Booth Creek Reports Third Quarter Results

VAIL, Colo.–(BUSINESS WIRE)–Sept. 13, 2002–Booth Creek Ski Holdings, Inc. (“Booth Creek” or the “Company”) announced today results for the third fiscal quarter ended Aug. 2, 2002.

Third Quarter Ended Aug. 2, 2002

Continuing Operations

Booth Creek’s fiscal third quarter is an off-peak period during which the Company begins its summer maintenance and capital programs. Booth Creek also offers summer activities at some of its resorts, including golf, mountain biking, lodging, conference facilities, food and beverage operations and certain other recreational amenities.

Resort operations revenues for the quarter ended Aug. 2, 2002, were $3,482,000, compared with $3,248,000 in the 2001 period, reflecting increased golf rounds at Northstar and improved summer operations at Loon Mountain.

Cost of sales and selling, general and administrative expense applicable to the resort segment totaled $10,213,000 for the quarter ended Aug. 2, 2002, an increase of $435,000, or 4 percent, from the 2001 period. The increase was principally due to normal inflationary factors.

Resort operations incurred an EBITDA loss (as defined below) from continuing operations of $6,731,000 for the quarter ended Aug. 2, 2002, as compared to an EBITDA loss of $6,530,000 for the 2001 period. Operating loss for the resort segment for the 2002 period was $10,579,000 compared to an operating loss of $11,704,000 for the 2001 period. The improvement in operating loss was primarily due to reduced depreciation and amortization expense in 2002.

Real estate revenues for the quarter ended Aug. 2, 2002, were $2,400,000, due to the close of escrow on five lots within the Unit 7 development at Northstar-at-Tahoe. One lot remains available for sale. There were no sales of real estate during the 2001 period. Timber operations contributed revenues of $160,000 and $190,000 for the 2002 and 2001 periods, respectively.

Cost of sales and selling, general and administrative expense for the real estate and other segment totaled $748,000 (including noncash cost of real estate sales of $363,000) for the quarter ended Aug. 2, 2002, as compared to $409,000 for the 2001 period.

Real estate and other operations generated EBITDA (excluding the noncash cost of real estate sales) of $2,175,000 for the quarter ended Aug. 2, 2002, as compared to an EBITDA loss of $219,000 during the 2001 period. Operating income for the real estate and other segment was $1,721,000 for the 2002 period, as compared to an operating loss of $303,000 in the 2001 period.

Interest expense and other, net, was $3,960,000 for the quarter ended Aug. 2, 2002, as compared to $4,142,000 for the 2001 period. The decline in the 2002 period was primarily due to reduced borrowings and lower average interest rates.

Total EBITDA loss from continuing operations (excluding the noncash cost of real estate sales) was $4,556,000 for the quarter ended Aug. 2, 2002, as compared to an EBITDA loss of $6,749,000 for the 2001 period.

The Company’s loss from continuing operations for the quarter ended Aug. 2, 2002, was $12,818,000, an improvement of $3,331,000 from the loss from continuing operations of $16,149,000 generated for the 2001 period, as a result of the factors discussed above.

Discontinued Operations

On July 22, 2002, the Company entered into definitive agreements for the sale of all of the capital stock of Bear Mountain, Inc. (“Bear Mountain”) to Snow Summit Ski Corp. for a purchase price of $12,000,000 in cash, subject to certain adjustments for working capital, assumed debt and allocations of off-season operating losses and capital expenditures. As a result of the intended disposition, the Company has reflected the operating results of Bear Mountain as discontinued operations in its consolidated statement of operations for all periods presented. The closing of the proposed transaction is conditioned upon the receipt of certain third-party consents and governmental approvals, including approvals of t United States Forest Service, and other customary closing conditions. The Company is currently seeking an amendment to its Amended and Restated Credit Agreement dated March 15, 2002, which would permit the sale transaction. The closing of the sale is expected to occur in the fourth quarter of fiscal 2002. However, no assurances can be given that the transaction will be consummated on the terms contemplated or at all. Based on the terms of the pending transaction and the anticipated closing date, the Company recorded an estimated impairment loss of $3,200,000 relating to the long-lived assets of Bear Mountain.

The Company’s loss from discontinued operations for the quarter ended Aug. 2, 2002, was $1,290,000, excluding the estimated impairment loss of $3,200,000, compared with a loss of $1,477,000 for the 2001 period. The improvement was primarily due to lower depreciation expense in the 2002 period.

Combined Operations

Total EBITDA (excluding the noncash cost of real estate sales) was a loss of $5,356,000 for the quarter ended Aug. 2, 2002, compared with an EBITDA loss of $7,477,000 for the 2001 period, an improvement of $2,121,000 or 28 percent.

Net loss for the quarter ended Aug. 2, 2002, was $17,308,000, compared with a net loss of $17,626,000 for the corresponding period of fiscal 2001.

Nine Months Ended Aug. 2, 2002

Continuing Operations

Resort operations revenue was $104,742,000 for the nine months ended Aug. 2, 2002, versus $101,819,000 (including $1,754,000 of revenues earned under paid skier visit insurance arrangements) in the 2001 period. Total skier visits were 2,154,000 for the 2002 period, a decline of 13,000 visits or slightly less than one percent from the 2001 period.

Cost of sales and selling, general and administrative expense for the resort operations segment was $73,340,000 for the nine months ended Aug. 2, 2002, an increase of $2,419,000, or 3 percent, from the 2001 period.

Resort operations generated EBITDA of $31,402,000 for the nine months ended Aug. 2, 2002, as compared to EBITDA of $30,898,000 for the 2001 period. Operating income for the resort segment for the 2002 period was $18,987,000 compared to $15,161,000 for the 2001 period. The improvement in operating income was primarily due to reduced depreciation and amortization expense in the 2002 period.

Revenues from real estate operations were $11,300,000 for the nine months ended Aug. 2, 2002, which were due to the sale of 25 single family lots within the Unit 7 subdivision at Northstar-at-Tahoe. There were no real estate sales in the 2001 period. Timber operations contributed revenues of $175,000 and $190,000 in the 2002 and 2001 periods, respectively.

Cost of sales and selling, general and administrative expense for the real estate and other segment totaled $3,416,000 (including noncash cost of real estate sales of $2,492,000) for the nine months ended Aug. 2, 2002, as compared to $807,000 for the 2001 period.

Real estate and other operations generated EBITDA (excluding the noncash cost of real estate sales) of $10,551,000 for the 2002 period compared to an EBITDA loss of $617,000 for the 2001 period. Operating income for the real estate and other segment was $7,968,000 for the 2002 period, as compared to an operating loss of $701,000 in the 2001 period.

Interest expense and other, net, was $12,516,000 for the nine months ended Aug. 2, 2002, compared to $12,984,000 for the 2001 period. The decline was primarily due to reduced borrowings and lower average interest rates in the 2002 period.

Total EBITDA from continuing operations (excluding the noncash cost of real estate sales) was $41,953,000 for the nine months ended Aug. 2, 2002, as compared to EBITDA of $30,281,000 for the 2001 period.

The Company’s income from continuing operations for the nine months ended Aug. 2, 2002, was $14,439,000, an increase of $12,963,000 from the income from continuing operations of $1,476,000 for the 2001 period, as a result of the factors discussed above.

Discontinued Operations

The Company recognized income from the discontinued operations of Bear Mountain, excluding the impairment loss of $3,200,000 recorded on the anticipated disposal of $1,960,000 for the nine months ended Aug. 2, 2002, an increase of $309,000 from the income from discontinued operations of $1,651,000 generated for the 2001 period, due primarily to lower depreciation expense in 2002.

Combined Operations

Total EBITDA (excluding the noncash cost of real estate sales) was $45,306,000 for the nine months ended Aug. 2, 2002, compared with EBITDA of $34,198,000 for the 2001 period, an improvement of 32 percent.

Net income for the nine months ended Aug. 2, 2002, was $15,760,000, compared with net income of $4,850,000 for the corresponding period of fiscal 2001. Net income for the 2002 and 2001 periods reflect extraordinary gains of $2,761,000 and $1,723,000, respectively, from the early retirement of debt. Net income for the 2002 period also reflects a charge for the change in accounting principle for goodwill of $200,000.

Booth Creek currently consists of seven resorts across North America, including Northstar-at-Tahoe, Sierra-at-Tahoe and Big Bear Mountain in California; Waterville Valley, Mt. Cranmore Mountain Resort and Loon Mountain in New Hampshire; and The Summit at Snoqualmie near Seattle, Washington. Booth Creek is the fourth-largest ski resort operator in the country (www.boothcreek.com). factors discussed above.

Discontinued Operations

The Company recognized income from the discontinued operations of Bear Mountain, excluding the impairment loss of $3,200,000 recorded on the anticipated disposal of $1,960,000 for the nine months ended Aug. 2, 2002, an increase of $309,000 from the income from discontinued operations of $1,651,000 generated for the 2001 period, due primarily to lower depreciation expense in 2002.

Combined Operations

Total EBITDA (excluding the noncash cost of real estate sales) was $45,306,000 for the nine months ended Aug. 2, 2002, compared with EBITDA of $34,198,000 for the 2001 period, an improvement of 32 percent.

Net income for the nine months ended Aug. 2, 2002, was $15,760,000, compared with net income of $4,850,000 for the corresponding period of fiscal 2001. Net income for the 2002 and 2001 periods reflect extraordinary gains of $2,761,000 and $1,723,000, respectively, from the early retirement of debt. Net income for the 2002 period also reflects a charge for the change in accounting principle for goodwill of $200,000.

Booth Creek currently consists of seven resorts across North America, including Northstar-at-Tahoe, Sierra-at-Tahoe and Big Bear Mountain in California; Waterville Valley, Mt. Cranmore Mountain Resort and Loon Mountain in New Hampshire; and The Summit at Snoqualmie near Seattle, Washington. Booth Creek is the fourth-largest ski resort operator in the country (www.boothcreek.com).