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
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
For the Quarterly Period Commission File
Ended March 31, 1999 Number 001-05083
KANEB SERVICES, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 74-1191271
(State or other jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
2435 North Central Expressway
Richardson, Texas 75080
(Address of principle executive offices, including zip code)
(972) 699-4000
(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.
Class of Common Stock Outstanding at April 30, 1999
No par value 31,430,675 shares
<PAGE>
KANEB SERVICES, INC. AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED MARCH 31, 1999
- --------------------------------------------------------------------------------
Page No.
Part I. Financial Information
Item 1. Financial Statements (Unaudited)
Consolidated Statements of Income - Three Months Ended
March 31, 1999 and 1998 1
Condensed Consolidated Balance Sheets - March 31, 1999
and December 31, 1998 2
Condensed Consolidated Statements of Cash Flows - Three
Months Ended March 31, 1999 and 1998 3
Notes to Consolidated Financial Statements 4
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
<PAGE>
KANEB SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(In Thousands -- Except Per Share Amounts)
(Unaudited)
Three Months Ended
March 31,
--------------------
1999 1998
-------- --------
Revenues $ 99,356 $ 59,501
-------- --------
Costs and expenses:
Operating costs 43,842 39,933
Cost of sales 34,676 1,848
Depreciation and amortization 4,502 4,047
General and administrative 1,124 1,066
-------- --------
Total costs and expenses 84,144 46,894
-------- --------
Operating income 15,212 12,607
Other income (expense) 284 (37)
Interest expense (4,535) (3,745)
Amortization of excess of cost over fair
value of net assets of acquired business (511) (475)
-------- --------
Income before interest of outside non-controlling partners
in KPP's net income and income tax expense 10,450 8,350
Interest of outside non-controlling partners in KPP's
net income (7,364) (6,055)
Income tax expense (777) (459)
-------- --------
Net income 2,309 1,836
Dividends applicable to preferred stock 114 150
-------- --------
Net income applicable to common stock $ 2,195 $ 1,686
======== ========
Earnings per common share - Basic and Diluted $ .07 $ .05
======== ========
See notes to consolidated financial statements.
1
<PAGE>
KANEB SERVICES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In Thousands)
March 31, December 31,
1999 1998
--------- ----------
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 22,750 $ 9,134
Accounts receivable, trade 53,006 47,540
Inventories 11,480 13,465
Prepaid expenses and other current assets 7,984 6,615
--------- ---------
Total current assets 95,220 76,754
--------- ---------
Property and equipment 473,984 432,290
Less accumulated depreciation and amortization 133,502 130,759
--------- ---------
Net property and equipment 340,482 301,531
--------- ---------
Excess of cost over fair value of net assets
of acquired businesses 64,270 62,521
Other assets 7,120 7,239
--------- ---------
$ 507,092 $ 448,045
========= =========
LIABILITIES AND EQUITY
Current liabilities:
Short-term and current portion of long-term debt $ 35,696 $ 15,293
Accounts payable 15,197 14,520
Accrued expenses 44,326 41,309
--------- ---------
Total current liabilities 95,219 71,122
--------- ---------
Long-term debt, less current portion:
Industrial field services 21,176 20,292
Pipeline, terminaling and product marketing services 182,210 153,000
Parent company 23,666 23,666
--------- ---------
Total long-term debt, less current portion 227,052 196,958
--------- ---------
Deferred income taxes and other liabilities 19,326 15,626
Interest of outside non-controlling partners in KPP 76,376 76,894
Commitments and contingencies
Stockholders' equity:
Preferred stock, without par value 5,792 5,792
Common stock, without par value 4,240 4,239
Additional paid-in-capital 197,293 197,263
Accumulated deficit (86,228) (88,423)
Unamortized restricted stock (141) (141)
Treasury stock, at cost (29,767) (29,775)
Accumulated other comprehensive income (loss) -
foreign currency translation adjustment (2,070) (1,510)
--------- ---------
Total stockholders' equity 89,119 87,445
--------- ---------
$ 507,092 $ 448,045
========= =========
See notes to consolidated financial statements.
2
<PAGE>
KANEB SERVICES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)
(Unaudited)
Three Months Ended
March 31,
--------------------
1999 1998
-------- --------
Operating activities:
Net income $ 2,309 $ 1,836
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 4,502 4,047
Interest of outside non-controlling partners in KPP 7,364 6,055
Amortization of excess of cost over fair
value of net assets acquired 511 475
Deferred income taxes 404 187
Changes in working capital components 169 (2,712)
-------- --------
Net cash provided by operating activities 15,259 9,888
-------- --------
Investing activities:
Capital expenditures (2,651) (3,010)
Acquisitions, net of cash acquired (41,807) (6,591)
Change in other assets, net 68 (2,136)
-------- --------
Net cash used in investing activities (44,390) (11,737)
-------- --------
Financing activities:
Issuance of short-term and long-term debt 51,450 9,028
Payments on long-term debt (953) (3,315)
Preferred stock dividends (114) (150)
Distributions to outside non-controlling partners in KPP (7,675) (7,129)
Common stock issued 39 121
-------- --------
Net cash provided by (used in) financing activities 42,747 (1,445)
-------- --------
Increase (decrease) in cash and cash equivalents 13,616 (3,294)
Cash and cash equivalents at beginning of period 9,134 23,025
-------- --------
Cash and cash equivalents at end of period $ 22,750 $ 19,731
======== ========
Supplemental cash flow information:
Cash paid for interest $ 2,934 $ 2,836
======== ========
Cash paid for income taxes $ 204 $ 1,125
======== ========
See notes to consolidated financial statements.
3
<PAGE>
KANEB SERVICES, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(Unaudited)
1. SIGNIFICANT ACCOUNTING POLICIES
The unaudited condensed consolidated financial statements of Kaneb
Services, Inc. and its subsidiaries (the "Company") for the three month
periods ended March 31, 1999 and 1998, have been prepared in accordance
with generally accepted accounting principles applied on a consistent
basis. Significant accounting policies followed by the Company and its
subsidiaries are disclosed in the notes to the consolidated financial
statements included in the Company's Annual Report on Form 10-K for the
year ended December 31, 1998. In the opinion of the Company's management,
the accompanying condensed consolidated financial statements contain the
adjustments, consisting of normal recurring accruals, necessary to present
fairly the consolidated financial position of the Company and its
consolidated subsidiaries at March 31, 1999 and the consolidated results of
their operations and cash flows for the periods ended March 31, 1999 and
1998. Operating results for the three months ended March 31, 1999 are not
necessarily indicative of the results that may be expected for the year
ending December 31, 1999.
2. ACQUISITION
On February 1, 1999, Kaneb Pipe Line Partners, L.P. ("KPP") acquired six
terminals in the United Kingdom from GATX Terminals Limited for (pound)22.6
million (approximately $37.2 million) plus the assumption certain
liabilities. The acquisition, which was financed with term loans from a
bank, has been accounted for using the purchase method of accounting. The
pro forma effect of the acquisition was not material to the results of
operations.
3. COMPREHENSIVE INCOME
Comprehensive income for the three months ended March 31, 1999 and 1998 is
as follows:
Three Months Ended
March 31,
-------------------
1999 1998
------- --------
(in thousands)
Net income $ 2,309 $ 1,836
Other comprehensive income (loss) - foreign
currency translation adjustment (560) 1
------- -------
Comprehensive income $ 1,749 $ 1,837
======= =======
4. EARNINGS PER SHARE
The following is a reconciliation of Basic and Diluted earnings per share
(in thousands, except for per share amounts):
Weighted
Average
Net Common Per-Share
Income Shares Amount
------- --------- ---------
Three Months Ended March 31, 1999
---------------------------------
Net income $ 2,309
Dividends applicable to preferred stock (114)
-------
Basic earnings per share -
Income applicable to common stock 2,195 31,414 $ .07
=======
Effect of dilutive securities -
Common stock options and DSUs -- 1,011
------- -------
Diluted earnings per share -
Income applicable to common stock,
DSUs and assumed options exercised $ 2,195 32,425 $ .07
======= ======= =======
<PAGE>
Three Months Ended March 31, 1998
---------------------------------
Net income $ 1,836
Dividends applicable to preferred stock (150)
-------
Basic earnings per share -
Income applicable to common stock 1,686 32,189 $ .05
=======
Effect of dilutive securities -
Common stock options and DSUs -- 771
------- -------
Diluted earnings per share -
Income applicable to common stock,
DSUs and assumed options exercised $ 1,686 32,960 $ .05
======= ======= =======
Options to purchase 106,232 and 682 shares of common stock at weighted
average prices of $4.26 and $5.36, were outstanding at March 31, 1999 and
1998, respectively, but were not included in the computation of diluted
earnings per share because the options' exercise price was greater than the
average market price of the common stock. Additionally, the Company's 8.75%
convertible subordinated debentures were excluded from the computation of
diluted earnings per share because the effect of assumed conversion is
anti-dilutive.
5. DEBT
In January 1999, KPP entered into a credit agreement with a bank that
provides for the issuance of $39.2 million of term loans in connection with
the United Kingdom terminal acquisition and $5.0 million for general
partnership purposes. The term loans, which bear interest in varying
amounts, are secured by the capital stock of the subsidiaries that acquired
the United Kingdom terminals, and pari passu with the existing mortgage
notes and credit facility, by a mortgage on the East Pipeline. The term
loans, which are without recourse to the Company, contain certain financial
and operational covenants and are due in June 1999 ($18.3 million) and in
January 2002 ($25.9 million).
6. CONTINGENCIES
The operations of the Company are subject to Federal, state and local laws
and regulations relating to protection of the environment. Although KPP
believes that its operations are in general compliance with applicable
environmental regulation, risks of additional costs and liabilities are
inherent in its operations, and there can be no assurance that significant
costs and liabilities will not be incurred by KPP. Moreover, it is possible
that other developments, such as increasingly stringent environmental laws,
regulations, enforcement policies thereunder, and claims for damages to
property or persons resulting from the operations of KPP, could result in
substantial costs and liabilities to KPP.
The Company has other contingent liabilities resulting from litigation,
claims and commitments incident to the ordinary course of business.
Management believes, based on the advice of counsel, that the ultimate
resolution of such contingencies will not have a materially adverse effect
on the financial position or results of operations of the Company.
7. BUSINESS SEGMENT DATA
The Company provides industrial field services to an international client
base that includes refineries, chemical plants, pipelines, offshore
drilling and production platforms, steel mills, food and drink processing
facilities, power generation, and other process industries. The Pipeline,
Terminaling and Product Marketing Segment includes: (i) the pipeline and
terminaling operations of KPP which consist of the transportation of
refined petroleum products in the Midwestern states as a common carrier and
the storage of petroleum products, specialty chemicals and other liquids,
and (ii) the Company's products marketing business. Additionally, the
Company provides information services to governmental, insurance and
financial institutions.
<PAGE>
The Company measures segment profit as operating income. Total assets are
those controlled by each reportable segment.
Three Months Ended
March 31,
--------------------
1999 1998
-------- --------
(in thousands)
Business segment revenues:
Industrial field services $ 24,116 $ 27,489
Pipeline, terminaling and product marketing services 68,212 29,997
Information services 7,028 2,015
-------- --------
$ 99,356 $ 59,501
======== ========
Industrial field services segment revenues:
Underpressure services $ 9,725 $ 10,693
Turnaround services 10,616 11,625
Other services 3,775 5,171
-------- --------
$ 24,116 $ 27,489
======== ========
Pipeline, terminaling and product marketing
services segment revenues:
Pipeline operations $ 15,164 $ 14,101
Terminaling operations 21,681 13,969
Product marketing services 31,367 1,927
-------- --------
$ 68,212 $ 29,997
======== ========
Business segment profit:
Industrial field services $ 123 $ 1,007
Pipeline, terminaling and product marketing services 15,289 11,942
Information services 924 724
General corporate (1,124) (1,066)
-------- --------
Operating income 15,212 12,607
Other income (expense) 284 (37)
Interest expense (4,535) (3,745)
Amortization of excess of cost over fair
value of net assets of acquired businesses (511) (475)
-------- --------
Income before interest of outside
non-controlling partners of KPP's
net income and income tax expense $ 10,450 $ 8,350
======== ========
March 31 December 31
1999 1998
-------- --------
Total assets:
Industrial field services $110,055 $110,603
Pipeline, terminaling and product marketing services 374,101 323,058
Information services 16,181 11,082
General corporate 6,755 3,302
-------- --------
$507,092 $448,045
======== ========
<PAGE>
KANEB SERVICES, INC. AND SUBSIDIARIES
Management's Discussion and Analysis of Financial Condition
and Results of Operations
This discussion should be read in conjunction with the consolidated
financial statements of Kaneb Services, Inc. (the "Company") and notes
thereto included elsewhere in this report.
Operating Results:
Industrial Field Services
Three Months Ended
March 31,
--------------------
1999 1998
-------- --------
(in thousands)
Revenues:
United States $ 7,469 $ 8,936
Europe 13,820 15,887
Asia-Pacific 2,827 2,666
-------- --------
Total revenues $ 24,116 $ 27,489
======== ========
Operating income:
United States $ 39 $ 482
Europe 110 561
Asia-Pacific 319 105
Headquarters (345) (141)
-------- --------
Total operating income $ 123 $ 1,007
======== ========
Capital expenditures, excluding acquisitions $ 357 $ 622
======== ========
This business segment provides specialized industrial field services,
including underpressure leak sealing, on-site machining, safety and relief
valve testing and repair, passive fire protection and fugitive emissions
inspections to the process and power industry worldwide.
For the three months ended March 31, 1999, revenues for the Industrial
Field Services segment decreased by $3.4 million, or 12%, when compared to
the same 1998 period, due primarily to adverse market conditions in the
United States and Europe, partially offset by modest gains in Asia-Pacific.
In the United States, revenues decreased by 16%, compared to the same
period in 1998, due primarily to declines in on-site machining services. In
Europe, revenues decreased by 13%, due to lower turnaround and other
process plant services in the United Kingdom. Asia-Pacific revenues
increased by 6% in the first quarter of 1999, compared to 1998, due
primarily to increases in turnaround services in Australia and Singapore,
partially offset by declines in underpressure services in Hong Kong.
Overall, Industrial Field Services operating income decreased by $0.9
million for the quarter ended March 31, 1999, compared to the same 1998
period, due to decreases in revenues and operating income in the United
States and Europe, a result of adverse market conditions in these regions.
<PAGE>
Pipeline, Terminaling and Product Marketing Services
Three Months Ended
March 31,
--------------------
1999 1998
-------- --------
(in thousands)
Revenues:
Pipeline and terminaling $ 36,845 $ 28,070
Product marketing 31,367 1,927
-------- --------
$ 68,212 $ 29,997
======== ========
Operating income $ 15,289 $ 11,942
======== ========
Capital expenditures, excluding acquisitions $ 2,258 $ 2,350
======== ========
This business segment includes the operations of Kaneb Pipe Line Partners,
L.P. ("KPP") and the Company's products marketing business acquired in late
March 1998. KPP provides transportation services of refined petroleum
products through a pipeline system that extends through the Midwest and
Eastern Rocky Mountain areas and provides terminaling and storage services
for petroleum products and specialty chemicals. The Company operates,
manages and controls the pipeline and terminaling operations of KPP through
its 2% general partner interest and a 31% limited partner interest in the
partnership. The petroleum products marketing business provides wholesale
motor fuel marketing services throughout the Great Lakes and Rocky Mountain
regions, as well as California.
On October 30, 1998, KPP, through a wholly-owned subsidiary, entered into
acquisition and joint venture agreements with Northville Industries Corp.
to acquire and manage the former Northville terminal located in Linden, New
Jersey. Under the agreements, KPP acquired a 50% interest in the newly
formed ST Linden Terminal LLC for $20.5 million plus transaction costs.
During the year ended December 31, 1998, the Partnership acquired other
terminals for aggregate consideration of $15.9 million. On February 1,
1999, KPP acquired six terminals in the United Kingdom from GATX Terminal
Limited for approximately $37.2 million plus the assumption of certain
liabilities. The acquisitions (the "Acquisitions") were funded by KPP with
bank financing.
For the three months ended March 31, 1999, revenues for the Pipeline and
Terminaling business increased by $8.8 million, or 31%, when compared to
1998, due to a $1.1 million increase in revenues in the pipeline business
and $7.7 million increase in terminaling revenues when compared to the same
1998 period. The increase in pipeline revenues for the three months ended
March 31, 1999 is due primarily to increases in volumes shipped, when
compared to the same period in 1998. The increase in terminaling revenues
for the three months ended March 31, 1999 is due to the Acquisitions and an
increase in tank utilization resulting from favorable market conditions.
The $3.3 million increase in operating income for the quarter ended March
31, 1999, compared to 1998, is due to a $0.6 million increase in pipeline
operating income, a $2.4 million increase in terminaling operating income,
primarily resulting from the Acquisitions and the increase in tank
utilization, and $0.3 million from the products marketing business acquired
in March 1998.
The interest of outside non-controlling partners in KPP's net income was
$7.4 million and $6.1 million for the three month periods ended March 31,
1999 and 1998, respectively. Distributions paid to the outside
non-controlling unitholders of KPP aggregated approximately $7.7 million
and $7.1 million for the three month periods ended March 31, 1999 and 1998,
respectively.
Capital expenditures of $2.3 million for the three months ended March 31,
1999, relate to the maintenance of existing operations. Routine capital
expenditures for 1999 are currently estimated to be between $12 million and
$16 million.
<PAGE>
Information Services
The Company's information services business is conducted through a variety
of wholly-owned subsidiaries. The information services group provides
consulting services, sales of computer hardware manufactured by others,
insurance tracking services and other related information management and
processing services primarily for governmental, insurance and financial
institutions.
Three Months Ended
March 31,
--------------------
1999 1998
-------- --------
(in thousands)
Revenues $ 7,028 $ 2,015
======== ========
Operating income $ 924 $ 724
======== ========
Capital expenditures, excluding acquisitions $ 36 $ 38
======== ========
For the three months ended March 31, 1999, revenues increased $5.0 million,
or 249%, and operating income increased $0.2 million, or 28%, when compared
to 1998, primarily from increased computer hardware sales and consulting
services provided to various federal government agencies.
On March 23, 1999, the Company, through a wholly-owned subsidiary, acquired
the capital stock of Ellsworth Associates, Inc. ("Ellsworth"). Ellsworth
provides information technology services, including network, database and
systems design, and application programming, primarily to government
agencies.
Liquidity and Capital Resources
During the first three months of 1999, the Company's working capital
requirements for operations and capital expenditures (excluding
acquisitions) were funded through the use of internally generated funds.
Cash provided by operations was $15.3 million and $9.9 million for the
three months ended March 31, 1999 and 1998, respectively. Capital
expenditures (excluding acquisitions) were $2.7 million for the three
months ended March 31, 1999, compared to $3.0 million in 1998. Capital
expenditures in 1999 are expected to be funded by internally generated
funds.
In January 1999, KPP entered into a credit agreement with a bank that
provides for the issuance of $39.2 million of term loans in connection with
the United Kingdom terminal acquisition and $5.0 million for general
partnership purposes. The term loans, which bear interest in varying
amounts, are secured by the capital stock of the subsidiaries that acquired
the United Kingdom terminals, and pari passu with the existing mortgage
notes and credit facility, by a mortgage on the East Pipeline. The term
loans, which are without recourse to the Company, contain certain financial
and operational covenants and are due in June 1999 ($18.3 million) and in
January 2002 ($25.9 million).
Additional information related to the sources and uses of cash is presented
in the financial statements included in this report.
Year 2000 Issue
The Company recognizes the challenges associated with Year 2000 Issues
("Y2K") and has undertaken a review and testing of its computer systems to
identify Y2K-related issues associated with any items of software or
hardware used in its business operations. Most of the software systems used
by the Company are licensed from third parties and are Y2K compliant or
will be upgraded to Y2K compliant releases before the end of 1999. This
issue is being addressed by the Company in multiple phases, including
assessment, remediation, testing and implementation, and progress is being
monitored by the Company's senior management. All material systems, on a
world-wide basis, including non-information technology systems that may
house non-compliant, embedded technology are being evaluated.
In addition to addressing the Company's own systems, as described above,
the Company must assess the state of readiness of the systems of other
entities with which it does business. With respect to its third-party
relationships, the Company has contacted its primary suppliers and service
providers to assess their state of Y2K readiness. The Company has received
information from its critical suppliers and service providers and
anticipates receiving additional information in the near future that will
assist the Company in assessing the Y2K readiness of these parties. Failure
by these third parties to adequately resolve their Y2K problems could have
a material adverse effect on the Company's operations.
The Company believes its success in being Y2K compliant will not be
conclusively known until the year 2000 is actually reached. Although
failure by one or more of the Company's own systems could result in lost
revenues and/or additional expenses required to carry out manual processing
of transactions, the Company cannot predict the effect that external forces
could have on its business. Failures by banking institutions, the
telecommunications industry and others could have far-reaching effects on
the entire economy and the Company.
At March 31, 1999, the initial assessment phase has been completed for the
Company's information technology systems. Most of the major information
technology systems on which the Company's operations depend have been
updated, tested and certified to be Y2K compliant. The Company continues to
assess Y2K compliance and evaluate the appropriate courses of action of its
non-information technology systems, including embedded chips located in
pipeline, terminaling and other hardware. The Company's expects to complete
its assessment of non-information technology systems by the end of the
second quarter of 1999 and complete all phases of its Y2K program prior to
December 31, 1999.
The Company believes that it is not possible to determine with certainty
that all Y2K problems affecting the Company have been identified or
corrected. The number of devices that could be affected and the
interactions among these devices are simply too numerous. In addition, the
Company cannot accurately predict how many failures related to the Y2K
problem will occur or the severity, duration or financial consequences of
such failures. The Company has hired an outside Y2K consultant to assist
the Company in meeting its goals and in developing contingency plans to
define and address the worst-case scenario likely to be faced by the
Company. The plan is expected to be in place by the end of the second
quarter of 1999.
Through March 31, 1999, the Company has incurred approximately $0.9 million
of costs related to assessing, remediating and testing its information
technology and non-information technology systems. A portion of these costs
would have been incurred as part of normal system and application upgrades.
In certain cases, the timing of these expenditures has been accelerated due
to Y2K considerations. The Company does not anticipate that future costs to
become fully Y2K compliant will be material.
<PAGE>
PART II - Other Information
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits.
27. Financial Data Schedule
(b) Reports on Form 8-K
Registrant's Current Report on Form 8-K/A, dated March 9,
1999, (SEC File No. 001-05083).
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.
KANEB SERVICES, INC.
(Registrant)
Date: May 14, 1999 //s//
Michael R. Bakke
Controller
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> Dec-31-1999
<PERIOD-START> Jan-01-1999
<PERIOD-END> Mar-31-1999
<CASH> 22,750
<SECURITIES> 0
<RECEIVABLES> 53,853
<ALLOWANCES> 847
<INVENTORY> 11,480
<CURRENT-ASSETS> 95,220
<PP&E> 473,984
<DEPRECIATION> 133,502
<TOTAL-ASSETS> 507,092
<CURRENT-LIABILITIES> 95,219
<BONDS> 227,052
0
5,792
<COMMON> 4,240
<OTHER-SE> 79,087
<TOTAL-LIABILITY-AND-EQUITY> 507,092
<SALES> 0
<TOTAL-REVENUES> 99,356
<CGS> 34,676
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<INCOME-TAX> 777
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