the Parent, see Note 9 to these unaudited Condensed
Consolidated Financial Statements. The shares of common stock into which these
preferred securities are convertible have not been included in the diluted share
calculation as the impact of their inclusion would be anti-dilutive. The Parent
also had 2,732,819 and 2,519,221 exercisable options outstanding to purchase
shares of its common stock under the Parent's stock option plan as of January
27, 2002 and January 28, 2001, respectively. These shares are also excluded from
the diluted share calculation because in each case the exercise price is greater
than the average share price for the periods presented.

         4. Segment Information. In accordance with SFAS No. 131, Disclosures
about Segments of Enterprise and Related Information, the Company has classified
its operations into two business segments, Resorts and Real Estate. The Company
has concluded that each of the resorts have similar economic characteristics and
meet the aggregation criteria set forth in SFAS No. 131. 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

<PAGE>

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 before interest, taxes,
depreciation and amortization (EBITDA). Additionally, each of the resorts has
historically produced similar EBITDA 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 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 profits for each of the two reporting segments are as
follows:

<TABLE>
                                            13 weeks ended     13 weeks ended     26 weeks ended      26 weeks ended
                                            January 27, 2002   January 28, 2001   January 27, 2002   January 28, 2001
                                            ----------------  -----------------   ----------------   -----------------
                                                                       (in thousands)
<S>                                             <C>                <C>                <C>                 <C>
      Revenues:
             Resorts                            $   108,839        $   125,539        $   129,157         $   146,450
             Real Estate                             12,315             30,725             15,106              57,941
                                            ----------------  -----------------   ----------------   -----------------
      Total                                     $   121,154        $   156,264        $   144,263         $   204,391
                                            ----------------  -----------------   ----------------   -----------------

      Loss before benefit from income taxes

             Resorts                            $   (31,017)       $    (2,851)       $   (63,688)        $   (32,800)
             Real Estate                             (4,363)            (3,937)           (10,897)             (6,545)
                                            ----------------  -----------------   ----------------   -----------------
      Total                                     $   (35,380)       $    (6,788)       $   (74,585)        $   (39,345)
                                            ----------------  -----------------   ----------------   -----------------
</TABLE>

         5. Critical Accounting Policies. Financial Reporting Release No. 60,
which was recently released by the Securities and Exchange Commission, requires
all companies to include a discussion of critical accounting policies or methods
used in the preparation of financial statements. The Company considers certain
accounting policies related to long-lived and intangible assets and goodwill,
real estate developed for sale, and deferred taxes to be critical policies due
to the estimation process involved in each.

         Valuation of Long Lived and Intangible Assets and Goodwill. The Company
assesses the impairment of identifiable intangible assets, long-lived assets and
related goodwill whenever events or changes in circumstances indicate that the
carrying value may not be recoverable. Factors that management considers
important, which could trigger an impairment review, include the following:

         o      Significant under performance relative to expected historical or
                projected future operating results,

         o      Significant changes in the manner of use of the acquired assets
                or the strategy for the Company's overall business,

         o      Significant negative industry or economic trends.

         When the Company determines the carrying value of intangible assets,
long-lived assets and related goodwill may not be recoverable based upon the
existence of one or more of the above indicators of impairment, the Company will
measure the impairment based on a projected discount cash flow method,
determination of fair value, or other methods as appropriate.

         Real Estate Developed for Sale. The Company capitalizes as real estate
developed for sale the original acquisition cost of land, direct construction,
and development costs, property taxes, interest incurred on costs and financing
related to real estate under development, and other related costs until the
property reaches its intended use. The cost of sales for individual parcels of
real estate or quartershare units within a project is determined using the
relative sales value method. The Company assesses the impairment of the real
estate developed for sale periodically and will measure an impairment based on a
comparison of the carrying value of all such real estate developed for sale and
the realizable value that can be achieved in the real estate market.


<PAGE>

         Deferred Taxes. The Company recognizes deferred tax assets and
liabilities based on the differences between the financial statement carrying
amounts and the tax bases of assets and liabilities. The Company regularly
reviews its deferred tax assets for recoverability and establishes a valuation
allowance based on historical income, projected future taxable income, and
expected timing of the reversal of existing temporary differences. During fiscal
year 2001, the Company determined that a valuation allowance should be recorded
against its deferred tax assets for net operating loss carryforwards and other
tax attributes because it is more likely than not that the benefit of such
losses and attributes will not be realized.

         6. Acquired Other Intangible Assets. As of January 27, 2002, acquired
other intangible assets of the Company, which are entirely attributed to its
Resort segment, are broken down by the following asset classes (in thousands):


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


                 Amortized intangible assets
                       Lease agreements            $  1,853       $      (201)
                                                  ============   ===============

                 Unamortized intangible assets
                       Tradenames                  $  6,977
                                                  ============

         Amortization expense related to acquired other intangible assets was
$14,000 and $28,000 for the quarter and six months ended January 27, 2002.

         7. Goodwill. The changes in the carrying amount of goodwill for the 26
weeks ended January 27, 2002 are as follows (in thousands):

                                                                      Resort
                                                                      Segment
                                                                   -------------
                 Carrying value as of July 29, 2001                   $  23,518
                 Impairment losses                                      (18,658)
                 Reclassification of previously identified other
                  intangible Assets no longer allowed under SFAS No.
                  141                                                     2,027
                                                                   -------------
                 Carrying value as of January 27, 2002                 $  6,887
                                                                   =============

         Goodwill associated with the Resort segment is tested for impairment at
the end of each fiscal year, after the final results of the operating ski season
are available. For purposes of implementing SFAS No. 142, the Company used
independent third party appraisals, which were prepared using an income approach
based on expected future cash flows, to establish the fair value of its
reporting units as of July 30, 2001, the date of adoption. The carrying amount
of the reporting units associated with the Company's 1996 acquisition of SKI,
Ltd. and its subsidiaries exceeded their fair values at the date of adoption. As
a result, the Company recognized a transitional impairment loss of $18.7
million, which represented a write-down of goodwill that had been allocated to
those reporting units. This transitional impairment loss has been recorded as a
cumulative effect of accounting change in the Company's accompanying condensed
consolidated statement of operations for the 26 weeks ending ended January 27,
2002.

         8. Long Term and Short Term Debt. At January 27, 2002, the Company
classified all of the long term debt as current in the accompanying consolidated
balance sheet. As of that date, the Company was in violation of most of its
financial ratios and covenants associated with its senior credit facility,
including those in relation with total debt to EBITDA ratio, EBITDA to interest
expense ratio, adjusted cash flow to debt service ratio, minimum EBITDA and
senior debt to EBITDA ratio, primarily as a result of shortfalls in EBITDA from
planned amounts. For the six months ended January 27, 2002 the Company was below

<PAGE>

planned EBITDA by approximately $5.3 million. Although the Company obtained a
waiver for the financial ratios and covenant defaults, long term debt has been
reclassified to current because the Company's projections show it will be in
default of several senior credit facility covenants as of the end of the next
fiscal quarter unless it is successful in completing the sale of Steamboat or
another significant transaction and negotiate new ratios and covenants with its
lenders. Most of the Company's debt has cross default provisions that will
accelerate the maturity of these obligations unless the anticipated default is
corrected, the default is waived by the holder of the obligation or the debt is
restructured. A copy of the waiver provided by the lenders under the Company's
senior credit facility, which sets forth the scope of the waiver and its
limitations and conditions, is attached as an exhibit to this report.

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

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

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

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

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

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

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

         o        The outstanding Series B Preferred Stock that was held by Oak
                  Hill was stripped of all of its rights and preferences with
                  the exception of the right to elect up to four directors;
                  (plus two additional directors under the terms of Oak Hill's
                  existing Stockholders' Agreement with the Company and Leslie
                  B. Otten);

         o        The Parent issued to Oak Hill two new series of Preferred
                  Stock; (i) $40 million of Series C-1 Preferred Stock, and (ii)
                  $139.5 million of Series C-2 Preferred Stock. The initial face
                  value of the Series C-1 Preferred Stock and Series C-2
                  Preferred Stock correspond to the accrued liquidation
                  preference of the Series B Preferred Stock immediately before
                  being stripped of its right to such accrued liquidation
                  preference. The Series C-1 Preferred Stock and Series C-2
                  Preferred Stock carry preferred dividends of 12% and 15%,
                  respectively. At the Parent's option, dividends can either be
                  paid in cash or accrued in additional shares. The Series C-1

<PAGE>

                  Preferred Stock is convertible into common stock at a price of
                  $1.25 per share, subject to adjustments. The Series C-2
                  Preferred Stock is not convertible. Both of Series C-1
                  Preferred Stock and Series C-2 Preferred Stock will mature in
                  July, 2007;

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

         During July 2000, Resort Properties issued debt to Oak Hill under
Tranche C of the real estate credit facility. Additionally, Oak Hill entered
into a securities purchase agreement for the issuance of warrants for 6,000,000
shares of the Parent's common stock with an exercise price of $2.50 per share.
Under the terms of the agreement, net share settlement was required. The
transaction was accounted for as debt issued with detachable warrants under
Accounting Principles Board Opinion (APB) No. 14. APB No. 14 requires the
portion of the proceeds of debt securities issued with detachable stock purchase
warrants, which is allocable to the warrants should be accounted for as paid-in
capital. The allocation was based on the relative fair values of the two
securities at the time of issuance. Upon execution of the transaction, the
Parent did not issue Oak Hill the warrants. Therefore, the Company recorded a
$7.7 million long term liability to represent the Parent's obligation to issue
the warrants. As part of the July 15, 2001 security purchase agreement, which
closed on August 31, 2001, Oak Hill agreed to cancel its right to receive these
warrants, as they had an exercise price of $2.50 and the Parent's common stock
was then trading at approximately $1 per share. In the first quarter of fiscal
2002, the Company reclassified the $7.7 million other long term liability to
additional paid-in capital as if the warrants were issued, in accordance with
EITF 96-13, "contracts that require a net share settlement should be initially
measured at fair value and reported in permanent equity. Subsequent changes in
fair value should not be recognized." Therefore, any change in the market value
of the warrants since Oak Hill received the rights to receive the warrants, was
never recognized.

         The Company has accounted for the termination of the liquidation
preference of the Series B Preferred Stock as a capital transaction in
conjunction with the accounting for the termination of the warrants described
above. Accordingly, the Company reversed the carrying value of the Series B
Preferred Stock of $172.1 million as of August 31, 2001 and correspondingly
recorded the Series C-1 Preferred Stock and C-2 Preferred Stock at their initial
face values of $40.0 million and $139.5 million, respectively. No gain or loss
was recognized by the Company related to the recapitalization transactions. The
Company also reclassified the $7.3 million of net remaining unamortized issuance
costs related to the Series B Preferred Stock to additional paid-in capital.

         10. Subordinated Notes. In June of 1996 the Parent issued $120.0
million of 12% senior subordinated notes (the "Notes"). The Notes are general
unsecured obligations of the Parent, subordinated in right of payment to all
existing and future senior debt of the Company, including all borrowings of the
Company under its senior credit facility. The Notes are fully and
unconditionally guaranteed by all subsidiaries of the Parent, with the exception
of Ski Insurance, Killington West, Ltd., Uplands Water Company and Walton Pond
Apartments, Inc. The above listed subsidiaries that are not guarantors are
individually and collectively immaterial to the Company's balance sheet and
results of operations. The guarantor subsidiaries are wholly owned subsidiaries
of the Parent and its subsidiaries and the guarantees are full, unconditional,
and joint and several. Some of the guarantor subsidiaries are restricted in
their ability to declare dividends or advance funds to the Parent.

         As of January 27, 2002 the accreted value of the Notes net of issuance
costs was $118 million. This balance has been classified as current in the
accompanying consolidated balance sheet. Even though the Company obtained a
waiver for the covenant defaults under its senior credit facility for the
quarter ended January 27, 2002, the Company classified all long term debt to
current because present projections estimate the Company will be in default of
several senior credit facility covenants as of the end of its next fiscal
quarter unless it is successful in completing the sale of Steamboat or another
significant transaction and negotiating new covenants with its lenders. The

<PAGE>

Notes have a cross-default provision that will accelerate the maturity of these
Notes unless the default is corrected or the default is waived by a majority of
the holders of the Notes. Because of these uncertainties the Company has
classified the Notes and all other long term debt as current.

         11. Dividend Restrictions. Borrowers under the Resort Properties credit
facility, which include American Skiing Company Resort Properties, Inc. ("Resort
Properties"), and Resort Properties' subsidiaries, including Grand Summit Resort
Properties, Inc. ("Grand Summit") are restricted from declaring dividends or
advancing funds to the Parent by any other method, unless specifically approved
by these lenders.

         The Parent's senior credit facility contains restrictions on the
payment of dividends by the Parent on its common stock. Those restrictions
prohibit the payment of dividends in excess of 50% of the Company's consolidated
net income after July 31, 1997, and further prohibit the payment of dividends
under any circumstances when the effect of such payment would be to cause the
Company's debt to EBITDA ratio (as defined within the credit agreement) to
exceed 4.0 to 1. On an annual basis, the Company has not had net income
subsequent to July 31, 1997.

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

         12. Non-recurring Restructuring and Asset Impairment Charges. For the
13 weeks and 26 weeks ended January 27, 2002, the Company incurred $0.8 million
and $2.4 million, respectively, in charges related to the implementation of its
previously announced strategic restructuring plan. These costs consisted mainly
of legal, consulting and financing costs incurred in connection with its Resort
and Real Estate credit facility amendments and the capital infusion from Oak
Hill (See Note 9). There were no employee termination costs included in the
$0.8 or $2.4 million charge, as the Company had completed the staff reduction
phase of its strategic restructuring plan prior to the end of fiscal 2001. All
of the amounts recognized for the 13 weeks and 26 weeks ended January 27, 2002
were paid or accrued for services previously rendered in connection with this
strategic restructuring plan. The Company has not established any reserves for
anticipated future restructuring charges and did not have such a reserve
established at the end of fiscal 2001. The Company will continue to recognize
expenses associated with its strategic restructuring plan as they are incurred.

         In accordance with SFAS No. 121, the carrying value of the net assets
for both Steamboat and Sugarbush that are subject to their respective sales were
reclassified as assets held for sale on the accompanying condensed consolidated
balance sheet as of July 29, 2001. The assets held for sale have been reduced to
their estimated fair value based on the estimated selling price less costs to
sell, resulting in a combined pre-tax loss of $67.1 million, which is included
in the non-recurring merger, restructuring and asset impairment line in the
consolidated statement of operations for the year ended July 29, 2001. The
Company took an additional write down on Steamboat for the 13 and 26 weeks ended
January 27, 2002 of $25.5 million based on modifications from preliminary
estimates to the final purchase and sale agreement.

         13. Assets held for Sale. The Company has previously communicated its
intent to sell the Steamboat ski resort in Colorado to reduce the debt of the
Company as part of its strategic plan. During October of 2001, the Company
executed a non-binding letter of intent to sell Steamboat. In accordance with
SFAS No. 121, Accounting for the Impairment of Long-lived Assets and for
Long-Lived Assets to be Disposed Of, the Company reduced the carrying value of
the net assets of the resort to the fair market value of the resort. The result
was the recognition of a $50 million allowance to reduce the carrying value of
the assets to fair market value. The loss was recorded in cost of operations at
July 29, 2001. Additionally, the carrying value of the net assets was
reclassified as assets held for sale. On January 24, 2002 the Company signed a
purchase and sale agreement for the Steamboat ski resort. The proceeds from the
sale of the resort are now estimated to be $25.5 million less than originally
expected due in part to the delay of the sale. Therefore, the Company has
recorded an additional allowance to reduce the carrying value of the net assets
to the revised fair

<PAGE>

value. The additional allowance of $25.5 million has been recorded in the
non-recurring restructuring and asset impairment charges line in the
accompanying condensed consolidated statement of operations for the 26 weeks
ended January 27, 2002. The components of the net assets held for sale as of
January 27, 2002 are as follows (in thousands):


                      --------------------------------------------------
                      Net Assets as of January 27, 2002        Total
                      --------------------------------------------------
                      Accounts receivable                    $    1,726
                      Inventory                                   1,690
                      Prepaid expenses                              203
                      Property & equipment, net                  80,409
                      Real estate developed for sale              6,500
                      Goodwill                                   59,872
                      Other assets                                   27
                      Accounts payable and accrued
                        liabilities                              (8,605)
                      Deposits and deferred revenues             (7,452)
                      LTD retired at closing                     (3,505)
                      Other Liabilities retired at closing         (339)
                                                            ------------
                      Assets held for sale                      130,526
                      Allowance for loss on sale                (75,500)
                                                            ------------
                      Net assets held for sale               $   55,026
                      --------------------------------------------------

         Summary operating results of Steamboat for the 26 weeks ended January
27, 2002 and January 28, 2001, which have historically been included in the
Company's resort segment in its results of operations, are as follows (in
thousands):

----------------------------------------------------------------------
26 weeks ended                     January 27, 2002    January 28, 2001
                      -------------------------------------------------

Total revenues                       $   22,748           $   23,307
Total expenses (1)                       37,618               26,486
                                     -------------        -------------
Total income (loss) from operations  $  (14,870)          $   (3,179)
--------------------------------------------------------------------


(1) Included in the total expenses for the 26 weeks ended January 27, 2002 is an
asset impairment charge of $25.5 million.  There was also no depreciation
included in total expenses for the 26 weeks ended January 27, 2002. Total
depreciation included in the 26 weeks ended January 28, 2001 was $4.1 million.

         Annual operating results for Steamboat which have historically been
included in the Company's resort segment results of operations, are as follows
(in thousands):

--------------------------------------------------------------------
Fiscal Years Ended                          2001           2000
--------------------------------------------------------------------
Total revenues                              $ 56,035      $  50,618
Total expenses (1)                           102,171         43,904
                                        -------------  -------------
Total income (loss) from operations         $(46,136)     $   6,714
--------------------------------------------------------------------


(1) Included in the total expenses for the year ended July 27, 2001 is an asset
impairment charge of $50.0 million.



<PAGE>

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


                           Forward-Looking Statements

         This document contains both historical and forward-looking statements.
All statements other than statements of historical facts are, or may be deemed
to be, 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
American Skiing Company's current expectations concerning future results and
events. Similarly, statements that describe the Company's objectives, plans or
goals are or may be forward looking statements. Such forward-looking statements
involve a number of risks and uncertainties. American Skiing Company has tried
wherever possible to identify such statements by using words such as
"anticipate," "assume," "believe," "expect," "intend," "plan," and words and
terms similar in substance in connection with any discussion of operating or
financial performance. 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:
failure to fully implement the restructuring plan outlined in Company press
releases and documents on file with the Securities and Exchange Commission; the
Company's substantial leverage; restrictions on the Company's ability to access
additional sources of capital; a decrease in visitation at the Company's resorts
as a result of the events of September 11th, and related events thereafter;
changes in regional and national business and economic conditions affecting both
American Skiing Company's resort operating and real estate segments; failure to
renew or refinance existing financial liabilities and obligations or attain new
outside financing; and other factors listed from time-to-time in American Skiing
Company's documents filed by the Company with the Securities Exchange
Commission. 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, American Skiing Company does not have or
undertake any obligation to publicly update any forward-looking statements to
reflect subsequent events or circumstances.

General

         The following is our discussion and analysis of the financial condition
and results of operations for the quarter ended January 27, 2002. As you read
the material below, we urge you to carefully consider our fiscal 2001 Annual
report on Form 10-K filed on November 14, 2001 and our unaudited condensed
consolidated financial statements and related notes contained elsewhere in this
report.

         Restructuring Plan. During the 13 weeks ended January 27, 2002, we
pursued the implementation of the restructuring plan announced on May 30, 2001,
the details of which are set forth in our quarterly report on Form 10-Q for the
quarter ended October 28, 2001.

         We completed the $14 million long-term financing facility of equipment
relating to the Heavenly gondola on December 6, 2001. Oak Hill provided a
guarantee to the lenders of this loan. However the ultimate success of this
comprehensive strategic plan is dependent on the execution of the remaining plan
elements, in particular the sale of Steamboat or another resort to significantly
reduce leverage and improve our ability to meet our obligations under our credit
facilities. We have been confronted with successive delays in the completion of
the sale of Steamboat initially resulting from the tragic events of September
11th, and then due to problems encountered by the buyer in its financing of the
purchase price for Steamboat. We nonetheless are targeting the completion of the
sale of Steamboat within the next thirty days, even though such sale remains
subject to a number of contingencies that may not be satisfied, including the
release of certain liens of the transferred assets.

         Due to these delays we evaluated other alternatives, including the sale
of certain other resorts, and the effect the completion of one or more of these
alternatives would have on our leverage.


<PAGE>

         The failure to consummate a transaction that will enable us to
significantly reduce our leverage may have significant adverse effects on our
future liquidity, operating performance and results. For a more detailed
discussion, see "Resort Liquidity" below.

Liquidity and Capital Resources

        Short Term. Our primary short term liquidity needs involve funding
seasonal working capital requirements, marketing and selling our real estate
development projects, funding our fiscal 2002 capital improvement program,
meeting the amortization and interest payments on our debt, redeeming our Series
A Preferred Stock on November 15, 2002 and exercising a $5 million lease/option
payment for certain of our ski terrain at The Canyons resort. We use different
sources to fund the cash requirements of our ski-related and real estate
development activities. Other than the proceeds from the recapitalization
described above, our primary source of liquidity for ski-related working capital
and ski-related capital improvements are cash flows from operations of our
non-real estate subsidiaries and borrowings under our senior credit facility.
Other than the proceeds from the recapitalization described above, real estate
development and real estate working capital is funded primarily through
construction financing facilities established for major real estate development
projects, a real estate credit facility, and net proceeds from the sale of real
estate developed for sale after required construction loan repayments. These
real estate facilities are without recourse to us and our resort operating
subsidiaries (although defaults under these facilities could result in
cross-defaults under our major credit facilities) and are collateralized by
significant real estate assets of Resort Properties, and its subsidiaries,
including the assets and stock of Grand Summit, our primary hotel development
subsidiary. As of January 27, 2002, the book value of the total assets that
collateralized these facilities and which are included in the accompanying
unaudited condensed consolidated balance sheet was approximately $202.3 million.

         Resort Liquidity. We maintain a $156.1 million senior credit facility
with Fleet National Bank, as agent, and certain other lenders. This facility
consists of a $94.6 million revolving portion and a $61.5 million term portion.
The revolving portion of the senior credit facility matures on May 30, 2004 and
the term portion matures on May 31, 2006. On January 14, 2002, we created a $7.2
million sub-tranche under the existing revolving portion of the facility for the
purpose of funding the January 15, 2002 interest payment on our Senior
Subordinated Notes. As described below, we permanently reduced the term portion
by $2.2 million and the availability of the revolving portion of the facility by
$5.4 million in conjunction with the sale of Sugarbush on September 28, 2002. As
of March 15, 2002, the outstanding amount of the term loan was $61.5 million and
we had drawn or committed for letters of credit approximately $24.1 million of
the total $41.2 million available under the revolving portion of our senior
credit facility. Total availability under the revolver will decrease to $16.2
million on March 31, 2002, and will increase to $46.2 million on April 29, 2002,
with monthly increases after April 29, 2002 until July 29, 2002. Prior to August
1, 2002 we will need to renegotiate the maximum availablility under the
revolving portion of the senior credit facility which is currently deemed to be
$0 as of such date, since we did not consummate the optional prepayment on or
prior to December 27, 2001. We currently anticipate renegotiating these terms in
conjuction with our sale of a significant asset.

        The term portion of the senior credit facility amortizes in five annual
installments of $650,000 payable on May 31 of each year, with the remaining
portion of the principal due in two substantially equal installments on May 31,
2005 and May 31, 2006. In addition, the senior credit facility requires
mandatory prepayment of the term portion and a reduction in the availability
under the revolving portion of an amount equal to 50% of the consolidated excess
cash flows (as defined in accordance with the senior credit facility) during any
period in which the excess cash flow leverage ratio exceeds 3.50 to 1.

        The interest rate on all term and revolving credit amounts outstanding
(excluding the $5.2 million and $7.2 million sub-tranches) is equal to the Fleet
National Bank Base Rate plus 3.0%, until such time that we make the optional
prepayment. Should we make the $90 million optional prepayment, the interest
rates will be reset to a new pricing grid under which the rates for both the
term and revolving facilities will vary, based on our leverage ratios, from a
minimum of the Fleet National Bank Base Rate plus 1.25% or LIBOR plus 2.50% to a
maximum of the Fleet National Bank Base Rate plus 2.25% or LIBOR plus 3.75%.
Should we fail to make the optional prepayment, the interest rates on both the
revolving and term facilities will increase incrementally to the Fleet National
Bank Base Rate plus 4.25%. The $5.2 million sub-tranche bears interest at a
fixed rate of 12% and the $7.2 million sub-tranche bears interest at a fixed
rate of 17.5%.


<PAGE>

        The senior credit facility includes a provision for a deferred interest
spread, pursuant to which interest shall accrue (effective on May 1, 2001) at a
rate of 2% per annum on all amounts outstanding under the facility. We failed to
make an optional prepayment on December 24, 2001 and the deferred interest
spread will continue to accrue and we will be obligated to pay the deferred
interest spread that has accrued as of August 1, 2002. We are in the process of
negotiating with the lenders of the senior credit facility to waive this
obligation in conjunction with a significant permanent reduction in the
facility, which would be generated by the sale of a significant asset. As of
January 27, 2002, we have accrued $2.0 million of deferred interest spread under
this provision.

        The maximum availability of the revolving portion of the senior credit
facility varies between $16.2 million and $94.6 million following a schedule we
negotiated with our lenders and adjusted for the sale of Sugarbush. The
revolving portion of the facility is also subject to an annual 30-day clean-down
requirement, which period must include April 30 of each year, during which the
sum of the outstanding principal balance and letter of credit exposure shall not
exceed $16.2 million.

        The senior credit facility contains affirmative, negative and financial
covenants customary for this type of credit facility, which includes maintaining
certain financial ratios. The senior credit facility is secured by substantially
all of our assets and subsidiaries except those of our real estate development
subsidiaries. The senior credit facility also places an annual maximum level of
non-real estate capital. For fiscal 2001, we satisfied the maximum capital
expenditure requirement, as our resort capital expenditures were $8.8 million
for the year (excluding the Heavenly gondola for which there was a separate
approval under the credit agreement). The Heavenly gondola became operational,
and began transporting skiers in December 2000. As of January 27, 2002 we have
expended $24.9 million on the construction of the Heavenly gondola.

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

        During the second quarter of fiscal 2002, we paid $3.1 million in fees
for failure to make a $90 million optional prepayment under the current senior
credit facility agreement. We are also obligated to pay up to an additional $2.5
million in amendment fees on a periodic basis through July 31, 2002 under the
senior credit facility agreement. All of these contingent fees have been
recorded on our balance sheet as deferred financing costs and will be amortized
against income over the remaining life of the facility. If Steamboat or a
similarly sized resort is sold, the Company expects to negotiate a waiver with
the lenders of the senior credit facility for all or a portion of these deferred
fees.

        On September 28, 2001, we closed on the sale of our Sugarbush ski resort
in Warren, VT to Summit Ventures NE, Inc. The net proceeds from this sale of
approximately $7.3 million, after certain working capital adjustments, were used
to reduce the revolving portion of our senior credit facility by $5.2 million,
of which $3.3 million was a permanent reduction, and to permanently reduce the
term portion by $2.2 million. In conjunction with this transaction, we also
entered into a third amendment to our senior credit facility, dated as of
September 10, 2001. This amendment, among other things, provides the consent of
the lenders to sell the Sugarbush resort and it further reduces the maximum
revolver availability amounts established in the second amendment to the
facility by $1.9 million, excluding the permanent reduction based on the
proceeds of the sale.

        As of the end of the second quarter of fiscal 2002 we were not in
compliance with most of our financial covenants under the senior credit
facility. On March 18, 2002 we obtained a waiver from our resort lenders that
waived all pending defaults of the financial covenants included in our senior
credit facility as of the end of the second quarter of fiscal 2002.


<PAGE>

        We are pursuing the sale of Steamboat, the proceeds from which are
expected to substantially reduce our leverage. A transaction may be completed
within the next thirty days. Should we complete the Steamboat sale, we presently
anticipate that we will need to negotiate revised covenants and terms to our
existing credit facility in conjunction with the transaction. In the event that
we are unable to complete the Steamboat sale or consummate a transaction of a
similar size by the end of the third quarter of fiscal 2002, we presently
anticipate that we will not be able to meet the financial covenants of the
senior credit facility as of the end of the third quarter of fiscal 2002, at
which time we would no longer be in compliance under these covenants and such
failure will constitute an event of default thereunder. As a result, all amounts
outstanding under our senior credit facility, together with accrued and unpaid
interest, could be declared due and payable at any time, upon a decision by the
lenders holding a majority of the aggregate principal amount outstanding and
available under the senior credit facility. We would then be required to
renegotiate those covenants or obtain a default waiver from our senior lenders.
If we are unable to obtain acceptable amendments to or restructure our senior
credit facility, we will be required to pursue one or more alternative
strategies, such as selling assets, refinancing or restructuring our
indebtedness, selling additional debt or equity securities, and/or any other
alternatives available to us under applicable law while we implement plans and
actions to satisfy our financial obligations. However, we cannot assure you that
any alternative strategies would be available or feasible at the time or prove
adequate. Also, some alternative strategies would require the consent of our
lenders before we engage in them. If we were not able to successfully execute
one or more of these alternative strategies and manage to repay the amounts
outstanding under our senior credit facility, when due and payable, our lenders
would have the right to proceed against the collateral granted to them to secure
such indebtedness. Also, the acceleration of the indebtedness under our senior
credit facility would constitute an event of default under the indenture
governing our Senior Subordinated Notes. The principal and accrued but unpaid
interest on these notes could then be declared due and payable at any time.

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

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

        As mentioned below, we currently do not anticipate that American
Skiing Company Resort Properties will be able to meet all of its loan
amortization obligations if we are unable to consummate the sale of Steamboat on
or before March 31, 2002. We anticipate that it will also be in default of
several covenants related to its Resort Properties real estate credit facility
and that its subsidiary, Grand Summit Resort Properties, Inc., will not be able
to meet certain of its future loan amortization obligations. In the event of a
payment default under or principal acceleration of either the real estate term
facility or the construction loan facility, a cross-default will occur under the
Indenture governing our Senior Subordinated Notes. Such a cross-default, unless
waived by a majority of the holders of the Senior Subordinated Notes, will also
constitute a default under our resort senior credit facility. If a cross-default
were to occur and we were unable to obtain acceptable amendments to our credit
facilities, we would be required to pursue one or more alternative strategies,
such as attempting to renegotiate the terms of these facilities, selling assets,
refinancing or restructuring our indebtedness, selling additional debt or equity
securities, and/or any other alternatives available to us under the applicable
law while we implement plans and actions to satisfy our financial obligations.
However, we cannot assure you that any alternative strategies will be available
or feasible at the time or prove adequate. Also, some alternative strategies
will require the consent of our lenders before we engage in those strategies.
Our inability to successfully execute one or more of these alternative
strategies would likely have a material adverse effect on our business and our
company.


<PAGE>

         Real Estate Liquidity. To fund working capital and fund its fiscal 2002
real estate development plan, Resort Properties relies on the net proceeds from
the sale of real estate developed for sale after required construction loan
repayments, a $73 million real estate credit facility and construction loans
through special purpose subsidiaries. We have revised our real estate business
plan and started discussions with our real estate lenders regarding near-term
liquidity issues.

         We have experienced a significant reduction in sales activity from the
previous year and as compared to our business plan for the current year as a
result of the events of September 11th and the related economic slowdown. The
reduction in sales activity has been significant enough that we believe we will
not be able to meet the scheduled amortization requirements for our construction
loan or real estate term facility in the very near future. If we are unable to
make the required debt amortization and interest payments we will be in default
of these loans. The purpose of the discussions with the real estate lenders is
to develop a plan to amend the current facilities in such a way to avoid an
event of default. Potential solutions could include rate reductions, deferred
amortization of these facilities, or a consensual transfer of control by Resort
Properties of all or a portion of assets that are pledged as collateral to these
facilities.

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

         o        Tranche A is a revolving facility which, as of December 11,
                  2001, has a current maximum principal amount of $22 million
                  and bears interest at a variable rate equal to the Fleet
                  National Bank Base Rate plus 2.0% (payable monthly in
                  arrears). Mandatory principal payments on Tranche A of $3.75
                  million and $2.5 million each were payable on December 31,
                  2001 and January 31, 2002, respectively. So long as no event
                  of default exists under the facility, the Company has the
                  option of extending the December 31, 2001 amortization payment
                  to March 30, 2002. We made the January 31, 2002 payment and
                  extended the December 31, 2001 payment to March 30, 2002. We
                  currently do not anticipate being able to make the March 31,
                  2002 payment unless the Steamboat transaction is completed
                  prior to that date. Additional mandatory principal reductions
                  will be required in certain prescribed percentages ranging
                  from 50% to 75% of net proceeds from any future sales of
                  undeveloped parcels. The remaining principal amount
                  outstanding under Tranche A will be payable in full on June
                  30, 2003.

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

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

         As of March 8, 2002, the principal balances outstanding, including
accrued and unpaid interest, under Tranches A, B and C of the second amended
real estate facility were $18.8 million, $28.2 million, and $14.6 million,
respectively.

         Security interests in, and mortgages on, substantially all of Resort
Properties' assets, which primarily consist of undeveloped real property and the
stock of its real estate development subsidiaries (including Grand Summit)
collateralize the real estate credit facility. As of January 27, 2002, the book
value of the total assets that collateralized the real estate facilities, and
are included in the accompanying consolidated balance sheet, was approximately
$202.3 million.

         Construction Loan Facility: We conduct substantially all of our real
estate development through single purpose subsidiaries, each of which is a
wholly owned subsidiary of Resort Properties. Grand Summit owns our existing
Grand Summit Hotel projects, which are primarily financed through a $110 million
construction loan facility among Grand Summit and various lenders, including TFC
Textron Financial, the syndication and administrative agent. Due to construction
delays and cost increases at the Steamboat Grand Hotel project, Grand Summit
entered into a $10 million subordinated loan tranche with TFC Textron Financial
on July 25, 2000. We have used this facility solely for the purpose of funding
the completion of the Steamboat Grand Hotel. We have also issued a $3.8 million
note to the general contractor for the Steamboat Grand Hotel project, for the
remaining balance due under this project. Discussions have begun with the holder
of the note to extend the maturity date. The balance of the note as of January
27, 2002 was $2.6 million. That note matures on March 31, 2002, and we do not
anticipate being able to retire this note at maturity.

         As of February 24, 2002, the amount outstanding under the construction
loan facility was $41.6 million and there was no availability remaining under
this facility. The principal is payable incrementally as quartershare sales are
closed based on a predetermined per unit amount, which approximates between 65%
and 80% of the net proceeds of each closing. Mortgages against the project sites
(including the completed Grand Summit Hotels at Killington, Mt. Snow, Sunday
River, Attitash Bear Peak, The Canyons, and Steamboat) collateralize the
facility, which is subject to covenants, representations and warranties that are
customary for this type of construction facility. The facility is non-recourse
to us and our resort operating subsidiaries (although it is collateralized by
substantial assets of Grand Summit, having a total book value of $150.2 million
as of October 28, 2001, which in turn comprise substantial assets of our
business). In August 2001, we entered into amendments to our Textron
construction loan and subordinated loan tranche facilities, which, among other
things, reduced the effective interest rates and extended the maturity dates of
these facilities. The maturity date for funds advanced under the Steamboat
portion of the senior Textron facility is March 31, 2003 and the maturity date
for funds advanced under the Canyons portion of the senior Textron facility is
September 28, 2002. The interest rate on funds advanced under the Steamboat
portion of the senior Textron facility is Prime plus 3.5% and the interest rate
floor on Steamboat advances is 9.0%. The interest rate on funds advanced under
The Canyons portion of the senior Textron facility is at Prime plus 2.5%, with a
floor of 9.0% for advances made by Textron and 9.5% for advances made by other
lenders in the syndicate.

         We are required to reduce the outstanding principal balance of the
Textron construction facility to $50 million by March 31, 2002 and to $25
million by September 30, 2002. As of February 24, 2002 the outstanding principal
balance under the construction loan was $41.6 million. However, we do not
anticipate that we will be able to meet the September 30, 2002 amortization
level with proceeds from anticipated quartershare unit sales over the next six
months. We are closely monitoring macro and resort-specific factors affecting
the sale of our current real estate inventory. Although we have been
experiencing an improvement in sales activities, we have not achieved planned
sales levels during the current ski season. As a result, we have opened
discussions with Textron on restructuring the terms of the facility and expect
those negotiations to be completed in the next 30 to 60 days, but can give no
assurances that they will be completed on terms favorable to the company or will
not result in loss of control of all or a portion of the collateral assets.

         The amended subordinated loan tranche facility bears interest at a
fixed rate of 20% per annum, payable monthly in arrears, provided that only 50%
of the amount of this interest shall be due and payable in cash and the other
50% of such interest shall, if no events of default exist under the subordinated
loan tranche facility or the construction loan Textron facility, automatically
be deferred until the final payment date. As of February 24, 2002, the amount
outstanding under the subordinated loan tranche facility was $5.7 million and
there was no remaining availability since the penthouses had been completed in
January of 2002.


<PAGE>

         Preferred Stock Requirement: We have 36,626 shares of Series A
Preferred Stock outstanding, with an accreted value of $57 million as of January
27, 2002. The Series A Preferred Stock is exchangeable at the option of the
holder into our common stock at a conversion price of $17.10 for each common
share. On November 15, 2002, we will be required to redeem the Series A
Preferred Stock at a redemption price of approximately $62 million, to the
extent that we have funds legally available for such redemption. We do not
expect to redeem the Series A Preferred Stock prior to its mandatory redemption
date, and we can give no assurance that the necessary liquidity will be
available to effect such redemption on a timely basis. We currently plan to
commence discussions with the Series A Preferred Stock holders regarding the
timing and manner of the redemption of the Series A Preferred Stock and/or
possible alteration of the terms thereof when we have completed the remaining
elements of the current restructuring plan. In the event that the Series A
Preferred Stock is not redeemed on its mandatory redemption date, the
Certificate of Designation for the Series A Preferred Stock provides that the
holders shall be entitled to elect two additional members of our board of
directors.

         Long Term. Our primary long term liquidity needs are to fund
skiing-related capital improvements at certain of our resorts, development of
our slope side real estate and the mandatory redemption of our mandatorily
redeemable 10 1/2% preferred stock on November 15, 2002. With respect to capital
needs, we have invested over $185 million in skiing related facilities since the
beginning of fiscal 1998. As a result, and in keeping with restrictions imposed
under the senior credit facility, we expect our resort capital programs for the
next several fiscal years will be more limited in size. Our fiscal 2002 resort
capital program is estimated at approximately $13 million (of which $5.4 million
had been expended as of January 27, 2002).

         For our 2002 and 2003 fiscal years, we anticipate our annual
maintenance capital needs to be approximately $10 to $12 million. There is a
considerable degree of flexibility in the timing and, to a lesser degree, scope
of our growth capital program. Although specific capital expenditures can be
deferred for extended periods, continued growth of skier visits, revenues and
profitability will require continued capital investment in on-mountain
improvements. Following the sale of the Steamboat we anticipate that annual
maintenance capital for fiscal 2003 will be reduced to the $8 to $10 million
range.
         Our practice is to finance on-mountain capital improvements through
resort cash flow, capital leases and our senior credit facility. The size and
scope of the capital improvement program will generally be determined annually
depending upon the strategic importance and expected financial return of certain
projects, future availability of cash flow from each season's resort operations
and future borrowing availability and covenant restrictions under the senior
credit facility. The senior credit facility places a maximum level of non-real
estate capital expenditures for fiscal 2002 and beyond at the lesser of $13.8
million, or the total of the non-real estate development subsidiaries'
consolidated EBITDA for the four fiscal quarters ended in April of the previous
fiscal year less consolidated debt service for the same period.

         Our real estate development is undertaken through our real estate
development subsidiary, American Skiing Company Resort Properties. Recourse on
debt incurred to finance this real estate development is limited to American
Skiing Company Resort Properties and its subsidiaries, which include Grand
Summit Resort Properties. This debt is usually collateralized by the projects
that it finances, which, in some cases, constitute a significant portion of our
assets. As of January 27, 2002, the total assets collateralizing the real estate
facilities, and included in the accompanying consolidated balance sheet, totaled
approximately $202.3 million. American Skiing Company Resort Properties' seven
existing development projects are currently being funded by the real estate term
facility and the construction loan facility.

         We expect to undertake future real estate development projects through
special purpose subsidiaries with financing provided principally on a
non-recourse basis to us and our resort operating subsidiaries. Although this
financing is expected to be non-recourse to us and our resort subsidiaries, it
will likely be collateralized by the real estate projects being financed, which
may constitute significant assets to us. Required equity contributions for these
projects must be generated before they can be undertaken, and the projects are
subject to mandatory pre-sale requirements under the real estate term facility.
Potential sources of equity contributions include sales proceeds from existing

<PAGE>

real estate projects and assets, (to the extent not applied to the repayment of
indebtedness) and the possible sale of equity or debt interests in American
Skiing Company Resort Properties or its real estate development subsidiaries.
Financing commitments for future real estate development do not currently exist,
and we can offer no assurance that they will be available on satisfactory terms.
We will be required to establish both equity sources and construction facilities
or other financing arrangements for our projects before undertaking them.

           Changes in Results from Operations For the 13 weeks ended January 27,
2002 compared to the 13 weeks ended January 28, 2001

Resort Operations:

         Sale of Sugarbush: We completed the sale of Sugarbush resort on
September 28, 2001. As such Sugarbush's results of operations are not included
in our accompanying statement of operations for the 13 weeks ended January 27,
2002. The results of operations for the 13 weeks ended January 28, 2001,
however, include results of operations of the Sugarbush resort. For
comparability purposes, the results of operations at Sugarbush are excluded from
both current and prior year results in the following discussion of the results
of resort operations. The following table reconciles the results from resort
operations as reported for the 13 weeks ended January 27, 2002 and January 28,
2001, to the amounts used in the following discussion on results from resort
operations (in thousands):

<TABLE>

                                  Resort Results as        Sugarbush Results      Results Excluding Sugarbush    Variance
                                   13 Weeks ended            13 Weeks ended            13 Weeks ended            Excluding
                               ------------------------   ---------------------    -----------------------       Sugarbush
                                 1/27/02     1/28/01       1/27/02    1/28/01       1/27/02     1/28/01
                               ------------ -----------   ---------- ----------    ----------- -----------       ------------
<S>                              <C>         <C>             <C>      <C>           <C>         <C>              <C>

Total resort revenues            $ 108,839   $ 125,539       $    1   $  6,752      $ 108,838   $ 118,797        $  (9,949)
                               ------------ -----------   ---------- ----------    ----------- -----------       ------------

Cost of resort operations           72,276      84,291           12      5,028         72,264      79,263           (6,999)
Marketing, general and
      Administrative costs          18,072      17,867           10        772         18,062      17,095              967
Other non-recurring charges         26,128           -            -          -         26,128           -           26,128
Depreciation and amortization       13,987      18,989            -        980         13,987      18,009           (4,022)
Interest expense                     9,393       8,772           24         21          9,369       8,751              618
                               ------------ -----------   ---------- ----------    ----------- -----------       ------------
Total resort expenses              139,856     129,919           46      6,801        139,810     123,118           16,692
                               ------------ -----------   ---------- ----------    ----------- -----------       ------------
Loss from resort operations     $  (31,017)  $  (4,380)      $  (45)  $    (49)     $ (30,972)  $  (4,331)       $ (26,641)
                               ============ ===========   ========== ==========    =========== ===========       ============

Resort EBITDA(1), excluding
   other non-recurring charges  $   18,491   $  23,381       $  (21)  $    952      $  18,512   $  22,429        $  (3,917)
                               ============ ===========   ========== ==========    =========== ===========       ============
</TABLE>

         (1) We believe that earnings before interest, taxes, depreciation and
amortization ("EBITDA") is an indicative measure of a resort company's operating
performance and is generally used by investors to evaluate companies in the
resort industry. Excluded from EBITDA in the above schedule for the 13 weeks
ended January 27, 2002 was a $25.5 million asset impairment charge related to
the sale of Steamboat. We have also excluded $0.6 million of restructuring
charges as described in footnote 12.


         Excluding results of Sugarbush, resort revenues decreased 8.4%, or
$10.0 million, in the second quarter of 2002 compared to the second quarter of
fiscal 2001, from $118.8 million to $108.8 million, respectively. Our results of
operation during the early part of the ski season were weaker than the previous
year as a result of the softening economy, warmer than normal temperatures, and
a lack of natural snowfall during the beginning of the ski season at most of our
resorts. This resulted in decreased skier visits that directly impacted our
total revenues. Additionally, during 2001, we experienced very favorable skiing
conditions in the east that contributed significantly to the results of 2001.


<PAGE>

         Excluding the results of Sugarbush, our resort segment generated a
$31.0 million loss before income taxes and preferred dividends for the 13 weeks
ended January 27, 2002, compared to a $4.3 million loss for the 13 weeks ended
January 28, 2001. The resort segment operating loss increased by $26.6 million
over the comparable 13 week period in fiscal 2001 primarily due to:

         I.       $10 million decrease in revenues, primarily from reduced
                  skier visits

         II.      $7 million reduction in cost of resort operations, primarily
                  from reduced skier visits and cost saving initiatives

         III.     $4 million decrease in depreciation, primarily from the effect
                  of SFAS No. 121 and the Steamboat resort

         IV.      $26.1 million increase in non-recurring restructuring and
                  asset impairment charges.

         V.       $1.0 million increase in marketing, general and administrative
                  costs

         VI.      $0.6 million increase in interest expense

         During the 13 weeks ended January 27, 2002, we recorded an additional
$25.5 million asset impairment charge related to the sale of the Steamboat
resort. This charge was a result of revised estimates of the fair value of the
resort based on the completed purchase and sale agreement signed January 24,
2002. The Steamboat resort was accounted for in accordance with Statement of
Financial Accounting Standards (SFAS) No. 121, Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to be Disposed of. SFAS No. 121
requires the asset to be disposed of, to be separately classified as an asset
held for sale on the balance sheet and that depreciation expense not be recorded
during the period in which the asset is held for sale. Therefore, we did not
record depreciation and amortization expenses in the accompanying condensed
consolidated statement of operations. The $4 million decrease in depreciation
from the previous year and was almost entirely related to taking no depreciation
on Steamboat in accordance with SFAS. No. 121.

         We were able to generate cost savings from restructuring efforts and
delayed openings of many of our resorts. However, these cost savings have been
offset by the significant non-recurring restructuring and asset impairment
charges as well as decreased revenues that have been experienced during the 13
weeks ended January 27, 2002. Excluding these non-recurring restructuring and
asset impairment charges, our resort earning before interest, taxes,
depreciation and amortization, or EBITDA, was $18.5 million and $22.4 million
for the 13 weeks ended January 27, 2002 and January 28, 2001, respectively, a
$3.9 million decrease.

         We believe that EBITDA is an indicative measure of a resort company's
operating performance and is generally used by investors to evaluate companies
in the resort industry.

         Recent Trends: Results at our resorts have improved since the early
part of the ski season, but continue to fall short of the prior year. Results
have been impacted positively by natural snowfall at the western resorts, as
well as colder temperatures in the east that have allowed the resorts to make
additional snow and provide improved skiing conditions. We have also experienced
a negative impact at The Canyons from decreased skier visits which we believe to
be primarily caused by the Olympics.  Additionally, many of the resorts
experienced strong holiday weekends during February of 2002.

Real Estate Operations:

         We have made no adjustments for the sale of Sugarbush to our analysis
of real estate operations, as there were no material real estate transactions
attributed to Sugarbush during the periods discussed. Real estate revenues
decreased by $ 18.4 million in the current quarter as compared to fiscal 2001,
from $30.7 million to $12.3 million. During the second quarter of 2001, Real
Estate operations were favorably impacted by the completion of the Steamboat
Grand Hotel, The Canyons Grand Summit Hotel, and the Locke Mountain townhouses
at Sunday River. We realized $16.2 million in revenues from closings of pre-sold
quartershare units at the Steamboat Grand Hotel, and $5.5 million in revenue
from closings at The Canyons Grand Summit Hotel during the 13 weeks ended
January 28, 2001. In addition, we recognized $2.2 million of revenue during
fiscal 2001 from closings at the Locke Mountain Townhomes project

<PAGE>

at Sunday River. During the second quarter of fiscal 2002, real estate revenue
was primarily driven by sales at the Steamboat Grand Hotel, The Canyons Grand
Summit Hotel, and the Attitash Grand Summit Hotel. The sales at the Steamboat
and The Canyons Grand Summit Hotels were significantly less than anticipated.
However, Attitash quartershare sales contributed $4.1 million in revenue from
the execution of management's plan to reduce quartershare inventory for all
Grand Summit hotels located in the east.

         Our Real estate segment generated a loss before income taxes of $4.4
million for the second quarter of fiscal 2002, compared to a $3.9 million loss
in the second quarter of fiscal 2001. The current year's operating loss consists
of $0.2 million in real estate EBITDA, offset by $4.0 million in real estate
interest expense and $0.6 million in real estate depreciation and amortization.
The comparative breakdown from the second quarter of fiscal 2001 was real estate
EBITDA of $4.5 million, real estate interest expense of $7.5 million and real
estate depreciation and amortization of $0.9 million. We believe that EBITDA is
an indicative measure of the real estate segment's operating performance and is
generally used by investors to evaluate companies in the real estate industry.


         Recent Trends: Over the past several months we have experienced a
reduction in sales volume and sales leads at Steamboat and The Canyons. We
believe that this is primarily the result of weakening economic conditions which
have impacted destination visits at both resorts as well as Olympic related
weakness in the Utah marketplace. We are monitoring the developing economic
conditions and adjusting our real estate operations and plans accordingly. We do
no currently have any new projects in sales or construction. We are in the
development planning stage on several small projects but continue to concentrate
our efforts on the reduction of existing inventory.

      Accretion of discount and dividends accrued on mandatorily redeemable
preferred stock.  The dividends on mandatorily redeemable preferred stock
increased $2.3 million, from $5.8 million for the second quarter of fiscal 2001
to $8.1 million for the current quarter. This increase is attributed to the
recapitalization that occurred during July of 2001, and specifically the
exchange of the Series B Preferred Stock for the Series C-1 and Series C-2
Preferred Stock (as discussed previously). The Series C-1 and Series C-2
Preferred Stock carry preferred dividends of 12% and 15%, respectively, whereas
the Series B carried preferred dividends at an effective rate of 9.7%.
Additionally, the compounding effect of accruing dividends on the value of the
preferred shares is contributing to the increase in the accompanying
consolidated statement of operations for the 13 weeks ended January 27, 2002.

                       Changes in Results from Operations
               For the 26 weeks ended January 27, 2002 compared to
                      the 26 weeks ended January 28, 2001

         Resort Operations: Sale of Sugarbush: We completed the sale of
Sugarbush resort on September 28, 2001. As such Sugarbush's results of
operations are included in our accompanying statement of operations through
September 28, 2001, which covers the first two months of the 2002 fiscal year.
For comparability, the results of operations for Sugarbush in both current and
prior year results in our analysis of resort operations. The following table
reconciles the results from resort operations as reported for the 26 weeks ended
January 27, 2002 and January 28, 2001, to the amounts used in our analysis of
resort operations (in thousands):

<TABLE>

                                  Resort Results as Resported   Sugarbush Results  Results Excluding Sugarbush   Variance
                                   26 Weeks ended                26 Weeks ended        26 Weeks ended            Excluding
                               ------------------------   ---------------------    -----------------------       Sugarbush
                                 1/27/02     1/28/01       1/27/02    1/28/01       1/27/02     1/28/01
                               ------------ -----------   ---------- ----------    ----------- -----------     ------------
<S>                              <C>         <C>            <C>       <C>          <C>         <C>             <C>

Total resort revenues            $ 129,157   $ 146,450      $  698    $ 7,839      $  128,459  $  138,611      $ (10,152)
                               ------------ -----------   ---------- ----------    ----------- -----------    ------------

Cost of resort operations           99,450     114,633        1,153      6,999         98,297     107,634         (9,337)
Marketing, general and
      Administrative costs          29,463      28,310          468      1,311         28,995      26,999           1,996
Other non-recurring charges         27,639           -            -          -         27,639           -          27,639
Depreciation and amortization       17,580      22,518            -        994         17,580      21,524         (3,944)
Interest expense                    18,713      16,803           32         34         18,681      16,769           1,912
                               ------------ -----------   ---------- ----------    ----------- -----------    ------------
Total resort expenses              192,845     182,264        1,653      9,338        191,192     172,926          18,266
                               ------------ -----------   ---------- ----------    ----------- -----------    ------------

Loss from resort operations     $ (63,688)   $(35,814)       $ (955)   $(1,499)      $(62,733)   $(34,315)      $ (28,418)
                               ============ ===========   ========== ==========    =========== ===========    ============

Resort EBITDA(1), excluding
  Other non-recurring charges     $   244    $  3,507        $ (923)    $ (471)      $  1,167    $  3,978      $   (2,811)
                               ============ ===========   ========== ==========    =========== ===========    ============

<FN>
(1) We believe that earnings before interest, taxes, depreciation and
amortization ("EBITDA") is an indicative measure of a resort company's operating
performance and is generally used by investors to evaluate companies in the
resort industry. Excluded from EBITDA in the above schedule for the 26 weeks
ended January 27, 2002 was a $25.5 million asset impairment charge related to
the sale of Steamboat. We have also excluded $2.1 million of restructuring
charges as described in footnote 12.
</FN>
</TABLE>

<PAGE>

         Excluding the results of Sugarbush, resort revenues decreased 7.3%, or
$10.2 million, during fiscal 2002 compared to the fiscal 2001, from $138.6
million to $128.5 million, respectively. Our results from operations during the
early part of the ski season were weaker than the previous year as a result of
the softening economy, warmer than normal temperatures, and a lack of natural
snowfall. This resulted in decreased skier visits that directly impacted total
revenues recognized during the 26 weeks ended January 27, 2002. Additionally,
during 2001, we experienced very favorable skiing conditions in the east that
contributed significantly to the results of fiscal 2001.

         Our resort segment generated a $62.7 million loss before income taxes
and preferred dividends for the first 26 weeks of fiscal 2002, compared to a
$34.3 million loss for the first 26 weeks of fiscal 2001. Our resort segment
operating loss increased by $28.4 million compared to the prior period primarily
due to $27.6 million of non-recurring restructuring and asset impairment
charges.

         During the 26 weeks ended January 27, 2002, we recorded an additional
$25.5 million asset impairment charge related to the Steamboat resort. This
charge was a result of revised estimates of the fair value of the resort based
on the completed purchase and sale agreement signed January 24, 2002. The sale
of the Steamboat resort was accounted for in accordance with Statement of
Financial Accounting Standards (SFAS) No. 121, Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to be Disposed of. SFAS No. 121
requires the asset to be disposed of to be separately classified as an asset
held for sale on the balance sheet and that depreciation expense not be recorded
during the period in which the asset is held for sale. Therefore, we did not
record depreciation and amortization expenses in the accompanying condensed
consolidated statement of operations. There was $4 million decrease in
depreciation from the previous year and was almost entirely related to taking no
depreciation on Steamboat in accordance with SFAS. No. 121.

         We were able to generate cost savings from restructuring efforts and
delayed openings of many of our resorts. However, these cost savings have been
offset by the significant non-recurring restructuring and asset impairment
charges as well as decreased revenues that have been experienced during the 26
weeks ended January 27, 2002. Excluding these non-recurring restructuring and
asset impairment charges, our resort earning before interest, taxes,
depreciation and amortization, or EBITDA, was $1.2 million and $4.0 million for
the 26 weeks ended January 27, 2002 and January 28, 2001, respectively, a $2.8
million decrease.

         We believe that EBITDA is an indicative measure of a resort company's
operating performance and is generally used by investors to evaluate companies
in the resort industry.

         Recent Trends: Results at the resorts have improved since the early
part of the ski season, but continue to fall short of the prior year.  Results
have been impacted positively during periods of natural snowfall at the western
resorts, as well as colder temperatures in the east that have allowed the
resorts to make additional snow and provide improved skiing conditions. We have
also experienced a negative impact at The Canyons from decreased skier visits
which we believe to be primarily caused by the Olympics. Additionally, many of
the resorts experienced strong holiday weekends during February.

Real Estate Operations:

         We have not made any adjustments for the sale of Sugarbush to our
analysis of real estate opertions, as there were no material real estate
transactions attributed to Sugarbush during the peiods discussed. Real estate
revenues decreased by $42.8 million in the current 26 week period compared to
the 26 week period of fiscal 2001, from $57.9 million to $15.1 million. During
the first six months of 2001, Real Estate operations were favorably impacted by
the completion of the Steamboat Grand Hotel, The Canyons Grand Summit Hotel, and
the Locke Mountain townhouses at Sunday River. We realized $31.8 million in
revenues from closings of pre-sold quartershare units in the recently completed
Steamboat Grand Hotel. We also realized $10.8 million in revenue from closings
at The Canyons Grand Summit Hotel during the current quarter. In addition, we
recognized $2.5 million of revenue in the current quarter from closings at the
fully sold Locke Mountain Townhomes project at Sunday River. Also in fiscal
2001, we sold our option rights to certain real estate in the South Lake Tahoe
Redevelopment District to Marriott Ownership Resorts, Inc., a wholly owned
subsidiary of Marriott International, for $8.5 million. During the second
quarter of fiscal 2002 , real estate revenue was primarily driven by sales at
the Steamboat Grand Hotel, The Canyons Grand Summit Hotel, and the Attitash
Grand Summit Hotel. The sales at the Steamboat and The Canyons Grand Summit
Hotels were significantly less than anticipated. However, Attitash quartershare
sales contributed $4.1 million in revenue from the execution of management's
plan to reduce quartershare inventory for all Grand Summit hotels located in the
east.

         Our Real estate segment generated a loss before income taxes of $10.9
million for the 26 week period ended January 27, 2002, compared to a $6.5
million loss for the 26 week period ended January 28, 2001. The current year
operating loss consists of an EBITDA loss of $1.2 million, $8.4 million in real
estate interest expense, and $1.3 million in real estate depreciation and
amortization. The comparative breakdown from fiscal 2001 was a real estate
EBITDA loss of $8.1 million, real estate interest expense of $13.2 million, and
real estate depreciation and amortization of $1.4 million.

         We believe that EBITDA is an indicative measure of a resort company's
operating performance and is generally used by investors to evaluate companies
in the resort industry.

         Recent Trends: Over the past several months we have experienced a
reduction in sales volume and sales leads at Steamboat and The Canyons. The
decrease in sales volume was not anticipated for this period. We believe that
this is primarily the result of weakening economic conditions which have
impacted destination visits at both resorts as well as business volume weakness
related to the impact of the Olympics . We are monitoring economic conditions
and adjusting our real estate operations and plans accordingly. We do no
currently have any new projects in sales or construction. We are in the
development planning stage on several small projects but continue to concentrate
our efforts on the reduction of existing inventory.

         Cumulative effect of accounting changes.  In July 2001, the Financial
Accounting Standards Board (FASB) issued Statement of Financial Accounting
Standards (SFAS) No. 142, Goodwill and Other Intangible Assets. This statement
applies to goodwill and intangible assets acquired after June 30, 2001, as well
as goodwill and intangible assets previously acquired. Under this statement,
goodwill as well as certain other intangible assets determined to have an
infinite life, will no longer be amortized. Instead, these assets will be
reviewed for impairment on a periodic basis. The Company has elected early
adoption of the provisions of SFAS No. 142 during the fiscal quarter ended
October 28, 2001. As a result of the adoption of SFAS No. 142, the Company
recorded an impairment charge of $18.7 million, which has been recorded as a
cumulative effect of accounting change in the accompanying consolidated
statement of operations. See Notes 6 and 7 for additional disclosure information
required by SFAS No. 142.

         In the first quarter of fiscal 2001, the Company changed its method of
accounting for interest rate swaps in accordance with its adoption of SFAS No.
133 Accounting for Derivative Instruments and Hedging Activities, SFAS No. 137
Accounting for Derivative Instruments and Hedging Activities - Deferral of the
Effective Date of FASB Statement No. 133 - an Amendment of FASB Statement No.
133 and SFAS No. 138 Accounting for Certain Derivative Instruments and Certain
Hedging Activities - an Amendment of FASB Statement No. 133 (collectively "SFAS
No. 133 as amended").

         SFAS No. 133 as amended requires that derivatives be recorded on the
balance sheet as an asset or liability at fair value. The Company has entered
into three interest rate swap agreements that do not qualify for hedge
accounting under SFAS No. 133 as amended. As of July 30, 2000, the Company had
$8.6 million recorded in Other Long Term Liabilities in the accompanying
Consolidated Balance Sheet and had been recording the net effect of the
anticipated $2.1 million in interest savings from these agreements on a straight
line basis over the life of the agreements through the income statement. Upon
adoption of SFAS No. 133 as amended, the fair value of these swaps was recorded
as a $6.5 million asset and an $11.1 million liability, with a corresponding
$4.6 million entry to cumulative effect of accounting change in earnings. The
$8.6 million recorded in Other Long Term Liabilities was also recognized through
a cumulative effect of accounting change in earnings, resulting in a net
cumulative effect of accounting change of $4.0 million (before a $1.5 million
provision for income taxes). Subsequent changes in the fair values of the swaps
are being recorded through the income statement as an adjustment to interest
expense.

      Accretion of discount and dividends accrued on mandatorily redeemable
preferred stock. The dividends on manditorily redeemable preferred stock
increased $4.2 million, from $11.5 million for fiscal 2001 to $15.7 million for
2002. This increase is attributed to the recapitalization that occurred during
July of 2001, and specifically the exchange of the Series B Preferred Stock for
the Series C-1 and Series C-2 Preferred Stock (as discussed previously). The
Series C-1 and Series C-2 Preferred Stock carry preferred dividends of 12% and
15%, respectively, whereas the Series B carried preferred dividends at an
effective rate of 9.7%. Additionally, the compounding effect of accruing
dividends on the value of the preferred shares is contributing to the increase
in the accompanying consolidated statement of operations for the 26 weeks ended
January 27, 2002.

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

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




                                     Item 3
           Quantitative and Qualitative Disclosures about Market Risk

         There have been no material changes in information relating to market
risk since the Company's disclosure included in Item 7A of Form 10-K as filed
with the Securities and Exchange Commission on November 14, 2001.

                                     Item 4
               Submission of Matters to a Vote of Security Holders

         On January 2, 2002, the Company held its Annual Meeting of its
shareholders to approve:

         o        The election of the Company's Board of Directors; and

         o        The ratification of Arthur Andersen as the Company's
                  independent auditors for the 2002 fiscal year.

         The results of the Annual Meeting were as follows:

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:


<TABLE>
                                 Board Election:

                               Voting For          Voting Against or         Abstaining          Broker Non-Votes
                                                        Withheld
<S>                           <C>                       <C>                      <C>                    <C>
David Hawkes                  14,790,597(1)             168,832                  0                      0
Paul Wachter                  14,790,597(1)             168,832                  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
Bradford Bernstein             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

<FN>
(1)      Messrs. 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. Bernstein, Gruber, Crandall and Janes were elected by the holders of the Company's Series B Preferred Stock.
</FN>
</TABLE>
<TABLE>
                        Ratification of Arthur Andersen:

                               Voting For            Voting Against          Abstaining          Broker Non-Votes
<S>                            <C>                      <C>                    <C>                      <C>
Common Stock                   14,782,096               129,767                47,566                   0
Class A Common Stock           14,760,530                  0                     0                      0
Series C-1 Preferred
Stock                           40,000(1)                  0                     0                      0
                          ---------------------- ----------------------- ------------------- -------------------------
10.5% Preferred Stock           36,626(2)                  0                     0                      0
                          ---------------------- ----------------------- ------------------- -------------------------
Total All Classes           65,433,318(1) (2)           129,767                47,566                   0

<FN>
(1) The Series C-1 Preferred Stock votes together with Common Stock on an
"as-if-converted" basis. The 40,000 shares of Series C-1 Preferred Stock,
together with accrued and unpaid dividends, have a voting right equal to
32,641,600 shares of Common Stock. The results set forth in the "Total All
Classes" row is calculated using this as-if-converted number.

(2) The 10.5% Preferred Stock votes together with Common Stock on an
"as-if-converted" basis. The 36,626 shares of 10.5% Preferred Stock, together
with accrued and unpaid dividends, have a voting right equal to 3,249,092 shares
of Common Stock. The results set forth in the "Total All Classes" row is
calculated using this as-if-converted number.
</FN>
</TABLE>
                           Part II - Other Information


                                     Item 6
                        Exhibits and Reports on Form 8-K

a) Exhibits

         Included herewith are the following material agreements entered as of
in the Company's second fiscal quarter of 2002.

Exhibit No.       Description

10.01    Waiver Under the Amended, Restated and Consolidated Credit Agreement
         dated as of January 27, 2002.

10.02    Fifth Amendment to the Amended, Restated And Consolidated Credit
         Agreement dated January 14, 2002 with respect to the Amended, Restated
         and Consolidated Credit Agreement dated as of October 12, 1999 by and
         among American Skiing Company and the other borrowers party thereto,
         the lenders party thereto and Fleet National Bank, N.A. as agent

10.03    Loan Participation Agreement dated as of January 14, 2002 by and among
         the lenders under the Amended, Restated and Consolidated Credit
         Agreement dated as of October 12, 1999, as amended, and Madeleine
         L.L.C.


b) Reports on Form 8-K

         The Company filed a report on Form 8-K on March 7 2002, reporting that
it had received notification from the New York Stock Exchange ("NYSE") that
trading on American Skiing Company's common stock will be suspended as of March
14, 2002 and the issue will be removed from the NYSE's trading list.




<PAGE>


                                   SIGNATURES

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



Date: March 18, 2002                         /s/ William Fair
-------------                                 --------------------------------
                                              William Fair
                                              Chief Executive Officer
                                              (Duly Authorized Officer)



Date: March 18, 2002                         /s/ Mark J. Miller
-------------                                 -------------------------------
                                              Mark J. Miller
                                              Senior Vice President
                                              Chief Financial Officer
                                              (Principal Financial Officer)