BLUE RIDGE REAL ESTATE COMPANY
BIG BOULDER CORPORATION
ANNUAL REPORT 1997
To Our Shareholders:

   To better reflect business cycles between our ski and non-ski seasons,
the companies changed the Fiscal year end to March 31.

   Net income for the ten months ended March 31, 1997 was $486,806 or $.24 
per combined share compared to net income of $43,263 or $.02 per combined 
share for the twelve months ended May 31, 1996.

   We took advantage of cold temperatures in early November to open tubing
at Jack Frost Mountain on November 16, 1996 and Big Boulder for skiing on
November 29, 1996.  These dates represent our earliest opening for the ski 
season.  This was made possible because of our investment in an additional
10,000 CFM of air at Jack Frost Mountain.

   The ski areas experienced a profitable winter season with 374,000 visitors.
Skier's and Snowboarders' combined visits totaled 277,000, while Snow Tubers 
added another 97,000.  Tubing, introduced to East Coast ski area by Jack Frost 
Mountain in December 1994, has become very popular as a winter recreation 
activity.  We have expanded our tubing facilities each of the last three years 
and in view of the success achieved to date, our capital plans this year 
include additional expansion.
   Snowboarding continues to grow in popularity representing almost 24% of our 
skier visits.  To accommodate and indeed encourage these customers, our ski 
areas have built halfpipes, snowparks, obstacle courses and hosts snowboard 
competition on a weekly basis.  We will both continue and expand our efforts 
to grow this market.
   Big Boulder celebrated its 50th year of operation this past season with 
torchlight parades, fireworks displays and entertainment every Saturday night 
representing five decades of music styles.  This celebration coupled with the 
introduction of the family tube resulted in a successful season for Boulder.
   The Ski Areas have diversified into winter recreation resorts with tubing,
 snowboarding, snowmobiling and townhouse rentals.
   The introduction of summertime activities over the last five years has 
proven successful:
   We currently host seven Festivals from Memorial Day through Columbus Day 
weekend with attendance ranging from 4,000 to 10,000 per festival.  
   Splatter, our paintball game, continues to grow and is now operated on a
year-round basis.
   New activities available to our summer visitors include and In-Line Skate 
Park and an A.T.V. (All Terrain Vehicle) Park.
   Fern Ridge Campground, in its third year of operation under company manage-
ment, has expanded to 205 sites, including wilderness cabins.  
   Our Summer Festivals and Splatter  have complemented the occupancy of 
this facility.

   Realizing our Companies' major potential lies in the future development 
opportunities of its large land holdings, we continue to explore possible 
real estate ventures and periodically test the market in order to be prepared 
to move forward should an upturn occur.  The Companies have municipal approval 
for some 800 homesites adjacent to our Ski Areas and permits in place to 
construct a golf course at Jack Frost Mountain.

   Your Companies have an excellent record in the ski industry and have made 
marked progress toward our goal of generating revenues and profits during the 
non-ski season.  I would like to thank our employees for their innovativeness 
and hard work, which have contributed to the positive image and profitability 
of the Companies.
									Gary A. Smith
									President
Blakeslee, Pennsylvania
June 16, 1997
                                   PAGE 1
<PAGE>							
<TABLE>
<CAPTION>

COMBINED BALANCE SHEETS
March 31, 1997 and May 31, 1996
ASSETS                                                1997           1996
<S>                                               <C>         <C>

Current Assets:
Cash and cash equivalents (including interest-
bearing deposits of $2,084,101 in 1997 and 
$1,770,546 in 1996)                                $2,084,101  $1,958,963
Marketable securities                                 303,096     293,588
Current installments of mortgage notes receivable           0      10,670
Accounts receivable                                   430,628     334,397
Refundable income taxes                                23,146           0
Inventories                                           249,590     123,257
Prepaid expenses and other current assets             623,561     766,921
 Total current assets                               3,714,122   3,487,796
Mortgage notes receivable less current 
installments                                                0       2,479 
Other non-current assets                               36,797      71,297 
Properties:
Land, principally unimproved (19,884 acres
 per land ledger)                                   1,867,766   1,867,766 
 Land improvements, buildings and equipment        47,146,625  45,779,980 
                                                   49,014,391  47,647,746 
Less accumulated depreciation & amortization       28,962,573  27,999,628 
                                                   20,051,818  19,648,118 
                                                  $23,802,737 $23,209,690 

LIABILITIES AND SHAREHOLDERS' EQUITY                    1997         1996 
Current liabilities:
Current installments of long-term debt            $   532,513  $  504,681 
Accounts and other payables                           430,814     503,063 
Accrued claims                                        158,905     204,147 
Accrued income taxes                                  138,566      59,098 
Accrued liabilities                                   801,849     684,835 
Deferred revenue                                      192,556     293,095 
 Total current liabilities                          2,255,203   2,248,919 
Long-term debt, less current installments           9,245,918   9,189,486 
Deferred income taxes                               2,201,348   2,157,823 
Commitments and contingencies
Combined shareholders' equity:
Capital stock, without par value, stated value $.30
per combined share, Blue Ridge and Big Boulder each
authorized 3,000,000 shares, each issued 2,198,148
shares                                                659,444     659,444 
Capital in excess of stated value                   1,461,748   1,461,748 
Earnings retained in the business                   9,235,309   8,748,503 
                                                   11,356,501  10,869,695 
Less cost of 194,134 shares of
capital stock in treasury                           1,256,233   1,256,233 
                                                   10,100,268   9,613,462 
                                                  $23,802,737 $23,209,690 
</TABLE>
The accompanying notes are an integral part of the combined financial
statements. 
	                                PAGE	2
<PAGE>
<TABLE>
<CAPTION>

COMBINED STATEMENTS OF OPERATIONS AND
EARNINGS RETAINED IN THE BUSINESS
 <S>                              <C>          <C>          <C>

For the 10 months ended March 31, 1997
& the years ended May 31,1996 & 1995
					                    1997        1996        1995

Revenues:
	Ski operations                   $11,251,882  10,618,961   7,837,872
	Real estate management             3,367,627   2,928,213   2,757,217
	Rental income                      1,418,491   1,761,812   1,587,139 
	Disposition of properties                  0           0      62,262 
	                                  16,038,000  15,308,986  12,244,490 
Costs and expenses:
	Ski operations                     9,778,443   9,741,679   7,720,572 
	Real estate management             3,164,328   3,062,437   2,656,771 
	Rental income                        768,565     827,229     798,759 
	Disposition of properties                  0           0       3,687 
	General and administrative           893,485     941,001     972,146 
	                                  14,604,821  14,572,346  12,151,935 
	Income from operations             1,433,179     736,640      92,555 

Other income (expense):
	Interest and other income             57,067      88,060      82,956 
	Interest expense                    (748,531)   (866,262)   (884,068) 
	                                    (691,464)   (778,202)   (801,112) 

	Income (loss)before income taxes     741,715     (41,562)   (708,557) 

Provision(credit)for income taxes:
Current                               234,528      58,731       3,810
Deferred                               20,381    (143,556)   (276,599)
                                      254,909     (84,825)   (272,789)

Net income (loss)                     486,806      43,263    (435,768) 

Earnings retained in business:
	Beginning of year                  8,748,503   8,705,240   9,141,008 
	End of year                       $9,235,309  $8,748,503  $8,705,240 


Per weighted average combined share:
	Net income (loss)                      $0.24       $0.02      $(0.21) 

</TABLE>
The accompanying notes are an integral part of the combined financial
statements.

                                  PAGE 3
<PAGE>
<TABLE>
<CAPTION>

COMBINED STATEMENTS OF CASH FLOWS
for the 10 months ended March 31, 1997
and the years ended May 31,1996 and 1995
<S>        <C>                         <C>            <C>       <C>

                                             1997        1996        1995
Cash Flows From Operating Activities 
Net income (loss)                      $  486,806     $43,263   $(435,768) 
Adjustments to reconcile net income 
(loss) to net cash provided by 
operating activities:
Depreciation                            1,928,651   2,132,581   2,255,928 
Deferred income taxes                      20,381    (143,556)   (276,599) 
Write-off of project development costs          0     178,818           0  
 Deferred revenue                        (100,539)   (119,129)    174,363  
Gain on sale of land                            0           0     (58,575)  
Changes in operating assets and
 liabilities:
Accounts receivable                       (85,561)   (132,331)    (29,976) 
 Refundable income taxes                  (23,146)     10,000      30,000 
Prepaid expenses & other current assets    17,027    (318,527)    (89,123) 
Accounts payable & accrued liabilities       (477)    251,340      89,985 
Accrued income taxes                       79,468      59,098           0 
Net cash provided by operating 
 activities                             2,322,610   1,961,557   1,660,235 
Cash Flows From (used in) Investing
Activities:
Marketable securities                      (9,508)   (293,588)          0 
Collection of mortgage receivable           2,479      11,189       9,919 
Other non-current assets                   34,500     (34,500)          0 
Proceeds from disposition of assets         4,200           0      62,262 
Additions to properties                (2,313,407) (1,225,983) (1,414,650)
Cash(used in)investing activities      (2,281,736) (1,542,882) (1,342,469)
Cash Flows From (used in) Financing
Activities:
Additions to long-term debt               649,985           0           0
Borrowings under short-term financing   1,500,000     900,000   1,075,000  
Payment of short-term financing         1,500,000    (900,000  (1,075,000) 
Payment of long-term debt                (565,721)   (544,999)   (511,227) 
Purchase of treasury stock                      0           0    (609,863) 
Net cash provided by (used in) 
 financing activities                      84,264    (544,999) (1,121,090) 
Net increase (decrease) in cash
 & cash equivalents                       125,138    (126,324)   (803,324) 
Cash & cash equivalents, beginning
 of year                                1,958,963   2,085,287   2,888,611 
Cash & cash equivalents, end of year   $2,084,101  $1,958,963  $2,085,287 
Supplemental disclosures of cash flow
information:
Cash paid (received) during year for:
Interest                                 $726,430    $863,438    $888,550   
Income taxes                             $207,300     $25,091    $(17,602)  
</TABLE>

The accompanying notes are an integral part of the combined financial
 statements.
                                 PAGE 4                                   
<PAGE>

NOTES TO COMBINED FINANCIAL STATEMENTS

1.  Summary of Significant Accounting Policies:
BASIS OF COMBINATION:
     The combined financial statements include the accounts of Blue Ridge
Real Estate Company (Blue Ridge) and its wholly-owned subsidiaries, North-
east Land Company, Jack Frost Mountain Company, and BRRE Holdings, Inc.;
and Big Boulder Corporation (Big Boulder) and its wholly-owned subsidiar-
ies, Lake Mountain Company and BBC Holdings, Inc.  Under a Security
Combination Agreement between Blue Ridge and Big Boulder and under the By-
laws of both Companies, shares of the Companies are combined in unit certifi-
cates, each certificate representing concurrent ownership of the 
same number of shares of each company; shares of each company may be trans-
ferred only together with an equal number of shares of the other company.
All significant intercompany accounts and transactions are eliminated.
DISPOSITION OF LAND AND RESORT HOMES:
     The Companies recognize income on the disposition of real estate in
accordance with the provisions of Statement of Financial Accounting
Standards No. 66, "Accounting for Sales of Real Estate" (SFAS 66).  Down
payments of less than 20% are accounted for as deposits as required by
SFAS 66.
     The costs of developing land for resale as resort homes and the costs
of constructing certain related amenities are allocated to the specific
parcels to which the costs relate.  Such costs, as well as the costs of
construction of the resort homes, are charged to operations as sales
occur.  Land held for resale and resort homes under construction are 
stated at lower of cost or market.

PROPERTIES AND DEPRECIATION:
     Properties are stated at cost.  Depreciation is provided principally
using the straight-line method over the following years:
      Land improvements                    10-30
          Buildings                         3-30
          Equipment and furnishings         3-20
      Ski facilities:
          Land improvements                10-30
          Buildings                         5-30
          Machinery and equipment           5-20
      Upon sale or retirement of depreciable property, the cost and 
related accumulated depreciation are removed from the related accounts,
and resulting gains or losses are reflected in income.
      Interest, real estate taxes, and insurance costs, including those
costs associated with holding unimproved land, are normally charged to
expense as incurred.  Interest cost incurred during construction of
facilities is capitalized as part of the cost of such facilities.
      Maintenance and repairs are charged to expense, and major renewals
and betterments are added to property accounts.
      In 1996, the Companies adopted Financial Accounting Standards No.
121, (Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to be Disposed Of.(  Impairment losses are recog-
nized in operating income as they are determined.  The Companies
periodically review their property and equipment to determine if its
carrying cost will be recovered from future operating cash flows.  
In cases when the Companies do not expect to recover their carrying
cost, the Companies recognize an impairment loss.  No such losses
have been recognized to date.
INVENTORIES:
      Inventories consist of food, beverage, and retail merchandise
and are stated at cost which approximates market, with cost 
determined using the first-in, first-out method.
                                  PAGE 5
<PAGE>
PENSIONS:
      The Companies are parties to a non-contributory defined benefit 
pension plan covering all permanent employees who meet certain require-
ments as to age and length of employment.  Pension benefits vest after
five years of credited service and are based on the total earnings in 
the 60 consecutive months during the last ten years of employment in
which earnings are highest.  Plan assets consist primarily of U.S.
Government Notes, common stocks and short-term investments.
      Pension expense is computed under the aggregate cost method which
spreads past service costs over the average future service lives of
covered employees.  The Companies' policy is to fund pension contribu-
tions in accordance with statutory requirements.
INVESTMENTS:
      The Companies have classified their marketable securities as held
to maturity and have stated these securities at amortized cost.  The
investment represents Discount Commercial Paper.
DEFERRED REVENUE:
      Deferred revenues include revenues billed in advance for services
and dues which are not yet earned.

INCOME TAXES:
      The Companies account for income taxes utilizing the asset 
and liability method of recognizing the tax consequence of 
transactions that have been recognized for financial reporting or 
income tax purposes.  Among other things, the standard requires current 
recognition of the effect of changes in statutory tax rates on
previously provided deferred taxes.  Valuation allowances are estab-
lished, when necessary, to reduce tax assets to the amount expected
to be realized.  Blue Ridge, including its subsidiaries, and
Big Boulder, including its subsidiaries, report as separate entities for
federal income tax purposes.  State income taxes are reported on a 
separate company basis.

USE OF ESTIMATES AND ASSUMPTIONS:
      The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets
and liabilities and disclosure of contingent assets and liabilities at
the dates of the financial statements and the reported amounts of 
revenues and expenses during the reporting periods.  Actual results
could differ from those estimates.
FAIR VALUE:
      The Companies have estimated the fair value of their financial
instruments at March 31, 1997 as follows:  The carrying values of cash and 
cash equivalents, accounts receivable, accounts payable and accrued 
expenses are reasonable estimates of their fair values.  The carrying
values of variable and fixed rate debt are reasonable estimates of
their fair values based on their discounted cash flows at discount
rates currently available to the Companies for debt with similar
terms and remaining maturities.
EARNINGS PER SHARE:
      In March 1997, the Financial Accounting Standards Board issued 
Statement of Financial Accounting Standards ('SFAS') No. 128 "Earnings 
Per Share".  This Statement establishes standards for computing and present-
ing earnings per share ("EPS") and applies to entities with publicly held
common stock or potential common stock.  This Statement is effective for 
financial statements issued for periods ending after December 15, 1997,
earlier application is not permitted.  This statement requires restatement 
of all prior-period EPS data presented.  Adoption of SFAS No. 128 should not 
have a material impact on the Companies' financial statements.

STATEMENT OF CASH FLOWS:
      For purposes of reporting cash flows, the Companies consider cash
equivalents to be all highly liquid investments with maturities of three
months or less when acquired.
                                   PAGE 6
<PAGE> 
CONCENTRATION OF CREDIT RISK:
      Financial instruments which potentially subject the Companies to 
concentration of credit risk consist principally of temporary cash
investments.  The Companies' temporary cash investments are held by 
financial institutions.  The Companies have not experienced any losses
related to these investments.

2.  CHANGE IN FISCAL REPORTING PERIOD 
      At the July 24, 1996 Board of Directors meetings, a change in the 
fiscal year-end was approved from May 31, to March 31.  This change is 
effective for each of the Companies' 1997 Fiscal year.  The purpose is to 
have the fiscal reporting period coincide with the operating periods of the 
Companies.  The results of operations from the comparable 10 month period
of the prior year are as follows:
<TABLE>
<CAPTION>
                  <S>                    <C>                <C>

                                                            (UNAUDITED)
                                            3/31/97            3/31/96

                  Revenues               16,038,000         14,341,324
                  Operating Income        1,433,179          1,034,527
                  Income Taxes              254,909            127,662
                  Net Income                486,806            247,814
</TABLE>
3.  SALE OF LAND
      The Companies had no land sales for Fiscal 1997 or 1996.
The Companies sold land in Fiscal 1995 for cash consideration of
$62,262.

4.  CONDENSED FINANCIAL INFORMATION
      Condensed financial information of the constituent companies,
Blue Ridge and its subsidiaries and Big Boulder and its subsidiaries, 
at March 31, 1997, May 31, 1996, 1995, and for each of the periods  then
ended, is as follows: 
<TABLE>
<CAPTION>

<S>                               <C>           <C>          <C>

                                          Blue Ridge and Subsidiaries
                                10 Mos. Ended  12 Mos.Ended  12 Mos. Ended
                                      3/31/97      5/31/96      5/31/95
Financial position:
Current assets                    $ 1,894,928   $2,882,803   $2,499,262 
Total assets                       16,066,800   15,654,413   17,217,104 
Current liabilities                 1,723,363    1,427,707    2,679,640 
Shareholders' equity                4,796,387    4,764,634    4,656,463 
Operations:
Revenues                            8,880,248    9,407,238    8,082,007 
Income(loss)before income taxes        66,225       20,797     (430,741) 
Provision(credit)for income taxes      34,472      (87,373)    (176,487) 
Net income (loss)                      31,753      108,170     (254,254) 

                                          Big Boulder and Subsidiaries 
                               10 Mos. Ended  12 Mos. Ended  12 Mos. Ended
                                      3/31/97      5/31/96      5/31/95
Financial position:
Current assets                     $1,819,194     $604,993   $1,541,450 
Total assets                        7,735,937    7,555,277    7,570,807 
Current liabilities                   531,840      821,212      537,532 
Shareholders' equity                5,303,881    4,848,828    4,913,736 
Operations:
Revenues                            7,157,752    5,901,748    4,162,483 
Income(loss)before income taxes       675,490      (62,359)    (277,816) 
Provision(credit)for income taxes     220,437        2,548      (96,302) 
Net income (loss)                     455,053      (64,907)    (181,514) 
</TABLE>
5.SHORT-TERM FINANCING:  
   At March 31, 1997, Blue Ridge had an unused line of credit aggrega-
ting $2,000,000 available for short-term financing, expiring November 
1997, which management expects to be renewed.  The line of credit bears
interest at the bank's prime rate.
                             PAGE 7
<PAGE>
6. LONG-TERM DEBT:
Long-term debt as of March 31, 1997 and May 31, 1996 consists of the following:
<TABLE>
<CAPTION>
 <S>     <C>      <C>                                <C>         <C>

                                                          1997         1996
Mortgage note payable to insurance company,
 interest fixed at 9% payable in monthly
 installments of $47,834 including interest 
 through November 1997                               5,363,074   5,436,135 
Mortgage note payable to bank, interest at
 80% of the bank's prime rate (6.6% at March 31,
 1997) payable in monthly installments of 
 $24,187 through Fiscal 2005                         2,442,906   2,684,778 

Mortgage note payable to bank, interest at
 80% of the bank's prime rate (6.6% at March  31,
 1997) payable in monthly installments of 
 $11,951 through December 1996                               0     .95,600 
Mortgage note payable to insurance company,
 interest fixed at 10.5% payable in monthly
 installments of $15,351 including interest
 through Fiscal 2014                                 1,452,466   1,477,654 
Mortgage note payable to bank, interest at
7% fixed payable monthly with principle
reduction at $32,500 per month December to
March through 2001                                     519,985           0 
                                                     9,778,431   9,694,167 
Less current installments                              532,513     504,681 
                                                     9,245,918   9,189,486 

Properties at net book value, which have been pledged as collateral 
for long-term debt, include the following at March 31, 1997:
Investment properties leased to others                             7,596,278
Ski facilities                                                    23,862,208
</TABLE>
The aggregate amount of long-term debt maturing in each of the years
 ending subsequent to March 31, 1997, is as follows:                
 1998-$532,513; 1999-$536,179; 2000-$540,249; 2001-$544,753; 2002-$419,785

7.  INCOME TAXES
    The provision (credit) for income taxes is as follows:
<TABLE>
<CAPTION>
<S>                                  <C>          <C>           <C>
                                         1997        1996         1995
Currently payable
Federal                              $234,528     $58,731       $3,810 
State                                       0           0            0 
                                      234,528      58,731        3,810 
Deferred
Federal                                20,381    (142,441)    (229,616) 
State                                       0      (1,115)     (46,983) 
                                       20,381    (143,556)    (276,599) 
                                     $254,909    $(84,825)   $(272,789) 
A reconciliation between the amount computed using the statutory federal 
income tax rate and the provision (credit) for income taxes is as 
follows: 
                                         1997         1996         1995 
Computed at statutory rate           $253,060     $(14,131)   $(240,911) 
State income taxes, net of federal
 income tax                                 0       (7,153)     (21,156) 
Change in state tax rate                    0        6,417      (19,162) 
Other                                   1,849       (7,124)       8,440 
Change in valuation allowance               0       (62,834)          0 
Provision(credit)for income taxes    $254,909      $(84,825)  $(272,789) 
</TABLE>
                                PAGE 8
<PAGE>
The components of the deferred tax assets and liabilities under the new
 accounting method as of March 31, 1997 and May 31, 1996 are as follows: 
<TABLE>
<CAPTION>
<S>                                            <C>            <C>
                                                      1997         1996 
Gross deferred tax asset:
Accrued expenses                                  $75,979      $134,710 
Net operating loss and AMT credit carryforward    627,181       902,613 
Contribution carryforward                           1,316       168,647 
                                                  704,476     1,205,970 
Less valuation allowance                         (105,961)     (405,348)
                                                  598,515       800,622 
Gross deferred tax liability:
Depreciation                                    2,799,863     2,957,496 
Deferred gains                                          0           949 
                                                2,799,863     2,958,445 
Net deferred tax liability                     $2,201,348     2,157,823 
</TABLE>
At March 31, 1997, the Companies have $522,536 of Alternative Minimum Tax
(AMT) credit carryforward available to reduce future federal income taxes.
The AMT credit has no expiration date.  For state income tax purposes,
the Companies have available state net operating loss carryforwards of 
$1,587,111 which expire in Fiscal 1998 and 1999.  The valuation allowance
decreased by $299,387 during Fiscal 1997, due to the expiration of charitable
contribution carryforwards and the utilization/expiration of state net 
operating losses.

8.  PENSION PLAN  
Pension expense for 1997, 1996 and 1995 includes the following components: 
<TABLE>
<CAPTION>
<S>                                         <C>        <C>         <C>
Service costs, benefits earned during 
the period                                  $124,044   $148,042    $117,509 
Interest cost on projected benefit
 obligation                                  137,314    161,992     141,608 
Actual return on plan assets                (222,439)  (377,221)   (188,902) 
Net amortization and deferral                 67,433    231,468      50,079 
Pension expense                             $106,352    164,281     120,294 
</TABLE>
Net amortization and deferral consists of the deferral of differences
between actual and estimated return on assets and amortization of the
net unrecognized transition obligation on a straight-line basis over 
26 years.  The funded status of the pension plan and the amounts 
recognized in the Companies' combined balance sheets at March 31, 1997
were as follow:
<TABLE>
<CAPTION>
 <S>         <C>                               <C>         <C>
                                                     1997         1996
Actuarial present value of benefit obligations:
Accumulated benefit obligation (including vested
 benefits of $1,571,300 and $1,545,200,
 respectively)                                 (1,638,000) $(1,606,000) 
Effect of future increase in compensation        (624,900)    (615,300) 
Projected benefit obligation                   (2,262,900)  (2,221,300) 
Plan assets at fair value                       2,633,321    2,491,554
Plan assets in excess of benefit obligation       370,421      270,254 
Unrecognized net gain                            (529,903)    (391,414) 
Unrecognized net transition obligation            137,092      144,159 
Unrecognized prior service costs                   11,714       12,223 
Prepaid pension expense                          ($10,676)      35,222 
Significant assumptions used in determining the actuarial present value
of the projected benefit obligations and pension expense are as follows:
                                                 1997        1996     1995 
Discount rate                                    7.50%       7.50%    7.50%
Rate of compensation increase                    5.00%       5.00%    5.00%
Expected long-term rate of return                7.50%       7.50%    7.50%
</TABLE>
                                 PAGE 9
<PAGE>                                       
9.  PROPERTIES
<TABLE>
<CAPTION>
<S>                                         <C>              <C>

Properties consist of the following at March 31, 1997  and May 31, 1996:
                                                 1997              1996
Land, principally unimproved                 $1,867,766      $1,867,766 
Land improvements                             7,246,611       6,725,314 
Corporate buildings                             434,512         434,512 
Buildings leased to others                    7,928,855       7,850,266 
Ski facilities:
Land                                              4,552           4,552
Land improvements                             5,136,418       4,244,068 
Buildings                                     7,093,100       7,041,699 
Machinery & equipment                        18,272,223      18,452,243 
Equipment & furnishings                       1,030,354       1,027,326 
                                             49,014,391      47,647,746 
Less accumulated depreciation                28,962,573      27,999,628 
                                            $20,051,818      19,648,118 
</TABLE>
Buildings leased to others include land of $1,056,700 at March 31, 1997 and
May 31, 1996 and 1995.  Development costs relating to real estate projects 
of $178,816 were written off during Fiscal 1996, which was included in the 
land balance at May 31, 1995.

10.  LEASES
     The Companies are lessors under various operating lease agreements
for the rental of land, land improvements and investment properties
leased to others.  Rents are reported as income over the terms of the
leases as they are earned.  A shopping center is leased to various
tenants for renewable terms averaging 4.01 years with options for
renewal.  A store has been net leased until January 2014.  Information
concerning rental properties and minimum future rentals under current
leases (excluding renewal options) as of March 31, 1997, is as follows:
<TABLE>
<CAPTION>
<S>                                     <C>               <C>

                                    Properties Subject To Lease
                                                         Accumulated
                                         Cost           Depreciation
Investment properties leased to
   others                                7,928,854          2,767,298
Land and land improvements               3,570,528            996,624
Minimum future rentals:
 Fiscal years ending March 31:    1998   1,188,837
                                  1999     828,690
                                  2000     668,445
                                  2001     612,266
                                  2002     713,712
                            Thereafter   8,409,397*
                                        12,421,347 
</TABLE>
*Includes $1,554,000 under a land lease expiring in 2072 and $2,597,130
under a net lease for a store expiring in 2014.  There were no 
contingent rentals included in income for Fiscal 1997, 1996 or
1995.

11.  QUARTERLY FINANCIAL INFORMATION (Unaudited)
     The results of operations for each of the quarters in the last two
years are presented below: 
<TABLE>
<CAPTION>
<S>                      <C>         <C>           <C>               <C>

                                                            Earnings (Loss)
                                   Income(loss)               Per Weighted
                     Operating      from         Net          Avg.Combined
       Quarter       Revenues   Operations    Income(Loss)        Share 
         1997 
          1st          $2,184,620   $304,384     $71,993           0.04 
          2nd           1,115,056    (62,398)   (169,013)         (0.08) 
          3rd          11,295,423  1,694,076     922,988           0.46 
         1 mo           1,442,901   (502,883)   (339,162)         (0.18) 
                      $16,038,000 $1,433,179    $486,806          $0.24 
</TABLE>
                                 PAGE 10
<PAGE>    
<TABLE>
<CAPTION>
<S>                    <C>           <C>          <C>             <C>

          1996
          1st           1,490,288    168,625     (17,594)         (0.01) 
          2nd             975,344   (129,757)   (200,669)         (0.10) 
          3rd          10,091,533    955,306     463,208           0.23 
          4th           2,751,821   (257,534)   (201,682)         (0.10) 
                       15,308,986    736,640      43,263          (0.02) 
</TABLE>
     The quarterly results of operations for 1997 and 1996 reflect the 
cyclical nature of the Companies' business since (1) the Companies two
ski facilities operate principally during the months of December through
March and (2) land dispositions occur sporadically and do not follow any 
pattern during the fiscal year.  Costs and expenses, net of revenues
received in advance attributable to the ski facilities for the months of
June through November, are deferred and recognized as revenue and opera-
ting expenses, ratably, over the operating period. 

     The Fiscal 1996 fourth quarter includes the write-off of $178,816 
of real estate development costs ($60,797 after tax) relating  to the pre-
liminary phase of real estate projects.  The fourth quarter of 1996 includes
approximately $63,000 from the partial utilization of state net operating 
losses which had been subject to a valuation allowance in the prior year.

12.  INDUSTRY SEGMENT INFORMATION:
     The Companies and the subsidiaries operate in two industry
segments consisting of the following:
SKI OPERATIONS:
     Two ski areas located in the Pocono Mountains of Northeastern 
Pennsylvania.
REAL ESTATE MANAGEMENT/RENTAL OPERATIONS:
     Investment properties leased to others located in Eastern Pennsyl-
vania and South Carolina, fees from managing investor-owned properties,
principally resort homes, recreational club activities and services to
the trusts that operate resort communities, sales of land held for
resale and investment purposes, and rental of land and land improvements.

     Income or loss for each segment represents total revenue less
operating expenses.  General and administrative expenses, other income, 
and interest expense are not specifically attributable to any one
industry segment.  Identifiable assets are those utilized in the 
operation of the respective segments; corporate assets consist 
principally of cash and non-revenue producing properties held for 
investment purposes.
<TABLE>
<CAPTION>
 <S>                                   <C>         <C>          <C>
                                                         Year Ended       
                                         3/31/97      05/31/96    05/31/95
Revenues:
 Ski operations                        $11,251,882 $10,618,961  $7,837,872 
 Real estate management/Rental
 operations                              4,786,118   4,690,025   4,406,618 
                                       $16,038,000 $15,308,986 $12,244,490 

Income:
 Ski operations                         $1,473,439    $877,282    $117,300 
 Real estate management/Rental
 operations                                853,225     800,359     947,401 
                                        $2,326,664  $1,677,641  $1,064,701 

General & administrative expenses         (893,485)   (941,001)   (972,146) 
Interest and other income                   57,067      88,060      82,956 
Interest expense                          (748,531)   (866,262)   (884,068) 

Income(loss) before income taxes          $741,715    $(41,562)  $(708,557) 
</TABLE>
     In Fiscal 1997, 1996 and 1995, no one customer represented 10% or
more of total revenues.
                                 PAGE 11
<PAGE>
     Identifiable assets, net of accumulated depreciation at March 31, 1997
and May 31,1996 and 1995, and depreciation expense and capital expenditures
for the years then ended by industry segment are as follows:
<TABLE>
<CAPTION>
<S>                                <C>            <C>          <C>

                                   Identifiable  Depreciation      Capital
                                      Assets       Expense     Expenditure
      1997

Ski Operations                     $10,364,590    $1,304,906   $2,091,557 
Real Estate Management/Rental
 Operations                         10,937,749       357,691      187,431 
Other Corporate                      2,500,398       242,910       34,419 
                       Total       $23,802,737    $1,905,507   $2,313,407 

      1996
Ski Operations                      $9,186,757    $1,451,159   $1,066,507 
Real Estate Management/Rental
 Operations                        $10,540,000      $415,449     $121,757 
Other Corporate                      3,482,933       283,181      104,626 
                       Total       $23,209,690    $2,149,789   $1,292,890 

     1995
Ski Operations                     $10,353,174    $1,507,073   $1,293,301 
Real Estate Management/Rental
 Operations                         10,315,950       333,597        8,789 
Other Corporate                      2,994,547       415,258      112,560 
                       Total       $23,663,671    $2,255,928   $1,414,650 
</TABLE>
13  CONTINGENT LIABILITIES AND COMMITMENTS:
     The Companies are party to various legal proceedings incidental to
their business.  Certain claims, suits, and complaints arising in the
ordinary course of business have been filed or are possible of assertion
against the Companies.  In the opinion of management, all such matters
are without merit or are of such kind, or involve such amounts, that are
not expected to have a material effect on the combined financial
position or result of operations of the Companies.
     At March 31, 1997, the Companies had an outstanding letter of credit
of $75,000 which guarantees the ski facilities' aggregate liability
insurance deductible.
     Blue Ridge has pledged approximately 20 acres of its leased land
(cost $144,786) to serve as collateral, together with the lessee's land
improvements, for the lessee's mortgage loan which amounts to approxi-
mately $2,683,862 at March 31, 1997.

14.  STOCK OPTIONS AND CAPITAL STOCK:
     The Chairman of the Board of the Companies was granted an Option  
for 10,000 shares of the Companies' common stock in July 1993 at $6.75  
per share, which expires in ten years.  The Option has not been exercised
at March 31, 1997.  The Option price was not less than the market value
at the date of the grant.
     The Board of Directors has authorized the repurchase of up to 
200,000 shares of the Companies' common stock in the open market from 
time to time.  As of March 31, 1997, 194,134 shares had been purchased. 
No shares were purchased in Fiscal 1997 or 1996, and 96,600 shares
were purchased in Fiscal 1995.
                                 PAGE 12
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To Shareholders of
Blue Ridge Real Estate Company
and Big Boulder Corporation

We have audited the accompanying combined balance sheets of Blue Ridge 
Real Estate Company and subsidiaries and Big Boulder Corporation and
subsidiaries as of March 31, 1997 and May 31, 1996, and related combined 
statements of operations and earnings retained in the business and cash 
flows for each of the ten months ended March 31, 1997 and each of the
two years in the period ended May 31, 1996.  These financial statements 
are the responsibility of the Companies' management. Our responsibility is 
to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards.  Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements
are free of material misstatement.  An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the 
financial statements.  An audit also includes assessing the accounting
principles used and significant estimates made by management, as well 
as evaluating the overall financial statement presentation.  We believe
that our audits provide a reasonable basis for our opinion.

In our opinion, the combined financial statements referred to above 
present fairly, in all material respects, the combined financial posi-
tion of Blue Ridge Real Estate Company and subsidiaries and Big Boulder 
Corporation and subsidiaries as of March 31, 1997 and May 31, 1996, and the
combined results of their operations and their cash flows for the ten months
ended March 31, 1997 and each of the two years ended May 31, 1996
in conformity with generally accepted accounting principles.

COOPERS & LYBRAND L.L.P.
2400 Eleven Penn Center
Philadelphia, Pennsylvania
June 12, 1997

PRICE RANGE OF COMMON SHARES AND DIVIDEND INFORMATION
     Prior to May 4, 1993, Blue Ridge Real Estate Company and Big 
Boulder Corporation common shares were listed and traded as unit
certificates on the Over-the-Counter market and were quoted on the
NASDAQ National Market System (Symbol: BLRGZ).  Effective May 4,
1993, the Companies decided to discontinue their listing with NASDAQ.
Subsequent to May 4, 1993, the Companies are aware of limited trades
in their common stock; however, Management does not believe such
limited activity constitutes an established public trading market.

     The following sets forth the high asked and low price quotations
as reported on the monthly statistical reports of the National
Association of Securities Dealers, Inc. for Fiscal Years 1997 and 1996.
No dividends were paid on common stock in either Fiscal Year.
<TABLE>
<CAPTION>
               <S>                          <C>            <C>

                       FISCAL YEAR              HIGH        LOW
                         1997                  ASKED        BID
                First Quarter                  7.000      6.250
               Second Quarter                  6.750      6.250
                Third Quarter                  7.000      6.500
               Fourth Quarter (March '97)      7.000      6.625

                       FISCAL YEAR           HIGH           LOW
                         1996               ASKED           BID 
                First Quarter               5.875          5.125 
               Second Quarter               6.250          5.500 
                Third Quarter               6.000          5.375 
               Fourth Quarter               6.750          5.375
</TABLE>
                                PAGE 13
<PAGE>
     The reported quotations represent prices between dealers, do not 
reflect retail mark-ups, mark-downs or commissions and do not neces-
sarily represent actual transactions.  The approximate number of 
holders of record of common stock on March 31, 1997 was 718.       


BLUE RIDGE REAL ESTATE COMPANY AND SUBSIDIARIES
AND BIG BOULDER CORPORATION AND SUBSIDIARIES
COMBINED SUMMARY OF SELECTED FINANCIAL DATA
<TABLE>
<CAPTION>
<S>                                  <C>          <C>          <C>

                                            1997         1996         1995 
Revenues                             $16,038,000  $15,308,986  $12,244,490 
Net income(loss)                         486,806       43,263     (435,738) 
Net income(loss)per combined share         $0.24        $ .02        $(.21) 
Cash dividends per combined share              0            0            0 
Weighted average number of
 combined shares outstanding           2,004,014    2,004,014    2,029,630 
Total assets                          23,802,737   23,209,690   23,663,671 
Long-term debt                         9,778,431    9,694,167   10,239,166 
Shareholders' equity                  10,100,268    9,613,462    9,570,199 

                                                        1994          1993
Revenues                                         $13,423,910   $13,370,007 
Net income(loss)                                    (163,884)      130,214 
Net income(loss)per combined share                     $(.08)         $.06 
Cash dividends per combined share                          0             0 
Weighted average number of
 combined shares outstanding                       2,109,246     2,144,442 
Total assets                                      25,232,780    26,190,005 
Long-term debt                                    10,750,393    11,262,128 
Shareholders' equity                              10,615,830    10,905,140 
</TABLE>
                                 PAGE 14
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATION
Results of Operations
FISCAL 1997 VERSUS FISCAL 1996
     For Fiscal Year ended March 31, 1997, the Companies reported net
income of $486,806 or $.24 per combined share as compared with a net
income of $43,263 or $.02 per combined share for Fiscal 1996.
     Combined revenue of $16,038,000 represents an increase of
$729,014 or 5% when compared to Fiscal 1996.  Ski Operations 
increased $632,921 or 6%, and Real Estate Management Operations
increased $96,093 or 2% when compared to Fiscal 1996.
     The Ski Operations had approximately 277,000 skiers visit our 
slopes compared to 267,000 skier visits last season.  The increase
of 10,000 skier visits represents a 4% increase.  Revenue per skier
was $41 compared to $40 last season for an increase of $1.00 or 2%.
Tubing operations had approximately 97,000 tuber visits compared to 
64,000 tuber visits last season.  The increase of 33,000 tuber visits
represents a 52% increase.  Revenue per tuber was $11.32 compared to
$9.63 last season for a increase of $1.69 or 17%.  The ski areas
operated for a combined total of 213 days compared to 212 days last
season.  The food and beverage operation at the ski area contributed
revenue of $7.03 per skier visit.  The retail shop operation at the 
ski area contributed revenue of $2.02 per skier visit compared to
$2.16 the previous season.  
     The Real Estate Management Operations increase is attributed to
fewer vacancies in investment properties, festival revenues, leasing 
commissions in resort communities, fees for services provided to the
Trust of the resort communities, and fishing and hunting leases.  The
increases were offset by a decrease in commissions for resale of 
homes in our resort communities.  Disposition of properties occur
sporadically and do not follow any pattern during the fiscal year.
No major land sales occurred in Fiscal 1997 or Fiscal 1996.
     Operating costs associated with Ski Operations increased by
$36,764 when compared to Fiscal 1996.  This increase is
attributed to more operating days, advertising costs, and associated
personnel costs.
     Operating costs associated with Real Estate Management Operations
increased by $43,227 when compared to Fiscal 1996.  This increase is
attributed to increased advertising costs, and associated personnel costs.
General and Administrative expenses decreased by $47,516 when compared to
Fiscal 1996.  The decrease is attributable to a reduction in supplies and 
services and two months less of operations.
     Interest and Other Income decreased by $30,993 compared to Fiscal
1996.  This decrease is attributable to a Mortgage Receivable Payoff and 
two months less of operations. 
     Interest expense decreased by $117,731 compared to Fiscal 1996.  
This decrease is attributable to reduction of debt obligation and two months
less of operations.
      The effective Tax Rate for Fiscal 1997 and 1996 was 34%.  

FISCAL 1996 VERSUS FISCAL 1995
     For Fiscal Year ended May 31, 1996, the Companies reported a net 
profit of $43,263 or $.02 per combined share as compared with a net 
loss of $435,768 or $(.21) per combined share for Fiscal 1995.
     Combined revenue of $15,308,986 represents a increase of $3,064,496
or 25% when compared to Fiscal 1995.  Real Estate Management Operations
increased $283,407 or 6% when compared to Fiscal 1955. Ski Operations
increased $2,781,089 or 35% when compared to Fiscal 1995.
                               PAGE 15
<PAGE>
     The Ski Operations had approximately 267,000 skiers visit our
slopes compared to 220,000 skier visits last season.  The increase
of 47,000 skier visits represents a 21% increase.  Revenue per skier was
$40 compared to $36 last season for an increase of $4.00 or 11%.  The ski
areas operated for a combined total of 212 days compared to 167 days last 
season.  The food and beverage operation at the ski areas contributed
revenue of $6.75 per skier visit.
     The Real Estate Management Operations revenue increase is attri-
buted to fees for services provided to the Trust of the resort communi-
ties, fewer vacancies in investment properties, more campsites rented,
increased festival revenue, commissions for resales of homes in our 
resort communities, fishing and hunting leases, and leasing commissions 
in resort communities.  Disposition of properties occur sporadically
and do not follow any pattern during the fiscal year.  No major land
sales occurred in Fiscal 1996 or Fiscal 1995. 
     Operating costs associated with Ski Operations increased by $2,021,107
when compared to Fiscal 1995. This increase is attributed to personnel,
advertising costs, and more operating days.  
     Operating costs associated with Real Estate Management Operations 
increased by $430,449 when compared to Fiscal 1995.  This increase is
attributed to cost related to real estate development projects.  General
and Administrative expenses decreased by $31,145 because of reduction in  
supplies and services.  Cost of properties disposed of is directly related to 
land sold.
     Interest and Other Income increased by $5,104 compared to Fiscal
1995.  This increase was attributed to Interest Earned from Interest-bearing
deposits.
     Interest expense decreased by $17,806 compared to Fiscal 1995.  This
decrease is attributed to reduction of debt obligation.
     The effective Tax Rate for Fiscal 1996 is a credit of 34%.versus
a credit of 38% for Fiscal 1995.

LIQUIDITY AND CAPITAL RESOURCES
     The Combined Statement of Cash flows reflects net cash provided
by operating activities of $2,322,610, $1,961,557$1, and $1,660,235 in 
Fiscal 1997, 1996 and 1995 respectively.
     The major capital investment made in Fiscal 1997 was the expansion 
of the Big Boulder Tubing Area.
     During Fiscal 1997, the Companies borrowed against their $2,000,000
line of credit for a period of three months in varying amounts with a
maximum of $1,500,000.
     During Fiscal 1996, the Companies borrowed against their $2,000,000
line of credit for a period of one month in varying amounts with a
maximum of $900,000.
     The Companies have a combined working capital of $1,458,919 at March
31, 1997 versus $1,238,877 at May 31, 1996.

MOVING FORWARD
     The Companies continue to develop activities to generate profit
during the non-ski season with increased festivals and the introduc-
tion in Fiscal 1998 of an All Terrain Vehicle Park.  Plans are underway 
to expand our snowtubing area.
     The Companies will address any necessary changes to our financial 
software package to encompass all issues regarding the year 2000.
                               PAGE 16
	<PAGE>
	BOARD OF DIRECTORS
	Kieran E. Burke
		Chairman, Chief Executive Officer and Director
		Premier Parks, Inc.
	Milton Cooper
		Chairman, Kimco Realty Corporation;
		Director, Getty Petroleum Corp.;
		Director, Kimco Realty Corporation
	Michael J. Flynn
		Chairman of the Board of the Companies;
		Vice Chairman and Director, Kimco Realty Corporation
	Allen J. Model
		Private Investor, Model Entities
	J. Anthony V. Townsend
		Managing Director, Finsbury Asset Management Ltd;
		Director, Rea Brothers Group, Plc.
	Wolfgang Traber
		Chairman of the Board, Hanseatic Corporation & Co.-N.Y.
The above Directors serve both Companies.

OFFICERS
	Michael J. Flynn
		Chairman of the Board
	Gary A. Smith
		President
	Melanie A. Murphy
		Vice President of Operations
	Eldon D. Dietterick
		Secretary
	Christine Liebold
		Assistant Secretary
	Cynthia A. Barron
		Controller
The above Officers serve both Companies.

TRANSFER AGENT
	Summit Bank, Hackensack, New Jersey

INDEPENDENT ACCOUNTANTS
	Coopers & Lybrand L.L.P., Philadelphia, Pennsylvania
                                  PAGE 17
<PAGE>
NOTICE OF ANNUAL MEETINGS
The Annual Meetings of Shareholders of Blue Ridge Real Estate Company
and Big Boulder Corporation will be announced with mailing of Proxy 
Material in July.

FORM 10-K AVAILABLE
The Companies will furnish to any shareholder, without charge, a copy
of their Fiscal Year 1997 Annual Report as filed with the Securities
and Exchange Commission on Form 10-K.  Written requests should be 
directed to the attention of the Secretary, Blue Ridge Real Estate
Company, P. O. Box 707, Blakeslee,  PA  18610-0707

CORPORATE PROPERTIES
Resorts in the Pocono Mountains
	Big Boulder Ski Area
	Jack Frost Mountain
	Fern Ridge Campground
Investment Properties
	Dreshertown Plaza Shopping Center
		Dresher, Montgomery County, Pennsylvania
	Wal-Mart Store, Laurens, South Carolina
	Blue Heron Grille, Lake Harmony, Pennsylvania
							
Land Holdings
	Blue Ridge
		18,852 acres of land, held for investment
	Big Boulder
		929 acres of land, held for investment 
	Northeast Land Company
		103 acres of land
Recreational Areas
	"The Stretch" on the Tunkhannock
	Porter Run Hunting Preserve
	Splatter (Paintball game)
	Wheels, In-Line Skate and Board Park	
	Ride, ATV Park
                              PAGE 18
<PAGE>