##### Table of Contents



UNITED STATES SECURITIES AND
    EXCHANGE COMMISSION
 Washington, DC 20549
  Form 10-K
  þ

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended
    July 30, 2006oro

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For 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
    incorporation or organization)

(I.R.S. Employer
    Identification No.)   136 Heber Avenue, #303
 P.O. Box 4552
 Park City, Utah 84060
 (Address of principal executive
    office)
 (Zip code)
   (435) 615-0340
 (Registrants telephone
    number, including area code)
  Securities registered pursuant to Section 12(b) of the
    Act:
  None.
  Securities registered pursuant to Section 12(g) of the
    Act:
  Common Stock, $.01 par value
 (Title of Each Class)
  o þ
  o þ
  þ o
  Regulation S-K Form 10-K Form 10-K. þ
  Rule 12b-2
 o o þ
  Rule 12b-2 o þ
    DOCUMENTS
    INCORPORATED BY REFERENCE




---



##### 



American
    Skiing Company
  Form 10-K
    Annual Report, for the year ended July 30, 2006
  Table of
    Contents
  
  PagePART IItem 1


Business


1Item 1A


Risk
    Factors


8Item 1B


Unresolved Staff
    Comments


13Item 2


Properties


14Item 3


Legal
    Proceedings


17Item 4


Submission of
    Matters to a Vote of Security Holders


19PART IIItem 5


Market for the
    Registrants Common Equity and Related Stockholder
    Matters


20Item 6


Selected Financial
    Data


21Item 7


Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations


22Item 7A


Quantitative and
    Qualitative Disclosures about Market Risk


37Item 8


Financial
    Statements and Supplementary Data


39Item 9


Changes in and
    Disagreements with Accountants on Accounting and Financial
    Disclosure


39Item 9A


Controls and
    Procedures


40PART IIIItem 10


Directors and
    Executive Officers of the Registrant


40Item 11


Executive
    Compensation


40Item 12


Security Ownership
    of Certain Beneficial Owners and Management and Related
    Stockholder Matters


40Item 13


Certain
    Relationships and Related Transactions


40Item 14


Principal
    Accountant Fees and Services


40PART IVItem 15


Exhibits and
    Financial Statement Schedules


40Signatures


47EXHIBIT 21.1EXHIBIT 23.1EXHIBIT 31.1EXHIBIT 31.2EXHIBIT 32.1EXHIBIT 32.2   i




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##### Table of Contents



PART I  Item 1
    Business  American
    Skiing Company
  Business
    Description
        Resort
    Operations
    Company2005-06


Percentage


Skier Visits


RegionalTotal Skier


of Total


at Company


MarketGeographic Region

Visits*


Skier Visits


Resorts


Share


Company Resorts(In millions)





(In millions)Northeast


12.5



21.2
%


2.2



17.6
%

Killington/Pico, Mount Snow,
    Sunday
    River, Sugarloaf/USA, AttitashSoutheast


5.8



9.9
%






Midwest


7.8



13.3
%






Rocky Mountain


20.8



35.4
%


1.5



7.2
%

Steamboat, The CanyonsPacific West


11.9



20.2
%






U.S. Overall


58.8



100.0
%


3.7



6.3
%    (*)
    
    Source: Kottke National End of Season Survey 2005/06 Final
    Report. 1




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##### Table of Contents



Resort
    Revenues
    Lift Ticket Sales.
  Season Passes.
  Food and Beverage.
  Retail Sales.
  Lodging and Property Management. Four Diamond
 2




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##### Table of Contents



Skier Development.
  Resort
    Operating Strategy
    Multi-Resort Network.
    
    Create one of the largest cross-marketing programs in the
    industry,
    Achieve efficiencies and economies of scale when goods and
    services are purchased,
    Strengthen our distribution network of travel agents and tour
    operators by offering a range of mountain resort alternatives,
    consistent service quality, convenient travel booking, and
    incentive packages,
    Establish performance benchmarks for operations across all of
    our resorts,
    Utilize specialized individuals and cross-resort teams at the
    corporate level as resources for our entire business, and
    Develop and implement consumer information and technology
    systems for application across all of our resorts.  Improve Snowmaking Capabilities.
  Increase Revenues Per Skier.
 3




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##### Table of Contents



mEticket mEticket 2004-2005 mEticket ,
  Continue to Build Brand Awareness and Customer Loyalty and to
    Improve our Guests Experience.
  
    Increase the education of skiers and riders about the risks of
    unsafe skiing and riding,
    Establish stricter policy enforcement for reckless skiing,
    Provide on-mountain safety communications in resort brochures
    and other marketing collateral materials, and
    Support public efforts where appropriate for legislation of
    tougher reckless skiing/riding laws and regulations.  Continued Focus on Cost Management. ramp-up
  Expand Golf and Convention
    Business. Golf Digest New England
    Golf Journal.
 4




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##### Table of Contents



Capitalize on Real Estate Growth
    Opportunities.
  Real
    Estate Properties and Real Estate Development
    Activities
      Grand Summit Hotels.
   5




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##### Table of Contents



parcel-by-parcel and/or
  
    The Canyons:  Pursuant to our November 1999
    approved master plan, density for the residential units and
    commercial development for our
    15-year
    master plan has been approved. As we seek to develop specific
    projects within the master plan at The Canyons, we will need
    local approval for specific site plans. See
    Item 1A  Risk Factors  Our
    business is subject to heavy environmental and land use
    regulation in Part I for additional discussion
    regarding the status of our master plan permits at The Canyons.
    Killington:  Local voters in the town of
    Killington approved the master plan for the Killington Resort
    Village in November 1999 and local and state permits were issued
    in July 2000. Killington received partial and conceptual
    approval for the ten criteria which are part of the state of
    Vermont land use review and approval process. Final approval of
    each of the criteria will be rendered upon submittal of actual
    construction plans for specific projects.  Alpine
    Resort Industry
         6




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##### Table of Contents



lower-than-average-age
    
    Advances in ski equipment technology, such as the development of
    parabolic skis which make skiing easier to learn and enjoy,
    The continued growth of snowboarding as a significant and
    enduring segment of the industry which in turn increases youth
    participation in alpine sports,
    A greater focus on leisure and fitness in general,
    Expanding demand for second home vacation real estate,
    The existence of approximately 66.7 million members of the
    baby boom generation who are now approaching the 40 to
    59 year age group where discretionary income, personal
    wealth, and pursuit of leisure activities are maximized, and
    The emergence of the echo boom generation (children of baby
    boomers) as a significant economic force which is just beginning
    to enter the prime entry age for skiing, snowboarding, and other
    on-snow
    sports.    Competition
      Employees
    and Labor Relations
    Government
    Regulation
   7




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##### Table of Contents



Systems
    and Technology
  Information Systems.
  Snowmaking Systems and Technology.
 Item 1A 
    Risk Factors  Form 10-K, Form 10-K Form 10-K.
 8




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##### Table of Contents



Our
    business is substantially leveraged and we face a number of
    financial risks.
            Series C-1 Series C-1 Series C-2 Series C-2
 9




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##### Table of Contents



Our
    business is highly seasonal and unfavorable weather conditions
    can adversely affect our business.
  mid-November.
    We
    operate in a highly competitive industry which makes maintaining
    our customer base difficult.
    Changes
    in regional and national economic conditions could adversely
    affect our results of operations.
    Our
    business is subject to heavy environmental and land use
    regulation.
   10




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##### Table of Contents



Failure
    to cure the alleged default under the Ground Lease at The
    Canyons could have a material adverse effect on the
    Company.
  and/or and/or
  A
    disruption in our water supply would impact our snowmaking
    capabilities and impact our operations.
    Our
    revenues from real estate development are vulnerable to
    particular risks.
   11




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##### Table of Contents



The loss
    of any of our executive officers or key personnel would harm our
    business.
    Our
    business requires significant capital expenditures. These
    expenditures do not, however, guarantee improved
    results.
      Our
    company is controlled by a small number of principal
    stockholders.
  Series C-1 Series C-2
  We are
    structured as a holding company and have no assets other than
    the common stock of our subsidiaries.
   12




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##### Table of Contents



A
    significant portion of our ski resorts are operated under leases
    or forest service permits.
    Our
    examination of strategic alternatives available at Steamboat may
    not lead to a sale or other disposition of that
    resort.
    Item 1B
    Unresolved
    Staff Comments   13




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##### Table of Contents



Item 2
    Properties  Resort
    Properties
    Skiable


Vertical





Total Lifts


Snowmaking


Ski


2005-06Resort, Location

Terrain


Drop


Trails


(high-speed)


Coverage


Lodges


Skier Visits(acres)


(feet)














(000s)Western
    ResortsSteamboat, Colorado


2,939



3,668



142



20
(5)


15
%


4



1,047The Canyons, Utah


3,500



3,190



144



16
(7)


6
%


3



471Eastern
    ResortsKillington/Pico, Vermont


1,182



3,050



200



31
(8)


70
%


8



795Sunday River, Maine


660



2,340



127



18
(4)


92
%


4



473Mount Snow, Vermont


586



1,700



97



19
(3)


78
%


4



430Sugarloaf/USA, Maine


1,410



2,820



129



15
(2)


92
%


2



311Attitash, New Hampshire


280



1,750



70



12
(2)


97
%


2



187Total


10,557



18,518



909



131
(31)






27



3,714   Steamboat.
    The Canyons.
 14




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##### Table of Contents



Killington.
  Sunday River. three-hour
  Mount Snow.
  Sugarloaf/USA.
  Attitash.
  Real Estate Properties.
 15




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##### Table of Contents



Leased or
    Otherwise Committed Properties
  see also Item 1A  Risk Factors 
    Failure to cure the alleged default under the Ground Lease
    could have a material adverse effect on the
    Company.
  50-year year-to-year
  40-year 30-year
  40-year
     16




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##### Table of Contents



See Item 1A  Risk
    Factors  Failure to cure the alleged default under
    the Ground Lease could have a material adverse effect on the
    Company
        Item 3
    Legal
    Proceedings   17




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##### Table of Contents



18




---



##### Table of Contents



and/or
        Item 4
    Submission
    of Matters to a Vote of Security Holders   19




---



##### Table of Contents



PART II  Item 5
    Market
    for the Registrants Common Equity and Related Stockholder
    Matters      American
    Skiing Company Common Stock (AESK)
  Fiscal 2005


Fiscal 2006High


Low


High


Low1st Quarter

$
0.25


$
0.12


$
0.38


$
0.272nd Quarter


0.70



0.23



0.37



0.223rd Quarter


0.48



0.25



0.24



0.184th Quarter


0.33



0.27



0.21



0.16   Market
    Information
  Series C-1 Series C-2
 20




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##### Table of Contents



Item 6
    Selected
    Financial Data    Historical Year Ended(1)(2)July 28,


July 27,


July 25,


July 31,


July 30,2002


2003


2004


2005


2006(In thousands, except per share and per skier visit
    amounts)Consolidated Statements of
    Operations Data:Net revenues:Resort(3)

$
243,842


$
251,638


$
250,706


$
267,314


$
274,369Real estate


28,274



12,898



33,405



9,163



33,441Total net revenues


272,116



264,536



284,111



276,477



307,810Operating expenses:Resort


166,968



168,010



167,518



172,855



174,426Real estate


30,091



12,166



24,661



7,185



27,559Marketing, general and
    administrative


46,699



49,645



54,801



51,439



53,167Merger, restructuring and asset
    impairment charges(4)


111,608



1,451



137







Depreciation and amortization


26,238



27,513



26,477



31,798



31,116Impairment loss on sale of
    commercial property


















1,533Loss on disposal of commercial
    property


















917Writeoff of financing costs


3,338



2,761







5,983



Total operating expenses


384,942



261,546



273,594



269,260



288,718Operating income (loss)


(112,826
)


2,990



10,517



7,217



19,092Other income (expense):Interest expense, net


(54,752
)


(47,364
)


(87,603
)


(81,668
)


(86,675
)Gain on sale of Haystack resort














822



169Increase in fair value of interest
    rate swap agreement














314



1,761Gain on extinguishment of debt










23,091







Gain on transfer of assets
    associated with extinguishment of debt










25,493







Loss from continuing operations
    before accretion of discount, preferred stock dividends, and
    cumulative effects of changes in accounting principles


(167,578
)


(44,374
)


(28,502
)


(73,315
)


(65,653
)Accretion of discount and
    dividends on mandatorily redeemable preferred stock


(32,791
)


(37,644
)










Loss from continuing operations
    attributable to common stockholders before cumulative effects of
    changes in accounting principles(1)

$
(200,369
)

$
(82,018
)

$
(28,502
)

$
(73,315
)

$
(65,653
)Net loss attributable to common
    stockholders

$
(206,710
)

$
(82,018
)

$
(28,502
)

$
(73,315
)

$
(65,653
)Basic and diluted net loss from
    continuing operations per share attributable to common
    stockholders

$
(6.34
)

$
(2.59
)

$
(0.90
)

$
(2.31
)

$
(2.07
)Basic and diluted net loss per
    share attributable to common stockholders

$
(6.54
)

$
(2.59
)

$
(0.90
)

$
(2.31
)

$
(2.07
) 21




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##### Table of Contents



Historical Year Ended(1)(2)July 28,


July 27,


July 25,


July 31,


July 30,2002


2003


2004


2005


2006(In thousands, except per share and per skier visit
    amounts)Consolidated Balance Sheets
    Data:Total assets

$
521,993


$
475,305


$
430,800


$
422,934


$
386,277Long-term debt and redeemable
    preferred stock, including current maturities


582,096



638,928



603,563



653,682



679,113Common stockholders deficit


(155,305
)


(237,295
)


(240,962
)


(314,277
)


(379,930
)Consolidated Statements of Cash
    Flows Data:Cash flows provided by (used in)
    operating activities

$
(1,092
)

$
(7,999
)

$
22,160


$
34,558


$
48,153Cash flows provided by (used in)
    investing activities


94,683



(4,658
)


(7,359
)


(11,940
)


(10,028
)Cash flows provided by (used in)
    financing activities


(98,259
)


12,329



(17,130
)


(20,669
)


(38,072
)Other Data:Skier visits


3,756



3,977



3,887



3,987



3,714Resort revenues per skier visit

$
64.92


$
63.27


$
64.50


$
67.05


$
73.87     (1)
    
    The historical data above does not reflect the financial
    position and results of operations for our Heavenly resort
    (Heavenly). The financial data for Heavenly is reflected as
    discontinued operations because Heavenly was sold during fiscal
    2002.(2)
    
    The historical data above includes the financial position and
    results of operations for the Haystack resort, which was part of
    the Mount Snow resort. The Haystack resort was sold in June
    2005. The financial data for the Haystack resort is not
    reflected as discontinued operations as it does not meet the
    requirements in SFAS No. 144.(3)
    
    Resort revenues represent all revenues, excluding revenues
    generated by the sale of real estate interests.(4)
    
    During fiscal 2002, we recognized the following merger,
    restructuring, and asset impairment charges: a
    $25.4 million asset impairment charge related to the assets
    at our Steamboat resort that were previously classified as held
    for sale as of July 29, 2001; a $38.7 million charge
    related to the remaining quartershare units at the Steamboat
    Grand Hotel and The Canyons Grand Summit Hotel; a
    $18.9 million charge related to land and land options at
    The Canyons; a $24.8 million charge related to master
    planning and real estate costs at The Canyons, Killington, Mount
    Snow, Sugarloaf/USA, Sunday River, and Steamboat; a
    $1.4 million charge related to a land option at Sunday
    River and certain resort fixed assets; $2.7 million in
    legal and financial consulting charges related to our strategic
    restructuring plan; offset by a $0.3 million gain to
    finalize the sale of Sugarbush. During fiscal 2003, we
    recognized the following merger, restructuring and asset
    impairment charges: a $1.2 million charge related to
    certain resort fixed assets and other assets; and
    $0.4 million in restructuring charges; offset by a
    $0.2 million reversal of a previous impairment charge
    determined not to be needed. During fiscal 2004, we recognized
    the following in merger, restructuring, and asset impairment
    charges: a $0.1 million restructuring charge. During fiscal
    2005, we recognized no merger, restructuring, and asset
    impairment charges. During fiscal 2006, we recognized no merger,
    restructuring, and asset impairment charges.  Item 7
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations  Forward-Looking
    Statements
  Form 10-K
 22




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##### Table of Contents



.
  General
    52-week 53-week
  day-to-day
   23




---



##### Table of Contents



Liquidity
    and Capital Resources
    Short-term.
     24




---



##### Table of Contents



Resort Liquidity.
  
    Revolving Facility  $40.0 million,
    including letter of credit (L/C) availability of up to
    $6.0 million. The amount of availability under this
    facility is correspondingly reduced by the amount of each L/C
    issued.
    First Lien Term Loan  $85.0 million
    borrowed on the funding date of November 24, 2004.
    Second Lien Term Loan  $105.0 million
    borrowed on the funding date of November 24, 2004.        6-month
 25




---



##### Table of Contents



6-month 3-month
                Real Estate Liquidity.
  Construction Loan Facility:
 26




---



##### Table of Contents



Long-term.
   27




---



##### Table of Contents



(Series C-1 (Series C-2 Series C-1 Series C-2 Series C-1 Series C-2 Series C-1
 28




---



##### Table of Contents



Contractual
    Obligations
    Payments Due by PeriodLess Than


1 to 3


3 to 5


After 5Obligation

Total


1 Year


Years


Years


YearsResort Senior Credit Facility

$
308,437


$
28,670


$
49,605


$
121,104


$
109,058Other Resort long-term debt


12,993



1,007



1,764



3,793



6,429Capital lease obligations


8,583



4,312



4,271







Real estate long-term debt
    (deferred interest)


4,179







4,179







Subordinated notes and debentures


230,274



398



796



1,932



227,148Mandatorily Redeemable 12%
    Series C-1
    Preferred Stock


80,533







80,533







Mandatorily Redeemable 15%
    Series C-2
    Preferred Stock


333,388







333,388







Operating leases


9,338



1,934



2,188



1,441



3,775The Canyons infrastructure costs


1,307



1,307











The Canyons golf course obligations


3,323



3,323











The Canyons obligation to build
    ski lifts


3,206



2,106



1,100







Steamboat air program contribution
    obligation


1,050



1,050











Total

$
996,611


$
44,107


$
447,824


$
128,270


$
346,410     Off-Balance
    Sheet Arrangements
    Critical
    Accounting Policies
   29




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##### Table of Contents



Property
    and Equipment
    Goodwill
    and Other Intangible Assets
  Goodwill and Other Intangible
    Assets
  Long-Lived
    Assets
  Accounting
    for the Impairment or Disposal of Long-Lived Assets
  Revenue
    Recognition
    Seasonality
     30




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##### Table of Contents



Results
    of Operations
  Fiscal
    Year Ended July 30, 2006 (fiscal 2006)
 Versus
    Fiscal Year Ended July 31, 2005 (fiscal 2005)
  Resort
    Operations:
    Increase/(Decrease)Fiscal 2005


Fiscal 2006


Dollars


Percent(In millions, except skier visit and perskier visit amounts)Revenue category:Lift tickets

$
120.8


$
123.1


$
2.3



1.9
%Food and beverage


39.6



40.3



0.7



1.8
%Retail sales


25.8



24.9



(0.9
)


(3.5
)%Lodging and property


39.0



40.8



1.8



4.6
%Skier development


24.3



26.3



2.0



8.2
%Golf, summer activities, and
    other


17.8



19.0



1.2



6.7
%Total resort revenues


267.3



274.4



7.1



2.7
%Cost of resort
    operations


172.9



174.4



1.5



0.9
%Marketing, general, and
    administrative


51.4



53.2



1.8



3.5
%Depreciation and
    amortization


31.1



30.6



(0.5
)


(1.6
)%Loss on disposal of
    property






0.9



0.9



n/aWrite off of financing
    costs


6.0







(6.0
)


n/aTotal resort expenses


261.4



259.1



(2.3
)


(0.9
)%Income from resort
    operations


5.9



15.3



9.4



159.3
%Other income
    (expense):Interest expense, net


(78.5
)


(85.8
)


( 7.3
)


(9.3
)%Gain on sale of resort
    assets


0.8



0.2



(0.6
)


(75.0
)%Increase in fair value of
    interest rate swap arrangement


0.3



1.8



1.5



500
%Loss before income
    taxes

$
(71.5
)

$
(68.5
)

$
3.0



(4.2
)%Total skier visits
    (000s)


3,987



3,714



(273
)


(6.8
)%Total resort revenue per skier
    visit

$
67.05


$
73.87


$
6.82



10.2
%   2005-06
 31




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##### Table of Contents



Recent Trends: nd rd
 32




---



##### Table of Contents



Real
    Estate Operations:
    Increase/(Decrease)Fiscal 2005


Fiscal 2006


Dollars


Percent(In millions)Total real estate
    revenues

$
9.2


$
33.4


$
24.2



263.0
%Cost of real estate
    operations


7.2



27.6



20.4



283.3
%Depreciation and
    amortization


0.7



0.5



(0.2
)


(28.6
)%Impairment loss on sale of
    commercial property






1.5



1.5



n/aTotal real estate
    expenses


7.9



29.6



21.7



274.7
%Income from real estate
    operations


1.3



3.8



2.5



192.3
%Other expense:Interest expense, net


(3.1
)


(0.9
)


2.2



(71.0
)%Income (loss) from real estate
    operations before taxes

$
(1.8
)

$
2.9


$
4.7



n/a                     Recent Trends:
  Benefit from income taxes.
 33




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##### Table of Contents



Results
    of Operations
  Fiscal
    Year Ended July 31, 2005 (fiscal 2005)
 Versus
    Fiscal Year Ended July 26, 2004 (fiscal 2004)
  Resort
    Operations:
    Increase/(Decrease)Fiscal 2004


Fiscal 2005


Dollars


Percent(In millions, except skier visit and perskier visit amounts)Revenue category:Lift tickets

$
112.6


$
120.8


$
8.2



7.3
%Food and beverage


35.4



39.6



4.2



11.9
%Retail sales


23.9



25.8



1.9



7.9
%Lodging and property


37.7



39.0



1.3



3.4
%Skier development


22.8



24.3



1.5



6.6
%Golf, summer activities, and
    other


18.3



17.8



(0.5
)


(2.7
)%Total resort revenues


250.7



267.3



16.6



6.6
%Cost of resort
    operations


167.5



172.9



5.4



3.2
%Marketing, general, and
    administrative


54.8



51.4



(3.4
)


(6.2
)%Merger, restructuring, and
    asset impairment charges


0.1







(0.1
)


(100.0
)%Depreciation and
    amortization


25.6



31.1



5.5



21.5
%Write off of financing
    costs






6.0



6.0



n/aTotal resort expenses


248.0



261.4



13.4



5.4
%Income from resort
    operations


2.7



5.9



3.2



118.5
%Other income
    (expense):Interest expense, net


(70.1
)


(78.5
)


( 8.4
)


(12.0
)%Gain on sale of resort
    assets






0.8



0.8



n/aIncrease in fair value of
    interestrate swap
    arrangement






0.3



0.3



n/aLoss from resort operations
    before taxes

$
(67.4
)

$
(71.5
)

$
(4.1
)


(6.1
)%Total Skier Visits
    (000s)


3,887



3,987



100



2.6
%Total resort revenue per skier
    visit

$
64.50


$
67.05


$
2.55



4.0
%      34




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##### Table of Contents



day-to-day
               35




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##### Table of Contents



Real
    Estate Operations:
    Increase/(Decrease)Fiscal 2004


Fiscal 2005


Dollars


Percent(In millions)Total real estate
    revenues

$
33.4



9.2


$
(24.2
)


(72.5
)%Cost of real estate
    operations


24.7



7.2



(17.5
)


(70.9
)%Depreciation and
    amortization


0.9



0.7



(0.2
)


(22.2
)%Total real estate
    expenses


25.6



7.9



(17.7
)


(69.1
)%Income from real estate
    operations


7.8



1.3



(6.5
)


(83.3
)%Other income
    (expense):Interest expense, net


(17.5
)


(3.1
)


14.4



(82.3
)%Gain on extinguishment of
    debt


23.1







(23.1
)


n/aGain on transfer of assets
    associated with extinguishment of debt


25.5







(25.5
)


n/aLoss from real estate
    operations before taxes

$
38.9


$
(1.8
)

$
(40.7
)


n/a                      36




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##### Table of Contents



Benefit from income taxes.
  Recently
    Issued Accounting Standards
  Accounting for Uncertainty
    in Income Taxes  an interpretation of FASB Statement
    No. 109 Accounting for Income Taxes.
  Considering the
    Effects of Prior Year Misstatements in Current Year Financial
    Statements
  Item 7A
    Quantitative
    and Qualitative Disclosures about Market Risk  6-month 3-month
 37




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##### Table of Contents



BalanceOutstanding


AverageInterest


as of


Balance


Hypothetical


HypotheticalVariable Rate Debt

Rate Index and

Rate


July 30,


Outstanding


1% Change in


2% Change in(principal only)

Margin

Floor


2006


in FY 2006(1)


Rate Index(2)


Rate Index(2)Resort Senior Credit
    Facility:Revolving Credit Facility and First
    Lien Term Loan

Prime Rate + 3.50%
    or LIBOR + 4.50%


n/a


$
86,980


$
93,096


$
506


$
1,012Second Lien Term Loan

Prime Rate + 7.00%
    or LIBOR + 8.00%


n/a



105,000



105,000



525



1,050Construction
    Loan Facility

Prime Rate + 3.50%


9.00
%






9,081



91



182$
191,980


$
207,177


$
1,122


$
2,244     (1)
    
    Average Balance of Revolving Credit Facility, First Lien Term
    Loan and the Second Lien Term Loan determined through
    July 30, 2006 (includes only the new Resort Senior Credit
    Facility),(2)
    
    Pro forma impact calculated after giving effect to interest rate
    swap. 38




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##### Table of Contents



Item 8
    Financial
    Statements and Supplementary Data  Selected
    Quarter Operating Results
  Form 10-K No. 03-06, Series C-1 Series C-1
  First


Second


Third


FourthQuarter


Quarter


Quarter


QuarterFiscal 2006:Net revenues

$
20,116


$
112,499


$
157,022


$
18,173Income (loss) from
    operations


(21,631
)


10,344



50,458



(20,079
)Net income (loss)


(42,199
)


(11,321
)


29,413



(41,546
)Net income (loss) available
    (attributable) to common stockholders


(42,199
)


(11,321
)


10,693



(41,546
)Basic income (loss) per common
    share:Net income (loss) available
    (attributable) to common stockholders

$
(1.33
)

$
(0.36
)

$
0.34


$
(1.31
)Weighted average common shares
    outstanding


31,738



31,738



31,738



31,738Diluted income (loss) per
    common share:Net income (loss) available
    (attributable) to common stockholders

$
(1.33
)

$
(0.36
)

$
0.34


$
(1.31
)Weighted average common shares
    outstanding


31,738



31,738



31,738



31,738Fiscal 2005:Net revenues

$
19,546


$
106,074


$
135,194


$
15,663Income (loss) from
    operations


(18,267
)


5,523



43,837



(23,876
)Net income (loss)


(37,720
)


(22,144
)


23,835



(37,286
)Net income (loss) available
    (attributable) to common stockholders


(37,720
)


(22,144
)


9,325



(37,286
)Basic income (loss) per common
    share:Net income (loss) available
    (attributable) to common stockholders

$
(1.19
)

$
(0.70
)

$
0.29


$
(1.17
)Weighted average common shares
    outstanding


31,738



31,738



31,738



31,738Diluted income (loss) per
    common share:Net income (loss) available
    (attributable) to common stockholders

$
(1.19
)

$
(0.70
)

$
0.29


$
(1.17
)Weighted average common shares
    outstanding


31,738



31,738



31,738



31,738   Item 9
    Changes
    in and Disagreements with Accountants on Accounting and
    Financial Disclosure   39




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##### Table of Contents



Item 9A
    Controls
    and Procedures  Rules 13a-15(e) 15d-15(e)).
  Rules 13a-15(f) 15d-15(f))
   PART III  Form 10-K, Items 10 11 12 13 14
 PART IV  Item 15
    Exhibits
    and Financial Statement Schedules      PageReport of
    Independent Registered Public Accounting Firm


F-1Consolidated
    Balance Sheets


F-2Consolidated
    Statements of Operations


F-3Consolidated
    Statements of Stockholders Deficit


F-4Consolidated
    Statements of Cash Flows


F-5Notes to
    Consolidated Financial Statements


F-6       ExhibitNo.

Description3
.1

Certificate of Incorporation of
    American Skiing Company (incorporated by reference to
    Exhibit 3.1 to the Companys
    Form 10-K
    for the report date of October 22, 1999).3
.2

Certificate of Designation of 12%
    Series C-1
    Convertible Participating Preferred Stock of the Company
    (incorporated by reference to Exhibit 3.2 to the
    Companys
    Form 8-K
    for the report date of September 4, 2001).3
.3

Certificate of Designation of 15%
    Series C-2
    Preferred Stock of the Company (incorporated by reference to
    Exhibit 3.3 to the Companys
    Form 8-K
    for the report date of September 4, 2001). 40




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##### Table of Contents



ExhibitNo.

Description3
.4

Certificate of Designation of
    Series D Participating Preferred Stock of the Company
    (incorporated by reference to Exhibit 3.4 to the
    Companys
    Form 8-K
    for the report date September 4, 2001).3
.5

Amended and Restated Bylaws of the
    Company Adopted July 10, 2001 (incorporated by reference to
    Exhibit 3.1 to the Companys
    Form 8-K
    for the report date of September 4, 2001).3
.6

Articles of Merger ASC East, Inc.
    and ASC West, Inc. into American Skiing Company dated
    October 5, 1999 with Plan of Merger (incorporated by
    reference to Exhibit 4.3 to the Companys
    Form 8-K
    for the report date of October 6, 1999).3
.7

Articles of Merger American Skiing
    Company into ASC Delaware, Inc. dated October 12, 1999 with
    Agreement and Plan of Merger (incorporated by reference to
    Exhibit 4.3 to the Companys
    Form 8-K
    for the report date of October 6, 1999).4
.1

Specimen Certificate for shares of
    Common Stock, $.01 par value, of the Company (incorporated
    by reference to Exhibit 4.1 to the Companys
    Form 10-K
    for the report date of October 22, 1999).4
.2

Indenture relating to
    11.3025% Convertible Subordinated Notes Due 2007 dated as
    of August 31, 2001 (incorporated by reference to
    Exhibit 4.1 to the Companys
    Form 8-K
    for the report date of September 4, 2001).4
.3

Specimen Certificate for
    Class A Common Stock, $.01 par value, of the Company
    (incorporated by reference to Exhibit 4.4 to the
    Companys
    Form 10-K
    for the report date of November 14, 2001).4
.4

Specimen Certificate for
    Series B Convertible Participating Preferred Stock,
    $.01 par value, of the Company (incorporated by reference
    to Exhibit 4.5 to the Companys
    Form 10-K
    for the report date of November 14, 2001).4
.5

Specimen Certificates for
    Series C-1
    Preferred Stock, $.01 par value, of the Company
    (incorporated by reference to Exhibit 4.6 to the
    Companys
    Form 10-K
    for the report date of November 14, 2001).4
.6

Specimen Certificates for
    Series C-2
    Preferred Stock, $.01 par value, of the Company
    (incorporated by reference to Exhibit 4.7 to the
    Companys
    Form 10-K
    for the report date of November 14, 2001).4
.7

Specimen Certificates for
    Series D Preferred Stock, $.01 par value, of the
    Company (incorporated by reference to Exhibit 4.8 to the
    Companys
    Form 10-K
    for the report date of November 14, 2001).4
.8

Indenture, dated as of
    November 24, 2004, between the Company and Madeline LLC as
    trustee (incorporated by reference to Exhibit 10.3 to the
    Companys
    Form 10-Q
    filed December 8, 2004).4
.9

Supplemental Indenture, dated as
    of November 24, 2004, between the Company and Oak Hill
    Capital Partners, L.P. as trustee (incorporated by reference
    from exhibit to
    Form 8-K
    filed December 1, 2004).10
.1

Loan and Security Agreement among
    Grand Summit Resort Properties, Inc., Textron Financial
    Corporation and certain lenders dated as of September 1,
    1998 (incorporated by reference to Exhibit 10.1 to the
    Companys quarterly report on
    Form 10-Q
    for the quarter ended October 25, 1998).10
.2

First Amendment Agreement Re: Loan
    and Security Agreement Among Grand Summit Resort Properties,
    Inc., as Borrower and Textron Financial Corporation, as
    Administrative Agent dated as of April 5, 1999
    (incorporated by reference to Exhibit 10.1 to the
    Companys quarterly report on
    Form 10-Q
    for the quarter ended April 25, 1999).10
.3

Accession, Loan Sale and Second
    Amendment Agreement Re: Loan and Security Agreement among Grand
    Summit Resort Properties, Inc. and Textron Financial Corp. and
    The Lenders Listed therein dated June 24, 1999
    (incorporated by reference to Exhibit 10.22 to the
    Companys annual report on
    Form 10-K
    for the fiscal year ended July 25, 1999).10
.4

Third Amendment Agreement Re: Loan
    and Security Agreement Among Grand Summit Resort Properties,
    Inc., as Borrower and Textron Financial Corporation, as
    Administrative Agent dated as of January 2000 (incorporated by
    reference to Exhibit 10.16 to the Companys
    Form 10-K
    for the report date November 14, 2002).10
.5

Fourth Amendment Agreement Re:
    Loan and Security Agreement Among Grand Summit Resort
    Properties, Inc., as Borrower and Textron Financial Corporation,
    as Administrative Agent dated as of September 15, 2000
    (incorporated by reference to Exhibit 10.17 to the
    Companys
    Form 10-K
    for the report date November 14, 2002). 41




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##### Table of Contents



ExhibitNo.

Description10
.6

Fifth Amendment Agreement Re: Loan
    and Security Agreement Among Grand Summit Resort Properties,
    Inc., as Borrower and Textron Financial Corporation, as
    Administrative Agent dated as of August 20, 2001
    (incorporated by reference to Exhibit 10.18 to the
    Companys
    Form 10-K
    for the report date November 14, 2002).10
.7

Sixth Amendment Agreement Re: Loan
    and Security Agreement Among Grand Summit Resort Properties,
    Inc., as Borrower and Textron Financial Corporation, as
    Administrative Agent dated as of August 29, 2002
    (incorporated by reference to Exhibit 99.2 to the
    Companys
    Form 8-K
    for the report date October 11, 2002).10
.8

Statement of Intention and Special
    Additional Financing Agreement dated July 25, 2000 between
    Grand Summit Resort Properties, Inc. and Textron Financial
    Corporation (incorporated by reference from the
    Registrants
    Form 10-K
    for the fiscal year ended July 30, 2000).10
.9

First Amendment Agreement to the
    Statement of Intention and Special Additional Financing
    Agreement between Grand Summit Resort Properties, Inc. and
    Textron Financial Corporation dated August 20, 2001
    (incorporated by reference to Exhibit 10.20 to the
    Companys
    Form 10-K
    for the report date November 14, 2002).10
.10

Second Amendment Agreement to the
    Statement of Intention and Special Additional Financing
    Agreement between Grand Summit Resort Properties, Inc. and
    Textron Financial Corporation dated as of August 29, 2002
    (incorporated by reference to Exhibit 99.2 to the
    Companys
    Form 8-K
    for the report date October 11, 2002).10
.11

Seventh Amendment Agreement Re:
    Loan and Security Agreement Among Grand Summit Resort
    Properties, Inc., as Borrower and Textron Financial Corporation,
    as Administrative Agent dated as of December 31, 2003
    (incorporated by reference to Exhibit 4.1 to the
    Companys
    Form 10-Q
    for the quarter ended January 25, 2004).10
.12

Third Amendment Agreement to the
    Statement of Intention and Special Additional Financing
    Agreement between Grand Summit Resort Properties, Inc. and
    Textron Financial Corporation dated as of December 31, 2003
    (incorporated by reference to Exhibit 4.2 to the
    Companys
    Form 10-Q
    for the quarter ended January 25, 2004).10
.13

Eighth Amendment Agreement Re:
    Loan and Security Agreement Among Grand Summit Resort
    Properties, Inc., as Borrower and Textron Financial Corporation,
    as Administrative Agent dated as of June 30,
    2005(incorporated by reference to Exhibit 10.1 to the
    Companys
    Form 8-K
    for the report date of May 27, 2005).10
.14

Fourth Amendment Agreement to the
    Statement of Intention and Special Additional Financing
    Agreement between Grand Summit Resort Properties, Inc. and
    Textron Financial Corporation dated as of June 30, 2005
    (incorporated by reference to Exhibit 10.2 to the
    Companys
    Form 8-K
    for the report date of July 7, 2005).10
.15

Amendment Letter dated as of
    December 30, 2004 to Loan and Security Agreement dated as
    of September 1, 1998 among Grand Summit Resort Properties,
    Inc., the lenders named therein, and Textron Financial
    Corporation as administrative agent (incorporated by reference
    from Exhibit 10.1 to the Companys
    Form 8-K
    filed January 4, 2005).10
.16

Waiver Letter dated as of
    September 30, 2005 to Loan and Security Agreement dated as
    of September 1, 1998 among Grand Summit Resort Properties,
    Inc., the Lenders named therein, and Textron Financial
    Corporation as administrative agent (incorporated by reference
    from Exhibit 10.1 to the Companys
    Form 8-K
    filed October 6, 2005).10
.17

Loan Settlement Agreement dated as
    of March 31, 2004 among American Skiing Company, Killington
    Ltd., American Skiing Company Resort Properties, Inc., The
    Canyons Resort Properties, Inc., Fleet National Bank, Ski
    Partners LLC, Oak Hill Capital Partners, L.P. and OHSF ASTC, LLC
    (incorporated by reference to Exhibit 4.1 to the
    Companys
    Form 8-K
    for the report date June 9, 2004).10
.18

Agreement Regarding Killington
    Resort and Certain Nearby Properties dated as of March 31,
    2004, among American Skiing Company, American Skiing Company
    Resort Properties, Inc., Killington Ltd. And SP Land Company,
    LLC (incorporated by reference to Exhibit 4.2 to the
    Companys
    Form 8-K
    for the report date June 9, 2004). 42




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##### Table of Contents



ExhibitNo.

Description10
.19

Schedule to Industry standard 1992
    ISDA Master Agreement (the Agreement) dated
    May 23, 2005 with Credit Suisse First Boston International
    (the Counterparty) in connection with the
    Companys obligation to mitigate certain floating rate
    interest risk pursuant to the terms of its existing first lien
    and second lien credit agreements (the Credit
    Agreements) and entered into an interest rate swap
    transaction (the Swap Transaction) with the
    Counterparty.10
.20

Registration Rights Agreement
    dated November 10, 1997 by and between American Skiing
    Company and ING (U.S.) Capital Corporation (incorporated by
    reference to Exhibit 3 to the Companys quarterly
    report on
    Form 10-Q
    for the quarter ended October 26, 1997).10
.21

Preferred Stock Subscription
    Agreement dated July 9, 1999 between the Registrant and the
    Purchasers listed on Annex A thereto, including a form of
    Stockholders Agreement, Voting Agreement and Certificate of
    Designation relating to the preferred stock to be issued
    (incorporated by reference to Exhibit 2.1 to the
    Companys
    Form 8-K
    for the report date of July 9, 1999).10
.22

Stockholders Agreement dated as of
    August 6, 1999 among Oak Hill Capital Partners, L.P., and
    the other entities identified in Annex A attached thereto,
    Leslie B. Otten and the Registrant (incorporated by reference to
    Exhibit 10.2 to the Companys
    Form 10-K
    for the report date of October 22, 1999).10
.23

Amendment to Stockholders
    Agreement dated July 31, 2000 among the Registrant, Oak
    Hill Capital Partners, L.P. and Leslie B. Otten (incorporated by
    reference to Exhibit 10.2 to the Companys
    Form 8-K
    for the report date of July 31, 2000).10
.24

Securities Purchase Agreement
    dated July 31, 2000 among the Registrant, American Skiing
    Company Resort Properties, Inc. and Oak Hill Capital Partners,
    L.P. (incorporated by reference to Exhibit 2.1 to the
    Companys
    Form 8-K
    for the report date of July 31, 2000).10
.25

Securities Purchase Agreement
    dated as of July 15, 2001 among American Skiing Company, a
    Delaware corporation, Oak Hill Capital Partners, L.P., a
    Delaware limited partnership, and other entities identified in
    Annex A thereto (incorporated by reference to
    Exhibit 99.2 to the Companys
    Form 8-K
    for the report date of July 16, 2001).10
.26

Amendment No. 1 to Securities
    Purchase Agreement among American Skiing Company, a Delaware
    corporation, Oak Hill Capital Partners, L.P., a Delaware limited
    partnership dated August 22, 2001 (incorporated by
    reference to Exhibit 10.1 to the Companys
    Form 8-K
    for the report date of August 31, 2001).10
.27

Stock Purchase Agreement dated as
    of August 1, 1997, among Kamori International Corporation,
    ASC West and the Company (incorporated by reference to
    Exhibit 2.1 of the Companys Registration Statement on
    Form S-1,
    Registration
    No. 333-33483).10
.28

Purchase and Sale Agreement dated
    as of October 16, 1996, among Sherburne Pass Mountain
    Properties, LLC, Pico Mountain Sports Center, LLC, Pico Mountain
    Operating Company, LLC, Harold L. and Edith Herbert, and Pico
    Ski Area Management Company (incorporated by reference to
    Exhibit 10.62 to ASC Easts Registration Statement on
    Form S-4,
    Registration
    No. 333-9763).10
.29

Letter of Agreement dated
    August 27, 1996, among SKI Ltd and certain stockholders of
    Sugarloaf Mountain Corporation (incorporated by reference to
    Exhibit 10.63 to ASC Easts Registration Statement on
    Form S-4,
    Registration
    No. 333-9763).10
.30

Assignment dated May 30,
    1997, between Wolf Mountain Resorts, L.C. and ASC Utah
    (incorporated by reference to Exhibit 10.7 to the
    Companys Registration Statement on
    Form S-1
    Registration
    No. 333-33483).10
.31

Indenture dated October 24,
    1990, between Killington Ltd. and The Howard Bank, as trustee
    (representative of indentures with respect to similar
    indebtedness aggregating approximately $2,995,000 in original
    principal amount and maturing at various times from 2015 to
    2016) (incorporated by reference to Exhibit 10.19 to ASC
    Easts Registration Statement on
    Form S-4,
    Registration
    No. 333-9763).10
.32

Lease dated October 15, 1980,
    among H. Donald Penley, Joseph Penley, Albert Penley and Sunday
    River Skiway Corporation (incorporated by reference to
    Exhibit 10.40 to ASC Easts Registration Statement on
    Form S-4,
    Registration
    No. 333-9763). 43




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##### Table of Contents



ExhibitNo.

Description10
.33

Lease/Option dated
    October 12, 2003, between John Blake and L.B.O. Holding,
    Inc. (incorporated by reference to Exhibit 10.38 to the
    Companys
    Form 10-K
    for the fiscal year ended July 27, 2003).10
.34

Lease dated November 10,
    1960, between the State of Vermont and Sherburne Corporation
    (predecessor to Killington, Ltd.) (incorporated by reference to
    Exhibit 10.44 to ASC Easts Registration Statement on
    Form S-4,
    Registration
    No. 333-9763).10
.35

Amended and Restated Lease
    Agreement between Sugarloaf Mountain Corporation and the
    Inhabitants of the Town of Carrabassett Valley, Maine,
    concerning the Sugarloaf Golf Course dated November 16,
    2000 (incorporated by reference to Exhibit 10.35 to
    American Skiing Companys Registration Statement on
    Form S-4,
    filed on January 9, 2001).10
.36

Ground Lease Agreement dated
    July 3, 1997, between ASC Utah and Wolf Mountain Resorts,
    L.C. (incorporated by reference to Exhibit 10.64 to the
    Companys Registration Statement on
    Form S-1,
    Registration
    No. 333-33483).10
.37

Ground Lease Guaranty dated
    July 3, 1997, from the Company to Wolf Mountain Resorts,
    L.C. (incorporated by reference to Exhibit 10.65 to the
    Companys Registration Statement on
    Form S-1,
    Registration
    No. 333-33483).10
.38

Stock Option Plan (incorporated by
    reference to Exhibit 10.89 to the Companys
    Registration Statement on
    Form S-1,
    Registration
    No. 333-33483).10
.39

Form of Non-Qualified Stock Option
    Agreement (Five-Year Vesting Schedule) (incorporated by
    reference to Exhibit 10.90 to the Companys
    Registration Statement on
    Form S-1,
    Registration
    No. 333-33483).10
.40

Form of Non-Qualified Stock Option
    Agreement (Fully-Vested) (incorporated by reference to
    Exhibit 10.91 to the Companys Registration Statement
    on
    Form S-1,
    Registration
    No. 333-33483).10
.41

Form of Incentive Stock Option
    Agreement (incorporated by reference to Exhibit 10.92 to
    the Companys Registration Statement on
    Form S-1,
    Registration
    No. 333-33483).10
.42

Executive Employment Agreement
    between the Registrant and Foster A. Stewart, Jr. dated as
    of September 1, 2003 (incorporated by reference to
    Exhibit 10.1 to the Companys
    Form 10-Q
    for the quarter ended January 25, 2004).10
.43

Executive Employment Agreement
    between the Registrant and Helen E. Wallace dated as of
    November 7, 2002 (incorporated by reference to
    Exhibit 10.37 to the Companys
    Form 10-K
    for the year ended July 28, 2002).10
.44

Employment Letter between the
    Registrant and Franklin Carey dated July 21, 2003
    (incorporated by reference to Exhibit 10.23 to the
    Companys
    Form 10-K
    for the fiscal year ended July 27, 2003).10
.45

The Canyons Resort Village
    Management Agreement dated as of November 15, 1999
    (incorporated by reference to Exhibit 2 to the
    Companys
    Form 10-Q
    for the quarter ended October 24, 1999).10
.46

Amended and Restated Development
    Agreement for The Canyons Specially Planned Area Snyderville
    Basin, Summit County, Utah dated as of November 15, 1999
    (incorporated by reference to Exhibit 3 to the
    Companys
    Form 10-Q
    for the quarter ended October 24, 1999).10
.47

American Skiing Company Phantom
    Equity Plan dated as of December 1, 2001 (incorporated by
    reference to Exhibit 10.41 to the Companys
    Form 10-K
    for the year ended July 28, 2002).10
.48

Form of Phantom Equity Plan Grant
    Agreement (Five Year Vesting Schedule) (incorporated by
    reference to Exhibit 10.42 to the Companys
    Form 10-K
    for the year ended July 28, 2002).10
.49

Form of Phantom Equity Plan Grant
    Agreement (Four Year Vesting Schedule) (incorporated by
    reference to Exhibit 10.43 to the Companys
    Form 10-K
    for the year ended July 28, 2002).10
.50

Amended and Restated Limited
    Liability Company Operating Agreement of SP Land Company, LLC
    (incorporated by reference to Exhibit 10.1 to the
    Companys
    Form 10-Q
    for the quarter ended April 25, 2004).10
.51

Limited Liability Operating
    Agreement of Cherry Knoll Development, LLC (incorporated by
    reference to Exhibit 10.1 to the Companys
    Form 10-Q
    for the quarter ended April 25, 2004). 44




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##### Table of Contents



ExhibitNo.

Description10
.52

Full Release and Settlement
    Agreement dated July 8, 2004 among American Skiing Company,
    Steamboat Ski & Resort Corporation, Walton Pond
    Apartments, Inc., American Skiing Company Resort Properties,
    Inc., Triple Peaks, LLC and Steamboat, LLC (incorporated by
    reference to Exhibit 4.2 to the Companys
    Form 8-K
    for the report date July 13, 2004).10
.53

Restatement of Agreement dated
    August 1, 2001, by and among D.A. Osguthorpe, D.A.
    Osguthorpe Family Partnership, D. A. Osguthorpe as trustee of
    The Dr. D.A. Osguthorpe Trust, Stephen A. Osguthorpe and
    ASC Utah. Utah (incorporated by reference to Exhibit 10.37
    to the Companys
    Form 10-K
    for the fiscal year ended July 26, 2004).10
.54

Amended and Restated Lease
    Agreement Number 419 between The State of Utah, acting through
    the School and Institutional Trust Lands Administration and
    ASC Utah, d/b/a The Canyons, dated July 1, 1998.
    (incorporated by reference to Exhibit 10.38 to the
    Companys
    Form 10-K
    for the fiscal year ended July 26, 2004).10
.55

Agreement dated August 18,
    1997, between Killington, Ltd. and Farm and Wilderness
    Foundation, Inc. (incorporated by reference to
    Exhibit 10.39 to the Companys
    Form 10-K
    for the fiscal year ended July 26, 2004).10
.56

Third Amendment to Ground Lease
    Agreement dated September 16, 2004 among Wolf Mountain
    Resorts, L.C. and ASC Utah Inc. (incorporated by reference to
    Exhibit 10.40 to the Companys
    Form 10-K
    for the fiscal year ended July 26, 2004).10
.57

First Lien Credit Agreement, dated
    as of November 24, 2004, among the Company, certain of its
    domestic subsidiaries, certain lenders, General Electric Capital
    Corporation, as administrative agent and collateral agent, and
    Credit Suisse First Boston, as syndication agent (incorporated
    by reference to Exhibit 10.1 to the Companys
    Form 10-Q
    filed December 8, 2004).10
.58

Second Lien Credit Agreement,
    dated as of November 24, 2004, among the Company, certain
    of its domestic subsidiaries, certain lenders, General Electric
    Capital Corporation, as administrative agent and collateral
    agent, and Credit Suisse First Boston, as syndication agent
    (incorporated by reference to Exhibit 10.2 to the
    Companys
    Form 10-Q
    filed December 8, 2004).10
.59

Exchange Agreement, dated as of
    October 12, 2004, between the Company and Madeline LLC
    (incorporated by reference to Exhibit 10.6 to the
    Companys
    Form 10-Q
    filed December 8, 2004).10
.60

Executive Employment Agreement
    effective as of March 23, 2005 between American Skiing
    Company and William J. Fair (incorporated by reference to
    Form 8-K
    filed March 31, 2005).10
.61

Phantom Equity Award dated as of
    March 23, 2005 between American Skiing Company and William
    J. Fair (incorporated by reference to
    Form 8-K
    filed March 31, 2005).10
.62

Waiver Agreement dated as of
    April 28, 2005 to Loan and Security Agreement dated as of
    September 1, 1998 among Grand Summit Resort Properties,
    Inc., the lenders named therein, and Textron Financial
    Corporation as administrative agent (incorporated by reference
    from exhibit to
    Form 8-K
    filed April 29, 2005).10
.63

An industry standard 1992 ISDA
    Master Agreement (the Agreement) with Credit Suisse
    First Boston International (the Counterparty) dated
    May 23, 2005 entering into an interest rate swap
    transaction (the Swap Transaction) (incorporated by
    reference from exhibit to
    Form 8-K
    filed May 27, 2005).10
.64

Eighth Amendment Agreement (the
    Eighth Amendment) dated June 30, 2005 amending
    the Loan and Security Agreement (LSA), dated as of
    September 1, 1998, among Grand Summit, Textron Financial
    Corporation (Textron) (incorporated by reference
    from exhibit to
    Form 8-K
    filed July 7, 2005).10
.65

Waiver Agreement dated as of
    September 30, 2005 to Loan and Security Agreement dated as
    of September 1, 1998 among Grand Summit Resort Properties,
    Inc., the lenders named therein, and Textron Financial
    Corporation as administrative agent (incorporated by reference
    from exhibit to
    Form 8-K
    filed October 6, 2005). 45




---



##### Table of Contents



ExhibitNo.

Description10
.66

Waiver Agreement dated as of
    February 14, 2006 to Loan and Security Agreement dated as
    of September 1, 1998 among Grand Summit Resort Properties,
    Inc., the lenders named therein, and Textron Financial
    Corporation as administrative agent (incorporated by reference
    from exhibit to
    Form 8-K
    filed February 24, 2006).21
.1

Subsidiaries of the Company.23
.1

Consent of Independent Registered
    Public Accounting Firm.31
.1

Certification of Chief Executive
    Officer pursuant to Section 302 of the Sarbanes-Oxley Act
    of 2002.31
.2

Certification of Chief Financial
    Officer pursuant to Section 302 of the Sarbanes-Oxley Act
    of 2002.32
.1

Certification of Chief Executive
    Officer pursuant to 18 U.S.C. Section 1350 as adopted
    pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.32
.2

Certification of Chief Financial
    Officer pursuant to 18 U.S.C. Section 1350 as adopted
    pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.  46




---



##### Table of Contents



SIGNATURES      By:
    /s/  William
    J. Fair          th
  By:
    /s/  William
    J. Fair        By:
    /s/  Helen
    E. Wallace            By:    By:
    /s/  Gordon
    M. Gillies    By:
    /s/  David
    Hawkes    By:
    /s/  Edward
    V. Dardani   47




---



##### Table of Contents



By:
    /s/  Steven
    Gruber    By:
    /s/  J.
    Taylor Crandall    By:
    /s/  William
    Janes    By:    By:
    /s/  Robert
    Branson    By:
    /s/  William
    J. Fair   48




---



##### Table of Contents



Independent
    Auditors Report           
    F-1




---



##### Table of Contents



American
    Skiing Company and Subsidiaries
  Consolidated Balance Sheets
  July 31, 2005


July 30, 2006(In thousands, except share and per share amounts)ASSETSCurrent assetsCash and cash equivalents

$
6,216


$
6,269Restricted cash


2,557



2,679Accounts receivable, net of
    allowance for doubtful accounts of $579 and $357, respectively,
    including related party amounts (see Note 13)


5,627



6,273Inventory


3,576



4,115Prepaid expenses and other


3,829



2,885Deferred income taxes


7,536



3,923Total current assets


29,341



26,144Property and equipment, net


348,619



330,231Real estate developed for sale


22,304



2,191Intangible assets, net


6,307



6,249Deferred financing costs, net


6,472



5,361Other assets, including related
    party amounts (see Note 13)


9,891



12,488Total assets

$
422,934


$
382,664LIABILITIES, MANDATORILY
    REDEEMABLE PREFERRED STOCK, AND STOCKHOLDERS
    DEFICITCurrent liabilitiesCurrent portion of long-term debt

$
31,223


$
9,286Accounts payable and other current
    liabilitiesAccounts payable, including related
    party amounts (see Note 13)


9,936



10,274Accrued interest


8,992



9,135Other current liabilities


24,291



22,746Deposits and deferred revenue


22,139



25,144Total current liabilities


96,581



76,585Long-term debt, net of current
    portion


209,519



198,021Subordinated notes and debentures


102,813



113,685Other long-term liabilities


10,635



12,259Deferred income taxes


7,536



3,923Mandatorily Redeemable
    81/2%
    Series B Preferred Stock; 150,000 shares authorized,
    issued, and outstanding (redemption value of $0)






Mandatorily Redeemable Convertible
    Participating 12%
    Series C-1
    Preferred Stock, par value of $0.01 per share;
    40,000 shares authorized, issued, and outstanding,
    including cumulative dividends (redemption value of $63,574 and
    $71,530, respectively)


63,203



71,320Mandatorily Redeemable 15%
    Nonvoting
    Series C-2
    Preferred Stock, par value of $0.01 per share;
    139,453 shares authorized, issued, and outstanding,
    including cumulative dividends (redemption value of $248,339 and
    $287,624, respectively)


246,924



286,801Mandatorily Redeemable Nonvoting
    Series D Participating Preferred Stock, par value of
    $0.01 per share; 5,000 shares authorized; no shares
    issued or outstanding






Total liabilities and mandatorily
    redeemable preferred stock


737,211



762,594Stockholders deficitCommon stock, Class A, par
    value of $0.01 per share; 15,000,000 shares
    authorized; 14,760,530 shares issued and outstanding


148



148Common stock, par value of
    $0.01 per share; 100,000,000 shares authorized;
    16,977,653 shares issued and outstanding


170



170Additional paid-in capital


302,285



302,285Accumulated deficit


(616,880
)


(682,533
)Total stockholders deficit


(314,277
)


(379,930
)Total liabilities, mandatorily
    redeemable preferred stock, and stockholders deficit

$
422,934


$
382,664    F-2




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##### Table of Contents



American
    Skiing Company and Subsidiaries
  Consolidated Statements of Operations
  Year EndedJuly 25,


July 31,


July 30,2004


2005


2006(In thousands, except per share amounts)Net revenues:Resort

$
250,706


$
267,314


$
274,369Real estate


33,405



9,163



33,441Total net revenues


284,111



276,477



307,810Operating expenses:Resort


167,518



172,855



174,426Real estate


24,661



7,185



27,559Marketing, general, and
    administrative


54,801



51,439



53,167Restructuring charges, net


137







Depreciation and amortization


26,477



31,798



31,116Impairment loss on commercial
    property sold










1,533Loss on disposal of commercial
    property










917Write off of financing costs






5,983



Total operating expenses


273,594



269,260



288,718Income from operations


10,517



7,217



19,092Interest expense, net


(87,603
)


(81,668
)


(86,675
)Gain on sale of resort assets






822



169Increase in fair value of interest
    rate swap agreement






314



1,761Gain on extinguishment of debt


23,091







Gain on transfer of assets
    associated with extinguishment of debt


25,493







Loss before benefit for income
    taxes


(28,502
)


(73,315
)


(65,653
)Benefit for income taxes










Net loss attributable to common
    stockholders

$
(28,502
)

$
(73,315
)

$
(65,653
)Basic and diluted net loss
    attributable to common stockholders

$
(0.90
)

$
(2.31
)

$
(2.07
)Weighted average common shares
    outstanding


31,738



31,738



31,738    F-3




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##### Table of Contents



American
    Skiing Company and Subsidiaries
  Consolidated Statements of Stockholders
    Deficit
  Class A








AdditionalCommon Stock


Common Stock


Paid-in


AccumulatedShares


Amount


Shares


Amount


Capital


Deficit


Total(In thousands, except share amounts)Balance as of July 27, 2003


14,760,530


$
148



16,977,653


$
170


$
277,450


$
(515,063
)

$
(237,295
)Exchange of debt for capital
    contribution


















24,835







24,835Net loss






















(28,502
)


(28,502
)Balance as of July 25, 2004


14,760,530



148



16,977,653



170



302,285



(543,565
)


(240,962
)Net loss






















(73,315
)


(73,315
)Balance as of July 31, 2005


14,760,530



148



16,977,653


$
170



302,285



(616,880
)


(314,277
)Net loss






















(65,653
)


(65,653
)Balance as of July 30, 2006


14,760,530


$
148



16,977,653


$
170


$
302,285


$
(682,533
)

$
(379,930
)    F-4




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##### Table of Contents



American
    Skiing Company and Subsidiaries
  Consolidated Statements of Cash Flows
  Year EndedJuly 25,


July 31,


July 30,2004


2005


2006(In thousands)Cash flows from operating activitiesNet loss

$
(28,502
)

$
(73,315
)

$
(65,653
)Adjustments to reconcile net loss
    to net cash (used in) provided by operating activities:Depreciation and amortization


26,477



31,798



31,116Non-cash interest and amortization
    of deferred financing costs


46,182



46,491



49,105Non-cash increase in fair value of
    interest rate swap agreement






(314
)


(1,761
)Amortization of discount on
    convertible debt


837



161



Non-cash interest on junior
    subordinated notes


1,724



8,453



10,872Non-cash compensation expense


156



523



273Write-off of financing costs






5,983



(Gain) loss from sale or impairment
    of assets, net


(1,147
)


(1,172
)


2,572Gain on extinguishment of debt


(23,091
)






Gain on transfer of assets
    associated with extinguishment of debt


(25,493
)






Decrease (increase) in assets:Restricted cash


(4,376
)


5,046



(122
)Accounts receivable, net


234



1



(646
)Inventory


25



52



(539
)Prepaid expenses and other


194



(98
)


944Real estate developed for sale


18,950



2,378



20,113Other assets


(831
)


126



(1,100
)Increase (decrease) in liabilities:Accounts payable and other current
    liabilities


6,735



(321
)


(1,377
)Deposits and deferred revenue


3,301



8,995



3,005Other long-term liabilities


785



(229
)


1,351Net cash provided by operating
    activities


22,160



34,558



48,153Cash flows from investing activitiesCapital expenditures


(9,573
)


(17,953
)


(13,159
)Proceeds from sale of assets


2,214



6,013



3,131Net cash used in investing
    activities


(7,359
)


(11,940
)


(10,028
)Cash flows from financing activitiesProceeds from borrowings under
    previous Resort Senior Credit Facility


68,465



22,659



Repayment of principal under
    previous Resort Senior Credit Facility


(67,203
)


(101,701
)


Proceeds from borrowings under
    current Resort Senior Credit Facility






262,794



55,006Repayment of principal under
    current Resort Senior Credit Facility






(60,035
)


(65,785
)Proceeds from issuance of long-term
    debt






2,550



Repayment of principal on long-term
    debt


(4,915
)


(10,844
)


(4,871
)Repayment of Subordinate debt






(121,875
)


Proceeds from issuance of real
    estate debt


6,159







Repayment of principal on real
    estate debt


(19,166
)


(6,911
)


(22,422
)Payment of deferred financing costs






(7,306
)


Payment for costs of extinguishment
    of debt


(470
)






Net cash used in financing
    activities


(17,130
)


(20,669
)


(38,072
)Net (decrease) increase in cash and
    cash equivalents


(2,329
)


1,949



53Cash and cash equivalents,
    beginning of year


6,596



4,267



6,216Cash and cash equivalents, end of
    year

$
4,267


$
6,216


$
6,269Supplemental disclosures of cash
    flow information:Cash paid for interest

$
39,268


$
22,522


$
25,198Cash refunded for income taxes, net


(113
)






Supplemental schedule of non-cash
    investing and financing activities:Exchange of debt for capital
    contribution


24,835







Acquisition of equipment under
    capital leases






12,655



4,636Conversion of Series A
    Preferred Stock to New Junior Subordinated Notes






76,673



Addition of interest to principal
    outstanding on New Junior Subordinated Notes






911



8,728    F-5




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##### Table of Contents



American
    Skiing Company



Notes to
    Consolidated Financial Statements



American
    Skiing Company



Notes to
    Consolidated Financial
    Statements  (Continued)  1.  Basis
    of Presentation
    Business
    Conditions
    Seasonality
      Strategic
    Plan
    
    Comprehensive financial restructuring package, including
    amendments to its resort and real estate construction credit
    facilities and redeemable preferred stock, additional capital
    infusions, and the refinancing of its Resort Senior Credit
    Facility and its Senior Subordinated Notes along with its Real
    Estate Term Facility to improve financial flexibility,
    Aggressive efforts to sell the remaining quartershare units in
    the Grand Summit Hotels at The Canyons and Steamboat to generate
    funds to pay down its Real Estate Constuction Loan Facilities,
    Reorganization, staff reduction, and performance enhancement
    programs designed to achieve operational cost savings and
    improve financial performance, F-6




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##### Table of Contents



American
    Skiing Company
  Notes to
    Consolidated Financial
    Statements  (Continued)
   
    Strategic redeployment of management and capital resources to
    emphasize the integration and growth of resort village
    development and operations,
    Significant focus of capital and resources to improving each
    resorts functional business lines revenues
    opportunities and operational cost performance in order to drive
    financial performance,
    Improvement of the financial performance of Killington Ski
    Resort through continued enhancements both in the physical
    appearance and guest service experience of the resort,
    Implementation of the All for One all eastern season pass
    program designed to lock in skier visitation through increase in
    season pass sales, increase related net resort operating
    revenues, increase market share in the east and to hedge against
    poor weather conditions in the east during the ski
    season, and
    Reorganization of marketing and sales functions, strengthen
    sales staff capabilities, increase marketing dollar spend into
    in-market needs to achieve broader marketing and sales coverage
    in our designated markets.
    Drive to broaden the companys network of well-known
    partnership sponsors throughout the organization in order to
    create new national co-op campaigns and resort specific events
    to increase market share and customer wallet penetration.
    Increase emphasis on resort master planning at all of our
    resorts along with site and land use planning in order to better
    define the vision of each resort and drive maximum utilization
    value for all real estate holdings.         F-7




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##### Table of Contents



American
    Skiing Company
  Notes to
    Consolidated Financial
    Statements  (Continued)
      (Series C-1 (Series C-2 Series C-1 Series C-2 Series C-1 Series C-2 Series C-1
    2.
    Summary
    of Significant Accounting Policies  Principles
    of Consolidation
    Fiscal
    Year
  52-week 53-week
  Cash
    and Cash Equivalents
   F-8




---



##### Table of Contents



American
    Skiing Company
  Notes to
    Consolidated Financial
    Statements  (Continued)
  Restricted
    Cash
    Inventory
  (first-in,
  Property
    and Equipment
    Real
    Estate Developed for Sale
    Goodwill
    and Other Intangible Assets
  Goodwill and Other Intangible
    Assets Accounting
    for the Impairment or Disposal of Long-Lived Assets
 F-9




---



##### Table of Contents



American
    Skiing Company
  Notes to
    Consolidated Financial
    Statements  (Continued)
    July 31,


July 30,2005


2006Definite-lived Intangible
    Assets:Lease agreements

$
1,853


$
1,853Less accumulated amortization


(404
)


(462
)1,449



1,391Indefinite-lived Intangible
    Assets:Trade names


170



170Water rights


4,688



4,688Intangible Assets,
    net

$
6,307


$
6,249     Deferred
    Financing Costs
    Long-Lived
    Assets
  Accounting
    for the Impairment or Disposal of Long-Lived Assets,
  Revenue
    Recognition
   F-10




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##### Table of Contents



American
    Skiing Company
  Notes to
    Consolidated Financial
    Statements  (Continued)
    Interest
    Employee
    Savings Plan
    Advertising
    Costs
    Earnings
    per Share
   F-11




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##### Table of Contents



American
    Skiing Company
  Notes to
    Consolidated Financial
    Statements  (Continued)
    Fiscal


Fiscal


Fiscal2004


2005


2006(In thousands, except per share amounts)Net loss attributable to common
    stockholders

$
(28,502
)

$
(73,315
)

$
(65,653
)SharesTotal weighted average common
    shares outstanding (basic And diluted)


31,738



31,738



31,738Basic and diluted loss per
    common shareNet loss attributable to common
    stockholders

$
(0.90
)

$
(2.31
)

$
(2.07
)     Stock
    Compensation
   F-12




---



##### Table of Contents



American
    Skiing Company
  Notes to
    Consolidated Financial
    Statements  (Continued)
    WeightedWeighted


AverageAverage


RemainingNumber of


Exercise


Contractual


IntrinsicShares


Price


Term


Value(In years)


(In thousands)Outstanding as of July 27,
    2003


3,821,187


$
4.25



6.23


$
Granted






Exercised






Forfeited


(10,000
)


3.00Outstanding as of July 25,
    2004


3,811,187



4.26



5.23



Granted






Exercised






Forfeited






4.26Outstanding as of July 31,
    2005


3,811,187



4.26



4.23



Granted






Exercised






Forfeited






Outstanding as of July 30,
    2006


3,811,187


$
4.26



3.23


$
    F-13




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##### Table of Contents



American
    Skiing Company
  Notes to
    Consolidated Financial
    Statements  (Continued)
    Weighted








ExercisableAverage


Outstanding





WeightedRemaining


Weighted Average





AverageRange of Exercise Prices

Outstanding


Contractual Life


Exercise Price


Exercisable


Exercise Price(In years)$ 0.72


25,000



4.90


$
0.72



25,000


$
0.721.75 -  2.50


1,420,337



3.60



2.11



1,420,337



2.113.00 -  4.00


1,439,250



3.62



3.18



1,439,250



3.187.00 -  8.75


735,750



2.23



7.19



735,750



7.1914.19 - 18.00


190,850



1.24



17.55



190,850



17.553,811,187



3.23



4.26



3,811,187



4.26   Accounting for Stock Issued to
    Employees,
  Share Based
    Payment. fair-value-based
  52-week
 F-14




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##### Table of Contents



American
    Skiing Company
  Notes to
    Consolidated Financial
    Statements  (Continued)
  Accounting for Stock-Based Compensation-Transition and
    Disclosure, an amendment of FASB Statement
    No. 123,
  Fiscal Years Ended

Fiscal 2004


Fiscal 2005Net loss attributable to common
    stockholdersAs reported

$
(28,502
)

$
(73,315
)Stock-based employee
    compensation expense determined under fair-value method for all
    awards, net of tax


(330
)


(129
)Pro forma

$
(28,832
)

$
(73,444
)Basic and diluted net loss per
    common shareAs reported

$
(0.90
)

$
(2.31
)Pro forma


(0.91
)


(2.31
)     Fair
    Value of Financial Instruments
      July 31, 2005


July 30, 2006Carrying


Fair


Carrying


FairAmount


Value


Amount


Value11.3025% Convertible
    Subordinated Notes

$
19,021


$
17,496


$
21,165


$
19,715New Junior Subordinated
    Notes


77,584



75,079



86,312



83,989Other subordinated
    debentures


6,208



5,534



6,208



5,147   Derivative
    Financial Instruments
   F-15




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##### Table of Contents



American
    Skiing Company
  Notes to
    Consolidated Financial
    Statements  (Continued)
    Income
    Taxes
  Accounting for Income
    Taxes.
  Use of
    Estimates
    Reclassifications
    Accounting
    for Variable Interest Entities
  Consolidation of Variable Interest Entities Consolidated Financial
    Statements,
   F-16




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##### Table of Contents



American
    Skiing Company
  Notes to
    Consolidated Financial
    Statements  (Continued)
          Recently
    Issued Accounting Standards
  Accounting for Uncertainty in Income Taxes 
    an interpretation of FASB Statement No. 109 Accounting
    for Income Taxes.
  Considering the
    Effects of Prior Year Misstatements in Current Year Financial
    Statements
 F-17




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##### Table of Contents



American
    Skiing Company
  Notes to
    Consolidated Financial
    Statements  (Continued)
  3.
    Property
    and Equipment    July 31,


July 30,2005


2006Buildings and grounds

$
191,298


$
187,363Machinery and
    equipment


135,760



137,615Lifts and lift lines


126,806



127,154Trails


25,201



25,219Land improvements


10,144



10,213489,209



487,564Less: accumulated depreciation
    and amortization


(218,044
)


(238,006
)271,165



249,558Land


74,485



74,255Construction-in-progress


2,969



6,418Property and equipment,
    net

$
348,619


$
330,231    F-18




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##### Table of Contents



American
    Skiing Company
  Notes to
    Consolidated Financial
    Statements  (Continued)
  4.
    Long-Term
    Debt    July 31,


July 30,2005


2006Resort Senior Credit Facility
    (see Note 5)

$
202,759


$
191,980Real estate construction loan
    facility with a face value of $110,000 (see
    Note 6)


11,822



Real estate construction loan
    facility with a face value of $10,600 to provide liquidity for
    the hotel development subsidiary and for completion of the
    Steamboat Grand Hotel (see Note 6)


10,600



Real estate mortgage note
    payable with a face value of $1.9 million secured by an
    employee housing complex at the Companys Steamboat resort.
    The note is on a
    5-year
    amortization schedule maturing in March 2010 and principal and
    interest (6.25% as of July 30, 2006) are payable
    monthly


1,831



1,754Real estate mortgage note
    payable with a face value of $2.5 million secured by
    commercial property at Killington. The note is on a
    10-year
    amortization schedule maturing in October 2009 and principal and
    interest (6.5% as of July 30, 2006) are payable
    monthly


2,404



2,209Note payable bearing interest
    at 9% per annum, which is payable monthly beginning January
    1998 for a
    15-year term
    and is secured by a building at Killington. The principal is due
    in full in December 2012


2,250



2,250Note payable with interest
    payable monthly beginning January 1998 for a
    30-year
    term. The interest rate is 7.00% per annum for the first
    10 years, 8.44% per annum for the second 10 years
    and 10.55% per annum for the final 10 years. The
    principal is due in full in December 2027. The note is secured
    by land at Killington


1,600



1,600Obligations under capital
    leases (see Note 15)


7,342



7,390Other notes payable


134



124240,742



207,307Less: current portion


(31,223
)


(9,286
)Long-term debt, net of current
    portion

$
209,519


$
198,021    F-19




---



##### Table of Contents



American
    Skiing Company
  Notes to
    Consolidated Financial
    Statements  (Continued)
    Long-Term





TotalDebt and Capital


Subordinated


Debt andLeases


Notes and Debentures


Capital Leases2007

$
10,029


$



$
10,0292008


4,361







4,3612009


2,255







2,2552010


3,875



1,292



5,1672011


850







8502012 and thereafter


187,130



112,393



299,523Interest related to capital
    lease obligations (rates ranging from 5.0% to 12.2%)


(1,193
)






(1,193
)207,307



113,685



320,992Less current portion


(9,286
)






(9,286
)Long-term debt and subordinated
    notes and debentures, net of current portion

$
198,021


$
113,685


$
311,706   5.
    Resort
    Senior Credit Facility    
    Revolving Facility  $40.0 million, including
    letter of credit (L/C) availability of up to
    $6.0 million. The amount of availability under this
    facility is correspondingly reduced by the amount of each L/C
    issued.
    First Lien Term Loan  $85.0 million borrowed on
    the funding date of November 24, 2004.
    Second Lien Term Loan  $105.0 million borrowed
    on the funding date of November 24, 2004.   F-20




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##### Table of Contents



American
    Skiing Company
  Notes to
    Consolidated Financial
    Statements  (Continued)
    6-month 3-month
      6.
    Real
    Estate Construction Loan Facility and Term
    Facility  Construction
    Loan Facility
   F-21




---



##### Table of Contents



American
    Skiing Company
  Notes to
    Consolidated Financial
    Statements  (Continued)
          Real
    Estate Term Facility
   F-22




---



##### Table of Contents



American
    Skiing Company
  Notes to
    Consolidated Financial
    Statements  (Continued)
        co-borrower
  7.
    Subordinated
    Notes and Debentures  12% Senior
    Subordinated Notes
    11.3025%
    Junior Subordinated Notes
   F-23




---



##### Table of Contents



American
    Skiing Company
  Notes to
    Consolidated Financial
    Statements  (Continued)
    New
    Junior Subordinated Notes
    Other
    Subordinated Debentures
    Interest


PrincipalYear

Rate


Amount2010


8
%

$
1,2922012


6
%


1,1552013


6
%


1,0652015


6
%


1,5002016


6
%


1,196$
6,208   8.
    Mandatorily
    Redeemable Securities  Series A
    Preferred Stock
    Series B
    Preferred Stock
   F-24




---



##### Table of Contents



American
    Skiing Company
  Notes to
    Consolidated Financial
    Statements  (Continued)
  Series C-1 Series C-2 Series C-1
  Series C-1
    and C-2 Preferred Stock
  Series C-1 Series C-2 Series C-1 Series C-2 Series C-1 Series C-2 Series C-1 Series C-2 Series C-1 Series C-2 Series C-1 Series C-2 Series C-1 Series C-2 Series C-1
  Series D
    Preferred Stock
  Series C-1 Series C-2
  9.
    Capital
    Stock   F-25




---



##### Table of Contents



American
    Skiing Company
  Notes to
    Consolidated Financial
    Statements  (Continued)
    10.
    Dividend
    Restrictions and Stockholders Agreement  Dividend
    Restrictions
      Stockholders
    Agreement
    
    Six directors of the Company nominated by Oak Hill, so long as
    Oak Hill owns 80% of the shares of common stock it owned as of
    July 30, 2000 on a fully diluted basis, such number of
    directors decreasing ratably with the percentage of Oak
    Hills ownership of the common stock on a fully diluted
    basis compared to such ownership as of July 30,
    2000; and
    Two directors of the Company nominated by Mr. Otten, so
    long as Mr. Otten owns 15% of the shares of common stock
    outstanding on a fully diluted basis, and one director so
    nominated, so long as Mr. Otten owns at least 5% of the
    shares of common stock outstanding on a fully diluted basis.         F-26




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##### Table of Contents



American
    Skiing Company
  Notes to
    Consolidated Financial
    Statements  (Continued)
    11.
    Income
    Taxes      July 31,


July 31,2005


2006Property and equipment basis
    differential

$
(42,402
)

$
(39,068
)Other


(11,034
)


(4,348
)Gross deferred tax
    liabilities


(53,436
)


(43,416
)Tax loss and credit
    carryforwards


123,967



124,824Capitalized costs


3,857



419Deferred revenue and
    contracts


6,883



6,765Stock compensation
    charge


869



968Reserves and accruals


10,954



6,948Tax goodwill


13,651



11,666Impaired assets


31,093



22,501Gross deferred tax
    assets


191,274



174,091Valuation allowance


(137,838
)


(130,675
)Net deferred tax (liability)
    asset

$



$
  F-27




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##### Table of Contents



American
    Skiing Company
  Notes to
    Consolidated Financial
    Statements  (Continued)
    July 31, 2005


July 30, 2006Gross





Net


Gross





NetDeferred Tax





Deferred Tax


Deferred Tax





Deferred Tax(Liability)


Valuation


(Liability)


(Liability)


Valuation


(Liability)Asset


Allowance


Asset


Asset


Allowance


AssetNet current deferred tax
    asset

$
23,590


$
(16,054
)

$
7,536


$
15,729


$
(11,806
)

$
3,923Net long term deferred tax
    (liability) asset:Long term asset


167,684



(121,784
)


45,900



158,362



(118,869
)


39,493Long term liability


(53,436
)






(53,436
)


(43,416
)






(43,416
)Total valuation
    allowance






(137,838
)










(130,675
)Net long term deferred tax
    liability









$
(7,536
)









$
(3,923
)Net deferred tax (liability)
    asset









$











$
     Fiscal


Fiscal


Fiscal2004


2005


2006Income tax provision (benefit)
    at the statutoryU.S. tax rate

$
(10,028
)

$
(25,660
)

$
(22,977
)Increase (decrease) in rate
    resulting from:State income taxes,
    net


(413
)


(2,193
)


(233
)Change in valuation
    allowance


(11,912
)


7,793



(7,163
)Accretion of discount and
    dividends on Mandatorily Redeemable Preferred Stock included as
    interest expense


15,092



18,475



21,065Non-deductible items


1,450



231



271Other


5,811



1,354



9,037Income tax benefit at the
    effective tax rate

$



$



$
      F-28




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##### Table of Contents



American
    Skiing Company
  Notes to
    Consolidated Financial
    Statements  (Continued)
  12.
    Business
    Segment Information  Disclosures About Segments of an Enterprise and Related
    Information.
    2004


2005


2006Net revenues:Resorts

$
250,706


$
267,314


$
274,369Real estate


33,405



9,163



33,441$
284,111


$
276,477


$
307,810Income (loss) before income
    taxes:Resorts

$
(67,470
)

$
(71,504
)

$
(68,550
)Real estate


38,968



(1,811
)


2,897$
(28,502
)

$
(73,315
)

$
(65,653
)Depreciation and
    amortization:Resorts

$
25,609


$
31,138


$
30,576Real estate


868



660



540$
26,477


$
31,798


$
31,116Interest expense,
    net:(2)Resorts

$
70,111


$
78,225


$
84,002Real estate


17,492



3,129



912$
87,603


$
81,354


$
84,914Restructuring, and asset
    impairment charges, gain on extinguishment of debt, and gain on
    transfer of assets associated with extinguishment of
    debt:Resorts

$
137


$
(822
)

$
748Real estate


(48,584
)






1,533$
(48,447
)

$
(822
)

$
2,281 F-29




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##### Table of Contents



American
    Skiing Company
  Notes to
    Consolidated Financial
    Statements  (Continued)
  2004


2005


2006Capital expenditures:Resorts(1)

$
9,573


$
17,953


$
13,159Real estate










$
9,573


$
17,953


$
13,159Identifiable assets:Resorts





$
363,394


$
347,493Real estate






50,385



29,687$
413,779


$
377,180     (1)
    
    During fiscal 2005, and as required under the terms of our
    Resort Senior Credit Facility, we converted certain types of
    lease agreements that we historically entered into as operating
    leases into terms that qualified them to be treated as capital
    leases. These converted capital leases totaled
    $12.7 million and are not within the $18.0 million
    noted above for fiscal year 2005.(2)
    
    During fiscal 2005, the Company entered into an interest rate
    swap agreement which has a fixed cash-pay rate for a portion of
    the Resort Senior Credit Facility (see Note 5). Changes in
    the fair value of the interest rate swap agreement are recorded
    as interest expense (income) at each reporting period. During
    the years ended July 31, 2005 and July 30, 2006, the
    Company recognized $314,405 and $1,760,951, respectively, of
    interest income from market value adjustments to this agreement.
    This amount is reported separately in the Consolidated
    Statements of Operations but is included above in the Resorts
    interest expense, net amount.    2004


2005


2006Capital expenditures:Resort capital
    expenditures

$
9,573


$
17,953


$
13,159Real estate capital
    expenditures










$
9,573


$
17,953


$
13,159Assets:Identifiable assets for
    segments





$
413,779


$
377,180Intangible and deferred income
    tax assets not allocated to segments






9,155



5,484Total consolidated
    assets





$
422,934


$
382,664   13.
    Related
    Party Transactions   F-30




---



##### Table of Contents



American
    Skiing Company
  Notes to
    Consolidated Financial
    Statements  (Continued)
    Series C-1 Series C-2
            14.
    Phantom
    Equity Plan   F-31




---



##### Table of Contents



American
    Skiing Company
  Notes to
    Consolidated Financial
    Statements  (Continued)
    15.
    Commitments
    and Contingencies          50-year year-to-year
 F-32




---



##### Table of Contents



American
    Skiing Company
  Notes to
    Consolidated Financial
    Statements  (Continued)
      50-year
       F-33




---



##### Table of Contents



American
    Skiing Company
  Notes to
    Consolidated Financial
    Statements  (Continued)
      and/or and/or
       F-34




---



##### Table of Contents



American
    Skiing Company
  Notes to
    Consolidated Financial
    Statements  (Continued)
                and/or
 F-35




---



##### Table of Contents



American
    Skiing Company
  Notes to
    Consolidated Financial
    Statements  (Continued)
          Capital


OperatingLeases


Leases2007

$
4,312


$
1,9342008


3,199



1,3182009


1,072



8702010






7672011






6742012 and thereafter






3,775Total payments


8,583


$
9,338Less interest (rates ranging
    from 5.0% to 12.2%)


(1,193
)Present value of net minimum
    payments


7,390Less current portion


(3,568
)Long-term obligations

$
3,822      F-36




---



##### Table of Contents



American
    Skiing Company
  Notes to
    Consolidated Financial
    Statements  (Continued)
             F-37