SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q
(x) QUARTERLY REPORT PURSUANT TO SECTION 13 or 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended
September 30, 1998
------------------
Commission File Number 1-12545
-------
Willamette Industries, Inc.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
State of Oregon 93-0312940
- --------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1300 S.W. Fifth Avenue, Suite 3800, Portland, Oregon 97201
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (503) 227-5581
-----------------------------
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes x No
----- -----
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date. Common Stock, 50 cent par
value: 110,968,148 at October 31, 1998.
--------------------------------
<PAGE>
WILLAMETTE INDUSTRIES, INC. AND SUBSIDIARIES FORM 10-Q
CONSOLIDATED BALANCE SHEETS PART I
(AMOUNTS, EXCEPT PER SHARE AMOUNTS, IN THOUSANDS) ITEM 1
<TABLE>
<S> <C> <C>
SEPTEMBER 30, DECEMBER 31,
ASSETS 1998 1997
------ --------- ----------
Current assets:
Cash $ 32,175 27,600
Accounts receivable, less allowance
for doubtful accounts of $4,752 and $4,571 346,820 307,002
Inventories (Note 2) 397,939 394,595
Prepaid expenses and timber deposits 52,984 36,991
--------- ---------
Total current assets 829,918 766,188
Timber, timberlands and related facilities, net 1,356,124 1,396,946
Property, plant and equipment, at cost less
accumulated depreciation of $2,229,523 and $2,018,206 2,674,449 2,566,291
Other assets 85,991 81,630
--------- ---------
$ 4,946,482 4,811,055
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Current liabilities:
Current installments on long-term debt (Note 3) $ 12,720 17,897
Notes payable 174,700 64,000
Accounts payable, includes book overdrafts
of $51,088 and $49,421 177,024 206,463
Accrued expenses 183,772 165,904
Accrued income taxes 5,174 3,831
--------- ---------
Total current liabilities 553,390 458,095
Deferred income taxes 412,161 402,896
Other liabilities 42,611 39,583
Long-term debt, net of current installments (Note 3) 1,919,208 1,916,001
Stockholders' equity:
Preferred stock, cumulative, of $.50 par value.
Authorized 5,000 shares. - -
Common stock, $.50 par value. Authorized 150,000
shares; issued 111,186 and 111,350 shares. 55,593 55,675
Capital surplus 291,117 294,760
Retained earnings 1,672,402 1,644,045
--------- ---------
Total stockholders' equity 2,019,112 1,994,480
--------- ---------
$ 4,946,482 4,811,055
========= =========
</TABLE>
2
<PAGE>
WILLAMETTE INDUSTRIES, INC. AND SUBSIDIARIES FORM 10-Q
CONSOLIDATED STATEMENTS OF EARNINGS PART I
(AMOUNTS, EXCEPT PER SHARE AMOUNTS, IN THOUSANDS) ITEM 1
<TABLE>
<S> <C> <C> <C> <C>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
------------------- --------------------
1998 1997 1998 1997
--------- --------- --------- --------
Net sales $ 956,794 888,795 $2,803,259 2,623,335
Cost of sales 805,486 766,127 2,398,752 2,272,556
--------- --------- --------- ---------
Gross profit 151,308 122,668 404,507 350,779
Selling and administrative expenses 62,771 61,073 188,926 181,933
--------- --------- --------- ---------
Operating earnings 88,537 61,595 215,581 168,846
Other income 1,751 1,039 4,505 1,829
--------- --------- --------- ---------
90,288 62,634 220,086 170,675
Interest expense 36,953 29,676 97,952 88,248
--------- --------- --------- ---------
Earnings before provision for income taxes 53,335 32,958 122,134 82,427
Provision for income taxes 17,600 12,261 40,304 30,663
--------- ---------- --------- ---------
Net earnings $ 35,735 20,697 $ 81,830 51,764
========= ========= ========= =========
Per share information (1):
Basic earnings per share $ 0.32 0.19 $ 0.73 0.47
========= ========= ========= =========
Diluted earnings per share $ 0.32 0.18 $ 0.73 0.46
========= ========= ========= =========
Dividends $ 0.16 0.16 $ 0.48 0.48
========= ========= ========= =========
Weighted average shares outstanding:
Basic 111,399 111,101 111,393 110,889
======= ======= ======= =======
Diluted (2) 111,696 111,916 111,877 111,600
======= ======= ======= =======
</TABLE>
(1) Per share earnings are based upon the weighted average number of shares
outstanding.
(2) Weighted average shares outstanding (diluted) are calculated using the
treasury stock method assuming all stock options are exercised.
3
<PAGE>
WILLAMETTE INDUSTRIES, INC. AND SUBSIDIARIES FORM 10-Q
CONSOLIDATED STATEMENTS OF CASH FLOWS PART I
(DOLLAR AMOUNTS IN THOUSANDS) ITEM 1
<TABLE>
<S> <C> <C>
NINE MONTHS ENDED
SEPTEMBER 30,
------------------------
1998 1997
--------- ----------
Cash flows from operating activities:
Net earnings $ 81,830 51,764
Adjustments to reconcile net earnings to net cash
from operating activities:
Depreciation 217,046 198,621
Cost of fee timber harvested 42,447 40,597
Other amortization 14,823 13,647
Increase in deferred income taxes 15,346 13,876
Changes in working capital items:
Accounts receivable (36,320) (31,578)
Inventories (758) (11,191)
Prepaid expenses and timber deposits (15,352) (635)
Accounts payable and accrued expenses (22,462) (7,246)
Accrued income taxes 1,343 (6,315)
--------- ----------
Net cash from operating activities 297,943 261,540
--------- ----------
Cash flows from investing activities:
Proceeds from sale of equipment 2,851 2,460
Expenditures for property, plant and equipment (303,735) (361,990)
Expenditures for timber and timberlands (2,699) (5,978)
Expenditures for roads and reforestation (12,255) (10,898)
Assets held for sale - 102,231
Other (21,517) 4,554
--------- ----------
Net cash from investing activities (337,355) (269,621)
--------- ----------
Cash flows from financing activities:
Net change in operating lines of credit 109,627 17,191
Debt borrowing 206 150,211
Proceeds from sale of common stock 2,748 12,216
Repurchased common stock (6,516) -
Cash dividends paid (53,473) (53,217)
Payment on debt (8,605) (112,273)
--------- ----------
Net cash from financing activities 43,987 14,128
--------- ----------
Net change in cash 4,575 6,047
Cash at beginning of period 27,600 22,222
--------- ----------
Cash at end of period $ 32,175 28,269
========= ==========
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest (net of amount capitalized) $ 106,579 91,247
========= ==========
Income taxes $ 21,585 23,102
========= ==========
</TABLE>
4
<PAGE>
FORM 10-Q
PART I
ITEM 1
WILLAMETTE INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1998
Note 1 The information furnished in this report reflects all
adjustments which are, in the opinion of management,
necessary to a fair statement of the results for the
interim periods presented.
Note 2 The components of inventories are as follows
(thousands of dollars):
September 30, December 31,
1998 1997
------- --------
Finished product $ 127,210 118,046
Work in progress 8,107 7,404
Raw material 176,197 187,912
Supplies 86,425 81,233
-------- --------
$ 397,939 394,595
======== ========
Note 3 In January 1998, the Company issued $200.0 million in
debentures - $100.0 million at 6.45% due 2005 and
$100.0 million at 7.0% due 2018. In June 1998, the
Company initiated a medium-term note program and has
issued $100.2 million of notes as of September 30,
1998. The medium-term notes carry interest rates
ranging from 6.45% to 6.60% and maturities ranging
from 11 to 15 years. The proceeds from these issuances
were used to replace notes and other bank borrowings
of the Company.
Note 4 Certain items previously reported have been
reclassified to conform with the 1998 presentation.
Other notes have been omitted pursuant to Rule
10-01(a)(5) of Regulation S-X.
5
<PAGE>
FORM 10-Q
PART I
ITEM 2
WILLAMETTE INDUSTRIES, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS
OF OPERATIONS AND FINANCIAL CONDITION
SEPTEMBER 30, 1998
The Company's two basic businesses, paper products and building materials, are
affected by changes in general economic conditions. Paper product sales and
earnings tend to follow the general economy. Building materials activity is
closely related to new housing starts and to the availability and terms of
financing for construction. Both industry segments are also influenced by global
economic factors of supply and demand. In addition, both industry segments use
wood fiber as the basic raw material. The cost of wood fiber is sensitive to
various supply and demand factors, including environmental issues affecting
supply.
<TABLE>
<S> <C> <C> <C> <C>
SEGMENT INFORMATION
-------------------
Three Months Ended Nine Months Ended
September 30, September 30,
----------------------- ---------------------
1998 1997 1998 1997
---------- ---------- ---------- ----------
Sales:
Paper Group $ 628,420 577,083 1,860,818 1,650,846
Building Materials Group 328,374 311,712 942,441 972,489
---------- ---------- ---------- ----------
$ 956,794 888,795 2,803,259 2,623,335
========== ========== ========== ==========
Operating Earnings:
Paper Group $ 65,248 40,867 183,289 97,444
Building Materials Group 34,216 30,616 65,002 101,784
Corporate (10,927) (9,888) (32,710) (30,382)
---------- ---------- ---------- ----------
$ 88,537 61,595 215,581 168,846
========== ========== ========== ==========
</TABLE>
6
<PAGE>
RESULTS OF OPERATIONS
---------------------
3rd Quarter 1998 vs. 3rd Quarter 1997
-------------------------------------
Consolidated net sales increased 7.7% in the third quarter of 1998 compared with
the third quarter of 1997, as sales increased for both the paper group and
building materials group. Consolidated operating earnings increased 43.7% over
the third quarter of 1997, reflecting improved markets for the Company's
unbleached paper products and unit shipment increases for both segments.
Paper group operating earnings were up 59.7% in the third quarter of 1998 from
the comparable period in 1997. Total paper product sales increased 8.9% in the
third quarter of 1998 over 1997 as average sales prices were greater for most
product lines. For unbleached products, corrugated container prices were up
10.3% while grocery bag prices increased 10.4% compared to the prior year.
Modest results were achieved for the bleached product lines as prices only
slightly increased for continuous forms and cut sheets. Hardwood market pulp,
however, continued to show its instability in 1998 as prices decreased 14.2%
from the third quarter of the prior year. Prices for all products, while up on
average over the third quarter of 1997, continued to struggle in 1998 due to
supply and demand imbalances created from the difficulties occurring in the
Asian economies. Raw material costs also affected earnings as old corrugated
container (OCC) costs decreased 31.6% while chip costs increased 9.1% from the
third quarter of 1997.
Unit shipment fluctuations were mixed in the third quarter of 1998 when compared
to the third quarter of 1997. For unbleached products, unit shipments
7
<PAGE>
of corrugated containers were up 5.5% over the prior year, while grocery bag
volume declined by 7.7%. The corrugated container increase was primarily due to
the 1997 addition of our box plant in Plant City, Florida, the acquisition of an
interest in a box plant in Mexico City in late 1997 and capital project
completions. With respect to bleached products, unit shipments increased 12.5%
for cut sheets and decreased 20.9% for hardwood market pulp and 6.3% for
continuous forms. The increased cut sheet volume is the result of the start-up
of our new Brownsville, Tennessee cut sheet plant which came on line in February
1998. The increased converting volume was aided by the new Kentucky paper
machine ("K-2"), which successfully came on line at the end of the second
quarter of 1998.
Operating earnings for the building materials group increased 11.8% in the third
quarter compared to the prior year and building materials sales increased 5.3%.
Unit shipment volumes were strong in the third quarter of 1998, as all product
lines experienced increases except for plywood. Lumber unit shipments increased
35.2% over the third quarter of 1997 as gains were realized from capital project
completions and the start-up of our new small-log sawmill in Taylor, Louisiana
in August 1998. In addition, strong housing starts continued into the third
quarter, which helped bolster lumber shipments. Composite board products also
realized unit shipment gains as particleboard increased 7.0% and medium density
fiberboard (MDF) increased 18.1% over volumes achieved in 1997. MDF unit
shipments increased as a result of expansion from capital projects and the
acquisition of a new facility in Morcenx, France in March 1998. Structural panel
volumes were mixed as OSB increased 1.3% while plywood decreased 1.9% from the
prior year. The decrease in plywood unit shipments was primarily related to a
plant closure which occurred in July 1997 at our
8
<PAGE>
Taylor, Louisiana plant, and a halt in production at our Zwolle, Louisiana plant
due to a fire that closed the facility early in the second quarter of 1998. The
Zwolle, Louisiana plant has been renovated and re-started operations in August
1998.
Prices for building materials products for the third quarter of 1998 had a mixed
impact on earnings compared to 1997. The bright spot for building materials was
the structural panel market. With the continued strength in housing starts,
prices for oriented strand board (OSB) increased 82.1% and plywood increased
6.4% over the third quarter of 1997. Unfortunately, the difficulties in the
Asian economies have continued to create supply and demand imbalances both
internationally and domestically, and have kept prices depressed for lumber and
composite board products since late in the second quarter of 1997. Lumber has
shown the largest decline, decreasing 18.5% from the third quarter of 1997.
Other price declines included 3.8% for particleboard, 1.4% for MDF and 8.4% for
log exports compared to the same period in the prior year.
Selling and administrative expenses increased $1.7 million or 2.8% in the third
quarter mostly due to expansion of Company operations. The ratio of selling and
administrative expenses to net sales was 6.6% for the third quarter of 1998
compared to 6.9% for the same period in 1997.
Interest expense was $37.0 million in the third quarter of 1998 compared with
$29.7 million in the prior year. The increase in interest expense was driven by
capital project completions, which resulted in a decrease in capitalized
interest from $5.4 million in the third quarter of 1997 to $.4 million for the
9
<PAGE>
third quarter of 1998. The Company's effective interest rate on average
outstanding debt remained steady at 7.1% for the third quarter of 1998 and 1997.
RESULTS OF OPERATIONS
---------------------
Nine Months ended September 30, 1998 vs.
----------------------------------------
Nine Months ended September 30, 1997
-----------------------------------
Consolidated net sales increased 6.9% and operating earnings increased 27.7% for
the first nine months of 1998 due to stronger performance from the paper group
operations.
Paper group operating earnings increased 88.1% and sales increased 12.7% over
the first nine months of 1997. Sales prices increased in all product lines
except hardwood market pulp, which decreased 5.8% from the first nine months of
1997. While average sales prices for the first nine months of 1998 have remained
above 1997 levels, they have continued to decline throughout the year. Unit
shipment volumes were up for unbleached products, except grocery bags, due to
new start-ups and acquisitions that occurred in 1997. Bleached volumes were
mixed as continuous forms and hardwood market pulp declined from the prior year.
However, significant gains were achieved in cut sheets primarily due to the
start-up of the new sheet plant in Brownsville in preparation for the start-up
of K-2, which occurred late in the second quarter of 1998. Finally, raw material
costs impacted earnings as OCC costs decreased 11.8% and chip costs increased
10.8% compared to 1997 levels.
10
<PAGE>
Building materials sales decreased 3.1% from the first nine months of 1997
primarily due to the continued price erosion which began late in the second
quarter of 1997. Sales prices were down in all product lines, except for OSB and
plywood, which increased 48.8% and 2.1%, respectively, over the prior year.
While prices were down, unit shipment volumes were up for the first nine months
of 1998 for lumber, MDF and particleboard due to completion of capital projects,
acquisitions and continued strong housing starts. Plywood unit shipments
decreased in 1998 primarily due to the Taylor plant closure and down time taken
at the Zwolle plant due to a fire. However, volume gains were not enough to
offset the price erosion which resulted in building materials operating earnings
decreasing 36.1% for the first nine months of 1998 compared to the prior year.
Selling and administrative expenses increased $7.0 million or 3.8% primarily due
to expansion of Company operations. The ratio of selling and administrative
expenses to net sales decreased to 6.7% for the first nine months of 1998 from
6.9% for the same period in 1997.
Interest expense was $98.0 million for the nine months ended September 30, 1998,
compared with $88.2 million for the same period in 1997. The increase is
attributable to an increase in average outstanding debt of $189.0 million for
the first nine months of 1998 compared to the 1997 period. In addition,
capitalized interest decreased to $12.5 million for the first nine months of
1998 from $13.3 million in 1997.
11
<PAGE>
Financial Condition as of September 30, 1998
-------------------------------------------
For the first nine months of 1998, cash flows from operating activities were
$297.9 million, representing an increase of 13.9% from the same period in 1997.
The increase was primarily attributable to increased earnings and depreciation
as well as reductions in inventories compared to the prior year. Net working
capital decreased 10.3% to $276.5 million at September 30, 1998 compared to
$308.1 million at December 31, 1997. The total debt to capital ratio increased
to 51.1% at September 30, 1998 from 50.0% at December 31, 1997.
In January 1998, the Company issued $200.0 million in debentures - $100.0
million at 6.45% due 2005 and $100.0 million at 7.0% due 2018. In June 1998, the
Company initiated a medium-term note program and had issued $100.2 million of
notes as of September 30, 1998. The medium-term notes carry interest rates
ranging from 6.45% to 6.60% and maturities ranging from 11 to 15 years. The
proceeds from these issuances were used to replace notes maturing in 1998 and
reduce other bank borrowings.
In September 1998, the Company announced its intention to sell 117,000 acres of
timberland acquired with the Cavenham purchase in 1996. The timberland
represents acreage in the state of Washington which is considered non-essential
to the Company's long-term operating plans. The Company intends to pay down debt
and repurchase up to $25.0 million of outstanding common stock with the proceeds
of the transaction.
12
<PAGE>
In August 1995, the Board of Directors authorized the repurchase of up to $100.0
million of the Company's common stock. Since an initial purchase of 50,000
shares for $2.7 million, the Company had not re-entered the market until the
third quarter of 1998. The Company reinitiated the program for up to $25.0
million and repurchased 252,600 shares of its common stock for $6.5 million in
the third quarter of 1998.
The Company believes it has the resources available to meet its short-term and
long-term liquidity requirements. Resources include internally generated funds,
short-term borrowing arrangements and the unused portion of the revolving loan
available under a Credit Agreement.
YEAR 2000 COMPLIANCE
--------------------
In 1996, the Company began working to address the possible effects of Year 2000
non-compliance on its information, financial and manufacturing systems. These
efforts include the assessment, development, modification and testing of these
key systems. Many of the modifications necessary for Year 2000 compliance have
been coordinated with other modifications made in the normal course of business.
To date, the Company has spent $3.5 million on Year 2000 compliance and
currently estimates that total spending will approximate $10.0 million. These
costs are being expensed as incurred and are not expected to have a material
impact on the Company's financial position.
As of September 30 1998, a majority of the Company's financial and information
systems have been modified and tested for Year 2000 compliance, and all
financial and information systems are expected to be compliant by the second
13
<PAGE>
quarter of 1999. In addition, the Company is nearing completion of the process
of inventorying and assessing its primary manufacturing systems for Year 2000
compliance. To date, no significant issues have been identified with the
Company's manufacturing systems and the Company expects to resolve any
compliance issues with these systems by the second quarter of 1999.
Finally, the Company has been surveying its major vendors, suppliers and
customers to assess the potential impact on its operations of these key third
parties. This process includes obtaining a letter of certification as to their
efforts associated with Year 2000 compliance. To date, no significant compliance
issues have been identified with these third parties. The Company plans to
continually update and evaluate compliance with these key third parties through
1999.
The most reasonably likely worst case scenario facing the Company is the
occurrence of unscheduled down-time at its facilities resulting from internal
system difficulties or third party failures that could have a significant
adverse affect on the Company's earnings. While it is the Company's belief that
all of its systems will be assessed and modified before January 1, 2000, there
can be no guarantee that problems will not arise pertaining to Year 2000
compliance of these systems or that vendors, suppliers and customers will
adequately address their Year 2000 compliance requirements. The Company is
considering contingency plans relating to key third parties. These include
identifying alternative suppliers and working with major customers that may be
affected by Year 2000 issues.
14
<PAGE>
Forward-Looking Statements
--------------------------
Statements contained in this report that are not historical in nature, including
without limitation the discussion of the pending sale of timberlands and the
resulting paydown of debt and repurchase of outstanding common stock, the
adequacy of the Company's liquidity resources, the impact of environmental
regulations and risks associated with the Year 2000 problem, are forward-looking
statements within the meaning of the Private Securities Litigation Reform Act of
1995. Forward-looking statements are subject to risks and uncertainties that may
cause actual future results to differ materially. Such risks and uncertainties
with respect to the Company, in addition to those included with the
forward-looking statements, include the effect of general economic conditions;
the level of new housing starts and remodeling activity; the availability and
terms of financing for construction; competitive factors, including pricing
pressures; the cost and availability of wood fiber; the effect of natural
disasters on the Company's timberlands; construction delays; risk of
non-performance by third parties; and the impact of environmental regulations
and the construction and other costs associated with complying with such
regulations. In view of these uncertainties, investors are cautioned not to
place undue reliance on such forward-looking statements.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
- ------------------------------------------------------------------
No disclosure is required under this item.
15
<PAGE>
FORM 10-Q
PART II
OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
- -----------------------------------------
(a) Exhibits
--------
Exhibit No. Exhibit
----------- -------
12 Computation of
Ratio of Earnings
to Fixed Charges.
27 Financial Data Schedule for nine-
month period ended September 30, 1998.
(b) Reports on Form 8-K
-------------------
No reports on Form 8-K were filed during the quarter for which
the report is filed.
16
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
WILLAMETTE INDUSTRIES, INC.
By /s/J. A. Parsons
---------------------------------------
J. A. Parsons
Executive Vice President
(Principal Financial Officer)
Date: November 5, 1998
EXHIBIT 12
WILLAMETTE INDUSTRIES, INC. AND SUBSIDIARIES
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(DOLLAR AMOUNTS IN THOUSANDS)
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
NINE MONTHS ENDED
YEAR ENDED DECEMBER 31, SEPTEMBER 30,
------------------------------------------- ----------------
1993 1994 1995 1996 1997 1997 1998
------- ------- ------- ------- ------- ------- -------
Fixed Charges:
Interest cost $ 79,194 80,807 77,237 103,338 136,929 101,564 110,465
One-third rent
expense 4,819 5,227 5,976 6,906 7,535 5,658 6,032
------- ------- ------- ------- ------- ------- -------
Total Fixed Charges $ 84,013 86,034 83,213 110,244 144,464 107,222 116,497
======= ======= ======= ======= ======= ======= =======
Add (Deduct):
Earnings before
income taxes $ 189,168 288,923 823,804 306,086 111,263 82,427 122,134
Interest capitalized (15,904) (9,294) (6,187) (10,534) (19,939) (13,316) (12,513)
------- ------- ------- ------- ------- ------- -------
Earnings for
Fixed Charges $ 257,277 365,663 900,830 405,796 235,788 176,333 226,118
======= ======= ======= ======= ======= ======= =======
Ratio of Earnings to
Fixed Charges 3.06 4.25 10.83 3.68 1.63 1.64 1.94
======= ======= ======= ======= ======= ======= =======
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
THE COMPANY'S CONSOLIDATED BALANCE SHEETS AND RELATED CONSOLIDATED
STATEMENTS OF EARNINGS FOR THE PERIOD ENDED SEPTEMBER 30, 1998 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> SEP-30-1998
<CASH> 32,175
<SECURITIES> 0
<RECEIVABLES> 351,572
<ALLOWANCES> 4,752
<INVENTORY> 397,939
<CURRENT-ASSETS> 829,918
<PP&E> 6,260,096
<DEPRECIATION> 2,229,523
<TOTAL-ASSETS> 4,946,482
<CURRENT-LIABILITIES> 553,390
<BONDS> 1,919,208
0
0
<COMMON> 55,593
<OTHER-SE> 1,963,519
<TOTAL-LIABILITY-AND-EQUITY> 4,946,482
<SALES> 2,803,259
<TOTAL-REVENUES> 2,803,259
<CGS> 2,398,752
<TOTAL-COSTS> 2,398,752
<OTHER-EXPENSES> 184,421
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 97,952
<INCOME-PRETAX> 122,134
<INCOME-TAX> 40,304
<INCOME-CONTINUING> 81,830
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 81,830
<EPS-PRIMARY> 0.73
<EPS-DILUTED> 0.73
</TABLE>
