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 period ended September 30, 1996
[ ] Transition Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the transition period from to
Commission file number 1-7092
ILLINOIS CENTRAL RAILROAD COMPANY
(Exact name of registrant as specified in its charter)
Delaware 36-2728842
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
455 North Cityfront Plaza Drive, Chicago, Illinois 60611-5504
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (312) 755-7500
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
As of September 30, 1996, 100 common shares were outstanding.
THE REGISTRANT IS A WHOLLY-OWNED SUBSIDIARY OF ILLINOIS CENTRAL
CORPORATION AND MEETS THE CONDITIONS SET FORTH IN GENERAL
INSTRUCTIONS H(1) (a) AND (b) OF THE FORM 10-Q AND IS THEREFORE
FILING THIS FORM WITH THE REDUCED DISCLOSURE FORMAT.
ILLINOIS CENTRAL RAILROAD COMPANY
AND SUBSIDIARIES
FORM 10-Q
Quarter and Nine Months Ended September 30, 1996
CONTENTS
Part I - Financial Information: Page
Item 1. Financial Statements:
Consolidated Statements of Income 3
Consolidated Balance Sheets 4
Consolidated Statements of Cash Flows 5
Notes to Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results
of Operations 8
Part II - Other Information:
Item 6. Exhibits and Reports on Form 8-K 13
Signatures 14
Exhibit Index E-1
ILLINOIS CENTRAL RAILROAD COMPANY AND SUBSIDIARIES
Consolidated Statements of Income
($ in millions)
(Unaudited)
Three Months Nine Months
Ended September 30, Ended September 30,
1996 1995 1996 1995
Revenues $ 150.8 $ 161.3 $ 462.8 $ 485.8
Operating expenses:
Labor and fringe
benefits 44.5 50.2 136.0 144.5
Leases and car
hire 14.5 18.7 42.4 47.0
Diesel fuel 7.8 8.1 25.0 25.2
Materials and
supplies 7.9 8.8 23.8 27.4
Depreciation and
amortization 7.6 7.2 23.2 21.9
Casualty, insurance
and losses 3.6 3.5 8.7 11.1
Other taxes 5.0 3.0 13.5 13.5
Other 5.0 10.4 25.2 28.5
Operating expenses 95.9 109.9 297.8 319.1
Operating income 54.9 51.4 165.0 166.7
Other income, net 0.1 0.7 1.7 2.2
Interest expense,
net (6.7) (6.0) (19.7) (20.4)
Income before income
taxes and
extraordinary item,
net 48.3 46.1 147.0 148.5
Provision for income
taxes 18.1 17.3 57.1 55.7
Income before
extraordinary item 30.2 28.8 89.9 92.8
Extraordinary item,
net - - - (11.4)
Net income $ 30.2 $ 28.8 $ 89.9 $ 81.4
The following notes are an integral part of the consolidated financial
statements.
ILLINOIS CENTRAL RAILROAD COMPANY AND SUBSIDIARIES
Consolidated Balance Sheets
($ in millions)
(Unaudited)
ASSETS September 30, 1996 December 31, 1995
Current assets:
Cash and temporary cash
investment $ 8.5 $ 3.0
Receivables, net of
allowance for doubt of $1.5
in 1996 and $2.0 in 1995 82.3 79.3
Materials and supplies,
at average cost 18.9 14.9
Assets held for disposition 2.3 7.7
Loans to affiliates 15.4 11.7
Deferred income taxes
- current 18.5 19.1
Other current assets 5.7 2.5
Total current assets 151.6 138.2
Investments 13.5 13.5
Loans to affiliates 77.6 26.9
Properties:
Transportation:
Road and structures,
including land 1,094.7 1,052.1
Equipment 160.1 143.5
Other, principally land 41.5 41.0
Total properties 1,296.3 1,236.6
Accumulated depreciation (36.5) (37.1)
Net properties 1,259.8 1,199.5
Other assets 15.3 14.7
Total assets $ 1,517.8 $ 1,392.8
LIABILITIES AND STOCKHOLDER'S EQUITY
Current liabilities:
Current maturities of
long-term debt $ 2.9 $ 10.7
Accounts payable 51.3 52.1
Income taxes payable - 6.9
Casualty and freight claims 24.9 24.9
Employee compensation and
vacations 14.3 16.9
Taxes other than income
taxes 11.8 16.3
Accrued redundancy reserves 4.2 4.3
Other accrued expenses 76.0 61.7
Total current liabilities 185.4 193.8
Long-term debt 508.5 373.9
Deferred income taxes 253.8 235.7
Other liabilities and
reserves 109.6 124.4
Contingencies and commitments
Stockholder's equity:
Common stock authorized,
issued and outstanding
100 shares, $1 par value - -
Additional paid-in capital 129.5 129.6
Retained income 331.0 335.4
Total stockholder's equity 460.5 465.0
Total liabilities and
stockholder's equity $ 1,517.8 $ 1,392.8
The following notes are an integral part of the consolidated financial
statements.
ILLINOIS CENTRAL RAILROAD COMPANY AND SUBSIDIARIES
Consolidated Statements of Cash Flows
($ in millions)
(Unaudited)
Nine Months Ended September 30,
1996 1995
Cash flows from operating activities :
Net income $ 89.9 $ 81.4
Reconciliation of net income
to net cash provided by (used for)
operating activities :
Extraordinary item, net - 11.4
Depreciation and amortization 23.2 21.9
Deferred income taxes 18.6 24.5
Equity in undistributed earnings
of affiliates,net of dividends
received (0.3) (0.5)
Net gains on sales of real estate (1.5) (0.3)
Cash changes in working capital (10.1) (2.8)
Changes in other assets (0.8) (2.5)
Changes in other liabilities and
reserves (14.5) (7.4)
Net cash provided by operating
activities 104.5 125.7
Cash flows from investing activities :
Additions to properties (80.1) (71.7)
Proceeds from sales of line segment
and real estate 2.6 2.1
Proceeds from equipment sales 2.6 2.2
Proceeds from sales of investments .2 0.6
Loan to affiliate (54.3) (18.2)
Other (7.3) (2.4)
Net cash (used for) investing
activities (136.3) (87.4)
Cash flows from financing activities :
Proceeds from issuance of debt 130.0 250.0
Payments on debt (8.3) (234.4)
Net proceeds (payments)
in commercial paper 5.0 15.0
Dividends paid (88.7) (71.8)
Purchase of subsidiary's common
stock (0.7) (0.1)
Net cash provided by (used for)
financing activities 37.3 (41.3)
Changes in cash and temporary cash
investments 5.5 (3.0)
Cash and temporary cash investments
at beginning of period 3.0 12.2
Cash and temporary cash investments
at end of period $ 8.5 $ 9.2
Supplemental disclosure of cash flow information :
Cash paid during the year for:
Interest (net of amount capitalized) $ 20.2 $ 20.3
Income taxes $ 45.4 $ 28.7
The following notes are an integral part of the consolidated financial
statements.
ILLINOIS CENTRAL RAILROAD COMPANY
AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Unaudited)
1. Basis of Presentation
Except as described below, the accompanying unaudited consolidated
financial statements have been prepared in accordance with
accounting policies described in the 1995 Annual Report on Form 10-K
and should be read in conjunction with the disclosures therein.
In the opinion of management, these interim financial statements
reflect all adjustments, consisting of normal recurring accruals,
necessary to present fairly the financial position, results of
operations and cash flows for the periods presented. Interim
results are not necessarily indicative of results for the full year.
Certain 1995 amounts have been reclassified to conform with the
presentation used in the 1996 financial statements.
Income Per Share
Income per common share has been omitted as the Railroad is a
wholly-owned subsidiary of Illinois Central Corporation ("IC").
2. Equity and Restrictions on Dividends
For the nine month period ended September 30, 1996, the Railroad has
paid cash dividends of $88.7 million to IC. The Railroad is no
longer subject to specific dividend restrictions. Covenants of the
Railroad's Revolver require specified levels of tangible net worth.
At September 30, 1996, the Railroad exceeded its tangible net worth
covenant by $25.7 million.
In March 1996, the Railroad transferred its ownership in the Chicago
Intermodal Company ("CIC") via a dividend of CIC stock to IC. The
book value of the CIC investment was $5.7 million.
3. CCP Holdings, Inc. Acquisition
On June 12, 1996, the Railroad used proceeds it received from the
issuance of Commercial Paper (average interest rate 5.52% and
average maturity 30 days) to pay a $50.0 million dividend to IC and to
loan $59.9 million (5.625% per annum) to IC. IC used the $109.9
million and its bank credit lines to acquire CCP Holdings, Inc.
("CCPH"). The transaction closed June 13, 1996, following the
effective date of the approval order issued by the Surface
Transportation Board ("STB").
CCPH has two principal operating subsidiaries - the Chicago Central
and Pacific Railroad ("CCPR") and the Cedar River Railroad ("CRR") -
which together comprise a Class II railroad system operating 850
miles of road. CCPR operates from Chicago to Omaha, Nebraska, with
connecting lines to Cedar Rapids and Sioux City, Iowa. CRR runs
from Waterloo, Iowa to Albert Lea, Minnesota.
4. Subsequent Event - RAIL Sale
On October 3, 1996, the Railroad sold its investment in an industry-
captive insurance company which will result in a one-time gain in the
fourth quarter of approximately $7 million.
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The discussion below takes into account the financial condition and
results of operations of the Railroad for the periods presented in the
consolidated financial statements.
Results of Operations
Three Months Ended September 30, 1996 Compared to Three Months Ended
September 30, 1995
Revenues for 1996 decreased from the prior year quarter by $10.5
million or 6.5% to $150.8 million. The decrease followed a 3.3% decrease
in the number of carloadings coupled with a 3.4% decrease in the average
freight revenue per carload. In addition to decreased carloadings in
paper and forest products (9.5%) and grain and grain mill products
(35.2%), the most significant factor affecting both declines was the lack
of export grain in 1996 compared with the high levels of 1995. For the
quarter intermodal loads increased 11.7%.
Operating expenses overall declined in the third quarter of 1996
by $14.0 million or 12.7%. Labor and fringe costs include wage increases
negotiated with eight of the Railroads' eleven unions. This category
declined, however, from 1995 primarily as a result of lower traffic levels
in 1996 and elimination of high overtime caused by congestion
experienced in 1995. Leases and car hire also benefited from the
elimination of congestion to return to more normal operating levels. In
1995, favorable one time adjustments on several capital leases were
recorded. Other taxes in 1996 reflects normal accruals based on
current assessments. The prior year was reduced by negotiated settlements
with various taxing authorities. Other expenses reflect the one time
reversal of non revenue related accruals to actual experience ($2.5
million) and favorable performance payments in joint facilities that
congestion in 1995 prevented us from receiving ($.7 million).
Operating income for 1996 increased by $3.5 or 6.8% to $54.9 million
for the reasons cited above.
Net interest expense of $6.7 million for 1996 increased 11.7%
compared to $6.0 million in 1995. The 1996 expense includes $1.8 million
from increased commercial paper borrowings to support the $109.9 million
transferred by the Railroad in June 1996. Overall in 1996, average
borrowings have been greater than 1995 and interest rates have been lower.
Nine Months Ended September 30, 1996 Compared to Nine Months Ended
September 30, 1995
Revenues for 1996 decreased from the prior year by $23.0 million to
$462.8 million. The decrease was a result of a 6.3% decrease in the
number of carloadings coupled with a 1.5% decrease in the average revenue
per carload. In 1996, the Railroad experienced decreased carloadings in
coal (10.2%), chemicals (1.6%) grain and grain products (22.0%), and paper
and forest products (5.1%), partially offset by increased intermodal loads
(11.0%).
Operating expenses overall declined in 1996 by $21.3 million or 6.7%.
Labor and fringe costs include wage increases negotiated with eight of the
Railroads' eleven unions. This category declined, however, from 1995
primarily as a result of lower traffic levels in 1996 and elimination of
high overtime caused by the congestion experienced in 1995. Leases and
car hire also benefited from the elimination of congestion to return to
more normal operating levels. In 1995, favorable one time adjustments on
several capital leases were recorded. Other taxes in 1996
reflects normal accruals based on current assessments. The prior year was
reduced by negotiated settlements with various taxing authorities. Other
expenses reflect the one time reversal of non revenue related accruals to
actual experience ($2.5 million).
Operating income for 1996 decreased by $1.7 million or 1.0% to
$165.0 million for the reasons cited above.
Net interest expenses of $19.7 million for 1996 decreased 3.4%
compared to $20.4 million in 1995. The 1996 expense includes $2.1 million
from the Railroad's increased commercial paper borrowings to support the
$109.9 million transferred to IC in June 1996. Overall in 1996, average
borrowings have been greater than 1995 and interest rates have been lower.
Liquidity and Capital Resources
Operating Data:
Nine Months Ended September 30,
1996 1995
($ in millions)
Cash flows provided by (used for):
Operating activities $ 104.5 $ 125.7
Investing activities (136.3) (87.4)
Financing activities 37.3 (41.3)
Net change in cash and
temporary cash investments $ 5.5 $ (3.0)
Operating activities in 1996 provided $104.5 million in cash,
primarily from net income before depreciation and deferred taxes.
Additions to property were as follows:
Nine Months Ended September 30,
1996 1995
($ in millions)
Communications and signals $ 14.2 $ 7.1
Equipment-rolling stock 21.5 27.2
Track and bridges 38.3 34.9
Other 6.1 2.5
Total $ 80.1 $ 71.7
Property retirements and removals generated proceeds of $5.2 million
and $4.3 million in 1996 and 1995, respectively.
The Railroad anticipates that capital expenditures for 1996, will
be approximately $114 million of which $83 million of base expenditures
will concentrate on track maintenance (i.e., renewal of track structure
including bridges) and freight car upgrades. Approximately $20 million
will be incurred to expand the Railroad's intermodal facility in Chicago
to serve Canadian National Railway. These expenditures are
expected to be met from current operations or other available sources.
The Railroad has a commercial paper program whereby a total of $200
million can be issued and outstanding at any one time. The program is
supported by a $250 million Revolver with the Railroad's lending group
(see below). At September 30, 1996, the commercial paper has been rated
A2, P2 and F2 and $62.0 million was outstanding. The average interest
rate on commercial paper for the nine month period ended September 30,
1996, was 5.62% with a range of 5.41% to 6.06%. The Railroad views this
program as a significant long-term funding source and intends to issue
replacement notes as each existing issue matures. Therefore, commercial
paper borrowings are classified as long-term. The Railroad's public debt
is rated Baa2 by Moody's and BBB by S&P.
In 1994, the Railroad entered into a revolving agreement to sell
undivided percentage interests in certain of its accounts receivable, with
recourse, to a financial institution. The agreement, which expires in
June 1998, allows for sales of accounts receivable up to a maximum of $50
million at any one time. The Railroad services the accounts receivable
sold under the agreement and retains the same exposure to credit loss as
existed prior to the sale. At September 30, 1996, $50 million had been
sold pursuant to the agreement. Costs related to the agreement fluctuate
with changes in prevailing interest rates. These costs, which are
included in Other Income Net, were $2.3 million and $2.3 million for the
nine month periods ended September 30, 1996 and 1995, respectively.
In April 1996, the Railroad concluded negotiations with its bank
lending group whereby the Railroad's $250 million Revolver was amended and
restated, for the fourth time since becoming unsecured in September 1993.
The amendment reduced various facility fees and borrowing spreads,
lowered the tangible net worth requirement beginning in the second quarter
of 1996 and extended the expiration date to 2001. Fees and borrowing
spreads are predicated on the Railroad's long-term credit ratings.
Currently, the annual facility fee is 15 basis points and borrowings under
this agreement are at Eurodollar offered rate plus 22.5 basis points. The
Revolver is used primarily for backup for the Railroad's commercial paper
program but can be used for general corporate purposes. The available
amount is reduced by the outstanding amount of commercial paper borrowings
and any letters of credit issued on behalf of the Railroad under the
facility. No amounts have been drawn under the Revolver. At September
30, 1996, the $250 million was limited to $188.0 million because $62.0
million in commercial paper was outstanding.
On July 30, 1996, the Railroad issued $50 million of 7.12% medium
term notes due 2001 and $30 million of 6.85% medium term notes due 1999.
On August 9, 1996, the Railroad issued $50 million of 6.72% medium term
notes due 2001 (together the "MTN's"). The MTN's were issued under a $200
million shelf registration declared effective July 23, 1996.
The Railroad has entered into various diesel fuel collar agreements
designed to mitigate significant changes in fuel prices. As a result,
approximately 17% of the Railroad's short-term diesel fuel requirements
through June 1997 are protected against significant price changes.
In October 1996, the Brotherhood of Maintenance of Way Employees (BMWE)
membership ratified a new agreement which settles wage and work rules
through 1999. The Railroad continues to negotiate with its two remaining
operating unions on a local level, while no agreements are pending
agreements may be reached that require significant lump sum payments. It
is too early to determine if separate agreements will be reached but
management believes available funding sources will be sufficient to meet
any required payments.
The Railroad believes that its available cash, cash generated by its
operations and cash available from the facilities described above will be
sufficient to meet foreseeable liquidity requirements. Additionally, the
Railroad believes it has access to the public debt market if needed.
Various borrowings of the Railroad are governed by agreements which
contain financial and operating covenants. All entities were in compliance
with these covenant requirements at September 30, 1996, and management does
not contemplate any difficulty maintaining such compliance.
Certain covenants of the Railroad's debt agreements require specific
levels of tangible net worth but not a specific dividend restriction. The
Railroad paid dividends to IC of $107.7 million in 1995, $42.5 million in
1994 and $27.4 million in 1993. At September 30, 1996, the Railroad
exceeded its tangible net worth covenant by $25.7 million. Through October
1996, the Railroad has declared and paid total dividends of $109.8 million
to IC, which includes the March 1996 transfer by the Railroad of its
ownership in the Chicago Intermodal Company ("CIC") via a dividend of CIC
stock. The book value of the CIC investment was $5.7 million.
Environmental Liabilities
The Railroad's operations are subject to comprehensive environmental
regulation by federal, state and local authorities. Compliance with such
regulation requires the Railroad to modify its operations and expend
substantial manpower and financial resources.
Under the federal Comprehensive Environmental Response, Compensation
and Liability Act of 1980 ("Superfund"), and similar state and federal
laws, the Railroad is potentially liable for the cost of clean-up of
various contaminated sites. The Railroad has been notified that it is a
Potentially Responsible Party at sites ranging from those with hundreds
of potentially responsible parties to sites at which the Railroad is
primarily responsible. The Railroad generally participates in the clean-
up at sites where other substantial parties share responsibility through
cost-sharing arrangements, but under Superfund and other similar laws the
Railroad can be held jointly and severally liable for all environmental
costs associated with such sites.
The Railroad is aware of approximately 30 contaminated sites and
various fueling facilities at which it is probably liable for some portion
of the clean-up. The Railroad paid approximately $6.3 million in 1995
toward the investigation and remediation of those sites, and anticipates
future expenditures of between $1 million and $2 million annually.
Furthermore, recent amendments to the Clean Air Act require the
Environmental Protection Agency to promulgate regulations restricting the
level of pollutants in locomotive emissions which could impose significant
retrofitting requirements, operational inefficiencies or capital
expenditures in the future.
For all known sites of environmental contamination where Railroad
loss or liability is probable, the Railroad has recorded an estimated
liability at the time when a reasonable estimate of remediation cost and
Railroad liability can first be determined. Adjustments to initial
estimates are recorded as necessary based upon additional information
developed in subsequent periods. Estimates of the Railroad's potential
financial exposure for environmental claims or incidents are necessarily
imprecise because of the difficulty of determining in advance the nature
and extent of contamination, the varying costs of alternative methods of
remediation, the regulatory clean-up standards which will be applied, and
the appropriate allocation of liability among multiple responsible
parties. At September 30, 1996, the Railroad estimated the probable range
of its estimated liability to be $14.0 million to $48.5 million, and in
accordance with the provisions of SFAS No. 5 had a reserve of $14.0
million for environmental contingencies. This amount is not reduced for
potential insurance recoveries or third-party contribution where the
Railroad is primarily liable.
The risk of incurring environmental liability in connection with
both past and current activities is inherent in railroad operations.
Decades-old railroad housekeeping practices were not always consistent
with contemporary standards, historically the Railroad leased substantial
amounts of property to industrial tenants, and the Railroad continues to
haul hazardous materials which are subject to occasional accidental
release. Because the ultimate cost of known contaminated sites cannot be
definitively established and because additional contaminated sites yet
unknown may be discovered or future operations may result in accidental
releases, no assurance can be given that the Railroad will not incur
material environmental liabilities in the future. However, based on its
assessments of the facts and circumstances now known, management believes
that it has recorded adequate reserves for known liabilities and does not
expect future environmental charges or expenditures to have a material
adverse effect on the Railroad's financial position, results of
operations, cash flow or liquidity.
CCP Holdings, Inc. Acquisition
On June 12, 1996, the Railroad used proceeds it received from the
issuance of Commercial Paper (average interest rate 5.52% and average
maturity 30 days) to pay a $50.0 million dividend to IC and to loan $59.9
million (5.625% per annum) to IC. IC used the $109.9 million and its
bank credit lines to acquire CCP Holdings, Inc. ("CCPH"). The transaction
closed June 13, 1996, following the effective date of the approval order
issued by the Surface Transportation Board ("STB").
CCPH has two principal operating subsidiaries - the Chicago Central
and Pacific Railroad ("CCPR") and the Cedar River Railroad ("CRR") - which
together comprise a Class II railroad system operating 850 miles of road.
CCPR operates from Chicago to Omaha, Nebraska, with connecting lines to
Cedar Rapids and Sioux City, Iowa. CRR runs from Waterloo, Iowa to
Albert Lea, Minnesota.
RAIL
On October 3, 1996, the Railroad sold its investment in an industry-
captive insurance company which will result in a one-time gain in the
fourth quarter of approximately $7 million.
Recent Accounting Pronouncements
In October 1995, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 123 "Accounting for Stock-
Based Compensation" ("SFAS No. 123"). SFAS No. 123 establishes a fair
value based method of accounting for stock-based compensation plans. The
Railroad has elected to measure compensation cost using the intrinsic
value based method as permitted under SFAS 123.
In June 1996, the Financial Accounting Standards Board issued
"Statement of Financial Accounting Standards No. 125-Accounting for
Transfers and Servicing of Financial Assets and Extinguishments of
Liabilities" ("SFAS No. 125"). SFAS No. 125 provides accounting and
reporting standards for transfers and servicing of financial assets and
extinguishments of liabilities. SFAS No. 125 provides consistent
standards for distinguishing transfers of financial assets that are sales
from transfers that are secured borrowings. The standard is effective for
events occurring after December 31, 1996 and is to be applied
prospectively. Earlier or retroactive application is not permitted. The
Railroad is reviewing the standard to ascertain its impact on its
receivable sales program. No determination has been made to date.
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
See Exhibit Index on page E-1
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Railroad has duly caused this report to be signed on its behalf
by the undersigned hereto duly authorized.
ILLINOIS CENTRAL RAILROAD COMPANY
/s/ DALE W. PHILLIPS
Dale W. Phillips
Vice President & Chief Financial Officer
/s/ JOHN V. MULVANEY
John V. Mulvaney
Controller
Date: November 8, 1996
ILLINOIS CENTRAL RAILROAD COMPANY AND SUBSIDIARIES
EXHIBIT INDEX
Exhibit Sequential
No. Description Page No.
27 Financial Data Schedule (This
exhibit is required to
be submitted electronically pursuant
to the rules and regulations
of the Securities and Exchange
Commission and shall not be deemed
filed for the purposes of Section 11
of the Securities Act of 1933
or Section 18 of the Securities
Exchange Act of 1934).
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> SEP-30-1996
<CASH> 8500
<SECURITIES> 0
<RECEIVABLES> 82300
<ALLOWANCES> 1500
<INVENTORY> 18900
<CURRENT-ASSETS> 151600
<PP&E> 1296300
<DEPRECIATION> 36500
<TOTAL-ASSETS> 1517800
<CURRENT-LIABILITIES> 185400
<BONDS> 508500
<COMMON> 0
0
0
<OTHER-SE> 460500
<TOTAL-LIABILITY-AND-EQUITY> 1517800
<SALES> 462800
<TOTAL-REVENUES> 462800
<CGS> 297800
<TOTAL-COSTS> 297800
<OTHER-EXPENSES> 1700
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 19700
<INCOME-PRETAX> 147000
<INCOME-TAX> 57100
<INCOME-CONTINUING> 89900
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 89900
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
