FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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 0-1051
CONSOLIDATED PAPERS, INC.
(Exact name of registrant as specified in its charter)
Wisconsin 39-0223100
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Wisconsin Rapids, WI 54495
(Address of principal executive offices)
(Zip Code)
715 422-3111
(Registrant's telephone number, including area code)
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 par value $1.00 outstanding October 15, 1998
90,445,113 shares
<TABLE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
CONSOLIDATED PAPERS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(DOLLARS IN THOUSANDS)
<CAPTION>
As Of
September 30 September 30
1998 1997 December 31
(Unaudited) (Unaudited) 1996
ASSETS
<S> <C> <C> <C>
Current Assets
Cash and cash equivalents $ 10,494 $ 6,874 $ 13,169
Receivables (net of reserves of
$6,772 as of September 30, 1998,
$5,885 as of September 30, 1997,
and $6,374 as of December 31,
1997) 157,643 123,321 160,874
Inventories
Finished stock 89,713 46,617 81,858
Unfinished stock 11,183 7,504 10,387
Raw materials and supplies 112,640 93,192 112,801
Total inventories 213,536 147,313 205,046
Prepaid expenses 48,047 44,690 26,506
Total current assets 429,720 322,198 405,595
Investments and other assets 58,399 304,938 61,065
Restricted cash related to leases 442,025 419,164 427,026
Goodwill 142,469 55,754 148,049
Plant and Equipment
Buildings, machinery and equipment 3,391,476 2,401,685 2,929,362
Less: Accumulated depreciation 1,010,323 857,768 883,265
2,381,153 1,543,917 2,046,097
Land and timberlands 40,598 37,616 39,774
Capital additions in process 172,791 126,043 219,904
Total plant and equipment 2,594,542 1,707,576 2,305,775
$ 3,667,155 $ 2,809,630 $ 3,347,510
LIABILITIES AND SHAREHOLDERS' INVESTMENT
<S> <C> <C> <C>
Current Liabilities
Accounts payable $ 100,167 $ 71,653 $ 92,330
Other 151,656 103,620 117,031
Total current liabilities 251,823 175,273 209,361
Long-term debt 1,056,014 484,000 868,665
Capital lease obligations 470,558 447,392 456,321
Deferred income taxes 337,891 276,138 309,875
Postretirement benefits 162,988 105,923 152,470
Other noncurrent liabilities 30,525 16,287 33,151
Shareholders' Investment
Preferred stock, authorized and
unissued 15,000,000 shares - - -
Common stock, shares issued
90,621,171 as of September 30, 1998,
89,949,596 as of September 30, 1997,
and 90,009,898 as of December 31,
1997 90,621 89,950 90,010
Capital in excess of par value 58,255 44,125 46,400
Accumulated other comprehensive
income (2,585) (2,534) (2,610)
Treasury stock, at cost, 186,026
shares as of September 30, 1998,
48,816 shares as of September 30,
1997, and 278,816 shares as of
December 31, 1997 (4,898) (1,190) (7,370)
Reinvested earnings 1,215,963 1,174,266 1,191,237
Total shareholders' investment 1,357,356 1,304,617 1,317,667
$ 3,667,155 $ 2,809,630 $ 3,347,510
CONSOLIDATED PAPERS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA - UNAUDITED)
Three Months Ended Nine Months Ended
September 30 June 30 September 30
1998 1997 1998 1998 1997
<S> <C> <C> <C> <C> <C>
Net sales $ 491,580 $ 396,795 $ 508,437 $ 1,517,026 $ 1,169,611
Cost of goods sold 421,996 336,508 414,392 1,249,270 974,131
Gross profit 69,584 60,287 94,045 267,756 195,480
Selling, general
and
administrative
expenses 25,799 20,456 25,625 74,531 60,275
Income from
operations 43,785 39,831 68,420 193,225 135,205
Interest expense (24,455) (10,288) (24,286) (72,785) (27,050)
Interest income 8,058 6,886 7,646 23,337 19,361
Miscellaneous, net 1,245 1,919 1,058 2,766 5,078
Total other
income
(expense), net (15,152) ( 1,483) (15,582) (46,682) ( 2,611)
Income before
provision for
income taxes 28,633 38,348 52,838 146,543 132,594
Provision for
income taxes 11,454 14,572 21,135 58,618 50,386
Net income before
extraordinary
item 17,179 23,776 31,703 87,925 82,208
Loss on debt
extinguishment,
net of tax
benefit of
$3,069 - - ( 4,603) ( 4,603) -
Net income $ 17,179 $ 23,776 $ 27,100 $ 83,322 $ 82,208
Net income per
share before
extraordinary
item - basic $ 0.19 $ 0.27 $ 0.36 $ 0.98 $ 0.92
Net income per
share before
extraordinary
item - diluted $ 0.19 $ 0.26 $ 0.36 $ 0.98 $ 0.91
Net income per
share - basic $ 0.19 $ 0.27 $ 0.30 $ 0.92 $ 0.92
Net income per
share - diluted $ 0.19 $ 0.26 $ 0.30 $ 0.92 $ 0.91
Average number of
common shares
outstanding 90,389,164 89,832,364 90,248,024 90,160,542 89,662,310
CONSOLIDATED STATEMENTS OF REINVESTED EARNINGS
(DOLLARS IN THOUSANDS - UNAUDITED)
Three Months Ended Nine Months Ended
September 30 June 30 September 30
1998 1997 1998 1998 1997
<S> <C> <C> <C> <C> <C>
Balance beginning
of period $ 1,218,670 $ 1,169,348 $ 1,211,417 $ 1,191,237 $ 1,148,546
Add: Net income 17,179 23,776 27,100 83,322 82,208
Deduct: Cash
dividends (19,886) (18,858) (19,847) (58,596) (56,488)
Balance end of
period $ 1,215,963 $ 1,174,266 $ 1,218,670 $ 1,215,963 $ 1,174,266
CONSOLIDATED PAPERS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(DOLLARS IN THOUSANDS - UNAUDITED)
Nine Months Ended
September 30
1998 1997
<S> <C> <C>
Cash Flows From Operating Activities:
Net income $ 83,322 $ 82,208
Depreciation and depletion 134,174 89,445
Amortization of goodwill and intangibles 7,601 4,400
Debt premium amortization ( 7,026) -
Deferred income taxes 24,398 24,183
Earnings of affiliates ( 3,307) ( 3,614)
(Increase) decrease in current assets,
other than cash and cash equivalents ( 26,800) ( 4,355)
Increase (decrease) in current
liabilities, other than current
maturities of long-term debt 46,080 11,517
Increase (decrease) in postretirement
benefits 10,518 7,309
Increase (decrease) in other noncurrent
liabilities ( 2,626) 2,743
Net cash provided by operating activities 266,334 213,836
Cash Flows From Investing Activities:
Capital expenditures (302,518) (148,665)
Other 3,215 (235,589)
Net cash (used in) investing activities (299,303) (384,254)
Cash Flows From Financing Activities:
Cash dividends ( 58,596) ( 56,488)
Proceeds from long-term debt 160,000 -
Repayment of long-term debt (143,831) -
Net borrowings under lines of credit
and revolvers 57,783 211,533
Other 14,938 9,319
Net cash provided by financing
activities 30,294 164,364
Net increase (decrease) in cash and cash
equivalents ( 2,675) ( 6,054)
Cash and cash equivalents - beginning of
period 13,169 12,928
Cash and cash equivalents - end of period $ 10,494 $ 6,874
Cash paid during the period for:
Interest $ 56,207 $ 20,497
Income taxes 37,838 20,971
<FN>
Notes to Financial Statements:
1. Reference is made to the Notes to Financial Statements that appear in the
1997 Annual Report on Form 10-K. The basic principles of those notes are
pertinent to these statements.
2. In January 1998, the company completed the exercise of its early purchase
option to buy out an operating lease on production equipment at Lake
Superior Paper Industries by paying $149.3 million in cash and assuming
$120.4 million in debt. This purchase resulted in an increase in fixed
assets in 1998 of $269.7 million. The company had previously purchased a
portion of the equipment in December 1997 by paying $38.9 million in cash
and assuming $30.2 million in debt. The total transaction resulted in an
increase in fixed assets of $338.8 million.
3. In the second quarter 1998, the company recognized a $4.6 million after
taxes, or 6 cents per share - basic, 6 cents per share - diluted,
extraordinary loss. The extraordinary loss was the result of the early
redemption of the company's $143.8 million, face value, term loan assumed
as part of the operating lease buyout on production equipment at Lake
Superior Paper Industries (see Note 2). The loss consisted primarily of a
prepayment penalty and costs associated with the early redemption, net of
the write-off of the remaining debt premium and net of income tax benefits
of $3.1 million. The redemption of the 12.08% debt was financed with
proceeds from private placement notes with interest rates between 6.93% and
7.30%.
4. The company adopted Statement of Financial Accounting Standards (SFAS) No.
130, "Reporting Comprehensive Income" in the first quarter of 1998. Other
comprehensive income consists solely of the cumulative translation
adjustment and is not material in any period.
5. On April 27, 1998, the board of directors approved a two-for-one stock
split. The split was completed by distributing one additional share of
stock for each share held on the record date of May 8, 1998. All share and
per share data have been restated to reflect the stock split.
* * * * *
The financial information is unaudited. It reflects all adjustments that are,
in the opinion of management, necessary to a fair statement of the results.
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations.
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Recent Acquisition
Effective October 1, 1997, the company completed the acquisition of Repap USA,
Inc., the holding company for Repap Wisconsin, Inc. and Repap Sales
Corporation, in Kimberly, Wisconsin. The company renamed these operations
Inter Lake Papers, Inc., Inter Lake Wisconsin, Inc. and Inter Lake Sales
Corp., respectively. The operating results of the acquired companies
subsequent to the acquisition dates are included in the Consolidated
Statements of Income. Details of the acquisition are included in Note 2 of
the Notes to Consolidated Financial Statements in the company's 1997 Annual
Report.
Subsequent Event
On October 27, 1998, the company announced that its corrugated products plant,
Castle Rock Container Company, will be offered for sale. A potential buyer has
not been named and a timetable for the sale has not been determined. Castle
Rock Container shipments represent approximately 2% of the total company's
shipments.
Sales and Cost of Sales
Third quarter net sales increased $95 million or 24% and first nine months'
net sales increased $347 million or 30% compared with similar periods in 1997.
Third quarter shipments were 539,351 tons, up 23%, and first nine months'
shipments were 1,645,024 tons, up 25%, when compared with similar periods in
1997. The increases are primarily due to the October 1997 acquisition.
Net income for the third quarter 1998 of $17 million or $.19 per share was a
decrease, compared with $24 million or $.26 per share, for 1997. Lower-priced
imports of coated printing papers are up 27% in 1998 over 1997, creating a
soft market, causing incremental downtime and driving down pricing for
domestic producers. To date in 1998, Consolidated has reduced its production
of these papers by approximately 50,000 tons due to market-related downtimes.
These market-related downtimes, combined with annual maintenance downtimes
taken in the third quarter at the company's Biron, Wisconsin Rapids, Wisconsin
River, and Kraft divisions, led to a higher cost per ton of paper produced and
resulted in a reduction in after-tax earnings. The company's earnings per
share are reported on a diluted basis and reflect a two-for-one split of the
company's common stock announced on April 27, with a payable date of May 22.
The groundwood-free coated printing paper mill, Wisconsin Rapids Division,
operated at 87% of capacity for the third quarter and 91% of capacity the
first nine months of 1998, compared with 100% of capacity for the third
quarter and for the first nine months of 1997. The Converting Division, which
converts heavier-weight groundwood-free rolls into sheets, operated at 100% of
capacity in the third quarter of 1998 and at 97% of capacity for the first
nine months of 1998, compared with 100% for the third quarter and 99% for the
first nine months in 1997.
Inter Lake Papers, which was acquired October 1, 1997, manufactures both
groundwood and groundwood-free coated printing paper and operated at 84% of
available capacity in the third quarter and 93% for the first nine months in
1998.
The lightweight groundwood coated printing paper mills, Biron, Wisconsin River
and Niagara divisions, on a combined basis, operated at 94% of capacity for
the third quarter and 97% of capacity the first three quarters of 1998,
compared with 100% of capacity for the third quarter and 96% for the first
three quarters of 1997. The two smallest groundwood coated paper machines,
Nos. 41 and 61, were idle during the first quarter of 1997. No. 41 paper
machine resumed operations on April 16, 1997, and No. 61 resumed operations on
July 7, 1997. No. 61 was again idled indefinitely on October 17, 1998, due to
lack of orders.
Lake Superior Paper Industries, which manufactures supercalendered printing
papers, operated at 100% of available capacity in both the third quarter and
first nine months of 1998, compared with 100% of capacity in the third quarter
and 99% of capacity in the first nine months of 1997. The company's
supercalendered paper machine at its Lake Superior Paper Industries facility
underwent a 20-day rebuild in February 1998, which included installation of a
gap former, enabling the machine to produce supercalendered "A Plus" paper
grades.
The coated specialty paper division (Stevens Point) operated at 83% of
capacity in the third quarter and 85% of capacity for the first nine months of
1998, compared with 75% of capacity in the third quarter and 89% of capacity
in the first nine months of 1997. The reduced operating rates beginning in the
second quarter of 1997 reflect the March 1997 start-up of the No. 35 paper
machine, which increased this mill's available capacity 55%.
Superior Recycled Fiber Industries, which manufactures recycled pulp from
postconsumer office scrap paper operated at 92% of available capacity during
the third quarter of 1998 and 90% of capacity for the first nine months of
1998, compared with 73% during the third quarter of 1997 and 95% for the first
nine months of 1997. Shipments of paperboard products decreased 4% compared
with year 1997 and corrugated products decreased by 14% compared with 1997.
Gross profit margins as a percent of net sales were 14.2% and 17.7% for the
third quarter and first nine months of 1998, compared with 15.2% and 16.7% for
the similar periods in 1997. The third quarter 1998 decrease in gross profit
margins were due to downtime taken resulting from the increase in lower-priced
imports of coated printing papers and annual maintenance downtimes taken in
the third quarter, offset somewhat by lower purchase pulp costs.
Selling, general and administrative expenses as a percent of net sales were
5.2% and 4.9% for the third quarter and first nine months of 1998,
respectively, compared with 5.2% for both the similar periods in 1997.
Selling, general and administrative expenses are typically considered to be
fixed costs and thus fluctuate as a percent of sales as shipments and revenue
increase. The quarter and year-to-date increase in expenses are basically from
the October 1, 1997 acquisition.
Other income (expense) increased $14 million in third quarter 1998 and
$44 million for the first nine months of 1998 as compared with similar periods
in 1997. Interest expense increased primarily due to the higher debt
associated with the October 1997 acquisition and the Lake Superior Paper
Industries operating lease buyout.
The effective tax rate was 40.0% in 1998,compared with 38.0% for 1997.
Liquidity and Capital Resources
The October 1997 acquisition was accounted for as a purchase and the assets
and liabilities, which have been stated at their fair value, affect the
comparison to prior periods.
On September 30, 1998, the ratio of current assets to current liabilities was
1.7:1, compared with 1.8:1 at September 30, 1997. During the third quarter,
working capital decreased by $9 million. Cash and cash equivalents decreased
by $2 million and receivables increased by $1 million. Inventories decreased
by $4 million. Prepaid expenses increased by $9 million, primarily due to
higher tax benefits and timings at September 30, 1998. Accounts payable and
other current liabilities increased by $15 million, due primarily to an
increase in interest payable and salary and wages payable at September 30,
1998, compared with June 30, 1998.
Early in the first quarter of 1998, the company completed the exercise of its
early purchase option to buy out the equity component of a 1987 leveraged
operating lease on production equipment at Lake Superior Paper Industries.
This transaction required an assumption of $144 million, face value, debt
carrying an annual interest rate of 12.1%. To reduce carrying costs, the 12.1%
interest rate debt was refinanced with $160 million of private placement
notes, bearing interest at a weighted average rate of 7.2%. As a result of
this refinancing, a one-time extraordinary charge to earnings of $4.6 million
after taxes, or 6 cents per share, was recorded in the second quarter of 1998.
The company's long-term debt on the balance sheet decreased $29 million during
the third quarter and increased $187 million during the first nine months
1998. The nine month increase is due primarily to the company's exercise of
its early purchase option to buy out an operating lease on production
equipment at Lake Superior Paper Industries by paying $149 million in cash and
assuming $120 million in debt. The resulting balance sheet long-term funded
debt to capital ratio on September 30, 1998, was 44%, compared with 44% on
June 30, 1998, 40% on December 31, 1997, and 27% on September 30, 1997.
Capital expenditures in the third quarter of 1998 totaled $50 million,
compared with $50 million during the same period in 1997. The major third
quarter 1998 expenditures included $16 million of an $86 million paper machine
rebuild at Biron Division, $9 million of $48 million supercalender and
woodroom additions at Niagara Division, $4 million of a $17 million hot-soft
calender addition at Stevens Point Division, and $3 million of a $7 million
hotel room addition at The Mead Inn. The company expects to spend a total of
$240 million during 1998 for capital additions, $169 million of which was
spent in the first nine months, $169 million of which was spent in the first
nine months, not including $149 million for the lease buyout at Lake Superior
Paper Industries.
Year 2000 Readiness Disclosure
General. The company's Year 2000 efforts are continuing, with completion of
the final stages of its internal compliance project now scheduled for August
1999. The company has defined two major areas for its internal efforts:
business applications and process applications (all other hardware and
software systems). The company has defined a nine-step process toward Year
2000 compliance for each of these areas: (1) planning and awareness; (2)
inventory; (3) triage (assess risks and prioritize efforts); (4) detailed
assessment (identify where failures may occur, determine solution and plan to
repair or replace); (5) resolution (repair, retire or replace non-compliant
systems; create bridges to other systems and perform unit testing); (6) test
planning; (7) test execution; (8) deployment of compliant systems; and (9)
fallout (remove bridges and patches, recertify standards). In both business
and process applications, planning and awareness, inventory, triage, and
detailed assessment are substantially complete. Work continues in the
remaining areas. The company's overall Year 2000 project was 41% complete at
the end of the third quarter 1998.
In addition to its internal efforts, the company's Year 2000 team is also
focusing on external factors which may affect the company, including the
compliancy status of suppliers and customers. The external effort includes
the development of contingency plans to address identified risks.
Business Applications. This area includes in-house developed applications,
purchased software systems and all hardware required for business
applications. The company's internal programmers began using four-digit date
fields for in-house developed applications in a major conversion effort over
ten years ago. 90% of these applications have been remediated, where
necessary, and testing is now in progress. The remaining 10% have external
software dependencies which have delayed the company's remediation efforts
until late 1998 or early 1999. As a result of the previous conversion effort,
only 1% of in-house developed applications required date related changes. The
Year 2000 compliance status is currently known for 90% of the company's high
and medium risk business side purchased software and hardware devices. The
Year 2000 team is currently assessing the final 10% of these items and is
developing and executing remediation plans for non-compliant purchased
software and hardware devices. Business applications are currently on schedule
for completion of system testing and deployment by August 1999.
Process Applications. This area includes the company's manufacturing
operations, where many items such as machine drives, scanners and process
control devices include date dependent features. Approximately 74% of these
devices have been determined to be compliant as of September 30, 1998. Of the
balance, 15% remain classified as unknown, pending further testing or receipt
of information from suppliers; 9% have been determined to be non-compliant;
and 1% are obsolete and will be discarded or replaced. The company's efforts
in this area have been slowed due to slow vendor responses to our inquiries.
We presently project completion of the detailed assessment of this area by
November 30, 1998. Remediation and testing of process applications, which
must be coordinated with scheduled mill downtime, are now scheduled for
completion in August 1999.
Costs. The total cost associated with the hardware and software modifications
required by the Year 2000 problem is not expected to be material to the
company's financial position. The company presently estimates that it will
spend approximately $25.6 million on its overall Year 2000 project. This
includes $20.1 million for remediation and replacement of non-compliant
systems, $1.1 million for outside consultant costs, and $4.4 million for
internal labor costs. The amount expected to be spent on remediation and
replacement includes previously budgeted items totaling $7.7 million where
these expenditures have been accelerated to meet Year 2000 requirements. Of
the overall $25.6 million cost, $5.2 million had been spent at the end of the
third quarter 1998.
External Factors - Customers and Suppliers. The company has surveyed its
customers and suppliers in an effort to determine and assess those parties'
Year 2000 compliance status. These groups have been prioritized based on
their relative importance to the company's operations. We are focusing our
efforts on those third parties whose failure to be Year 2000 compliant could
significantly affect the company's ability to do business. Prioritization
also includes an analysis of alternative sources of raw materials or
production equipment. While most of our key customers and suppliers appear to
be making good progress toward year 2000 compliancy, the company is concerned
about several key suppliers which have not yet fully responded to our
inquiries. Discussions with these suppliers are being pursued vigorously. We
are also engaged in an ongoing dialogue with major customers. Finally, the
company is testing its electronic data interchange (EDI) systems with its EDI
partners. The company's efforts to determine its suppliers' and customers'
Year 2000 status will continue throughout 1999 as we monitor the progress of
those parties' ongoing Year 2000 efforts.
Contingency Plans. As noted above, the company is now engaged in its internal
and external compliance efforts. The company presently believes that its
internal efforts will be successful in preventing any material disruption of
the company's business and process applications caused by the Year 2000
problem. Current external efforts are identifying certain potential risks,
such as shutdown of key customers or suppliers, breakdowns in transportation
systems, or failures of the electrical grid or the company's wide area
network. Contingency plans will be developed to address these problems where
possible. The company is in the early stages of developing contingency plans
with respect to suppliers. These plans will probably involve identification
of alternative sources as well as increased inventories of raw materials and
finished product. Identification of alternative sources may prove difficult
in some areas, particularly with respect to existing assets which require
repair, upgrade or replacement parts from the original vendor. The company is
concerned about the continued availability of electrical power from its
suppliers. The company purchases approximately 60% of its electrical power
needs. Should the electrical power grid be disrupted as a result of Year 2000
failures, the company would be forced to curtail operations until the grid is
restored. Should problems arise which prevent customers from purchasing or
using the company's products, the company would likely take manufacturing
downtime and other steps designed to minimize costs during a period of reduced
demand. The company expects to increase its focus on contingency planning in
the first quarter of 1999.
At this time, the company cannot predict the likelihood of a significant
disruption of its customers' or suppliers' businesses or of the economy as a
whole, either of which could have a material adverse impact on the company.
Forward Looking Statements.
Certain statements in this Form 10-Q report may constitute forward-looking
statements within the meaning of the Private Securities Litigation Reform Act
of 1995. Because these forward-looking statements include risks and
uncertainties, actual future results may differ materially from those
expressed in or implied by the statements. Factors that could cause actual
results to differ include, among other things: (1) increased competition from
either domestic or foreign paper producers, including increases in competitive
capacity through construction of new mills or conversion of older facilities
to produce competitive products; (2) increases in imports of competitive
papers as a result of uncertainty or disruption in foreign producers' domestic
markets as well as currency devaluations; (3) variations in demand for the
company's products; (4) changes in the cost or availability of the raw
materials used by the company, particularly market pulp and wood; (5) costs of
compliance with new environmental laws and regulations; (6) decisions by the
company to make a significant acquisition or a significant increase in
production capacity; and (7) unanticipated costs or problems associated with
Year 2000 compliance, particularly with respect to third-party systems over
which the company has no control.
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
(a) Furnish the exhibits required by Item 601 of Regulation S-K.
(27) Financial Data Schedule.
(b) Reports on Form 8-K.
There were no reports filed on Form 8-K during the quarter ended
September 30, 1998.
Items 1, 2, 3, 4, and 5 are not applicable and have been omitted.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
CONSOLIDATED PAPERS, INC.
Date November 10, 1998
/s/ Richard J. Kenney
By: Richard J. Kenney, Senior Vice President, Finance
Principal Financial Officer
Date November 10, 1998
/s/ Carl R. Lemke
By: Carl R. Lemke
Assistant Secretary
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND> This schedule contains summary financial information extracted from
the September 30, 1998 consolidated balance sheet and the consolidated
statements of income, reinvested earnings and cash flows for the nine-month
period ended 9/30/98 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-31-1997
<PERIOD-END> SEP-30-1998
<CASH> 10,494
<SECURITIES> 0
<RECEIVABLES> 164,415
<ALLOWANCES> 6,772
<INVENTORY> 213,536
<CURRENT-ASSETS> 429,720
<PP&E> 3,604,865
<DEPRECIATION> 1,010,323
<TOTAL-ASSETS> 3,667,155
<CURRENT-LIABILITIES> 251,823
<BONDS> 1,056,014
<COMMON> 90,621
0
0
<OTHER-SE> 1,266,735
<TOTAL-LIABILITY-AND-EQUITY> 3,667,155
<SALES> 1,517,026
<TOTAL-REVENUES> 1,517,026
<CGS> 1,249,270
<TOTAL-COSTS> 1,249,270
<OTHER-EXPENSES> 74,531
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 72,785
<INCOME-PRETAX> 146,543
<INCOME-TAX> 58,618
<INCOME-CONTINUING> 87,925
<DISCONTINUED> 0
<EXTRAORDINARY> (4,603)
<CHANGES> 0
<NET-INCOME> 83,322
<EPS-PRIMARY> 0.92
<EPS-DILUTED> 0.92
</TABLE>
